EXHIBIT A LIMITED PARTNERSHIP AGREEMENT

Limited Partnership Agreement

You are currently viewing:

This Limited Partnership Agreement involves

REALTY PARKING PROPERTIES L.P.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: EXHIBIT A LIMITED PARTNERSHIP AGREEMENT
Governing Law: Delaware Date: 3/29/2004

EXHIBIT A

LIMITED PARTNERSHIP AGREEMENT

REALTY PARKING PROPERTIES L.P.

TABLE OF CONTENTS

<TABLE>

Page

<S> <C>

Preliminary Statement .......................................................................................... A-3

Article I - Defined Terms .................................................................................... A-3

Article II - Name; Purpose; Term and Certificate ................................................... A-9

Section 2.1 Name; Formation .............................................................................. A-9

Section 2.2 Place of Registered Office .................................................................. A-9

Section 2.3 Purpose .......................................................................................... A-9

Section 2.4 Term .............................................................................................. A-9

Section 2.5 Recording of Certificate ..................................................................... A-9

Article III - Partners; Capital .............................................................................. A-10

Section 3.1 General Partners; Assignor Limited Partner; Subordinated

Limited Partners ........................................................................................... A-10

Section 3.2 Investors ........................................................................................ A-10

Section 3.3 Partnership Capital .......................................................................... A-10

Section 3.4 Liability of Partners and Investors ..................................................... A-11

Article IV - Allocations, Distributions and Applicable Rules ................................... A-12

Section 4.1 Allocation of Profit or Loss from a Sale ............................................. A-12

Section 4.2 Distribution of Net Proceeds of Sale or Financing ............................... A-12

Section 4.3 Distribution of Net Cash Flow and Allocation of Profit and

Loss from Operations .................................................................................... A-13

Section 4.4 Liquidation or Dissolution ............................................................... A-13

Section 4.5 General and Special Rules ............................................................... A- 14

Article V - Rights, Powers and Duties of Partners ................................................. A-16

Section 5.1 Management and Control of the Partnership; Tax Matters Partner ............. A-16

Section 5.2 Authority of General Partners .......................................................... A-16

Section 5.3 Authority of Investors ..................................................................... A-19

Section 5.4 Restrictions on Authority ................................................................. A-19

Section 5.5 Authority of Partners and Affiliated Persons to Deal with Partnership ............. A-21

Section 5.6 Duties and Obligations of the General Partner ................................... A-22

Section 5.7 Compensation of General Partner ..................................................... A-23

Section 5.8 Other Businesses of Partner .............................................................. A-23

Section 5.9 Liability of General Partner and Affiliates to Limited Partner or Investors . ..... A-23

Section 5.10 Indemnification ............................................................................. A-23

Article VI - Transferability of a General Partner's Interest ..................................... A-24

Section 6.1 Removal, Voluntary Retirement or Withdrawal of a General Partner;

Transfer of Interests ...................................................................................... A-24

Section 6.2 Election and Admission of Successor or Additional General Partners ....... A-24

Section 6.3 Events of Withdrawal of a General Partner ........................................ A-24

Section 6.4 Liability of a Withdrawn General Partner .......................................... A-25

Section 6.5 Valuation of Partnership Interest of General Partner ........................... A-25

Article VII - Assignment of Assignee Units to Investors; Transferability of Limited

Partner Interests and Units ..............................................................................A-26

Section 7.1 Assignments of the Assignee Units to Investors .................................. A-26

Section 7.2 Transferability of Units .................................................................... A-27

Section 7.3 Death, Bankruptcy or Adjudication of Incompetence of an Investor or a

Limited Partner ........................................................................................... A-28

</TABLE>

A-1

<PAGE>

<TABLE>

<S> <C>

Section 7.4 Effective Date ............................................................................ A-28

Section 7.5 Substitute Limited Partners .......................................................... A-28

Section 7.6 Retirement or Withdrawal of a Limited Partner ............................. A-28

Article VIII - Dissolution, Liquidation and Termination of the Fund ................... A-29

Section 8.1 Events Causing Dissolution ......................................................... A-29

Section 8.2 Liquidation ................................................................................ A-29

Section 8.3 Capital Contribution Upon Dissolution ......................................... A-30

Article IX - Certain Payments to the General Partners and Affiliates ................... A-30

Section 9.1 Reimbursement of Certain Costs and Expenses of the General Partner and

Its Affiliates ............................................................................................ A-30

Section 9.2 Fees and Other Payments ............................................................ A-31

Article X - Books and Records; Bank Accounts; Reports ................................... A-31

Section 10.1 Books and Records .................................................................... A-31

Section 10.2 Bank Accounts ......................................................................... A-32

Section 10.3 Reports .................................................................................... A-32

Section 10.4 Federal Tax Elections ................................................................ A-33

Article XI - Meetings of Investors ................................................................... A-34

Section 11.1 Calling Meetings ......................................................................... A-34

Section 11.2 Notice; Procedure ..................................................................... A-34

Section 11.3 Right to Vote ........................................................................... A-34

Section 11.4 Proxies; Rules .......................................................................... A-34

Article XII - General Provisions ..................................................................... A-35

Section 12.1 Appointment of General Partner as Attorney-in-Fact ......................... A-35

Section 12.2 Waiver of Partition ................................................................... A-35

Section 12.3 Notification .............................................................................. A-35

Section 12.4 Word Meanings ........................................................................ A-35

Section 12.5 Binding Provisions ................................................................... A-35

Section 12.6 Applicable Law ........................................................................ A-35

Section 12.7 Counterparts ............................................................................ A-35

Section 12.8 Separability of Provisions .......................................................... A-36

Section 12.9 Paragraph Titles ........................................................................ A-36

Section 12.10 Entire Agreement ...................................................................... A-36

Section 12.11 Amendments .......................................................................... A-36

Signatures ..................................................................................................... A-37

Schedule A .................................................................................................... A-38

</TABLE>

<PAGE>

REALTY PARKING PROPERTIES L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of October 4,1988, is by

and among Realty Parking Company, Inc., a Maryland corporation, as the General

Partner, Parking Properties Holding Co., Inc., a Maryland corporation, as the

Assignor Limited Partner, and Realty Associates 1988 Limited Partnership, a

Maryland limited partnership, as the Subordinated Limited Partner.

Preliminary Statement

The General Partner, the Subordinated Limited Partner and the Assignor

Limited Partner desire to form Realty Parking Properties L.P. (the

"Partnership"), pursuant to the Delaware Revised Uniform Limited Partnership

Act, for the purpose of acquiring parking lot properties located in the United

States.

NOW, THEREFORE, in consideration of the mutual promises made herein, the

parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINED TERMS

The defined terms used in this Agreement shall, unless the context

otherwise expressly requires, have the meanings specified in this Article I.

"Accountants" means such firm of independent certified public accountants

as shall be engaged from time to time by the General Partner on behalf of the

Partnership.

"Acquisition Expenses" means expenses, including, but not limited to, legal

fees and expenses, travel and communications expenses, costs of appraisals,

non-refundable option payments on property not acquired, accounting fees and

expenses, title insurance, and miscellaneous expenses related to selection and

acquisition of Properties, whether or not acquired.

"Acquisition Fees" means the total of all fees and commissions paid by any

party on behalf of the Partnership in connection with the selection, purchase or

development of, or investment in, any Property by the Partnership, including,

without limitation, the Property Acquisition Fee payable to the General Partner,

any real estate commission, selection fee, non-recurring management fee,

development fee, or any fee of a similar nature, however designated.

"Act"means the Delaware Revised Uniform Limited Partnership Act (6 DEL.C.

ss.17-101 et. seq.) as amended or modified from time to time.

"Additional General Partner" means any Person who is admitted as an

Additional General Partner of the Partnership, under the provisions of Article

VI, after the date of this Agreement.

"Adjusted Capital Balance" of a Partner or an Investor means the Capital

Contribution of the Partner or the Assignor Limited Partner made on behalf of an

Investor, less any Net Proceeds of Sale or Financing actually distributed to the

Partner or Investor (other than that portion, if any, which is payment of an

unpaid Preferred Return), as provided in Article IV herein, at the time of

reference thereto.

"Affiliate" means (i) any Person directly or indirectly controlling,

controlled by or under common control with another Person, (ii) any Person

owning or controlling 10% or more of the outstanding voting securities of such

other Person, (iii) any officer, director or partner of such Person, and (iv) if

such other Person is an officer, director or partner, any company for which such

Person acts in any such capacity.

"Agreement" means this Agreement of Limited Partnership as originally

executed and as amended from time to time, as the context requires. Words such

as "herein", "hereinafter, " "hereof," "hereto," "hereby" and "hereunder," when

used with reference to this Agreement, refer to this Agreement as a whole unless

the context otherwise requires.

A-3

<PAGE>

"Assigned Limited Partnership Interest" means a Partnership Interest which

is credited to the Assignor Limited Partner on the books and records of the

Partnership in respect of a purchase of one Unit by an Investor. Each Assigned

Limited Partnership Interest represents a contribution to the capital of the

Partnership equal to $25, regardless of any reduction in Selling Commissions.

"Assignee Units" means the ownership interests of an Investor in the

Partnership at any particular time, including the right of such Investor to any

and all benefits to which an Investor may be entitled as provided in this

Agreement. The ownership interests of the Investors in the Partnership are

sometimes referred to herein as "Units".

"Assignor Limited Partner" means Parking Properties Holding Co., Inc. which

will (i) own any Assigned Limited Partnership Interests issued pursuant to

Sections 3.2 and 7.1 hereof, and (ii) transfer and assign to those Persons who

acquire Units all of its rights and interest in Assigned Limited Partnership

Interests in accordance with Sections 3.2 and 7.1 hereof.

"Capital Account" means (i) the separate account maintained and adjusted on

the books and records of the Partnership for each Partner and (ii) the separate

subaccount of the Capital Account of the Assignor Limited Partner maintained and

adjusted for each Investor. Each Partner's and Inves- tor's Capital Account is

credited with his Capital Contributions and his distributive share of Profit (or

item thereof). Each Partner's or Investor's Capital Account is debited with the

cash and the fair market value of any property distributed to him (net of

liabilities assumed by such Partner or Investor and liabilities to which such

distributed property is subject), and his distributive share of Loss (and

deduction (or item thereof)). Each Partner's and Investor's Capital Account

shall also be adjusted pursuant to Section 4.5 hereof and as required by the

Income Tax Regulations promulgated under Section 704 of the Code. Any questions

concerning a Partner's or Investor's Capital Account shall be resolved by the

General Partner in its reasonably exercised discretion, applying principles

consistent with this Agreement and the regulations promulgated under Section 704

of the Code in order to assure that all allocations herein will have substantial

economic effect or will otherwise be respected for income tax purposes. For

purposes of this Agreement, a Partner or Investor who has more than one

Partnership Interest or Unit, as the case may be, shall have a single Capital

Account that reflects all of his Partnership Interests and Units, regardless of

the class of Interests owned (e.g., general or limited) and regardless of the

time or manner in which the Partnership Interests and Units were acquired.

"Capital Contribution" means the total amount of cash and the fair market

value of any other assets contributed to the Partnership by a Partner (net of

liabilities assumed by the Partnership and liabilities to which any such

contributed assets are subject) and, with respect to an Investor, the Capital

Contribution of the Assignor Limited Partner made on behalf of such Investor

(without regard to any reduction of Selling Commissions). Any reference in this

Agreement to the Capital Contribution of a then-Partner or Investor shall

include a Capital Contribution previously made by any prior Partner or Investor

with respect to the Interest or Unit of such then-Partner or then- Investor,

except to the extent that all or a portion of the Interest or Unit of any prior

Partner or Investor shall have been terminated and the portion so terminated not

transferred to a successor Partner or Investor.

"Certificate" means the Certificate of Limited Partnership establishing the

Partnership, as filed with the office of the Secretary of State of the State of

Delaware on or about the date of this Agreement, as it may be amended from time

to time in accordance with the terms of this Agreement and the Act.

"Code" means the Internal Revenue Code of 1986, as amended (or any

corresponding provision of succeeding law).

"Controlling Person"of the General Partner or Affiliate thereof means any

person who (a) performs functions for the General Partner or Affiliate similar

to those of (i) a Chairman or member of the Board of Directors, (ii) executive

management, such as a President, or a Vice-President, Secretary or Treasurer, or

(iii) senior management; or (b) holds a 5% or more equity interest in the

A-4

<PAGE>

General Partner or Affiliate, or has the power to direct or cause the direction

of the General Partner, or Affiliate, whether through the ownership of voting

securities, by contract or otherwise.

"Deferred Net Cash Flow Amount" means the cumulative excess of the amounts

of Net Cash Flow that the General Partner would have received if Net Cash Flow

had been distributed 95% to the Investors and 5% to the General Partner over the

amounts of Net Cash Flow actually received by the General Partner pursuant to

Section 4.3A hereof.

"Due Diligence Expense Reimbursement Fee" means the fee equal to 2% of the

Gross Proceeds of the Offering allowed to the Selling Agent, which may be

re-allowed to Soliciting Dealers, for advisory services, due diligence

activities and the reimbursement of expenses.

"Entity" means any general partnership, limited partnership, corporation,

joint venture, trust, estate, business trust, cooperative, association or other

legal form of organization.

"Escrow Agent" means Mercantile-Safe Deposit & Trust Company, or such other

escrow agent chosen by the General Partner to hold funds from Persons who have

subscribed to become Investors pending the assignment of Assignee Units to them.

"Financing" means all indebtedness encumbering the Properties or incurred

by the Partnership, the principal amount of which is scheduled to be paid over a

period of not less than 48 months, and not more than 50% of the principal amount

of which is scheduled to be paid during the first 24 months.

"Front-End Fees" means fees and expenses paid by any Person for any

services rendered during the organization or acquisition phase of the

Partnership, including the Offering and Organizational Expense Fee, the Due

Diligence Expense Reimbursement Fee, the Selling Commissions, the Acquisition

Expenses, the Acquisition Fees and any other similar fees.

"General Partner" means Realty Parking Company, Inc. and any other Person

designated as a General Partner in the Schedule and any Person who becomes a

Successor or Additional General Partner as provided herein, in each such

Person's capacity as a General Partner of the Partnership. "Gross Proceeds of

the Offering" means the aggregate of the proceeds from the sale of Units in the

Offering, which amount is equal to the total of all Capital Contributions of the

Investors.

"Increased Maximum Offering Amount" means the total amount of $60,000,000

in Gross Proceeds of the Offering.

"Interest" or "Partnership Interest" means the entire ownership interest

(which may be segmented into and/or expressed as a percentage of various rights

and/or liabilities) of a Partner in the Partnership at any particular time,

including the right of such Partner to any and all benefits to which a Partner

may be entitled as provided in the Agreement and in the Act, together with the

obligations of such Partner to comply with all the terms and provisions of this

Agreement and of the Act.

"Interim Investments" means the short-term investments made with the Net

Proceeds of the Offering until such Net Proceeds of the Offering are disbursed

for acquisition of Properties.

"Investor" means (i) any Person who holds an Assignee Unit and is reflected

as an Investor on the books and records of the Partnership, and (ii) any

Investor who has been admitted to the Partnership as a Substitute Limited

Partner pursuant to Section 7.5 hereof.

"Investment in Properties" means the amount of Capital Contributions

actually paid or allocated to the purchase and development of the Properties

(including the purchase of properties, working capital reserves allocable

thereto (except that working capital reserves in excess of 5% shall not be

included), and other cash payments such as interest and taxes but excluding

Front-End Fees).

"Investment Advisory Agreement" means the agreement referred to in the

Prospectus by and between the Partnership and Allright Auto Parks, Inc.

A-5

<PAGE>

"Leases" means those certain agreements to be entered into by the

Partnership and the Parking Lot Operator pursuant to which the Parking Lot

Operator shall lease, operate or manage each of the Properties.

"Limited Partner" means any Person who is designated as a Limited Partner

on the books and records of the Partnership at the time of reference thereto, in

each such Person's capacity as a Limited Partner of the Partnership.

"Limited Partnership Interest" means the ownership interest of the Assignor

Limited Partner and all other Limited Partners in the Partnership.

"Limited Partnership Interest Percentage" in respect of any Investor means

the percentage obtained by converting to a percentage the fraction having the

number of Assignee Units owned by such Investor as its numerator and having the

number of Assignee Units owned by all Investors at the time of reference thereto

as its denominator.

"Majority Vote of the Investors" shall mean the affirmative vote of

Investors owning more than 50% of the outstanding Units or the consent of

Investors owning more than 50% of the outstanding Units, as the case may be.

"Maximum Offering Amount" means the total amount of $25,000,000 in Gross

Proceeds of the Offering.

"Minimum Gain" means with respect to each non-recourse liability of the

Partnership and subject to certain adjustments pursuant to Income Tax Reg.

ss.1.704-1 (b)(4)(iv)(c), the amount of gain (of whatever character), if any,

that would be realized by the Partnership, if the Partnership disposed of (in a

taxable transaction) any of the assets subject to such liability in full

satisfaction of the liability. For this purpose, only the portion of the assets'

adjusted basis allocated to non-recourse liabilities of the Partnership shall be

taken into account.

"Minimum Offering Amount" means the amount of $2,000,000 in Gross Proceeds

of the Offering.

"Net Cash Flow" means, with respect to any fiscal period, the excess, if

any, of (i) all cash funds derived from the operations of the Partnership during

such period, including the yield from the Interim Investments and excess cash

reserves deemed distributable by the General Partner pursuant to Section 3.3E

hereof, over (ii) all cash disbursed in the operations of the Partnership during

such period, including cash used to pay, or establish reasonable reserves for,

operating expenses, fees, commissions, debt service and loan repayments,

improvements, repairs, replacements, contingencies and anticipated obligations,

except to the extent any such payment is made out of reserves set aside for such

purpose. Net Cash Flow shall not include amounts distributed or to be

distributed under Section 4.2 hereof.

"Net Proceeds from a Financing" means the gross proceeds to the Partnership

of any Financing, less any amounts deemed necessary by the General Partner to be

allocated to the establishment of reserves, the payment of any debts and

liabilities of the Partnership to creditors, and the payment of any reasonable

expenses or costs associated with the Financing, including but not limited to,

fees, points, or commissions paid to any unaffiliated Persons.

"Net Proceeds from a Sale" means the gross proceeds to the Partnership of

any Sale, less any amounts deemed necessary by the General Partner to be

allocated to the establishment of reserves, the payment of any debts and

liabilities of the Partnership to creditors, and the payment of any reasonable

expenses or costs associated with the Sale, including but not limited to, fees

or real estate brokerage commissions paid to any unaffiliated Persons and,

subject to Sections 5.2.A(viii) and 9.2.A(vi), fees or real estate brokerage

commissions paid to the General Partner or Affiliates.

"Net Proceeds of the Offering" means the Gross Proceeds of the Offering

less the Selling Commissions, the Due Diligence Expense Reimbursement Fee, and

the Offering and Organizational Expense Fee.

A-6

<PAGE>

"Net Proceeds from a Sale or Financing" means the Net Proceeds from a Sale

or Net Proceeds from a Financing, as the case may be.

"Notification" means a writing, containing the information required by this

Agreement to be communicated to any Person, sent or delivered to such Person in

accordance with the provisions of Section 12.3 of this Agreement.

"Offering"means the offering and sale of Units for a minimum of $2,000,000

and a maximum of $60,000,000, as more fully described in the Prospectus.

"Offering and Organizational Expense Fee" means the non-accountable fee

paid to the General Partner equal to 4.5% of the Gross Proceeds of the Offering,

payable at such times as the Investors are recognized as such on the books of

the Partnership, for services rendered and costs incurred in connection with the

organization of the Partnership and the offering of Units.

"Parking Lot Operator" means (i) Allright Auto Parks, Inc. or an Affiliate,

or (ii) such other person selected by the Partnership to operate the Properties.

"Partner" means any General Partner or Limited Partner. "Partnership" means the

limited partnership formed in accordance with this Agreement by the parties

hereto, as said limited partnership may from time to time be constituted.

"Partnership Property" means all or any portion of the assets owned or to

be owned by the Partnership, including the Properties and all incidental

personal property.

"Person" means any individual or Entity. "Preferred Return" means the

cumulative, non-compounded annual return equal to 12% of the Adjusted Capital

Balance of each Investor commencing on the earlier of (i) the final closing for

the sale of Units or (ii) December 31, 1988, less any Net Cash Flow distributed

to each Investor pursuant to Section 4.3 and any Net Proceeds from a Sale or

Financing distributed to each Investor in respect of the Preferred Return

pursuant to Section 4.2A(i).

"Profit" or "Loss" means, for each fiscal year or other period, an amount

equal to the Partner- ship's taxable income or loss for such year or period,

with the following adjustments: (i) any income of the Partnership that is exempt

from federal income tax shall be added to such taxable income or loss; (ii) any

expenditures of the Partnership described in Section 705(a)(2)(B) of the Code,

or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Income

Tax Reg. ss.1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable income

or loss; and (iii) Pursuant to Income Tax Reg. ss.1.704- l(b)(iv)(g)(3), an

amount equal to the depreciation, amortization, or other cost recovery deduction

allowable with respect to an asset for such year or other period for federal

income tax purposes shall be taken into account, except that if the fair market

value on the date that the asset is contributed to the Partnership (or if the

basis of such asset for book purposes is adjusted under the Income Tax

Regulations, such adjusted book basis) differs from its adjusted basis for

federal income tax purposes at the beginning of such year or other period, the

depreciation, amortization and other cost recovery deductions taken into account

shall be equal to an amount which bears the same ratio to such beginning fair

market value (or adjusted book basis) as the federal income tax depreciation,

amortization, or other cost recovery deduction for such year or other period

bears to such beginning adjusted tax basis. Except as otherwise provided herein,

each item of income, gain, loss, deduction, preference or recapture entering

into the computation of Profit or Loss hereunder shall be allocated to each

Partner in the same proportion as Profit and Loss are allocated.

"Profit or Loss from Operations" means Profit or Loss of the Partnership

from any source other than a Sale.

"Properties" means the parking lot properties acquired by the Partnership,

including, without limitation, surface commercial parking lots, parking garages,

suburban parking properties, parking properties requiring the prior demolition

of obsolete structures, or offsite airport parking lots.

A-7

<PAGE>

"Property Acquisition Fee" means the fee paid to the General Partner or its

Affiliates for identifying, evaluating and selecting the Properties, as

described in the Prospectus.

"Prospectus" means the Partnership's Prospectus contained in the

Registration Statement filed on Form S-11 with the Securities and Exchange

Commission for the registration of the Units under the Securities Act of 1933,

in the final form in which it is filed with the Securities and Exchange

Commission and as thereafter supplemented pursuant to Rule 424 under the

Securities Act of 1933. Any reference herein to "date of the Prospectus" shall

be deemed to refer to the date of the Prospectus in the form filed pursuant to

Rule 424(b) of the Securities Act of 1933.

"Sale" means any transaction entered into by the Partnership resulting in

the receipt of cash or other consideration (other than the receipt of Capital

Contributions) not in the ordinary course of its business, including, without

limitation, sales or exchanges or other dispositions of Properties and real or

personal property of the Partnership, condemnations, recoveries of damage awards

and insurance proceeds (other than business or rental interruption insurance

proceeds), but excepting any Financing.

"Schedule" means Schedule A annexed hereto as amended from time to time and

as so amended at the time of reference thereto.

"Selling Agent" means Alex. Brown Realty Securities, Inc., an Affiliate of

the General Partner, which will offer the Units on a best efforts basis pursuant

to the Selling Agent Agreement.

"Selling Agent Agreement" means that certain agreement to be entered into

by the Partnership, Alex. Brown Realty Securities. Inc., and the General

Partner, pursuant to which Alex. Brown Realty Securities, Inc. will offer and

sell the Units on a best efforts basis. "Selling Commissions" means the maximum

total (or any portion thereof) of 7% of the Gross Proceeds of the Offering paid

to the Selling Agent or Soliciting Dealers for their efforts in offering the

Units. The 7% maximum Selling Commissions will be reduced for volume purchases

and purchases by certain Affiliates as specified in the Prospectus.

"Sponsor" means any Person directly or indirectly instrumental in

organizing, wholly or in part, the Partnership or who will manage or participate

in the management of the Partnership, and any Affiliate of such Person, but does

not include (a) any Person whose only relationship with the Partnership or the

General Partner is that of an independent property manager if such person's only

compensation from the Partnership is in the form of fees for the performance of

property management services, or (b) wholly-independent third parties such as

attorneys, accountants and broker-dealers whose only compensation from the

Partnership is for professional services rendered in connection with the

Offering or the operations of the Partnership.

"Subordinated Limited Partner" means Realty Associates 1988 Limited

Partnership and such other Persons who are designated as Subordinated Limited

Partners on the books and records of the Partnership.

"Substitute Limited Partner" means any Investor who has elected to convert

from an Investor to a Limited Partner pursuant to Section 7.5 of this Agreement.

"Successor General Partner" means any Person who is admitted as a Successor

General Partner to the Partnership under the provisions of Article VI after the

date of this Agreement.

"Tax Matters Partner" means the General Partner designated in Section 5.1C

as the tax matters partner, as defined in Section 6231(a)(7) of the Code.

"Termination Date of the Offering" means the date upon which the Offering

will terminate, which, if not sooner terminated by the General Partner, will be

one (1) year from the date of the Prospectus.

"Unit" means (i) an Assignee Unit representing the assignment by the

Assignor Limited Partner of one Assigned Limited Partnership Interest, and (ii)

the Partnership Interest attributable to one Unit of any Investor who has become

a Substitute Limited Partner pursuant to Section 7.5 hereof.

A-8

<PAGE>

"U.S. Person" means a Person who is (i) an individual who is either a

United States citizen or a resident of the United States for federal income tax

purposes, (ii) a corporation, partnership, or other legal entity created or

organized in or under the laws of the United States or any political subdivision

thereof, (iii) a corporation that is not created or organized in or under the

laws of the United States or any political subdivision thereof but which has

made an election under Section 897(i) of the Code to be treated as a domestic

corporation for certain purposes of federal income taxation, or (iv) an estate

or trust whose income from sources without the United States is includable in

its gross income for federal income tax purposes regardless of its connection

with a trade or business carried on in the United States.

"Working Capital Reserves" means, initially, the portion of the Net

Proceeds of the Offering set aside as working capital reserves pursuant to

Section 3.3E, as increased or decreased from time to time at the discretion of

the General Partner.

ARTICLE II

NAME; PURPOSE; TERM AND CERTIFICATE

Section 2.1 Name; Formation

The Partners hereby form the limited partnership to be known as "Realty

Parking Properties L.P.," and such name shall be used at all times in connection

with the Partnership's business and affairs; provided, however, that the

Partnership may use trade names in its business operations. The Partnership

shall be governed by the Act.

Section 2.2 Place of Registered Office

The address of the registered office in the State of Delaware of the

Partnership is Corporation Trust Center, 1209 Orange Street, Wilmington,

Delaware 19801; the name of the registered agent for service of process on the

Partnership in the State of Delaware at that address is The Corporation Trust

Company. The Partnership's principal place of business is 225 East Redwood

Street, 4th Floor, Baltimore, Maryland 21202 or such other place(s) as the

General Partner may hereafter determine. Notification of any change in the

location of the principal office shall be given to the Partners and Investors on

or before the date of any such change.

Section 2.3 Purpose

The purpose of the Partnership is to acquire, own, develop, maintain,

finance, encumber, operate as a business, lease, sell, dispose of and otherwise

deal with the Properties, and to do all things necessary, convenient or

incidental to the achievement of the foregoing.

Section 2.4 Term

The Partnership shall continue until December 31, 2038, unless the

Partnership is sooner dissolved in accordance with the provisions of this

Agreement.

Section 2.5 Recording of Certificate

The General Partner shall take all necessary action to maintain the

Partnership in good standing as a limited partnership under the Act, including,

without limitation, the filing of the Certificate and such amendments and

further certificates as may be necessary under the Act and necessary to qualify

the Partnership to do business in such states as the Partnership owns property.

The General Partner shall not be required to send a copy of the Partnership's

filed Certificate to each Partner and Investor.

A-9

<PAGE>

ARTICLE III

PARTNERS; CAPITAL

Section 3.1 General Partner; Assignor Limited Partner; Subordinated Limited

Partner

The name, address and Capital Contribution of the General Partner, the

Assignor Limited Partner and the Subordinated Limited Partner are set forth on

the Schedule. Upon the dissolution and termination of the Partnership (i) the

General Partner, on or before the later of the last day of the fiscal year in

which the dissolution of the Partnership occurs or ninety (90) days after the

date of dissolution of the Partnership, shall make a Capital Contribution to the

Partnership in an amount equal to the lesser of (A) the deficit balance, if any,

in its Capital Account or (B) the excess of 2.02% of the Capital Contributions

of the Investors and Limited Partners (excluding capital contributions of the

Assignor Limited Partner on behalf of Investors) over the Capital Contributions

previously contributed by the General Partner, and (ii) the Subordinated Limited

Partner, on or before the later of the last day of the fiscal year in which the

dissolution of the Partnership occurs or ninety (90) days after the date of

dissolution of the Partnership, shall make a Capital Contribution to the

Partnership in an amount equal to the lesser of (x) the deficit balance in its

Capital Account or (y) the amount which it agrees to contribute to the capital

of the Partnership pursuant to an amendment hereto.

Section 3.2 Investors

A. The General Partner is authorized to accept orders for Units pursuant to

the Offering. All orders for Units shall be held in trust and deposited in an

escrow account with the Escrow Agent. Orders for Units shall be accepted or

rejected by the General Partner within thirty (30) days after their receipt by

the Escrow Agent.

B. Upon the receipt by the Escrow Agent of orders for an amount equal to

the Minimum Offering Amount, the Escrow Agent shall release the funds in the

escrow account to the Assignor Limited Partner which shall immediately transmit

such funds to the Partnership. Subsequent orders for Units that are accepted by

the General Partner shall be released from the escrow account and transmitted to

the Partnership or returned to subscribers in accordance with the Prospectus.

Upon release of an Investor's funds from the escrow account to the Partnership,

an Assigned Limited Partnership Interest shall be credited to the Assignor

Limited Partner on the books and records of the Partnership in respect of such

Unit and the Assignor Limited Partner shall assign all of its rights with

respect to such Assigned Limited Partnership Interest to the Investor to the

extent permitted by, and in accordance with, the Agreement and applicable law.

The Assignor Limited Partner hereby agrees to exercise any and all rights with

respect to such Assigned Limited Partnership Interest as directed by the

Investor.

C. Any interest earned on moneys paid by Investors during the period such

moneys are held in escrow by the Escrow Agent shall be paid to the Partnership

following the release of orders and shall be distributed in accordance with

Section 4.5A hereof. Persons whose orders for Units are rejected by the General

Partner shall be returned their moneys (and interest earned thereon) within ten

(10) days after such rejection.

D. No order for Units sold as part of the Offering shall be accepted after

the Termination Date of the Offering. If the General Partner does not accept

orders totalling an amount equal to the Minimum Offering Amount on or before the

Termination Date of the Offering, the Escrow Agent shall promptly return all

moneys deposited by subscribers together with any interest earned on such

moneys.

E. For purposes of this Agreement, an Investor who acquires Units in the

Offering shall be recognized as an Investor with respect to such Units on the

date that such Investor's funds are released from the escrow account to the

Partnership.

Section 3.3 Partnership Capital

A. Each Partner's and Investor's Capital Contribution shall be paid in cash

on or prior to the date of such Partner's admission to the Partnership or the

date of the recognition of the Investor on the books and records of the

Partnership.

A-10

<PAGE>

B. Except to the extent of any interest income earned on an Investor's

Capital Contribution while it is held in escrow, and later distributed to such

Investor pursuant to Section 4.5A, no Partner or Investor shall be paid interest

on any Capital Contribution.

C. Except as otherwise provided in this Agreement, no Partner or Investor

shall have the right to withdraw, or receive any return of, his Capital

Contribution prior to December 31, 2038.

D. Under circumstances requiring a return of any Capital Contribution, no

Partner shall have the right to demand or receive property other than cash.

E. The Partnership shall initially set aside Working Capital Reserves for

contingencies related to ownership of the Properties in an amount equal to at

least 3% of the Gross Proceeds of the Offering. If in any fiscal quarter, the

General Partner determines that the Working Capital Reserves of the Partnership

are in excess of the amount deemed sufficient in connection with the ownership

of the Properties and that such Working Capital Reserves may be reduced, the

amount of such reduction may be distributed to the Partners and Investors as a

portion of the Partnership's Net Cash Flow. Upon the Sale or disposition of a

Property, any Working Capital Reserves maintained for such Property may be

distributed, in the General Partner's discretion, to Partners and Investors or

applied as Working Capital Reserves for other Properties.

Section 3.4 Liability of Partners and Investors

A. Except as provided in Section 17-607 of the Act, or in Section 3.1 with

respect to the Subordinated Limited Partner, the Limited Partners and Investors

shall be liable only to pay their Capital Contributions and no Limited Partner

or Investor will be personally liable for the debts, liabilities, contracts, or

other obligations of the Partnership.

B. Except as set forth in 3.4A, no Limited Partner or Investor shall be

required to lend any funds to the Partnership or, after his Capital Contribution

has been fully paid, to make any further capital contribution to the

Partnership, nor shall any Limited Partner or Investor be liable for or have any

obligation to restore any negative balance in his Capital Account.

C. Subject to the provisions of Sections 3.1 and 5.9 of this Agreement, the

General Partner shall not have any personal liability for the repayment of the

Capital Contribution or the Preferred Return of any Limited Partner or Investor

or be required to repay to the Partnership all or any portion of any negative

balance of the Capital Accounts of the Limited Partners or the Investors.

A-11

<PAGE>

ARTICLE IV

ALLOCATIONS, DISTRIBUTIONS AND APPLICABLE RULES

Section 4.1 Allocation of Profit or Loss from a Sale

A. Profit from any Sale (and Profit from any deemed Sale pursuant to

Section 4.5) shall be allocated in the following order of priority:

(i) First, if one or more Investors or Partner has a negative balance in

his Capital Account, to such Partners and Investors, in proportion to their

negative Capital Accounts, until all such Capital Accounts have zero balances.

(ii) Second, to each of the Investors until the Capital Account of each

Investor is equal to the sum of his Adjusted Capital Balance plus his unpaid

Preferred Return, if any.

(iii) Third, to the General Partner until the Capital Account of the

General Partner is equal to the sum of its Adjusted Capital Balance and the

Deferred Net Cash Flow Amount.

(iv) Fourth, to the Subordinated Limited Partner, an amount of Profit equal

to the amount of Net Proceeds from such Sale to which the Subordinated Limited

Partner is entitled to receive pursuant to Section 4.2A (iii) or would have been

entitled to receive if the Sale Proceeds were distributed pursuant to Section

4.2A rather than Section 4.2B.

(v) Fifth, any remaining Profit shall be allocated 98% to the Investors and

2% to the General Partner.

B. Loss from any Sale (and Loss from any deemed Sale pursuant to Section

4.5) shall be allocated 98% to the Investors and 2% to the General Partner.

C. All Profit or Loss allocated pursuant to Section 4.1 hereof with respect

to any Unit which is transferred during a taxable year of the Partnership shall

be allocated to the Persons recognized (in accordance with Section 7.4 hereof)

as Investors as of the first business day of the month that includes the date on

which the Sale occurs; provided, however, that all such Profit or Loss which is

attributable to an installment or other deferred Sale shall be allocated to the

Persons recognized (in accordance with Section 7.4 hereof) as Investors as of

the first business day of the month that includes the date on which the deferred

Net Proceeds from such Sale are received by the Partnership, and the allocable

cash basis items with respect thereto shall be allocated as required under

Section 706(d) of the Code and the Income Tax Regulations thereunder.

Section 4.2 Distribution of Net Proceeds of Sale or Financing

A. Upon a Financing and upon a Sale that does not constitute a Sale of all

or substantially all of the Properties, Net Proceeds from the Financing or Sale

shall be distributed, credited and applied in the following order of priority:

(i) First, to the Investors until each Investor has received an amount

equal to his unpaid Preferred Return, if any, and then his Adjusted Capital

Balance.

(ii) Second, to the General Partner, an amount equal to the sum of its

Adjusted Capital Balance and the deferred Net Cash Flow Amount.

(iii) Third, except as provided in Section 4.2D below, any remaining Net

Proceeds of Sale or Financing shall be distributed 90% to the Investors, 9% to

Realty Associates 1988 Limited Partnership, and 1% to the General Partner.

B. Upon the Sale of all or substantially all of the Properties, Net

Proceeds from the Sale shall be allocated to the Partners and Investors, in

proportion to their positive Capital Accounts, after the allocation of Profit

and Loss pursuant to Sections 4.1A and 4.1B, until all such Capital Accounts

have been reduced to zero.

C. All Net Proceeds of Sale or Financing distributable with respect to any

Unit which is transferred during a taxable year of the Partnership shall be

distributed to the Persons recognized (in

A-12

<PAGE>

accordance with Section 7.4 hereof) as Investors as of the first business

day of the month that includes the date on which the Sale or Financing occurs;

provided, however, that all Net Proceeds from a Sale received by the Partnership

as a result of an installment or other deferred Sale shall be distributed to the

Persons recognized (in accordance with Section 7.4 hereof) as Investors as of

the first business day of the month that includes the date on which the deferred

Net Proceeds from a Sale are received by the Partnership.

D. Notwithstanding any other provision of this Article IV, the Subordinated

Limited Partner shall not be entitled to receive any Net Proceeds from a Sale

except (i) to the extent that it has been or will be allocated Profit from such

Sale in an amount equal to the Net Proceeds from such Sale which will be

allocated to it pursuant to Section 4.1A, and (ii) if the amount of Net Proceeds

from such Sale which it would be otherwise entitled to receive exceeds the

amount of Profit from such Sale to be allocated to it pursuant to Section 4.1A,

then, in addition to the amount to which the Subordinated Limited Partner is

entitled to receive under subparagraph (i), an amount equal to the excess of the

amount that the Subordinated Limited Partner has agreed to contribute pursuant

to Section 3.1 over the amount of Profit from such Sale which is allocated to it

(reduced by prior distributions pursuant to this subparagraph (ii)).

Section 4.3 Distribution of Net Cash Flow and Allocation of Profit and Loss

from Operations

A. Net Cash Flow shall be distributed 98% to the Investors and 2% to the

General Partner. The General Partner will endeavor to distribute Net Cash Flow

on a quarterly basis, within approximately sixty (60) days after the close of

each calendar quarter.

B. Profit and Loss from Operations for each fiscal year shall be allocated

98% to the Investors and 2% to the General Partner.

C. For each fiscal year, all Profit and Loss allocated pursuant to Section

4.3B to the Investors shall be allocated among the Persons that are recognized

as Investors during such year by determining the Profit and Loss attributable to

each month during such year and by allocating the amount of such Profit and Loss

among Persons who are recognized as Investors on the books of the Partnership on

the first business day of such month. The Profit or Loss attributable to each

month of the fiscal year shall be determined by dividing the Profit or Loss for

such year by the number of days in such year, and then multiplying such per diem

amount by the number of days in each month.

D. All Net Cash Flow distributable to the Investors attributable to each

month of a fiscal quarter, if any, pursuant to Section 4.3A, shall be

distributed among the Persons recognized as Investors on the books of the

Partnership on the first business day of such month during the fiscal quarter.

The Net Cash Flow attributable to each month of the fiscal quarter shall be

determined by dividing the amount of Net Cash Flow for such quarter by the

number of days in the quarter, and then multiplying such per diem amount by the

number of days in each month.

E. Notwithstanding Sections 4.3C and 4.3D, the Partnership shall adopt the

"interim closing of the books" method of allocating Profit and Loss, in

accordance with a "semi-monthly convention," among persons who become Investors

pursuant to a closing of the sale of the Units on or before the Termination

Date. Accordingly, if there is more than one closing of the sale of the Units,

Investors who are recognized on the books of the Partnership (i) prior to the

sixteenth day of a calendar month, shall be treated as an Investor on the books

of the Partnership on the first business day of the month of recognition, and

(ii) on or after the sixteenth day of a calendar month shall be treated as an

Investor on the books of the Partnership on the sixteenth day of the month of

recognition.

Section 4.4 Liquidation or Dissolution

A. If the Partnership is liquidated or dissolved, the net proceeds from

such liquidation, as provided in Article VIII, shall be distributed first to

creditors, including Partners who are creditors, to the extent otherwise

permitted by law (whether by payment or by establishment of reserves), other

than liabilities for distributions to Partners and Investors, and any remaining

net proceeds shall be

A-13

<PAGE>

distributed in proportion to the Capital Accounts of the Partners and

Investors, determined after the allocations in Sections 4.1A and 4.1B.

B. All distributions under this Section 4.4 shall be made by the end of the

taxable year of liquidation of the Partnership or, within ninety (90) days of

the date of liquidation, whichever is later.

Section 4.5 General and Special Rules

A. Except as otherwise provided herein, the timing and amount of all

distributions shall be determined by the General Partner. Notwithstanding any

other provision of this Agreement, the General Partner shall have authority to

make the following distributions to certain of the Investors: First, if the

Partnership has realized a savings on Selling Commissions payable by the

Partnership with respect to the purchase of Units (as more fully set forth in

the Prospectus), the General Partner shall make a distribution to such Investor

equal to the amount of such savings realized by the Partnership. Second, if any

interest is earned on an Investor's Capital Contribution while it is held in

escrow pending recognition as an Investor under Article VII, such interest shall

be paid by the Partnership to such Investor and Profit attributable to such

interest shall be allocated in the same manner.

B. Subject to all of the special rules of this Section 4.5, if any property

or assets of the Partnership are distributed to the Partners in kind, such

property or assets first shall be valued on the basis of the fair market value

thereof to determine the Profit or Loss that would have resulted if such

property or assets had been sold, and then such Profit or Loss shall be

allocated as provided in Section 4.1A and Section 4.1B, and shall be properly

credited or charged to the Capital Accounts in accordance with Income Tax Reg.

ss.1.704-1(b)(2)(iv)(e) or any successor provision thereto. Any Partner entitled

to any interest in such property or assets shall receive such interest as a

tenant-in-common with all other Partners so entitled. The fair market value of

such property or assets shall be determined by an independent appraiser who

shall be selected by the General Partner. This Section 4.5B governs income tax

consequences only and shall not be read or construed as authorizing the

distribution in kind of property or assets of the Partnership.

C. Notwithstanding Sections 4.1 and 4.3 hereof, if an allocation of Loss

(or item thereof) to an Investor or Partner, other than the General Partner,

would cause or increase a deficit balance in his or its Capital Account in

excess of his proportionate share of Minimum Gain (such excess being referred to

hereafter as the "Excess Deficit Balance"), plus, in the case of the

Subordinated Limited Partner, any amount which it agrees to contribute to the

capital of the Partnership pursuant to Section 3.1, then the allocation shall

not be made to such Investor or Partner. Instead, such Loss (or item thereof)

shall be allocated first to the Partners and Investors having positive Capital

Accounts, in proportion to such positive Capital Accounts, until all such

positive Capital Accounts have been reduced to zero, and any additional Loss (or

item thereof) shall be allocated to the General Partner. For purposes of making

the determination set forth above, each Investor's and each Partner's Capital

Account balance shall be reduced by reasonably expected allocations or

adjustments of loss (or item thereof) including Loss from a Sale under Income

Tax Regulation ss.ss.1.704-1(b)(2)(ii)(d)(4) and (5), and by reasonably expected

distributions to the extent not offset by reasonably expected Capital Account

increases ("Account Reduction Items"). For purposes of calculating reasonably

expected Capital Account increases, the value of the Partnership's assets shall

be presumed to be equal to their adjusted basis for federal income tax purposes.

D. Notwithstanding Sections 4.1 and 4.3 hereof, in accordance with Income

Tax Regulation ss.ss.1.704-1(b)(2)(ii)(d) and 1.704-1(b)(4)(iv)(e), (i) if, in

any fiscal year of the Partnership, an Account Reduction Item unexpectedly

causes or increases an Investor's or Partner's Excess Deficit Balance, or (ii)

if there is a net decrease in Minimum Gain during a taxable year, then all

Investors or Partners with an Excess Deficit Balance at the end of such year

shall be specially allocated Profit and, to the extent necessary, gross income

(as defined in Section 61 of the Code) to the extent of such Excess Deficit

Balances, in proportion to the Excess Deficit Balance of each Investor or

Partner. Any remaining Profit or Loss, after adjustment has been made for

allocation of income or gain pursuant to this Section 4.5D, shall be allocated

in accordance with Sections 4.1 and 4.3 hereof. The General Partner shall be

authorized to interpret and apply this Section 4.5D so as to satisfy the

requirements

A-14

<PAGE>

of Income Tax Regulation ss.ss.1.704-1(b)(2)(11)(d)and 1.704-1(b)(4)(iv)(e)

and any successor provisions.

E. Any special allocations of Profit, Loss or gross income under Section

4.5D shall be taken into account in computing subsequent allocations of Profit

or Loss, so that to the extent possible, the aggregate amounts of Profit or Loss

allocated to each Partner or Investor will be equal to the aggregate amounts

that would have been allocated to them in the absence of the unexpected Account

Reduction Items.

F. In the event that any Investor fails to furnish to the General Partner

evidence, in form and substance satisfactory to the General Partner,

establishing that the General Partner has no obligation under Section 1445 of

the Code with respect to such Investor to withhold and pay over an amount to the

Internal Revenue Service, the General Partner may, in its sole discretion,

withhold with respect to such Investor the amount it would be required to

withhold pursuant to Section 1445 of the Code if such Investor were not a U.S.

Person, and any amount so withheld shall be treated as a distribution under

Sections 4.2 or 4.3 of this Agreement, as the case may be, and shall reduce the

amount otherwise distributable to such Investor thereunder. Alternatively, the

General Partner may at its option loan the Investor an amount equal to the tax

to be withheld (at an interest rate equal to the Escrow Agent's announced "prime

rate" plus two percentage points), such loan to be repaid by retaining such

Investor's distributions. In addition, the General Partner is authorized to

withhold from any distribution made to an Investor the amount of tax paid or to

be paid by the Partnership under Section 1446 of the Code with respect to such

Investor.

G. Notwithstanding anything to the contrary that may be expressed or

implied in this Agreement, if at any time the allocation provisions of this

Article IV do not result in the allocation to the General Partner of at least 1%

of the Profit or Loss being allocated, the General Partner shall be allocated 1%

thereof.

H. It is the intent of the General Partner that each Investor's and

Partner's distributive share of Profit and Loss shall be determined and

allocated in accordance with this Article IV to the fullest extent permitted by

Sections 704(b) and 706 of the Code. Therefore, if the Partnership is advised by

the Accountants or the Partnership's legal counsel, that the allocations

provided in Article IV of this Agreement are unlikely to be respected for

federal income tax purposes, the General Partner has been granted the power in

Section 12.1l.B hereof to amend the allocation provisions of this Agreement, on

advice of the Accountants or the Partnership's legal counsel, to the minimum

extent necessary to conform to Sections 704(b) and 706 of the Code the plan of

allocations and distributions of Profit and Loss, Net Cash Flow and Net Proceeds

of Sale or Financing provided in this Agreement.

I. Notwithstanding any other provision of this Agreement, the General

Partner may, after giving ninety (90) days' prior Notification to the Investors,

(i) adopt any other method for determining, in the event of transfers of Units,

the Investors entitled to distributions of Net Cash Flow or Net Proceeds from a

Sale or Financing that the General Partner, subject to the review and approval

of the Accountants, determines is reasonable, and (ii) allocate Profit or Loss

among

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates