ARC PROPERTIES, INC.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
May 31, 2002
Cedar Income Fund, Ltd.
00 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxx, President
Gentlemen:
Reference is made to the Compensation Agreement of even date. Defined
terms herein shall have the meaning set forth in the Compensation Agreement.
As a component of the various services provided and to be provided by
ARC, ARC is currently structuring for Cedar a downREIT acquisition of two (2)
properties, including Red Lion Shopping Center ("Red Lion") in Philadelphia,
Pennsylvania and Golden Triangle Shopping Center ("GT") in Lancaster,
Pennsylvania (individually, "Property" and collectively, the "Properties"). The
acquisitions are being structured with ARC related entities ("ARC Affiliates")
acquiring limited partnership (or other ownership) interests (the "Interest" or
"Interests") in entities to be controlled by Cedar. It is anticipated that the
ARC Affiliates will contribute approximately $4.4 million in capital for Red
Lion and $4.1 million in capital for Golden Triangle.
This is to confirm that the triggering event for effectiveness of the
Compensation Agreement and the Warrant attached as Exhibit A to the Compensation
Agreement shall be the closing of one or more of the Properties. Accordingly, on
closing the acquisition by Cedar Group of an interest in one or more of the
Properties (the "Cedar Investment") and the closing of the acquisition of an
Interest in one or more of the Properties by the ARC Affiliates (the "ARC
Investment"), ARC shall be entitled, in accordance with the terms of the
Compensation Agreement and Warrant, to purchase up to 500,000 Operating
Partnership Units ("O.P. Units") in the Operating Partnership (which are
redeemable, subject to certain procedural requirements set forth in the
Operating Partnership's Agreement of Limited Partnership, on a one for one basis
for shares of Cedar common stock) as follows: (1) upon the closing of the Cedar
Investment (acquiring a 20% general partnership interest) in Red Lion and the
ARC Investment (acquiring 69% limited partnership interest) in Red Lion, ARC
shall be entitled to purchase 250,000 O.P. Units; and (2) upon the closing of
the Cedar Investment (acquiring a 20% general partnership interest) and the ARC
Investment (acquiring a 69% limited partnership interest) in GT, ARC shall be
entitled to purchase an additional 250,000 O.P. Units.
Until the closing of the ARC Investment and the Cedar Investment,
neither the Compensation Agreement nor the Warrant shall be effective or binding
on any party and until such time all originals of such agreements shall be held
in escrow.
Very truly yours,
ARC PROPERTIES, INC.,
a New Jersey corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx, President
AGREED AND ACCEPTED:
CEDAR INCOME FUND, LTD.,
Individually and on behalf of its Affiliates
By: /s/ Xxx X. Xxxxxx
-------------------------------
Its: President
CEDAR INCOME FUND PARTNERSHIP, L.P.
By: /s/ Xxx X. Xxxxxx
-------------------------------
Its: President
CEDAR BAY REALTY ADVISORS, INC.
By: /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx, President
SKR MANAGEMENT CORP.,
By: /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx, President
BRENTWAY MANAGEMENT, LLC,
By: /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx, President
/s/ Xxx X. Xxxxxx
--------------------------------
Xxx X. Xxxxxx, Individually
