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AMENDMENT NO. 2
TO
AGREEMENT OF LIMITED PARTNERSHIP
OF
CEDAR SHOPPING CENTERS PARTNERSHIP, L.P.
This Amendment No. 2 to Agreement of Limited Partnership (the
"Partnership Agreement") of Cedar Shopping
Centers Partnership, L.P. (this
"Amendment") is entered into as of July 26,
2004, by and among Cedar Shopping
Centers, Inc. (the "General Partner") and
the limited partners signatory hereto.
All capitalized terms used herein shall
have the meanings given to them in the
Partnership Agreement.
WHEREAS, Section 4.5 of the Partnership Agreement authorizes the
General
Partner to cause the Partnership to issue
additional Partnership Units in one or
more classes or series, with such
designations, preferences and relative,
participating, optional or other special
rights, powers and duties as shall be
determined by the General Partner, subject
to the provisions of such Section;
and
WHEREAS, the General Partner desires to amend the Partnership
Agreement
(i) to establish a new class of Partnership
Units, designated the 8?% Series A
Cumulative Redeemable Preferred Partnership
Units (the "Series A Preferred
Partnership Units") and (ii) to issue the
Series A Preferred Partnership Units
to the General Partner.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable
consideration, the receipt and
sufficiency of which is hereby
acknowledged, the parties hereto agree as
follows:
Section 1. Issuance
of Series A Preferred Partnership Units.
In consideration of the contribution of the net proceeds from the
issue
and sale by the General Partner of
2,350,000 shares of its 8?% Series A
Cumulative Redeemable Preferred Stock in an
underwritten public offering, the
Partnership hereby issues to the General
Partner 2,350,000 Series A Preferred
Partnership Units.
Section 2.
Definitions.
A. In
addition to those terms defined in the Partnership
Agreement, the following definitions shall
be for all purposes, unless otherwise
clearly indicated to the contrary, applied
to the terms used in the Partnership
Agreement and in this Amendment:
"Common Partnership Unit" means a Partnership Unit that is not
a
Preferred Partnership Unit.
"Liquidation Preference Amount" means, with respect to any
Preferred Partnership Unit, the amount
payable with respect to such Preferred
Partnership Unit (as established by the
instrument designating such Preferred
Partnership Unit) upon the voluntary or
involuntary dissolution, liquidation or
winding up of the Partnership, or upon the
earlier redemption of such Preferred
Partnership Units, as the case may be.
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"Preferred Partnership Unit" means any Partnership Unit issued
from time to time pursuant to Section 4.5
of the Partnership Agreement that is
designated by the General Partner at the
time of its issuance as a Preferred
Partnership Unit. Each Preferred
Partnership Unit shall have such preferences,
conversions and other rights, voting
powers, restrictions, limitations as to
dividends and other distributions,
qualifications and terms and conditions of
redemption as shall be determined by the
General Partner subject to the
requirements of Section 4.5 of the
Partnership Agreement.
"Partnership Interest" means, as to a Partner, with respect to
any class of Partnership Units held by such
Partner, an ownership interest in
such class of Partnership Units (including
any and all benefits to which the
holder of such a Partnership Interest may
be entitled as provided in the
Partnership Agreement, together with all
obligations of such Person to comply
with the terms and provisions of the
Partnership Agreement) as determined by
dividing the number of Partnership Units in
such class owned by such Partner by
the total number of Partnership Units in
such class then outstanding. A
Partnership Interest may be expressed as a
number of Partnership Units.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners
issued pursuant to Sections 4.1, 4.2 and
4.5 of the Partnership Agreement. The
ownership of Partnership Units shall be
evidenced by such form, if any, of
certificate for units as the General Partner
adopts from time to time on behalf of the
Partnership. Without limitation on the
authority of the General Partner as set
forth in Section 4.5 of the Partnership
Agreement, the General Partner may
designate any Partnership Units, when issued,
as Common Partnership Units or as Preferred
Partnership Units, may establish any
other class of Partnership Units, and may
designate one or more series of any
class of Partnership Units.
Section 3.
Requirement and Characterization of Distributions.
Section 5.1 of the Partnership Agreement is hereby deleted in
its
entirety and the following new Section 5.1
is inserted in its place:
"Section 5.1 Requirement and Characterization of Distributions.
The General Partner shall cause the Partnership to make
quarterly distributions of all or such
portion as the General Partner may in its
discretion determine, of Available Cash
generated by the Partnership during such
quarter to the Holders of Partnership Units
who are Holders on the Partnership
Record Date with respect to such quarter in
the following order of priority:
(i)
First, to the Holders of Partnership Units in
such amount as is required for the
Partnership to pay all distributions with
respect to such Preferred Partnership Units
due or payable in accordance with
the instruments designating such Preferred
Partnership Units through the last
day of such quarter; such distributions
shall be made to such Holders of
Partnership Units in such order of priority
and with such preferences as have
been established with respect to such
Preferred Partnership Units as of the last
day of such calendar quarter; and
(ii)
Second, to the Holders of Partnership Units in
proportion to their respective Percentage
Interests in Common Partnership Units
on such Partnership Record Date;
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provided that in no event may a Holder of
Partnership Units receive a
distribution of Available Cash with respect
to a Partnership Unit if such Holder
of Partnership Units is entitled to receive
a distribution out of such Available
Cash with respect to a REIT Share for which
such Partnership Unit has been
redeemed or exchanged. The General Partner
shall take such reasonable efforts,
as determined by it in its sole and
absolute discretion and consistent with its
qualification as a REIT, to cause the
Partnership to distribute sufficient
amounts to enable the General Partner to
pay unit holder dividends that will (a)
satisfy the requirements for qualifying as
a REIT under the Code and
Regulations, and (b) avoid any federal
income or excise tax liability of the
General Partner.
Notwithstanding anything to the contrary contained herein, in
no
event shall any Holder of Partnership Units
receive a distribution of Available
Cash with respect to any Common Partnership
Unit with respect to any quarter
until such time as the Partnership has
distributed to the holders of the
Preferred Partnership Units an amount
sufficient to pay all distributions
payable with respect to such Preferred
Partnership Units through the last day of
such quarter, in accordance with the
instruments designating such Preferred
Partnership Units."
Section 4. Tax
Provisions.
Section 6.2 of the Partnership Agreement is hereby deleted in
its
entirety and the following new Section 6.2
is inserted in its place:
"Section 6.2 Allocations of Net Income and Net Loss
For purposes of maintaining the Capital Accounts and in
determining the rights of the Holders of
Partnership Units among themselves, the
Partnership's items of income, gain, loss
and deduction shall be allocated among
the Holders of Partnership Units in each
taxable year (or portion thereof) as
provided herein below.
A. Net
Income. After giving effect to the special
allocations set forth in Section 6.3, Net
Income shall be allocated in the
following manner and order of priority:
(1)
First, to the General Partner until the
cumulative allocations of Net Income under
this Section 6.2.A.(1) equal the
cumulative Net Losses allocated to the
General Partner under Section 6.2.B.(4)
hereof;
(2)
Second, to the General Partner until the
cumulative allocations of Net Income under
this Section 6.2.A.(2) equal the
cumulative allocations of Net Loss to the
General Partner under Section
6.2.B.(3) hereof;
(3)
Third, to those Holders of Partnership Units who
have received allocations of Net Loss under
Section 6.2.B.(2) hereof until the
cumulative allocations of Net Income under
this Section 6.2.A.(3) equal such
cumulative allocations of Net Loss (such
allocation of Net Income to be in
proportion to the cumulative allocations of
Net Loss under such section to each
such Holder of Partnership Units);
(4)
Fourth, to the Holders of Partnership Units
until the cumulative allocations of Net
Income under this Section 6.2.A.(4)
equal the cumulative allocations of Net
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Loss to such Holders of Partnership Units
under Section 6.2.B.(1) hereof (such
allocation of Net Income to be in
proportion to the cumulative allocations of
Net Loss under such section to each such
Holder of Partnership Units); and
(5)
Fifth any remaining Net Income shall be
allocated to the Holders of Partnership
Units who hold Common Partnership Units
in proportion to their respective
Percentage Interests as holders of Common
Partnership Units.
B. Net
Losses. After giving effect to the special
allocations set forth in Section 6.3, Net
Losses shall be allocated to the
Holders of Partnership Units as
follows:
(1)
To the Holders of Partnership Units who hold
Common Partnership Units in accordance with
their respective Percentage
Interests as holders of Common Partnership
Units, except as otherwise provided
in this Section 6.2.B.
(2)
To the extent that an allocation of Net Loss
under Section 6.2.B.(1) would cause a
Holder of Partnership Units to have an
Adjusted Capital Account Deficit at the end
of such taxable year (or increase
any existing Adjusted Capital Account
Deficit of such Holder of Partnership
Units), such Net Loss shall instead be
allocated to those Holders of Partnership
Units, if any, for whom such allocation of
Net Loss would not cause or increase
an Adjusted Capital Account Deficit. Solely
for purposes of this Section
6.2.B.(2), the Adjusted Capital Account
Deficit, in the case of the General
Partner, shall be determined without regard
to the amount credited to the
General Partner's Capital Account for the
aggregate Liquidation Preference
Amount attributable to the General
Partner's Preferred Partnership Units. The
Net Loss allocated under this Section
6.2.B.(2) shall be allocated among the
Holders of Partnership Units who may
receive such allocation in proportion to
and to the extent of the respective amounts
of Net Loss that could be allocated
to such Holders of Partnership Units
without causing such Holders of Partnership
Units to have an Adjusted Capital Account
Deficit.
(3)
Any remaining Net Loss shall be allocated to the
General Partner to the extent that such
allocation of Net Loss would not cause
or increase an Adjusted Capital Account
Deficit of the General Partner.
(4)
Any remaining Net Loss shall be allocated to the
General Partner.
Section 5. Preferred
Unit Allocation.
The Partnership Agreement is hereby amended by adding the following
new
Section 6.3.C to the Partnership Agreement,
immediately following Section 6.3.B:
"C.
Priority Allocation With Respect To Preferred
Partnership Units. After taking into
account the special allocation provisions
of Section 6.3.A, all or a portion of the
remaining items of Partnership gross
income or gain for the Partnership Year, if
any, shall be specially allocated to
the holders of Series A Preferred
Partnership Units in an amount equal to the
excess, if any, of the cumulative
distributions received by the holders of
Series A Preferred Partnership Units
pursuant to Section 5.1(i) hereof for the
current Partnership Year and all prior
Partnership Years (other than any
distributions that are treated as being in
satisfaction of the Liquidation
Preference Amount for any Preferred
Partnership Units) over the cumulative
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allocations of Partnership gross income and
gain to the holders of Series A
Preferred Partnership Units under this
Section 6.3.C for all prior Partnership
Years."
Section 6. Redemption
Right.
The Partnership Agreement is hereby amended by adding the following
new
Sections 8.6.E and 8.6.F to the Partnership
Agreement, immediately following
Section 8.6.D:
"E.
Notwithstanding anything contained in Sections 8.6.A,
8.6.B, 8.6.C and 8.6.D, except as set forth
in Section 8.6.F, no Partner shall
be entitled to exercise the Redemption
Right pursuant to Section 8.6.A with
respect to any Preferred Partnership Unit
unless (i) such Preferred Partnership
Unit has been issued to and is held by a
Partner other than the General Partner,
and (ii) the General Partner has expressly
granted to such Partner the right to
redeem such Preferred Partnership Units
pursuant to Section 8.6.A.
F. Preferred
Partnership Units shall be redeemed, if at
all, only in accordance with such
redemption rights or options as are set forth
with respect to such Preferred Partnership
Units (or class or series thereof) in
the instruments designating such Preferred
Partnership Units (or class or series
thereof)."
Section 7. General
Amendments to Partnership Agreement.
Notwithstanding anything contained herein, all references to
Partnership
Units in the definition of Cash Amount and
in Section 7.5.B of the Partnership
Agreement shall be deemed to refer solely
to Common Partnership Units, and not
to Preferred Partnership Units. In
addition, references in Section 14.2 of the
Partnership Agreement to Percentage
Interests of the Limited Partners shall be
deemed to refer solely to Percentage
Interests of Limited Partners with respect
to Common Partnership Units. Further, the
reference to Partnership Interests
appearing in Section 14.2.A shall be deemed
to refer only to Partnership
Interests held with respect to Common
Partnership Units.
Section 8. Exhibits
to Partnership Agreement.
The General Partner shall maintain the information set forth in
Exhibit
A to the Partnership Agreement, as such
information shall change from time to
time, in such form as the General Partner
deems appropriate for the conduct of
the Partnership affairs, and Exhibit A
shall be deemed amended from time to time
to reflect the information so maintained by
the General Partner, whether or not
a formal amendment to the Partnership
Agreement has been executed amending such
Exhibit A. In addition to the issuance of
Series A Preferred Partnership Units
to the Investor pursuant to this Amendment,
such information shall reflect (and
Exhibit A shall be deemed amended from time
to time to reflect) the issuance of
any additional Partnership Units to the
General Partner or any other Person, the
transfer of Partnership Units and the
redemption of any Partnership Units, all
as contemplated herein.
In addition, the Partnership Agreement is hereby amended by
attaching
thereto as Exhibits 1 the Exhibit 1
attached hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
No. 2
to the Partnership Agreement to be executed
as of the day and year first above
written.
CEDAR SHOPPING CENTERS PARTNERSHIP, L.P.
By: Cedar
Shopping Centers, Inc.
General Partner
By:
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Name: Leo S.
Ullman
Title: President
LIMITED PARTNERS
By:
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Name: Leo S.
Ullman
By:
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Name: Brenda J.
Walker
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EXHIBIT 1
CEDAR SHOPPING CENTERS PARTNERSHIP, L.P.
DESIGNATION OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
OF THE
SERIES A PREFERRED PARTNERSHIP UNITS
All capitalized terms in this legend have the meanings defined
in the Limited Partnership Agreement of
Cedar Shopping Centers Partnership, L.P.
(1)
Designation and Number. A series of Preferred
Partnership Units, designated as the "8?%
Series A Cumulative Redeemable
Preferred Partnership Units" (the "Series A
Preferred Partnership Units"), is
hereby established. The number of Series A
Preferred Partnership Units shall be
2,350,000. The par value of the Series A
Preferred Partnership Units shall be
$.01 per unit.
(2)
Rank. The Series A Preferred Partnership Units will,
with respect to distribution rights and
rights upon liquidation, dissolution or
winding up of the Partnership, rank (a)
senior to all classes or series of
Partnership Units, and to all equity
securities, the terms of which provide that
such equity securities shall rank junior to
the Series A Partnership Units; (b)
on parity with all equity securities issued
by the Partnership the terms of
which specifically provide that such equity
securities rank on parity with the
Series A Partnership Units; and (c) junior
to all Partnership Units issued by
the Partnership the terms of which
specifically provide that such Partnership
Units rank senior to the Series A Preferred
Partnership Units. The term "equity
securities" shall not include convertible
debt securities.
(3)
Distributions.
(a)
Holders of Series A Preferred Partnership Units
