FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF BROWNMILL, LLC
FIRST
AMENDED AND RESTATED
OF
BROWNMILL,
LLC
This
First Amended and Restated Operating Agreement (this "Agreement") of BROWNMILL,
LLC (the "Company"), is made as of September 27, 2005, by and among LIGHTSTONE
HOLDINGS LLC, a Delaware limited liability company ("Holdings"), THE DWL 2003
FAMILY TRUST, a trust organized under the laws of the State of New Jersey (the
"Trust"), and BROWNMILL MANAGER CORP., a New Jersey corporation ("Brownmill
Corp.”), whose
addresses are set forth on Schedule A annexed hereto (each of the foregoing, a
"Member," and all of the foregoing collectively, the "Members"), and any persons
hereafter admitted as Members in accordance herewith.
RECITALS:
A. The
Company was formed on July 14, 2003, by Xxxxx Xxxxxxxxxxxx ("DL") and the Trust,
as a limited liability company under the New Jersey Limited Liability Company
Act, as amended from time to time (the "Act") and pursuant to an operating
agreement dated as of July 29, 2003 (the "Original Agreement");
B. Pursuant
to that certain Assignment of Membership Interest, dated as of the date hereof,
DL, assigned and transferred his 51% membership interest in the Company to
Holdings;
C. Pursuant
to that certain Assignment of Membership Interest, dated as of the date hereof,
Holdings, as assignor, assigned and transferred a 0.5% membership interest in
the Company to Brownmill Corp.
D.
The Members now desire to
amend and restate the Original Agreement to reflect the admission of Holdings
and Brownmill Corp. as members of the Company, and to make certain other
changes.
NOW
THEREFORE, the Members hereby amend and restate the Original Agreement to read
as follows:
ARTICLE
I
INTERPRETATION
1.1 Definitions.
Unless otherwise expressly provided herein or unless the context clearly
requires otherwise, the following terms as used in this Agreement shall have the
following meanings for the purposes of this Agreement:
"Act"
shall have the meaning ascribed thereto in the introductory paragraph of this
Agreement, as the same is in effect from time to time, including any
corresponding provisions or provisions of any succeeding law.
"Agreement"
shall have the meaning ascribed thereto in the introductory paragraph of this
Agreement.
"Certificate
of Formation" means the Certificate of Formation of the Company, dated July
11,2003 and filed with the Secretary of State on July 14, 2003.
"Code"
means the Internal Revenue Code of 1986, as amended from time to
time.
"Company"
means BROWNMILL, LLC.
"Fiscal
Year" means the taxable year of the Company.
"Managing
Member" means BROWNMILL MANAGER CORP.
"Person"
means any individual, corporation, partnership, limited liability company,
firm, joint venture, association, joint-stock company, trust, unincorporated
organization,
governmental or regulatory body or other entity.
"Secretary
of State" means the Secretary of State of the State ofNew Jersey.
ARTICLE
II THE COMPANY AND ITS
BUSINESS
2.1 Formation.
The Company was formed as a limited liability company under the Act by
the filing of the Certificate of Formation with the Secretary of State. The
Managing Member is
hereby designated as an "authorized person" within the meaning of the Act, and
shall continue as the designated "authorized person" within the meaning of the
Act. The Managing Member
shall execute, deliver and file any other certificates (and any amendments
and/or restatements thereof) necessary for the Company to qualify to do business
in any jurisdiction in which the Company may wish to conduct
business.
2.2 Name.
The name of the Company is "BROWNMILL, LLC".
2.3
Principal Office. The Company shall maintain its principal place of business at
c/o The Lightstone Group, 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, or at
such other place as the Managing Member may determine from time to
time.
2.4
Registered Office and Registered Agent. The Company's initial registered offices
shall be at the office of its registered agent, Xxxxxxx, Xxxxxxxxx LLP, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. The registered office and
registered agent may be changed from time to time by filing the address of the
new registered office and/or the name of the new registered agent with the
Secretary of State pursuant to the Act.
2.5 Term
of the Company. The Company shall not have a specific date of dissolution and
shall, subject to the terms and provisions of this Agreement and the Act, have a
perpetual existence.
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2.6
Purpose.
(1) The
Company's business and the sole purpose of the Company shall be to own, hold,
maintain, manage, mortgage, operate, improve, lease, and sell or otherwise
dispose of those certain properties commonly known as (i) the Browntown Shopping
Center, located at 0000
Xxxxx 000, in the city of Old Bridge, County of Middlesex, and State of New
Jersey, and (ii) the Millburn Mall, located at 0000 Xxxxxxxx Xxxx, in the city
and county of Union, and the state of New Jersey (collectively, the
"Properties"), together with such activities as may be necessary or advisable in
connection with the ownership of the Properties. The Company shall not engage in
any business or own any assets other than those related to the Properties or
otherwise in furtherance of the purpose of the Company.
(i) The
Company intends on entering into a loan transaction (the "Loan") with
Countrywide Commercial Real Estate Finance, Inc. ("Lender", which term shall
include its successors or assigns), which Loan shall be in the amount of
[$23,800,000] (the "Loan Amount") and will be secured by mortgages of the
Properties (the "Mortgage").
(2) Separateness.
In case of any conflict between the provisions of this Section and the
Agreement, the provisions of this Section shall supersede and take
precedence.
So long
as the Loan is outstanding, the Company covenants and agrees that it is and
shall continue to be, and agrees that its managing member shall continue to be,
a Special Purpose Bankruptcy Remote Entity (herein defined). A "Special Purpose
Bankruptcy Remote Entity" means a corporation, limited partnership or limited
liability company, which at all times on and after the date hereof:
(i) was
and will be organized solely for the purpose as provided in Section 2.6(1)
above;
(ii) has
not and will not engage in any business other than as stated in Section 2.6( 1)
above;
(iii) has
not and will not own any asset or property other than the Properties and
incidental personal property necessary for the ownership, management, leasing,
financing and operation of the Properties, and will conduct its business as
presently conducted and operated;
(iv) to
the fullest extent permitted by law, has not and will not engage in, seek or
consent to any dissolution, winding up, liquidation, consolidation or merger, in
whole or in part, and, except as otherwise expressly permitted under that
certain loan agreement by and between the Company and Lender, dated as of the
date hereof (the "Loan Agreement"), and has not and will not engage in, seek or
consent to any asset sale, transfer of partnership or membership interests, or
amendment of its Certificate of Formation or this Agreement;
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(v) has
not and will not fail to correct any known misunderstanding regarding its
separate identity;
(vi) has
and will have at least one (1) member that is and will be a Single-Purpose
Entity which is and will be a corporation, and such corporation is and will be
the managing member of the Company;
(vii) without
the unanimous consent of all of the partners, directors or managers or members,
as applicable, will not with respect to itself or to any other entity in which
it has a direct or indirect legal or beneficial ownership interest (w) file a
bankruptcy, insolvency or reorganization petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to
the relief from debts or the protection of debtors generally; (x) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such entity or all or any
portion of such entity's properties; (y) make any assignment for the benefit of
such entity's creditors; or (z) take any action that might cause such entity to
become insolvent,
(viii) has
maintained and will maintain its books, records, financial statements,
accounting records, bank accounts and other entity documents in its own name and
separate from any other Person;
(ix) has
maintained and will maintain its books, records, resolutions and agreements as
official records;
(x) has
not commingled and will not commingle its funds or other assets with those of
any other Person;
(xi) has
held and will hold its assets in its own name, and has maintained and will
maintain its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any other
Person;
(xii) has
conducted and will conduct its business in its own name;
(xiii) has
filed and will file its own tax returns (to the extent required to file any tax
returns) and has not and will not file a consolidated federal income tax return
with any other Person;
(xiv) is
and intends to remain solvent, and has paid and will pay its own debts and
liabilities out of its own funds and assets (to the extent of such funds and
assets) as the same shall become due, and will give prompt written notice to
Lender of the insolvency or bankruptcy filing of the Company or any general
partner, managing member or controlling shareholder of the Company, or the
death, insolvency or bankruptcy filing of any Guarantor (as defined in the Loan
Agreement);
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(xv) has
done or caused to be done, and will do or cause to be done, all things necessary
to observe all partnership, corporate or limited liability company formalities
(as applicable) and preserve its existence and good standing, and, has not and
without the prior written consent of Lender, will not, amend, modify or
otherwise change any of the single purpose, separateness or bankruptcy remote
provisions or requirements of the Certificate of Formation, this Agreement or
other organizational documents (except as required by law);
(xvi)
has maintained and will maintain an arms-length relationship with its
Affiliates;
(xvii) has
not incurred and will not incur any indebtedness other than the Indebtedness (as
defined in the Loan Agreement) and unsecured trade payables in the ordinary
course of business relating to the ownership and operation of the Properties
which (1) do not exceed, at any time, a maximum amount of two percent (2.00%) of
the Loan Amount, (2) are paid within sixty (60) days of the date incurred, and
(3) are not evidenced by a promissory note (the foregoing, "Permitted Trade
Payables");
(xviii) has
not and will not assume, guarantee, become obligated for or hold out its credit
as being available to satisfy the debts or obligations of any other Person, or
the decisions or actions respecting the daily business or affairs of any other
Person;
(xix)
has not acquired and will not acquire obligations or securities of its
partners, members or shareholders or any other Person;
(xx) has
allocated and will allocate fairly and reasonably shared expenses, including
shared office space, and has maintained and utilized and will maintain and
utilize separate stationery, invoices and checks bearing its own
name;
(xxi) except
as permitted under any of the documents and agreements evidencing or securing
the Loan (the "Loan Documents"), has not and will not pledge its assets for the
benefit of any other Person;
(xxii)
has held itself out and identified itself, and will hold itself out, to the
public as a legal entity separate and distinct from any other Person and under
its own name;
(xxiii)
has not made and will not make loans or advances to any Person;
(xxiv) has
not and will not identify itself or any of its affiliates as a division or part
of the other, except for services rendered under a business management services
agreement with an affiliate that complies with the terms set forth in clause
(xxv) below, so long as the manager, or equivalent thereof, under such business
management services agreement holds itself out as an agent of such
Single-Purpose Entity;
(xxv)
except as permitted under the Loan Documents, has not executed and will not
enter into any contract or agreement with its partners, members, shareholders or
its affiliates except in the ordinary course of its business and on terms which
are intrinsically fair and are no less favorable to it than would be obtained in
a comparable armslength transaction with an unrelated third party and which are
fully disclosed to Lender in writing in advance;
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(xxvi)
has paid and will pay the salaries of its own employees from its own funds (to
the extent of such funds) and has maintained and intends to maintain a
sufficient number of employees in light of its contemplated business
operations;
(xxvii)
intends to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations;
(xxviii)
shall dissolve only upon the bankruptcy of the managing member;
(xxix) shall
continue (and not dissolve) for so long as a solvent managing member or general
partner, as applicable, exists;
(xxx)
has not permitted and will not permit any Affiliate independent access to its
bank accounts except for its property manager in its capacity as the agent
pursuant to and in accordance with the terms of any applicable management
agreement;
(xxxi)
has not and will not have any obligation to indemnify or indemnify the
Managing Member, unless such an obligation was and is fully subordinated to the
Indebtedness and, to the fullest extent permitted by law, will not constitute a
claim against such entity in the event that cash flow in excess of the amount
required to pay the Indebtedness is insufficient to pay such indemnity
obligation;
(xxxii)
to the fullest extent permitted by law, has considered and will consider the
interests of its creditors in connection with all of its limited liability
company actions; and
(xxxiii)
has caused and will cause its agents and other representatives to act at all
times with respect to such entity consistently and in furtherance of the
foregoing and in the best interests of such entity.
ARTICLE
III INITIAL CAPITALIZATION
3.1
Capital Contributions. The Members have previously made capital contributions to
the Company in consideration of their membership interests in the Company. The
Members shall not be required to make any additional capital contributions to
the Company.
3.2
Liability of the Members and Its Affiliates. Except as otherwise provided by
applicable law, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company. Neither the Members nor any Person affiliated
with the Members shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of being a Member, or being an
affiliate of the Members.
3.3
Distributions of Available Cash. Cash distributions shall be made in accordance
with the membership interests set forth on Schedule A at the times determined by
the Managing Member.
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ARTICLE
IV MANAGEMENT
4.1
Management by the Managing Member. Brownmill Corp. is hereby designated as the
Managing Member of the Company pursuant to the Act. The Managing Member's sole
asset is its interest in the Company (or other entities which are or may be a
party to the Loan). The Managing
Member will at all times comply, and will cause the Company to comply, with each
of the covenants, terms and provisions contained in this Agreement as if such
representation, warranty or covenant was made directly by such Managing Member.
The business and affairs of the Company shall be managed exclusively by the
Managing Member, who may appoint officers and who shall be empowered and
authorized to act on behalfof the Company.
4.2
Expenses. The Company shall pay all of its own operating, overhead and
administrative
expenses of every kind, and the Members shall be reimbursed for all costs and
expenses previously incurred or hereafter incurred on behalfof the
Company.
4.3
Liability of the Managing Member; Indemnification.
(l) The
Members and the officers of the Company shall not be liable to the Company for
any loss or damages resulting from errors in judgment or for any acts or
omissions that do not constitute willful misconduct or gross negligence on the
part of the Members or such officers. In all transactions for or with the
Company, the Members and such officers shall act in good faith and in a manner
believed to be in the best interests of the Company.
(2) The
Company, its receiver or its trustee (but not the Members personally) shall
indemnify and defend the Managing Member and each officer against and hold each
of them harmless from any and all losses, judgments, costs, damages,
liabilities, fines, claims and expenses (including, without limitation,
reasonable attorney's fees and court costs, which shall be paid by the Company
as incurred) that may be made or imposed upon such Persons and any amounts paid
in settlement of any claims sustained by the Company by reason of any act or
inaction which is determined by the Managing Member or such officer in good
faith to have been in the best interests of the Company so long as such conduct
shall not constitute willful misconduct or gross negligence.
(3) In
the event of settlement of any action, suit or proceeding brought or threatened,
such indemnification shall apply to all matters covered by the settlement except
for matters as to which the Company as advised by counsel regularly retained by
the Company that the Person seeking indemnification, in the opinion of counsel,
did not act in good faith. The foregoing right of indemnification shall be in
addition to any rights to which the Members or officers may otherwise be
entitled and shall inure to the benefit of the successors or assigns of the
Members or officers.
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(4) The
Company shall pay the expenses incurred by the Members or any officer in
defending a civil or criminal action, suit or proceeding, upon receipt of an
undertaking by such Person to repay such payment if such Person shall be
determined not to be entitled to indemnification therefor as provided herein.
Any right of indemnity granted under this Section 4.3(4) may be satisfied only
out of the assets of the Company and no Member of the Company shall be
personally liable with respect to any such claim for
indemnification.
(5) The
Members shall have the power to purchase and maintain insurance in reasonable
amounts on behalf of themselves and each of the officers, employees and agents
of the Company against any liability incurred by them in their capacities as
such, whether or not the Company has the power to indemnify them against such
liability.
(6) No
reimbursement or indemnification against expenses incurred by any members,
managers, directors or officers shall be made instead of the payment of any
amounts due presently and owing under the Loan.
ARTICLE
V BOOKS AND RECORDS
5.1 Books
of Account. Complete books of account shall be kept by the Managing Member at
the principal office of the Company, or at such other office as the Sole Member
may designate.
5.2 Bank
Accounts. The Company may maintain one or more bank accounts for such funds of
the Company as it shall choose to deposit therein, and withdrawals therefrom
shall be made upon such signature or signatures as the Sole Member shall
determine.
5.3 Tax
Matters. The Managing Member intends that the Company be treated as a
partnership for Federal income tax purposes. The Company shall maintain a
capital account for each Member in accordance with Treasury Regulation Section
1.704-1(b). The Company's taxable income and tax losses shall be allocated pro
rata based on Percentage Interests. The Managing Member is hereby designated to
act as the "tax matters partners" within the meaning of Section 6231 (a)(7) of
the Code.
5.4 Title
to Assets. Title to, and all right and interest in and to, the Company's assets,
shall be acquired in the name of and held by the Company, or if acquired in any
other name, held for the benefit of the Company.
ARTICLE
VI MISCELLANEOUS
6.1
Severability. If any of the provisions of this Agreement is held invalid or
unenforceable, such invalidity or unenforceability shall not affect the other
provisions hereof which can be given effect without the invalid provision, and
to this end the provisions of this Agreement are intended to be and shall be
deemed severable.
6.2
Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of New Jersey without regard to the conflicts of law of
said state.
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6.3 No
Third Party Beneficiaries. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any of the creditors of the Company or any
other Person not a party to this Agreement.
6.4
Benefits of Agreement. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditor of the Company or of the Managing
Member.
6.5
Amendments. This Agreement may be amended only by written instrument executed by
the Managing Member.
6.6
Transfer. No direct or indirect interest of the Managing Member in the Company
may be transferred, assigned, sold, encumbered, pledged or
hypothecated.
[SIGNATURES
FOLLOW ON NEXT PAGE]
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IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement the day and
year first written above.
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Members:
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Lightstone
Holdings LLC
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By:
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\s\
Xxxxx Xxxxxxxxxxxx
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Name:
Xxxxx Xxxxxxxxxxxx
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Title:
Manager
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The
DWL 2003 Family Trust
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By:
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\s\
Xxxxxxx Xxxxxx
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Name:
Xxxxxxx Xxxxxx
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Title:
Trustee
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Brownmill
Manager Corp.
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By:
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\s\
Xxxxx Xxxxxxxxxxxx
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Name:
Xxxxx Xxxxxxxxxxxx
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Title:
President
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SCHEDULE
A
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Name
and Address
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Membership
Interest
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Lightstone
Holdings LLC
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50.5%
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c/o
The Lightstone Group
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000
Xxxxx Xxxxxx
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Xxxxxxxx,
Xxx Xxxxxx 00000
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The
DWL 2003 Family Trust
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49%
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c/o
The Lightstone Group
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000
Xxxxx Xxxxxx
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Xxxxxxxx,
Xxx Xxxxxx 00000
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Brownmill
Manager Corp.
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0.5%
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c/o
The Lightstone Group
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000
Xxxxx Xxxxxx
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Xxxxxxxx,
Xxx Xxxxxx 00000
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