FIRST AMENDMENT TO FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF BROWNMILL, LLC
FIRST
AMENDMENT TO FIRST AMENDED AND RESTATED OPERATING AGREEMENT
OF
BROWNMILL,
LLC
This
First Amendment to First Amended and Restated Operating Agreement (this “Amendment”) of
BROWNMILL, LLC (the “Company”), effective
as of this 1st day of
April, 2010, 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”),
BROWNMILL MANAGER CORP., a New Jersey corporation (“Brownmill Corp.”),
and LIGHTSTONE VALUE PLUS REIT II LP, a Delaware limited partnership (the “REIT OP”), whose
addresses are set forth on Schedule A annexed hereto, amends in relevant part
that certain First Amended and Restated Operating Agreement (“Operating
Agreement”), dated as of September 27, 2005, between Holdings, Trust and
Brownmill Corp. (each of the foregoing, a “Member,” and all of the foregoing
collectively, the “Members”), and any persons hereafter admitted as Members in
accordance herewith. All defined terms used herein but are not
otherwise defined shall have the meanings ascribed to them in the Operating
Agreement.
WITNESSETH:
WHEREAS, Xxxxx Xxxxxxxxxxxx (“Xxxxxxxxxxxx”) is the
sole member and managing member of Holdings, owning a 100% membership interests
in Holdings;
WHEREAS, Xxxxxxxxxxxx, REIT OP and
Lightstone SLP II LLC (“Lightstone SLP”)
entered into that certain Third Amended and Restated Agreement, dated as of
January, 30, 2009, pursuant to which Xxxxxxxxxxxx is required on a semi-annual
basis to fund the purchase of subordinated profits interests in the REIT OP with
(i) cash or (ii) contributions of interests in real property of equivalent value
(“Xxxxxxxxxxxx Funding
Requirement”);
WHEREAS, Holdings owns a 50.5%
membership interests (“Membership
Interests”) in the Company, the owner of those certain properties known
as Browntown Shopping Center located in Old Bridge, New Jersey and Millburn Mall
located in Union, New Jersey (the “Properties”);
WHEREAS,
on the date hereof, Xxxxxxxxxxxx, as the owner of Holdings, satisfied the
Xxxxxxxxxxxx Funding Requirement and, in furtherance thereof, directed Holdings
to contribute to the REIT OP a 51.98% of its Membership Interests (equaling to a
26.25% interest in the Company) in consideration of the REIT OP’s issuance to
Lightstone SLP associate partnership units in the REIT OP having a value of
$2,500,000; and
WHEREAS,
Holdings, Trust and Brownmill Corp. now desire to amend the Operating Agreement
to reflect the admission of REIT OP as a Member of the Company, and to make
certain other changes.
NOW
THEREFORE, the Members agree to amend the Operating Agreement to read as
follows:
1. Article
IV Management of the Operating Agreement is hereby amended to add the following
subsections:
4.4. Powers.
(a) Subject
to Sections 4.4(c), the Managing Member shall have the power to do any and all
acts necessary, convenient or incidental to or for the furtherance of the
purposes described in this Agreement, including all powers, statutory or
otherwise. Subject to Sections 2.6 and 4.4, the Managing Member has the
authority to bind the Company. Notwithstanding the foregoing, the parties
expressly acknowledge that the adoption, modification or revocation of a Major
Decision (defined below) requires the approval of REIT OP and any successor to
its interests. If the Managing Member proposes to adopt, modify or revoke a
Major Decision, it shall deliver notice to REIT OP describing the proposal. If
REIT OP fails to respond to the Managing Member within five (5) business days
after notice of such proposal, then such proposal shall be deemed to have been
approved.
(b) Managing Member as
Agent. To the extent of its powers set forth in this Agreement,
the Managing Member is an agent of the Company for the purpose of the Company’s
business, and the actions of the Managing Member taken in accordance with such
powers set forth in this Agreement shall bind the Company.
(c) Major Decisions.
Notwithstanding any other provisions of this Agreement, the
Company and/or the Managing Member may not, without the approval of REIT OP take
any of the following actions (each, a “Major
Decision”):
(i) borrow
money (whether on a secured or unsecured basis, on par or subordinate to that
certain loan in the original principal amount of $23,800,000 pursuant to that
Loan Agreement, dated as of September 28, 2005, by and between the Company and
Countrywide Commercial Real Estate Finance, Inc., as may be amended, modified,
or supplemented (the “Loan”), but excluding
trade debt or amend any of the material terms and conditions of any financing of
the Company;
(ii)
grant any mortgage, security interest or any other lien on any of
the Properties or any other assets of the Company or any of its subsidiaries,
other than the mortgage securing the Loan;
(iii) except
as otherwise provided herein, sell all or any portion of any of the
Properties;
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(iv) seek
or consent to any change in the zoning or other land use regulations affecting
any of the Properties or any permits or approvals granted thereunder if such
change will materially adversely affect the value of the Properties or the
rights, interests or obligations of the parties under this
Agreement;
(v) rebuild
or reconstruct the improvements on the Properties if they are substantially
damaged by a fire or other casualty, except to the extent the Company or any of
its Subsidiaries is required to do so pursuant to the Loan or except to the
extent that the cost to rebuild or reconstruct the improvements is less than
$1,000,000;
(vi) acquire
any real property (other than the Properties), any direct or indirect interest
in real property, or any interest in any Person other than the subsidiaries of
the Company;
(vii) incur
any single capital expenditure in excess of $250,000, other than capital
expenditures which are (i) set forth in a budget approved by the Members, or
(ii) otherwise specifically approved by REIT OP;
(viii) assign,
transfer, pledge, compromise or release any of the claims of or debts of the
Company or insurance or condemnation proceeds due the Company exceeding $50,000
except in connection with the receipt by the Company of payment in full of such
claims or debts;
(ix) except
for leases consistent with the leasing guidelines in the Budget, enter into any
lease for a portion of the Properties in excess of 15,000 square
feet;
(x) change
the Company’s or any of its subsidiaries’ accounting method, either for
financial or tax reporting purposes or otherwise;
(xi) dissolve
the Company;
(xii) effect
any merger, consolidation or restructuring of the Company;
(xiii) purchase
or redeem all or any portion of the limited liability company interest of any
Member in the Company, except as provided herein with respect to
permitted transfers;
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(xiv) other
than in connection with the Loan and except as provided in Section 4.4(c)(ix),
sell, assign, transfer, pledge, hypothecate or otherwise dispose of or encumber
all or any portion of any of the Company's interest in any subsidiary or permit
any subsidiary to sell, assign, transfer, pledge, hypothecate or otherwise
dispose of or encumber all or any portion of its assets or cause or permit any
additional equity interests to be issued by or new members to be admitted to any
subsidiary;
(xv) amend
or otherwise modify any of the organizational documents of the Company or any
subsidiary in any material respect or take any action which would result in the
Company not being able to manage or exercise control over any
subsidiary;
(xvi) employ
any management company for the Company, except that the Members specifically
approve The Lightstone Group (“Lightstone”) as the property manager pursuant to
that certain Property Management Agreement, dated as of September 12, 2005, by
and among the Company and Lightstone;
(xvii) approve
annual budgets of the Company;
(xviii) make
distributions pursuant to Section 3.3 above; and
(xix) take
any other actions which, pursuant to the terms of this Agreement,
require approval of all of the Members.
(d) Deadlock Regarding
Significant Decisions; Buy/Sell Option. In the event there is not a
unanimous vote of the Members with respect to any Major Decision (a “Deadlock”), whether
at a meeting of the Members or by an action by written consent in accordance
with this Section 4.4, then within two (2) business days after such vote (or
such consent is requested by a Member) each Member shall provide to the other
Member a written notice describing in reasonable detail the reason for its
position with respect to a Major Decision at issue. The Members shall then enter
into good faith negotiations to amicably resolve such Deadlock and continue such
negotiations for a period of at least five (5) business days (such period being
the “Cooling-Off
Period”). If a Deadlock is not resolved during the Cooling-Off Period,
then commencing on the business day following the date that the Cooling-Off
Period shall have terminated (the “Termination Date”),
each of the Members shall have the following rights:
(i) either
Member (the “Initiating Member”)
shall be entitled to deliver a written notice (the “Offer Notice”) to the
other (the “Deciding
Member”) specifying in such notice that the Initiating Member offers to
purchase all, but not less than all, of the limited liability company interest
in the Company of the Deciding Member upon the terms and conditions specified in
reasonable detail in the Offer Notice; and
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(ii) upon
receipt of an Offer Notice, the Deciding Member shall have three (3) business
days to deliver a written notice (the “Response Notice”) to
the Initiating Member specifying in the Response Notice either
that:
A. the
Deciding Member has elected to sell all of its limited liability company
interest in the Company to the Initiating Member at the price and upon the terms
and conditions specified in the Offer Notice, in which case, the Initiating
Member shall purchase, and the Deciding Member shall sell, all of the Deciding
Member's limited liability company interest in the Company at the price and upon
the terms and conditions specified in the Offer Notice; or
B. the
Deciding Member has elected to purchase all of the Initiating Member's limited
liability company interest in the Company at the Offer Price (as defined below)
and upon the terms and conditions specified in the Offer Notice, in which case
the Deciding Member shall purchase, and the Initiating Member shall sell, all of
the Initiating Member's limited liability company interest in the Company at the
Offer Price and upon the terms and conditions specified in the Offer
Notice.
(iii) An
Offer Notice shall only be valid if delivered on or after the Termination Date,
and any Offer Notice delivered prior to such time shall be deemed null and void
and have no force or effect. Each Member agrees that if an Offer Notice is not
sent within five (5) business days following the Termination Date, then the
Deadlock shall be deemed to have been amicably resolved and the proposed action
that is the subject of the Deadlock shall be deemed to have been adopted by the
Members.
(iv) Upon
delivery of an Offer Notice to either Member, then the Deciding Member shall not
be permitted to deliver a subsequent Offer Notice and any such subsequent Offer
Notice shall be deemed null and void and have no force or effect; provided,
however, that in the event that each Member shall have delivered to the other an
Offer Notice on the same day (without regard to the time of day such Offer
Notice is received) then, in such event, the Offer Notice which contains the
lowest purchase price for the other's limited liability company interest in the
Company shall be deemed null and void and have no force or effect.
(v) Notwithstanding
any provision contained herein to the contrary, in the event
that the Deciding Member has not delivered a Response Notice within the three
(3) business days period provided for in Section 4.4(f)(ii) above, then for
purposes of this Agreement the Deciding Member shall be deemed to have made the
election specified in Section 4.4(f)(ii)(A) above and thereafter the Deciding
Member shall sell all of its limited liability company interest in the Company
to the Initiating Member at the price and upon the terms and conditions
specified in the Offer Notice.
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(vi) The
Members agree that irreparable damage would occur in the event any of the
provisions of this Section 4.4(f) were not performed in accordance with the
terms hereof and that the Members shall be entitled to specific performance of
the terms and provisions of this Section 4.4(f), in addition to any other remedy
at law or equity. The Members further agree that time is of the essence with
respect to any time periods set forth in this Section 4.4(f).
(vii) For
purposes of this Section 4.4(f), the “Offer Price” means the product obtained
when multiplying (i) the quotient obtained when dividing (x) the dollar amount
of the
price offered by the Initiating Member in the Offer Notice by (y) the Percentage
of limited liability company interest in the Company of the Deciding Member
multiplied by 100, and (ii) the Percentage of limited liability company interest
in the Company of the Initiating Member multiplied by 100.
2. Section
6.6 of the Operating Agreement is hereby amended in its entirety to read as
follows:
6.6. Transfers. Except
as otherwise provided in this Agreement, (i) no Member may sell, transfer,
assign, hypothecate, pledge or otherwise dispose of or encumber (including the
grant of an option with respect to any of the foregoing), directly or indirectly
(“Transfer”),
all or any part of its limited liability company interest in the Company or
withdraw from the Company, and (ii) no Transfer of any direct or indirect
interest in a Member shall be permitted, except (in the case of both clauses (i)
and (ii)) with the prior written approval of the Managing Member, which approval
may be granted or withheld by the Managing Member in its sole and absolute
discretion.
3. Schedule
A of the Operating Agreement shall be replaced by Schedule A attached
hereto.
4. This
Amendment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors, and
assigns hereunder.
[SIGNATURES
FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, the undersigned
have duly executed this Agreement the day and year first above
written.
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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\ Xxxxxx Xxxxxxxxxxxx | |||
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Name:
Xxxxxx Xxxxxxxxxxxx
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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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LIGHTSTONE
VALUE PLUS REIT II LP
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By:
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LIGHTSTONE
VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC., a Maryland corporation,
its General Partner
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By:
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\s\ Xxxxx Xxxxxxx | |||
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Name:
Xxxxx Xxxxxxx
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Title: Chief
Financial
Officer
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SCHEDULE
A
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Name and Address
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Membership Interests
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Lightstone
Holdings LLC
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24.25 | % | ||
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c/o
The Lightstone Group, LLC
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0000
Xxxxx Xxxxxx Xxxxxx
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Xxxxx
0
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Xxxxxxxx,
XX 00000
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The
DWL 2003 Family Trust
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49 | % | ||
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c/o
The Lightstone Group, LLC
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0000
Xxxxx Xxxxxx Xxxxxx
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Xxxxx
0
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Xxxxxxxx,
XX 00000
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Brownmill
Manager Corp.
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0.5 | % | ||
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c/o
The Lightstone Group, LLC
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0000
Xxxxx Xxxxxx Xxxxxx
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Xxxxx
0
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Xxxxxxxx,
XX 00000
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Lightstone
Value Plus REIT II LP
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26.25 | % | ||
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c/o
The Lightstone Group, LLC
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0000
Xxxxx Xxxxxx Xxxxxx
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Xxxxx
0
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Xxxxxxxx,
XX 00000
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