Exhibit 10.1

 

AMENDMENT NO. 4 TO

 

LIMITED LIABILITY COMPANY AGREEMENT OF
JERNIGAN CAPITAL OPERATING COMPANY, LLC

 

December 16, 2019

 

WHEREAS, in accordance with Section 14.1(B)(3) of the Limited Liability Company
Agreement (the “Operating Agreement”) of Jernigan Capital Operating Company,
LLC, the Managing Member hereby amends the Operating Agreement without the
consent of the Non-Managing Members as follows in order to designate the terms
of Class B Units.

  

1.Defined Terms. Capitalized terms used herein and not otherwise defined shall
have the meanings given to such terms in the Operating Agreement.

 

2.Amendments to certain to Article I. Article I is hereby amended as follows:

 

The definition of the term “Common Unit” is hereby removed and replaced with the
following:

 

“Common Unit” means a Unit of Interest without any preference with respect to
the amount and timing of any distribution from the Company as set forth in this
Agreement and attachments hereto, and generally designated or referred to as
such by the Managing Member in this Agreement, including all Class A Units and
Class B Units. The Company may have one or more classes of Common Units. As used
in this Agreement, unless specifically mentioned otherwise, Common Units of the
various classes then outstanding will be referred to as “Common Units” in the
aggregate.

 

The definition of the term “Percentage Interest” is hereby removed and replaced
with the following:

 

“Percentage Interest” means, as to a Member holding a class or series of Units,
its interest in such class, determined by dividing the Units of such class or
series owned by such Member by the total number of Units of such class or Series
then outstanding. For purposes of determining the Percentage Interest of the
Class A Units at any time when there are Class B Units outstanding, all Class B
Units shall be treated as Class A Units.

 

The definition of the term “Unit” is hereby removed and replaced with the
following:

 

“Unit” means a fractional, undivided share of the Interests of all Members
issued pursuant to Section 4.1 and Section 4.2, and includes Class A Units,
Class B Units, LTIP Units and any other classes of Common Units or other Units
established after the date hereof. For purposes of determining the Percentage
Interest of the Common Units, all classes of Common Units then outstanding shall
be treated as one class. The number of Units outstanding and the Percentage
Interests of the class of the Interests represented by such Units are as set
forth in the Member Registry. Fractional Units may be issued by the Company.

 

The following terms are hereby added to Article I, such terms to be placed in
appropriate alphabetical order in such Article I:

 

“Class A” has the meaning set forth in Section 5.1.C.

 

“Class A Share” has the meaning set forth in Section 5.1.C.

 

“Class B” has the meaning set forth in Section 5.1.C.

 

“Class B Share” has the meaning set forth in Section 5.1.C.

 

“Class B Unit” means a Unit that is specifically designated by the Managing
Member as being a Class B Unit.

 

“Distribution Period” has the meaning set forth in Section 5.1.C.

 

 

 

 

3.Amendment to Section 4.2B. Section 4.2.B of the Operating Agreement is hereby
replaced in its entirety with the following:

 

“B. Effective on the date of Amendment Number 4 to this Operating Agreement, The
Company shall have three authorized classes of Units, entitled “Class A Units,”
“Class B Units” and “LTIP Units,” and, thereafter, such additional classes of
Units as may be created by the Managing Member pursuant to Section 4.2.A and
this Section 4.2.B.  Class A Units, Class B Units or a class of Interests
created pursuant to Section 4.2.A or this Section 4.2.B, at the election of the
Managing Member, in its sole and absolute discretion, may be issued to newly
admitted Members in exchange for the contribution by such Members of cash, real
estate interests, stock, notes or other assets or consideration; provided,
however, that any Unit that is not specifically designated by the Managing
Member as being of a particular class shall be deemed to be a Class A Unit. 
Each Class B Unit shall be converted automatically into a Class A Unit on the
day immediately following the Company Record Date for the Distribution Period in
which such Class B Unit was issued, without the requirement for any action by
the Managing Member, the Company or the Member holding the Class B Unit. The
issuance and terms of any LTIP Units shall be in accordance with Section 4.6.”

 

4.Amendment to Section 4.6.A. Section 4.6.A of the Operating Agreement is hereby
amended as follows:

 

The following to the end of the second sentence of the first paragraph of such
Section after the word “thereto”:

 

“(or, if so designated by the Managing Member in connection with the issuance
thereof, as Class B Units for the quarter in which such LTIP Units are issued).

 

Paragraph (ii) of such section is hereby replaced in its entirety as follows:

 

“The LTIP Unitholders shall, when, as and if authorized and declared by the
Managing Member out of assets legally available for that purpose, be entitled to
receive distributions in an amount per LTIP Unit equal to the distributions per
Class A Unit (the “Class A Unit Distribution”), paid to holders of Class A Units
on such Company Record Date established by the Managing Member with respect to
such distribution.  So long as any LTIP Units are outstanding, no distributions
(whether in cash or in kind) shall be authorized, declared or paid on Class A
Units or Class B Units, unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP Units.”

 

5.Amendment to Section 4.6.B. Section 4.6.B is hereby amended by replacing the
first sentence of such section with the following:

 

“Subject to the provisions of this Section 4.6 and the special provisions
of Sections 4.7 and 5.1.E, the LTIP Units shall rank pari passu with the Class A
Units and Class B Units as to the payment of regular and special periodic or
other distributions and distribution of assets upon liquidation, dissolution or
winding up.  As to the payment of distributions and as to distribution of assets
upon liquidation, dissolution or winding up, any class or series of Units which
by its terms specifies that it shall rank junior to, on a parity with, or senior
to the Class A Units shall also rank junior to, or pari passu with, or senior
to, as the case may be, the LTIP Units.”

 

6.Amendment to Section 5.1. Section 5.1 of the Operating Agreement is hereby
amended to add the following as Sections 5.1C and 5.1D. The paragraph currently
designated as Section 5.1C shall become Section 5.1.E.

 

“C.  Distributions When Class B Units Are Outstanding. If for any quarter or
shorter period with respect to which a distribution is to be made (a
“Distribution Period”) Class B Units are outstanding on the Company Record Date
for such Distribution Period, the General Partner shall allocate the Available
Cash with respect to such Distribution Period available for distribution with
respect to the Class A Units and Class B Units collectively between the Partners
who are holders of Class A Units (“Class A”) and the Partners who are holders of
Class B Units (“Class B”) as follows:

 

(1) Class A shall receive that portion of the Available Cash (the “Class A
Share”) determined by multiplying the amount of Available Cash by the following
fraction:

 

2

 

 

[tm1926332d1_ex10-1img001.jpg]

 

(2) Class B shall receive that portion of the Available Cash (the “Class B
Share”) determined by multiplying the amount of Available Cash by the following
fraction:

 

[tm1926332d1_ex10-1img002.jpg]

 

(3) For purposes of the foregoing formulas, (i) “A” equals the number of Class A
Units outstanding on the Company Record Date for such Distribution Period;
(ii) “B” equals the number of Class B Units outstanding on the Company Record
Date for such Distribution Period; (iii) “Y” equals the number of days in the
Distribution Period; and (iv) “X” equals the number of days in the Distribution
Period for which the Class B Units were issued and outstanding.

 

The Class A Share shall be distributed pro rata among Partners holding Class A
Units on the Company Record Date for the Distribution Period in accordance with
the number of Class A Units held by each Partner on such Company Record Date;
provided, however, that in no event may a Partner receive a distribution of
Available Cash with respect to a Class A Unit if a Partner is entitled to
receive a distribution with respect to a Share for which such Class A Unit has
been redeemed or exchanged.  If Class B Units were issued on the same date, the
Class B Share shall be distributed pro rata among the Partners holding Class B
Units on the Company Record Date for the Distribution Period in accordance with
the number of Class B Units held by each Partner on such Company Record Date. 
In no event shall any Class B Units be entitled to receive any distribution of
Available Cash for any Distribution Period ending prior to the date on which
such Class B Units are issued.

 

D. Distributions When Class B Units Have Been Issued on Different Dates. If
Class B Units which have been issued on different dates are outstanding on the
Company Record Date for any Distribution Period, then the Class B Units issued
on each particular date shall be treated as a separate series of Units for
purposes of making the allocation of Available Cash for such Distribution Period
among the holders of Units (and the formula for making such allocation, and the
definitions of variables used therein, shall be modified accordingly).  Thus,
for example, if two series of Class B Units are outstanding on the Company
Record Date for any Distribution Period, the allocation formula for each series,
“Series B1” and “Series B2” would be as follows:

 

(1) Series B1 shall receive that portion of the Available Cash determined by
multiplying the amount of Available Cash by the following fraction:

 

[tm1926332d1_ex10-1img003.jpg]

 

(2) Series B2 shall receive that portion of the Available Cash determined by
multiplying the amount of Available Cash by the following fraction:

 

[tm1926332d1_ex10-1img004.jpg]

 

(3) For purposes of the foregoing formulas the definitions set forth
in Section 5.1.C(3) remain the same except that (i) “B1” equals the number of
Units in Series B1 outstanding on the Company Record Date for such Distribution
Period; (ii) “B2” equals the number of Units in Series B2 outstanding on the
Company Record Date for such Distribution Period; (iii) “X1” equals the number
of days in the Distribution Period for which the Units in Series B1 were issued
and outstanding; and (iv) “X2” equals the number of days in the Distribution
Period for which the Units in Series B2 were issued and outstanding.”

 

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7.Amendment to Section 8.6. Section 8.6(i) is hereby replaced in its entirety
with the following:

 

“(i) Subject to Section 8.6.C and Section 11.6.E, at any time on or after one
(1) year following the date of the initial issuance thereof (which, in the event
of the transfer of a Class A Unit or Class B Unit, shall be deemed to be the
date that the Class A Unit or such Class B Unit, as the case may be, was issued
to the original recipient thereof for purposes of this Section 8.6), the holder
of a Class A Unit (if other than the Managing Member or any Subsidiary of the
Managing Member), including any LTIP Units that are converted into Class A
Units, shall have the right (the “Redemption Right”) to require the Partnership
to redeem such Class A Unit, with such redemption to occur on the Specified
Redemption Date and at a redemption price equal to and in the form of the Cash
Amount to be paid by the Partnership.  Any such Redemption Right shall be
exercised pursuant to a Notice of Redemption delivered to the Partnership (with
a copy to the Managing Member) by the holder of the Partnership Units who is
exercising the Redemption Right (the “Redeeming Partner”).  A Non-Managing
Member may exercise the Redemption Right from time to time, without limitation
as to frequency, with respect to part or all of the Partnership Units that it
owns, as selected by the Non-Managing Member, provided, however, that a
Non-Managing Member may not exercise the Redemption Right for fewer than one
thousand (1,000) Partnership Units of a particular class unless such Redeeming
Partner then holds fewer than one thousand (1,000) Partnership Units in that
class, in which event the Redeeming Partner must exercise the Redemption Right
for all of the Partnership Units held by such Redeeming Partner in that class,
and provided further that, with respect to a Non-Managing Member which is an
entity, such Non-Managing Member may exercise the Redemption Right for fewer
than one thousand (1,000) Units without regard to whether or not such
Non-Managing Member is exercising the Redemption Right for all of the Units held
by such Non-Managing Member as long as such Non-Managing Member is exercising
the Redemption Right on behalf of one or more of its equity owners in respect of
one hundred percent (100%) of such equity owners’ interests in such Non-Managing
Member.  For purposes hereof, a Class A Unit issued upon conversion of a Class B
Unit shall be deemed to have been issued when the Class B Unit was issued.”

 

8.Amendment to Exhibit C. Paragraph E of Exhibit C is hereby amended to add “and
Class B Units” after the words “Class A Units.”

 

9.Except as modified herein, all terms and conditions of the Operating Agreement
shall remain in full force and effect, which terms and conditions the Managing
Member hereby ratifies and confirms.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned has executed and agrees to be bound by this
Amendment as of the date first written above.

 

  MANAGING MEMBER:       JERNIGAN CAPITAL, INC., a Maryland corporation        
By: /s/ John A. Good   Name: John A. Good   Title: Chief Executive Officer

 

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