SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF LOFTS 21 LLC A New York Limited Liability Company THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement"), of LOFTS 21 LLC (the "Company"), dated effective as of February -, 2011, is entered into by and among AdvanceStar LLC, a New York limited liability company, as the Managing Member of the Company ("Managing Member"), Ryder Madison LLC ("Ryder"), David J. Mitchell ("Mitchell"), Kerry Wellington ("Wellington") and those other persons or entities executing this Agreement as of the date hereof as "Class A Members," and any other person or entity that is hereafter admitted as a member and becomes a party to this Agreement in accordance with the terms of this Agreement. Whereas, the Company was caused to be formed by Wellington by the filing of Articles of Organization in the Office of the Secretary of State of the State of New York on July I, 2010, and Whereas, pursuant to that certain original operating agreement of the Company dated as of July 1, 2010, Wellington was the sole member of the Company; and Whereas, the Company entered into that certain Purchase and Sale Agreement, dated as of July 30, 2010, by and between the Company, as Purchaser, and Plumbers No. 1 Real Estate Col., Inc., as Seller (the "Purchase Contract"), providing for the purchase and sale of that certain land and improvements thereon located at 21 East 26th Street, New York, New York (the "Property) for a purchase price of $13,250,000; and Whereas, Mitchell and Ryder were admitted as members of the Company and in connection therewith Wellington, Mitchell and Ryder amended and restated the original operating agreement of the Company as of September 2010; and Whereas, the existing members of the Company desire to admit additional members to the Company who will contribute additional capital to the Company for the purpose of acquiring and making certain improvements to the Property and providing working ca