FORM OF
LIMITED LIABILITY COMPANY AGREEMENT
OF
1407 BROADWAY MEZZ II LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of 1407 BROADWAY
MEZZ II LLC (the “Company”), is entered into by Lightstone 1407 Manager LLC, a
Delaware limited liability company, as the managing member (the “Managing
Member”), and LVP 1407 Broadway LLC, a Delaware limited liability company
(”LVP”; together with the Managing Member, collectively, the “Members” and
individually, a “Member”), and MICHELLE A. DREYER, as the Special Member (as
defined on Schedule A hereto). LVP shall sometimes hereinafter also be referred
to as the “Non-Managing Member”. Capitalized terms used and not otherwise
defined herein have the meanings set forth on Schedule A hereto.
 
RECITALS
 
WHEREAS, the Company was formed on November 28, 2006 as a limited liability
company under the Delaware Limited Liability Company Act, as amended from time
to time (the “Act”); and
 
  WHEREAS, the Members desire to state the terms and conditions of the Company.
 
NOW THEREFORE, in consideration of the premises and the agreements herein
contained, the Members and the Special Member hereby agree as follows:
 
Section 1. Name.
 
The name of the limited liability company formed hereby is 1407 BROADWAY MEZZ II
LLC.
 
Section 2. Principal Business Office.
 
The principal business office of the Company shall be located at 326 Third
Street, Lakewood, NJ 08701, or such other location as may hereafter be
determined by the Member.
 
Section 3. Registered Office.
 
The address of the registered office of the Company in the State of Delaware is
c/o Registered Agents Legal Services, LLC, 1220 N. Market Street, Suite 806,
Wilmington, DE 19801.
 
Section 4. Registered Agent.
 
The name and address of the registered agent of the Company for service of
process on the Company in the State of Delaware York is c/o Registered Agents
Legal Services, LLC, 1220 N. Market Street, Suite 806, Wilmington, DE 19801.
 

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Section 5. Members.
 
The mailing address of each Member is set forth on Schedule B attached hereto.
The Members were admitted to the Company as members of the Company upon their
execution of counterpart signature pages to this Agreement.
 
Subject to Section 9(d), the Members may act by written consent.
 
Upon the occurrence of any event that causes the last remaining Member to cease
to be a member of the Company (other than (i) upon an assignment by the last
remaining Member of all of its limited liability company interest in the Company
and the admission of the transferee pursuant to Sections 21 and 23, or (ii) the
resignation of the last remaining Member and the admission of an additional
member of the Company pursuant to Sections 22 and 23), the person acting as an
Independent Manager pursuant to Section 10 shall, without any action of any
Person and simultaneously with the last remaining Member ceasing to be a member
of the Company, automatically be admitted to the Company as a Special Member and
shall continue the Company without dissolution. No Special Member may resign
from the Company or transfer its rights as Special Member unless (i) a successor
Special Member has been admitted to the Company as Special Member by executing a
counterpart to this Agreement, and (ii) such successor has also accepted its
appointment as Independent Manager pursuant to Section 10; provided, however,
each Special Member shall automatically cease to be a member of the Company upon
the admission to the Company of a substitute Member. Each Special Member shall
be a member of the Company that has no interest in the profits, losses and
capital of the Company and has no right to receive any distributions of Company
assets. Pursuant to Section 18-301 of the Act, a Special Member shall not be
required to make any capital contributions to the Company and shall not receive
a limited liability company interest in the Company. A Special Member, in its
capacity as Special Member, may not bind the Company. Except as required by any
mandatory provision of the Act, each Special Member, in its capacity as Special
Member, shall have no right to vote on, approve or otherwise consent to any
action by, or matter relating to, the Company, including, without limitation,
the merger, consolidation or conversion of the Company. In order to implement
the admission to the Company of each Special Member, each person acting as an
Independent Manager pursuant to Section 10 shall execute a counterpart to this
Agreement. Prior to its admission to the Company as Special Member, the person
acting as an Independent Manager pursuant to Section 10 shall not be a member of
the Company.
 
Section 6. Certificates.
 
Nancy Bergmann is hereby designated as an “authorized person” within the meaning
of the Act, and executed, delivered and filed the Certificate of Formation of
the Company with the Secretary of State of the State of Delaware, and such
execution, delivery and filing is hereby approved and ratified. Upon the filing
of the Certificate of Formation with the Delaware Secretary of State, her powers
as an “authorized person” ceased, and the Managing Member thereupon became the
designated “authorized person” and shall continue as the designated “authorized
person” within the meaning of the Act. The Managing Member or an Officer 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.
 
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The existence of the Company as a separate legal entity shall continue until
cancellation of the Certificate of Formation as provided in the Act.
 
Section 7. Purposes. The purpose conducted or promoted by the Company has been
since its formation and will continue to be to engage in the following
activities:
 
(a)   
 
(i) to acquire and own hold, sell, transfer or otherwise dispose of a 100%
limited liability company interest (the “Membership Interest”) in, and to be and
act as the sole member of, 1407 Broadway Mezz LLC, a Delaware limited liability
company (“Mezz LLC”), to cause Mezz LLC to acquire and own, hold, sell, transfer
or otherwise dispose of a 100% limited liability company interest in, and to be
and act as the sole member of, 1407 Broadway Real Estate LLC, a Delaware limited
liability company (“Property Owner”), and to cause Property Owner to acquire,
improve, finance, hold, own, operate, rent, redevelop, sell, mortgage, exchange,
convey, or otherwise dispose of the Property, and to engage, and to cause the
Subsidiaries to engage, in all actions necessary and appropriate to accomplish
the foregoing;
 
(ii) to pledge its Membership Interest in Mezz LLC to Lehman Brothers Holdings
Inc. (“Lehman”), in connection with the Mezzanine Loan made by Lehman to Mezz
LLC, and to execute and deliver any documents and certificates or engage in any
actions necessary or desirable in connection therewith on behalf of itself and
Mezz LLC; and
 
(iii) to engage in any lawful act or activity and to exercise any powers
permitted to limited liability companies organized under the laws of the State
of Delaware that are related or incidental to and necessary, convenient or
advisable for the accomplishment of the above-mentioned purposes.
 
(b) The Company, by or through the Managing Member, or any Officer on behalf of
the Company, may enter into and perform the Basic Documents, and without any
further act, vote or approval of any other Person notwithstanding any other
provision of this Agreement, the Act or applicable law, rule or regulation. The
foregoing authorization shall not be deemed a restriction on the powers of the
Managing Member or any Officer to enter into other agreements on behalf of the
Company.
 
Section 8. Powers.
 
Subject to Section 9(d), the Company, the Managing Member and the Officers of
the Company on behalf of the Company, (i) shall have and exercise all powers
necessary, convenient or incidental to accomplish its purposes as set forth in
Section 7 and (ii) shall have and exercise all of the powers and rights
conferred upon limited liability companies formed pursuant to the Act.
 
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Section 9. Management.
 
(a) Subject to Sections 9(d) and 9(e), the business and affairs of the Company
shall be managed by or under the direction of the Managing Member. Subject to
Section 10, the Managing Member may determine at any time in its sole and
absolute discretion the number of Independent Managers. The initial number of
Independent Managers shall be one. The initial Independent Manager designated by
the Managing Member is Michelle A. Dreyer.
 
(b) Powers. Subject to Sections 9(d) and 9(e), 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 herein, including all powers,
statutory or otherwise. Subject to Sections 7 and 9, 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 requires the Approval of the Non-Managing Member. If the Managing
Member proposes to adopt, modify or revoke a Major Decision, it shall deliver
notice to the Non-Managing Member describing the proposal, which notice shall
contain a sentence in bold type stating that if the Non-Managing Member fails to
respond to the Managing Member within ten (10) business days after notice of
such proposal, then such proposal shall be deemed to have been Approved. If the
Non-Managing Member fails to respond to the Managing Member within ten (10)
business days after notice of such proposal, then such proposal shall be deemed
to have been Approved.
 
(c) Managing Member as Agent. To the extent of its powers set forth in this
Agreement and subject to Section 9(d), 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.
 
(d) Limitations on the Company's Activities.
 
(i) This Section 9(d) is being adopted in order to comply with certain
provisions of the Loan Documents required in order to qualify the Company as a
“special purpose” entity.
 
(ii) The Managing Member shall not, so long as any Obligation is outstanding,
amend, alter, change or repeal Sections 5, 7, 8, 9, 10, 16, 20, 21, 22, 23, 24,
25, 26 or 31 or Schedule A of this Agreement without the unanimous written
consent of the Members and the Independent Manager, and, after securitization of
the Loan, only if the Company receives confirmation that the Rating Agency
Condition is satisfied. Subject to this Section 9(d), the Managing Member
reserves the right to amend, alter, change or repeal any provisions contained in
this Agreement in accordance with Section 31.
 
(iii) A. Notwithstanding any other provision of this Agreement and any provision
of law that otherwise so empowers the Company, the Managing Member, any Officer
or any other Person, neither the Managing Member nor any Officer nor any other
Person shall be authorized or empowered, nor shall they permit the Company to,
and the Company shall not, with respect to itself, without the prior unanimous
written vote of the Members and the Independent Manager take any Bankruptcy
Action provided, however, that the Members may not vote on, or authorize the
taking of, any Bankruptcy Action, unless there is at least one Independent
Manager then serving in such capacity.
 
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B. Notwithstanding any other provision of this Agreement and any provision of
law that otherwise so empowers the Company, the Managing Member, any Officer or
any other Person, so long as any Obligations remain outstanding, neither the
Managing Member nor any Officer nor any other Person shall be authorized or
empowered, nor shall they permit the Company, to take any Material Action
without the consent of Lender (which consent will not be withheld if such
Material Action would result in proceeds which would indefeasibly satisfy the
Obligations in full in accordance with the Basic Documents).
 
(iv) The Managing Member shall cause the Company to do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if:
(1) the Managing Member shall determine that the preservation thereof is no
longer desirable for the conduct of its business and that the loss thereof is
not disadvantageous in any material respect to the Company and (2) the Rating
Agency Condition is satisfied. The Managing Member has not caused or permitted
the Company since its formation to and shall not cause or permit the Company to,
and the Company shall not:
 
A. engage in any business or activity other than as provided in Section 7 above;
 
B. acquire or own any assets other than as provided in Section 7 above;
 
C. to the fullest extent permitted by law, merge into or consolidate with any
Person or dissolve, wind-up, terminate or liquidate in whole or in part, sell,
transfer or otherwise dispose of all or substantially all of its assets or
change its legal structure, transfer or permit the direct or indirect transfer
of any interest, as applicable, other than as permitted in the Loan Documents or
seek to accomplish any of the foregoing;
 
D. fail to preserve its existence as a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware,
fail to remain qualified to do business and in good standing in each state in
which the conduct of its business will so require, amend, modify, terminate or
fail to comply with the single purpose entity provisions contained herein;
 
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E. own any subsidiary, other than Mezz LLC, or make any investment in, any
Person without the consent of Lender or acquire obligations or securities of its
members (other than the Membership Interests);
 
F. commingle its assets with the assets of any other Person;
 
G. incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than customary unsecured trade payables
incurred in the ordinary course of business provided the same (x) do not exceed,
in the aggregate, at any time a maximum amount of two percent (2%) of the
outstanding principal amount of the Note evidencing the Loan, and (y) are paid
within sixty (60) days of the date incurred;
 
H. fail to maintain its records, books of account, bank accounts, financial
statements, accounting records and other entity documents separate and apart
from those of any other Person and the Company shall not permit any affiliate
independent access to its bank accounts;
 
I. enter into any contract or agreement with any general partner, member,
shareholder, principal or affiliate of the Company, Guarantor or Indemnitor, or
any general partner, member, principal or affiliate thereof, except upon terms
and conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any general partner, member, shareholder, principal or affiliate of the Company,
Guarantor or Indemnitor, or any general partner, member, principal or affiliate
thereof;
 
J. maintain its assets in such a manner that it will be costly or difficult to
segregate, ascertain or identify its individual assets from those of any other
Person;
 
K. assume or guaranty the debts of any other Person, hold itself out to be
responsible for the debts of another person or otherwise pledge its assets for
the benefit of any other Person or hold out its credit as being available to
satisfy the obligations of any other Person except to the extent provided in the
Loan Documents;
 
L. make any loans or advances to any third party, including, without limitation,
any member or affiliate of the Company, or any general partner, member,
principal or affiliate thereof;
 
M. (i) if required by applicable law, fail to file its own tax returns (subject
to any permitted extensions), or (ii) if the Company is part of a consolidated
group for purposes of filing tax returns, fail to cause the Company to be shown
as a separate member of such group whose assets are not available to satisfy the
obligations of such group and whose liabilities remain separate from such group,
or (iii) if the Company is identified in any of its member’s tax returns, fail
to cause the Company to be identified as a separate entity whose assets are not
available to satisfy the obligations of any such members and whose liabilities
remain separate from such members;
 
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N. fail either to hold itself out to the public as a legal entity separate and
distinct from any other entity or person or to conduct its business solely in
its own name or fail to correct any known misunderstanding regarding its
separate identity and the Company shall not identify itself as being a
department or division of any other Person;
 
O. fail 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;
 
P. fail to pay its expenses and liabilities (including, without limitation,
salaries of its employees) only out of its own funds to the extent such funds
are available and the Company shall maintain a sufficient number of employees in
light of its contemplated business operations;
 
Q. fail to allocate shared expenses (including, without limitation, shared
office space) and use separate stationary, invoices and checks; or
 
R. acquire any business assets from, or capital stock, or other ownership
interest of, or be a party to, any acquisition.
 
Failure of the Company, or the Managing Member on behalf of the Company, to
comply with any of the foregoing covenants or any other covenants contained in
this Agreement shall not affect the status of the Company as a separate legal
entity or the limited liability of the Managing Member or the Independent
Manager. In addition, none of the foregoing provisions shall require the
Managing Member to make any additional capital contributions to the Company.
 
(v) So long as any Obligation is outstanding, the Managing Member shall not
cause or permit the Company to and the Company shall not:
 
A. except as contemplated by the Loan Documents, guarantee any obligation of any
Person, including any Affiliate or become obligated for the debts of any Person
or hold out its credit as being available to pay the obligations of any other
Person;
 
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B. engage, directly or indirectly, in any business other than the actions
required or permitted to be performed under Section 7, the Basic Documents or
this Section 9(d);
 
C. incur, create or assume any indebtedness or liabilities other than as
expressly permitted under the Loan Documents;
 
D. make or permit to remain outstanding any loan or advance to, or own or
acquire any stock or securities of, any Person;
 
E. to the fullest extent permitted by law, engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation, merger, asset sale or
transfer of ownership interests other than such activities as are expressly
permitted pursuant to any provision of the Basic Documents; or
 
F. other than with respect to Mezz LLC, form, acquire or hold any subsidiary
(whether corporate, partnership, limited liability company or other) or own any
equity interest in any Person,.
 
(e) Major Decisions. Notwithstanding any other provisions of this Agreement, the
Company and/or the Managing Member may not, without the approval of the
Non-Managing Member of the Company take any of the following actions or cause
Mezz LLC or Property Owner to take any of the following actions (each, a “Major
Decision”):
 
(i) borrow money (whether on a secured or unsecured basis, and whether senior,
on par or subordinate to the Loans, but excluding trade debt or amend the terms
and conditions of any financing of the Company or any of its Subsidiaries,
including the Loans, in any material respect or make elections with respect to
interest periods, interest rates or other material provisions under any such
financing;
 
(ii) lend money (whether on a secured or unsecured basis, but excluding trade
debt);
 
(iii) grant any mortgage, security interest or any other lien on any Property or
any other assets of the Company or any of its Subsidiaries;;
 
(iv) subject all or any part of any Property to a condominium statute or convert
any Property to condominium or cooperative form of ownership;
 
(v) except as otherwise provided herein, sell all or any portion of any
Property;
 
(vi) seek or consent to any change in the zoning or other land use regulations
affecting any Property or any permits or approvals granted thereunder if such
change will materially adversely affect the value of the Property or the rights,
interests or obligations of the parties under this Agreement;
 
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(vii) rebuild or reconstruct the improvements on the Property 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
Documents or except to the extent that the cost to rebuild or reconstruct the
improvements is less than $1,000,000;
 
(viii) acquire any real property (other than the Property), any direct or
indirect interest in real property, or any interest in any Person other than the
Subsidiaries;
 
(ix) adopt the annual operating budget of the Company and its Subsidiaries,
which must be submitted to the Non-Managing Member for its Approval by November
30 of the preceding year (each such annual budget, as Approved, an “Approved
Budget”);
 
(x) incur any single capital expenditure in excess of $50,000, other than
capital expenditures which are (i) set forth in an Approved Budget, or (ii)
otherwise specifically Approved by the Non-Managing Member;
 
(xi) assign, transfer, pledge, compromise or release any of the claims of or
debts 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;
 
(xii) enter into any lease for a portion of the Property in excess of 25,000
square feet;
 
(xiii) change the Company’s or any Subsidiaries’ accounting method, either for
financial or tax reporting purposes or otherwise;
 
(xiv) dissolve the Company or any Subsidiary;
 
(xv) effect any merger, consolidation or restructuring of the Company or any
Subsidiary;
 
(xvi) 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;
 
(xvii) form, directly or indirectly, any subsidiary other than the Subsidiaries;
 
(xviii) other than in connection with the Loans, 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;
 
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(xix) 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;
 
(xx) enter into or conduct any business or operations other than in connection
with the business of the Company as contemplated by Section 7 hereof or
otherwise herein, or take any action which would cause the Company or any
Subsidiary to cease being a “special purpose” entity as provided in Section 9(d)
above;
 
(xxi) employ any Member or any Affiliate of any Member on behalf of the Company
or any Subsidiary or otherwise deal with the Company or any Subsidiary (whether
as a buyer, seller, lessor, lessee, manager, broker, agent, furnisher of
services, lender or otherwise) and pay to or receive from the Company, its
Subsidiaries, any Member and any of their Affiliates any compensation, price,
fee, commission or other payment therefore, except as contemplated by this
Agreement or as set forth on Schedule D hereto;
 
(xxii) employ any accountants for the Company or any attorneys for the Company
(except that the Members specifically approve Herrick, Feinstein LLP and Cozen
O’Connor being retained as attorneys for the Company and Amper, Politziner,
Mattia and/or Schonbraun McCann Group being retained as accountants for the
Company);
 
(xxiii) settle any casualty loss (except to the extent fully covered by
insurance less any deductible) or condemnation claim in excess of $250,000;
 
(xxiv) settle any material litigation or threatened litigation, including
without limitation that certain litigation regarding the sub-leasehold interest
in the Property;
 
(xxv) enter into any material contract or amendment;
 
(xxvi) issue additional equity interests in itself or any Subsidiary; and
 
(xxvii) take any other actions which, pursuant to the terms of this Agreement,
require Approval of all of the Members.
 
(f)  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
or Bankruptcy Action (a "Deadlock"), whether at a meeting of the Members or by
an action by written consent in accordance with this Section 9 of this
Agreement, 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 the Major Decision or Bankruptcy Action 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:
 
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(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
 
(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 day period provided for in Section 9(f)(ii) above, then for
purposes of this Agreement the Deciding Member shall be deemed to have made the
election specified in Section 9(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 9(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 9(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 9(f).
 
(vii) For purposes of this Section 9(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.
 
Section 10. Independent Manager.
 
As long as any Obligation is outstanding, the Managing Member shall cause the
Company at all times to have at least one Independent Manager who will be
appointed by the Managing Member. To the fullest extent permitted by law,
including Section 18-1101(c) of the Act, the Independent Manager shall consider
only the interests of the Company, including its respective creditors, in acting
or otherwise voting on the matters referred to in Section 9(d)(iii). No
resignation or removal of an Independent Manager, and no appointment of a
successor Independent Manager, shall be effective until such successor shall
have executed a counterpart to this Agreement. In the event of a vacancy in the
position of Independent Manager, the Managing Member shall, as soon as
practicable, appoint a successor Independent Manager. All right, power and
authority of the Independent Manager shall be limited to the extent necessary to
exercise those rights and perform those duties specifically set forth in this
Agreement and the Independent Manager shall have no authority to bind the
Company. Except as provided in the second sentence of this Section 10, in
exercising their rights and performing their duties under this Agreement, any
Independent Manager shall have a fiduciary duty of loyalty and care similar to
that of a director of a business corporation organized under the General
Corporation Law of the State of Delaware. No Independent Manager shall at any
time serve as trustee in bankruptcy for any Affiliate of the Company.
 
Section 11. Officers.
 
(a) Officers. The initial Officers of the Company shall be designated by the
Managing Member and shall consist of at least a President and a Secretary. The
Managing Member may also choose one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Any number of offices may be held by the
same person. The Managing Member may appoint such other Officers and agents as
it shall deem necessary or advisable who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Managing Member. The salaries of all Officers and
agents of the Company shall be fixed by or in the manner prescribed by the
Managing Member. The Officers of the Company shall hold office until their
successors are chosen and qualified. Any Officer may be removed at any time,
with or without cause, by the affirmative vote of the Managing Member. Any
vacancy occurring in any office of the Company shall be filled by the Managing
Member. The initial Officers of the Company designated by the Managing Member
are listed on Schedule E hereto.
 
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(b) President. The President shall be the chief executive officer of the
Company, shall be responsible for the general and active management of the
business of the Company and shall see that all orders and resolutions of the
Company are carried into effect. The President or any other Officer authorized
by the President or the Managing Member shall execute all bonds, mortgages and
other contracts, except: (i) where required or permitted by law or this
Agreement to be otherwise signed and executed, including Section 7(b) (ii) where
signing and execution thereof shall be expressly delegated by the Managing
Member to some other Officer or agent of the Company, and (iii) as otherwise
permitted in Section 11(c).
 
(c) Vice President. In the absence of the President or in the event of the
President's inability to act, the Vice President, if any (or in the event there
be more than one Vice President, the Vice Presidents in the order designated by
the Managing Member, or in the absence of any designation, then in the order of
their election), shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents, if any, shall perform such other duties and have
such other powers as the Managing Member may from time to time prescribe.
 
(d) Secretary and Assistant Secretary. The Secretary shall be responsible for
filing legal documents and maintaining records for the Company. The Secretary
shall attend all meetings of the Company and record all the proceedings of the
meetings of the Company in a book to be kept for that purpose and shall perform
like duties for the standing committees when required. The Secretary shall give,
or shall cause to be given, notice of all meetings of the Member, if any, and
shall perform such other duties as may be prescribed by the President, under
whose supervision the Secretary shall serve. The Assistant Secretary, or if
there be more than one, the Assistant Secretaries in the order determined by the
Managing Member (or if there be no such determination, then in order of their
election), shall, in the absence of the Secretary or in the event of the
Secretary's inability to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Managing Member may from time to time prescribe
 
(e) Officers as Agents. The Officers, to the extent of their powers set forth in
this Agreement or otherwise vested in them by action of the Managing Member not
inconsistent with this Agreement, are agents of the Company for the purpose of
the Company's business and, subject to Section 9(d), the actions of the Officers
taken in accordance with such powers shall bind the Company.
 
(f) Duties of Officers. Except to the extent otherwise provided herein, each
Independent Manager and Officer shall have a fiduciary duty of loyalty and care
similar to that of directors and officers of business corporations organized
under the General Corporation Law of the State of Delaware.
 
Section 12. Limited Liability.
 
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Except as otherwise expressly provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise,
shall be the debts, obligations and liabilities solely of the Company, and
neither the Members nor the Special Member nor the Independent Manager shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member, Special Member or Independent Manager of the
Company.
 
Section 13. Capital Contributions.
 
The Members have contributed to the Company property of an agreed value as
listed on Schedule B attached hereto in consideration of their respective
Percentage Interests (hereinafter defined) in the Company. “Percentage Interest”
means the ownership interest of each Member in the Company (the “Membership
Interests”), expressed as a percentage, as set forth on Schedule B. In
accordance with Section 5, the Special Member shall not be required to make any
capital contributions to the Company.
 
Section 14. Additional Contributions.
 
The Members are not required to make any additional capital contribution to the
Company. However, the Members may make additional capital contributions to the
Company at any time upon the written consent of the Members. To the extent that
a Member makes an additional capital contribution to the Company, the Managing
Member shall revise Schedule B of this Agreement. The provisions of this
Agreement, including this Section 14, are intended to benefit the Members and
the Special Member and, to the fullest extent permitted by law, shall not be
construed as conferring any benefit upon any creditor of the Company (other than
Lender for so long as any Obligation is outstanding) (and no such creditor of
the Company shall be a third-party beneficiary of this Agreement, except as
provided in Section 29) and the Members and the Special Member shall not have
any duty or obligation to any creditor of the Company to make any contribution
to the Company or to issue any call for capital pursuant to this Agreement.
 
Section 15. Allocation of Profits and Losses.
 
All items of Company profit, loss, gain, deduction and credit shall be allocated
among the Members in proportion to their respective Percentage Interests.
 
Section 16. Distributions.
 
Distributions of Available Cash shall be distributed to the Members from time to
time, as determined by the Managing Member. All distributions shall be made on a
pro rata basis in accordance with each Member’s respective Percentage Interest.
The Managing Member shall use its commercially reasonable efforts to distribute
sufficient Available Cash to permit Lightstone Value Plus Real Estate Investment
Trust, Inc. (the “REIT”), the indirect parent of LVP, to distribute annually to
its stockholders all of its taxable income. Notwithstanding any provision to the
contrary contained in this Agreement, the Company shall not be required to make
a distribution to any Member on account of its interest in the Company if such
distribution would violate the Act or any other applicable law or any Basic
Document.
 
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Section 17. Books and Records.
 
(a) The Managing Member shall keep or cause to be kept complete and accurate
books of account and records with respect to the Company's business. The books
of the Company shall at all times be maintained by the Managing Member. The
Members and their duly authorized representatives shall have the right to
examine the Company books, records and documents during normal business hours.
The Company, and the Managing Member on behalf of the Company, shall not have
the right to keep confidential from the other Member any information that the
Managing Member would otherwise be permitted to keep confidential from the
Member pursuant to Section 18-305(c) of the Act. The Company's books of account
shall be kept using the method of accounting determined by the Managing Member
in accordance with generally accepted accounting principles in the United States
of America and in a manner that will permit the REIT to satisfy any reporting
requirements that state regulators may impose upon it. The Company's independent
auditor, if any, shall be an independent public accounting firm selected by the
Managing Member.
 
(b) All funds of the Company shall be deposited in a bank account or accounts in
the Company's name.
 
Section 18. Intentionally Omitted.
 
Section 19. Other Business.
 
The Members, the Special Member and any Affiliate of the Members or the Special
Member may engage in or possess an interest in other business ventures
(unconnected with the Company) of every kind and description, independently or
with others notwithstanding any other duty existing at law or in equity. The
Company shall not have any rights in or to such independent ventures or the
income or profits therefrom by virtue of this Agreement.
 
Section 20. Exculpation and Indemnification.
 
(a) Neither the Members nor the Special Member nor any Officer, Independent
Manager, employee or agent of the Company nor any employee, representative,
agent or Affiliate of the Members or the Special Member nor any member of the
Board of Directors of the REIT (collectively, the “Covered Persons”) shall, to
the fullest extent permitted by law, be liable to the Company or any other
Person who is bound by this Agreement for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of the authority conferred on such Covered Person by this
Agreement, except that a Covered Person shall be liable for any such loss,
damage or claim incurred by reason of such Covered Person's gross negligence or
willful misconduct.
 
(b) To the fullest extent permitted by applicable law, a Covered Person shall be
entitled to indemnification from the Company for any loss, damage or claim
incurred by such Covered Person by reason of any act or omission performed or
omitted by such Covered Person in good faith on behalf of the Company and in a
manner reasonably believed to be within the scope of the authority conferred on
such Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 20 by the Company shall be provided out of
and to the extent of Company assets only, and the Members and the Special Member
shall not have personal liability on account thereof and provided further, that
so long as any Obligation is outstanding, any indemnity payment from funds of
the Company (as distinct from funds from other sources, such as insurance) of
any indemnity under this Section 20 shall be subordinate to payments then due
pursuant to the Basic Documents.
 
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(c) To the fullest extent permitted by applicable law, expenses (including
reasonable legal fees) incurred by a Covered Person defending any claim, demand,
action,
suit or proceeding shall, from time to time, be advanced by the Company prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Company of an undertaking by or on behalf of the Covered Person
to repay such amount if it shall be determined that the Covered Person is not
entitled to be indemnified as authorized in this Section 20.
 
(d) A Covered Person shall be fully protected in relying in good faith upon the
records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, or any other facts pertinent to the
existence and amount of assets from which distributions to the Members might
properly be paid.
 
(e) To the extent that, at law or in equity, a Covered Person has duties
(including fiduciary duties) and liabilities relating thereto to the Company or
to any other Covered Person, a Covered Person acting under this Agreement shall
not be liable to the Company or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or any approval or authorization
granted by the Company or any other Covered Person. The provisions of this
Agreement, to the extent that they restrict the duties and liabilities of a
Covered Person otherwise existing at law or in equity, are agreed by the Members
and the Special Member to replace such other duties and liabilities of such
Covered Person.
 
(f) The foregoing provisions of this Section 20 shall survive any termination of
this Agreement.
 
Section 21. Assignments; Transfers.
 
(a) 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.
 
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(b) To the fullest extent permitted by law, any Transfer not in compliance with
the requirements of this Section 21 shall be void as against the Company and the
other Members and shall be disregarded by all of the Members and the Company for
all purposes of allocations and distributions hereunder. The Company shall be
entitled to treat the record owner of a limited liability company interest in
the Company as the absolute owner thereof for all purposes and shall incur no
liability to any purported transferee or any other Person for distributions of
money or other property in good faith made to the record owner of such limited
liability company interest in the Company, unless and until all conditions of
any Transfer shall have been fulfilled in accordance herewith to the
satisfaction of the Company, subject to 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.
 
(c) Unless a transferee is substituted as a Member in accordance with this
Section 21(c), the transferee shall not be entitled to any of the rights of a
Member hereunder with respect to the limited liability company interest in the
Company transferred. A transferee of a limited liability company interest in the
Company may be substituted as a Member and shall thereupon be entitled to the
rights of a Member with respect to such limited liability company interest in
the Company, only upon satisfaction of the following conditions:
 
(i) the transferor shall have granted the transferee the right to be substituted
as a Member in its place;
 
(ii) the Managing Member has approved the Transfer in writing, which it may
refuse to do for any reason or for no reason;
 
(iii) the transferee shall have paid, or made arrangement satisfactory to the
Managing Member to pay, to the Company all costs and expenses incurred by the
Company in connection with such substitution, including any costs incurred in
amending this Agreement, the certificate of formation, if necessary, or any
other document filed with respect to the Company in any jurisdiction;
 
(iv) the transferee shall have executed and delivered such instruments, in form
and substance satisfactory to the Managing Member, as the Managing Member may
deem to be necessary or desirable to effect such substitution and to confirm the
agreement of the transferee to be bound by and subject to all of the terms and
provisions of this Agreement and any other relevant agreements relating to the
Company to which the Transferor and the Company or other Members are parties;
 
(v) such Transfer shall not result in the termination of the Company or any of
its Subsidiaries pursuant to Code Section 708;
 
(vi) the Managing Member has received an opinion of the Company’s counsel that
the proposed Transfer is permissible under all applicable federal or state
securities laws and will not cause the Company to be classified other than as a
partnership for federal income tax purposes or cause the Company to terminate
for federal income tax purposes; and
 
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(vii) such assignment shall not result in a default or event of default under
any of the Loan Documents or any other material instruments or agreements to
which the Company or any of the Subsidiaries is a party or to which the Property
is subject and the Company and the Managing Member shall have obtained all
consents to such assignment required pursuant to the Loan Documents.
 
(d) Right to Force Sale of Property. Notwithstanding any provision contained
herein to the contrary, at any time after seven years from the date hereof, the
Non-Managing Member shall have the right to force the Company to dispose of the
Property by delivering written notice thereof (a “Sale Notice”) to the Managing
Member. Any Sale Notice shall indicate the appraised value of the Property, as
determined by an independent, third party appraiser selected by the Board of
Directors of the REIT (the “Appraised Value”). Upon receipt of a Sale Notice,
the Managing Member shall have the right to elect to either (i) initiate a sale
of the Property for the Appraised Value or (ii) within ninety (90) days of
receipt of a Sale Notice, purchase the Non-Managing Member’s Membership Interest
in the Company for an amount equal to the amount of cash that would be
distributed to the Non-Managing Member under Article 16, if the Property were
sold for the Appraised Value, assuming that all Company indebtedness were repaid
in full (including prepayment penalties that would be then due and payable) and
transaction costs equal to the sum of (i) the transfer taxes that would be due
upon such sale and (ii) two and one-half percent (2.5%) of the Appraised Value
were to be paid prior to the hypothecated liquidation distributions.
 
(e) Right of First Refusal; Tag-Along Right. Notwithstanding any provision
contained herein to the contrary, if at any time a Member shall desire to sell
all or any portion of its limited liability company interest in the Company to
an unaffiliated third party purchaser (the “Third Party Purchaser”), then before
any such sale may be consummated, the terms and provisions of this Section 11(e)
must be complied with.
 
(i) In the event that a Member intends to accept a bona fide written offer
received from a Third Party Purchaser to purchase all or any portion of its
limited liability company interest in the Company (the “Selling Member”), then
such Selling Member shall promptly give written notice (the “Sale Notice”)
thereof to the remaining Member (the “Remaining Member”) setting forth the terms
of the offer and the identity of the Third Party Purchaser and include therewith
copies of all relevant documents, to the extent such documentation exists. For a
period of ten (10) business days (the “Ten Day Period”) after receipt of the
Sale Notice, the Remaining Member shall have the right by delivering the written
notice provided in Section 11(e)(ii)(A) or Section 11(e)(iii)(A) below to
either:
 
A. purchase that portion of the Selling Member’s limited liability company
interest in the Company which the Third Party Purchaser intends to acquire (the
“Offered Company Interest”) in accordance with Section 11(e)(ii) below at an
aggregate purchase price (the “First Refusal Purchase Price”) equal to the
purchase price offered in writing by the Third Party Purchaser for the Offered
Company Interest (the “First Refusal Right”); or
 
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B. sell to the Third Party Purchaser in accordance with Section 11(e)(iii) below
that portion of Remaining Member’s limited liability company interest in the
Company (the “Tag-Along Portion”) equal to the product obtained when
multiplying: (I) the Remaining Member’s limited liability company interest in
the Company immediately prior to the sale to the Third Party Purchaser, and (II)
the aggregate amount of limited liability company interest in the Company the
Third Party Purchaser desires to acquire from the Selling Member and that the
Selling Member desires to sell to the Third Party Purchaser at an aggregate
purchase price (the “Tag-Along Purchase Price”) equal to the product obtained
when multiplying (I) the purchase price offered in writing by the Third Party
Purchaser for the Offered Company Interest, and (II) the Remaining Member’s
Percentage Interest in the Company immediately prior to the sale to the Third
Party Purchaser (the “Tag-Along Right”).
 
(ii) A. If the Remaining Member shall elect to exercise the First Refusal Right
pursuant to Section 11(e)(i)(A) above, then within the Ten Day Period the
Remaining Member: (x) shall send a written notice (the “First Refusal Notice”)
to the Selling Member specifying the date on which the purchase and sale of the
Offered Company Interest (the “First Refusal Closing”) shall occur, which date
shall not be earlier than ten (10) calendar days nor later than sixty (60)
calendar days from the date such notice is delivered; and (y) shall pay to the
Selling Member in immediately available funds by bank wire transfer, certified
check or bank cashier’s check a non refundable deposit in an amount equal to the
lesser of (a) $500,000, (b) the dollar amount of the First Refusal Purchase
Price, or (c) the dollar amount of any deposit offered or made by the Third
Party Purchaser (the “First Refusal Deposit”), which First Refusal Deposit, in
any event, shall be credited against the First Refusal Purchase Price if the
First Refusal Closing shall occur.
 
B. At the First Refusal Closing: (i) the Remaining Member shall pay to the
Selling Member the First Refusal Purchase Price less the First Refusal Deposit
in cash in immediately available funds by bank wire transfer, certified check or
bank cashier’s check; and (ii) the Selling Member shall transfer and assign to
the Remaining Member the Offered Company Interest free and clear of any
encumbrance and shall execute and deliver to the Company all necessary
documentation reasonably required in order to effectuate the transfer and sale
of the Offered Company Interest. In the event the Remaining Member does not
consummate the First Refusal Closing as aforesaid as a result of the Remaining
Member’s breach or default of its obligations hereunder, the First Refusal
Deposit shall be retained by the Selling Member as liquidated damages and not as
a penalty.
 
(iii) A. If the Remaining Member shall elect to exercise the Tag-Along Right
pursuant to Section 11(e)(i)(B) above, then within the Ten Day Period the
Remaining Member shall send a written notice (the “Tag-Along Notice”) to the
Selling Member which notice: (x) shall specify the Remaining Member’s desire to
exercise the Tag-Along Right pursuant to Section 11(e)(i)(B) above; and (y)
shall contain a covenant and undertaking by the Remaining Member to transfer and
assign the Tag-Along Portion to the Third Party Purchaser at a closing (the
“Tag-Along Closing”) determined by the Selling Member and the Third Party
Purchaser and to execute and deliver documentation substantively and
substantially identical to the documentation that the Selling Member is
executing and delivering in connection with the sale to the Third Party
Purchaser.
 
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B. At the Tag-Along Closing: (i) the Third Party Purchaser shall pay the
Tag-Along Purchase Price to the Remaining Member in the same manner as the Third
Party Purchaser pays the remaining portion of the purchase price for that
portion of the Selling Member’s limited liability company interest in the
Company which is subject to the Third Party Purchaser’s offer, and (ii) the
Remaining Member shall transfer and assign to the Third Party Purchaser the
Tag-Along Portion of the Remaining Member’s limited liability company interest
in the Company to the Third Party Purchaser free and clear of any encumbrance,
and shall execute and deliver to the Third Party Purchaser all necessary
documentation reasonably required by the Selling Member in order to effectuate
the transfer and sale of the Tag-Along Portion to the Third Party Purchaser;
provided, however, that the Remaining Member shall only be required to execute
documentation substantively and substantially identical to the documentation
that the Selling Member is executing and delivering in connection with the
Selling Member’s sale of its limited liability company interest in the Company
to the Third Party Purchaser.
 
(iv) The failure of the Remaining Member to give either (x) a First Refusal
Notice and to fund the First Refusal Deposit provided for in Section
11(e)(ii)(A) above within the time period required pursuant to Section
11(e)(ii)(A), or (y) the Tag-Along Notice provided for in Section 11(e)(iii)(A)
above within the time period required pursuant to Section 11(e)(iii)(A) shall be
deemed to be an election by the Remaining Member not to exercise the First
Refusal Right or the Tag-Along Right, as the case may be, as to such offer. The
election by the Remaining Member not to exercise the First Refusal Right or the
Tag-Along Right, as the case may be, as to any offer shall not affect the
Remaining Member’s First Refusal Right or the Tag-Along Right as to any
subsequent offer. If the Remaining Member elects not to exercise the First
Refusal Right or the Tag-Along Right, then the Selling Member may proceed to
transfer the Offered Company Interest in accordance with the terms of the third
party offer within a period of one hundred and eighty (180) days after the date
of the Sale Notice; but if such sale is not consummated within such one hundred
and eighty (180) day period, then the limited liability company interest in the
Company covered by the offer will be again be subject to the First Refusal Right
and Tag-Along Right provided by this Section 11(e); provided, however, that if
the Remaining Member shall timely deliver the First Refusal Notice and fund the
First Refusal Deposit in accordance with Section 11(e)(ii)(A) but later fails to
consummate the acquisition of the Offered Company Interest at the First Refusal
Closing, then, in addition to retaining the First Refusal Deposit as liquidated
damages (and not as a penalty) the Selling Member shall have a period of an
additional ninety (90) days from the date of the First Refusal Closing to
consummate the sale of the Offered Company Interest that was subject to the
First Refusal Right to the Third Party Purchaser; and provided further, however,
that if the Remaining Member shall timely deliver the Tag-Along Notice in
accordance with Section 11(e)(iii)(A) but later fails to sell the Tag-Along
Portion to the Third Party Purchaser at the Tag-Along Closing, then the Selling
Member shall have a period of an additional ninety (90) days from the date of
the Tag-Along Closing to consummate the sale of the entire amount of limited
liability company interest in the Company that the Third Party Purchaser
originally intended to acquire from the Selling Member.
 
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(v) Any Third Party Purchaser to whom the Offered Company Interest or the
Tag-Along Portion is transferred under this Section 11(e) shall hold such
limited liability company interest in the Company subject to all terms and
conditions of this Agreement and shall, as a condition of receiving such limited
liability company interest in the Company, execute and deliver any and all
documentation, and comply with any and all terms and conditions, reasonably
requested by the Managing Member.
 
Section 22. Resignation.
 
Except as expressly provided in this Agreement, the Managing Member shall not
resign or withdraw as managing member of the Company without the prior written
approval of the other Members, which approval may be withheld by such Members in
their sole discretion.
 
Section 23. Admission of Additional Members.
 
One or more additional Members of the Company may be admitted to the Company
with the written consent of the Managing Member; provided, however, that,
notwithstanding the foregoing, so long as any Obligation remains outstanding, no
additional Member may be admitted to the Company unless the Rating Agency
Condition is satisfied.
 
Section 24. Dissolution.
 
(a)  Subject to Section 9(d), the Company shall be dissolved, and its affairs
shall be wound up upon the first to occur of the following: (i) the termination
of the legal existence of the last remaining member of the Company or the
occurrence of any other event which terminates the continued membership of the
last remaining member of the Company in the Company unless the Company is
continued without dissolution in a manner permitted by this Agreement or the Act
or (ii) the entry of a decree of judicial dissolution under Section 18-802 of
the Act. Upon the occurrence of any event that causes the last remaining member
of the Company to cease to be a member of the Company or that causes the last
remaining Member to cease to be a member of the Company (other than (i) upon an
assignment by the last remaining Member of all of its limited liability company
interest in the Company and the admission of the transferee pursuant to Sections
21 and 23, or (ii) the resignation of the last remaining Member and the
admission of an additional member of the Company pursuant to Sections 22 and
23), to the fullest extent permitted by law, the personal representative of such
member is hereby authorized to, and shall, within 90 days after the occurrence
of the event that terminated the continued membership of such member in the
Company, agree in writing (i) to continue the Company and (ii) to the admission
of the personal representative or its nominee or designee, as the case may be,
as a substitute member of the Company, effective as of the occurrence of the
event that terminated the continued membership of the last remaining Member in
the Company.
 
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(b) Notwithstanding any other provision of this Agreement, the Bankruptcy of a
Member or the Special Member shall not cause such Member or Special Member,
respectively, to cease to be a member of the Company or cause the Company to be
dissolved or its affairs to be wound up and upon the occurrence of such an
event, the Company shall continue without dissolution. Except as otherwise
required by law, notwithstanding any other provision of this Agreement, the
dissolution of a Member or the Special Member shall not, by itself, cause the
Company to be dissolved or its affairs to be wound up and upon the occurrence of
such an event, the Company shall continue without dissolution.
 
(c) Notwithstanding any other provision of this Agreement, each Member and the
Special Member waives any right it might have to agree in writing to dissolve
the Company upon the Bankruptcy of a Member or the Special Member, or the
occurrence of an event that causes a Member or the Special Member to cease to be
a member of the Company.
 
(d) In the event of dissolution, the Company shall conduct only such activities
as are necessary to wind up its affairs (including the sale of the assets of the
Company in an orderly manner), and the assets of the Company shall be applied in
the manner, and in the order of priority, set forth in Section 18-804 of the
Act.
 
(e) The Company shall terminate when (i) all of the assets of the Company, after
payment of or due provision for all debts, liabilities and obligations of the
Company shall have been distributed to the Members in the manner provided for in
this Agreement and (ii) the Certificate of Formation shall have been canceled in
the manner required by the Act.
 
Section 25. Waiver of Partition; Nature of Interest.
 
Except as otherwise expressly provided in this Agreement, to the fullest extent
permitted by law, each Member and the Special Member hereby irrevocably waives
any right or power that such Person might have to cause the Company or any of
its assets to be partitioned, to cause the appointment of a receiver for all or
any portion of the assets of the Company, to compel any sale of all or any
portion of the assets of the Company pursuant to any applicable law or to file a
complaint or to institute any proceeding at law or in equity to cause the
dissolution, liquidation, winding up or termination of the Company. The Members
shall not have any interest in any specific assets of the Company, and the
Members shall not have the status of a creditor with respect to any distribution
pursuant to Section 16 hereof. The interest of the Members in the Company are
personal property.
 
Section 26. Benefits of Agreement; No Third-Party Rights.
 
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Company other than the Lender (for so long as
any Obligation is outstanding) or by any creditor of the Members or the Special
Member. Nothing in this Agreement shall be deemed to create any right in any
Person (other than Covered Persons and for so long as any Obligation is
outstanding, the Lender) not a party hereto, and this Agreement shall not be
construed in any respect to be a contract in whole or in part for the benefit of
any third Person (except as provided in Section 29).
 
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Section 27. Severability of Provisions.
 
Each provision of this Agreement shall be considered severable and if for any
reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Agreement which are valid, enforceable and legal.
 
Section 28. Entire Agreement.
 
This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof.
 
Section 29. Binding Agreement.
 
Notwithstanding any other provision of this Agreement, the Members agree that
this Agreement, including, without limitation, Sections 5, 7, 8, 9, 10, 16, 20,
21, 22, 23, 24, 25, 26, 29 and 31, constitutes a legal, valid and binding
agreement of the Members, and is enforceable against the Members by the
Independent Manager in accordance with its terms. In addition, the Independent
Manager and Lender (so long as any Obligations are outstanding) shall be
intended beneficiaries of this Agreement.
 
Section 30. Governing Law.
 
This Agreement shall be governed by and construed under the laws of the State of
Delaware (without regard to conflict of laws principles), all rights and
remedies being governed by said laws.
 
Section 31. Amendments.
 
Subject to Section 9(d), this Agreement may be modified, altered, supplemented
or amended pursuant to a written agreement executed and delivered by the
Managing Member. Notwithstanding anything to the contrary in this Agreement, so
long as any Obligation is outstanding, this Agreement may not be modified,
altered, supplemented or amended unless the Lender consents in writing and the
Rating Agency Condition is satisfied except: (i) to cure any ambiguity or (ii)
to convert or supplement any provision in a manner consistent with the intent of
this Agreement and the other Basic Documents.
 
Section 32. Counterparts.
 
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.
 
23

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Section 33. Notices.
 
Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by telecopy, electronic mail or other
similar form of rapid transmission, and shall be deemed to have been duly given
upon receipt (a) in the case of the Company, to the Company at its address in
Section 2, (b) in the case of a Member, to such Member at its address as listed
on Schedule B attached hereto and (c) in the case of either of the foregoing, at
such other address as may be designated by written notice to the other party.
 
Section 34. Tax Matters. It is the intention of the Members that the Company
shall be taxed as a "partnership" for federal, state, local and foreign income
tax purposes. The Members shall take all reasonable actions, including the
amendment of this Agreement and the execution of other documents, as may
reasonably be required in order for the Company to qualify for and receive
"partnership" treatment for Federal, state, local and foreign income tax
purposes. The books and records of the Company shall be maintained by the
Managing Member in accordance with generally accepted accounting principles,
consistently applied, and Section 704(b) of the Internal Revenue Code of 1986,
as amended (the “Code”) and the Regulations promulgated thereunder. A capital
account shall be established and maintained by the Managing Member on behalf of
each Member in accordance with the Treasury Regulation issued pursuant to
Section 704(b) of the Code. The Managing Member shall be the “tax matters
partner” as defined in Section 6231(a)(6) of the Code, with respect to the
Company.
 
Section 35. Subsidiaries. Any and all references herein to the Company or any
Member or Managing Member causing or directing any action on behalf of a
Subsidiary shall be deemed to refer to the Company causing (or such Member or
Managing Member causing the Company to cause), in its capacity as a direct or
indirect manager or member of such Subsidiary, such action to be taken for and
on behalf of such Subsidiary.
 
Section 36. Effectiveness.
 
Pursuant to the Act, this Agreement shall be effective as of the execution of
this Agreement.
 
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has
duly executed this Limited Liability Company Agreement as of the __ day of
January, 2007.

       
MEMBERS:
 
LVP 1407 BROADWAY LLC,
a Delaware limited liability company

By: Lightstone Value Plus REIT LP,
its sole member
 
By: Lightstone Value Plus Real Estate Investment Trust, Inc.,
    a Maryland corporation, its general partner
 
   
   
    By:      

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Name: Michael Schurer
Title: Chief Financial Officer
 

       
LIGHTSTONE 1407 MANAGER LLC,
a Delaware limited liability company

By: Lightstone Holdings LLC,
its managing member
 
   
   
    By:      

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Name: David Lichtenstein
Title: President
 

        SPECIAL MEMBER/INDEPENDENT MANAGER:  
   
   
         

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Michelle A. Dreyer

 

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SCHEDULE A

Definitions
 
A. Definitions
 
When used in this Agreement, the following terms not otherwise defined herein
have the following meanings:
 
“Act” has the meaning set forth in the preamble to this Agreement.
 
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly Controlling or Controlled by or under direct or indirect common
Control with such Person.
 
“Agreement” means this Limited Liability Company Agreement of the Company,
together with the schedules attached hereto, as amended, restated or
supplemented or otherwise modified from time to time.
 
“Approval” (and any variation thereof) of a Member shall mean the prior written
approval of such Member. Use of the term “reasonable” or “reasonably” in
connection with the term “Approval” or any variation thereof or with the term
“satisfactory” means that such Approval shall not be withheld, conditioned or
delayed unreasonably. Unless either of such terms is used in connection with the
term “Approval” (or any variation thereof), such Approval may be granted or
withheld in a Member’s (or its authorized representative’s) sole discretion.
 
“Certificate of Formation” means the Certificate of Formation of the Company
filed with the Secretary of State of the State of Delaware on November 28, 2006,
as amended or amended and restated from time to time.
 
“Available Cash” means, at any particular time, all cash and cash items (from
whatever source received) held by the Company at such time, to the extent such
cash is not reasonably necessary (in the judgement of the Managing Member) to
cover (a) obligations or expenses of the Company at such time, or reserves for
working capital and capital expenditures (taking into account expected revenues)
anticipated within a reasonable period thereafter.
 
“Bankruptcy” means, with respect to any Person, if such Person (i) makes an
assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of its properties, or (vii) if 120 days after the commencement
of any proceeding against the Person seeking reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed, or if within 90 days
after the appointment without such Person's consent or acquiescence of a
trustee, receiver or liquidator of such Person or of all or any substantial part
of its properties, the appointment is not vacated or stayed, or within 90 days
after the expiration of any such stay, the appointment is not vacated. The
foregoing definition of “Bankruptcy” is intended to replace and shall supersede
and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and
18-304 of the Act.
 

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“Bankruptcy Action” means to institute proceedings to have the Company be
adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Company or file a petition seeking, or
consent to, reorganization or relief with respect to the Company under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or a substantial part of its property, or make
any assignment for the benefit of creditors of the Company, or admit in writing
the Company's inability to pay its debts generally as they become due, or
declare or effectuate a moratorium on the payment of any obligation, or take
action in furtherance of any such action.
 
“Basic Documents” means this Agreement and the Loan Documents to which the
Company is a party and all documents and certificates contemplated thereby or
delivered in connection therewith.
 
“Company” means 1407 Broadway Mezz II LLC, a Delaware limited liability company.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. “Controlling” and “Controlled” shall
have correlative meanings. Without limiting the generality of the foregoing, a
Person shall be deemed to Control any other Person in which it owns, directly or
indirectly, ten percent (10%) or more of the ownership interests.
 
“Covered Persons” has the meaning set forth in Section 20(a).
 
“Guarantor” has the meaning assigned to that term in the Loan Documents.
 
“Indemnitor” has the meaning assigned to that term in the Loan Documents.
 
"Independent Manager" means a natural person who, for the five-year period prior
to his or her appointment as Independent Manager has not been, and during the
continuation of his or her service as Independent Manager is not: (i) an
employee, manager, stockholder, partner or officer of the Company or any of its
Affiliates (other than his or her service as an Independent Manager or similar
capacity of the Company or any of its Affiliates); (ii) a customer or supplier
of the Company or any of its Affiliates (other than an Independent Manager
provided by a corporate services company that provides independent managers in
the ordinary course of its business); or (iii) any member of the immediate
family of a person described in (i) or (ii). Each Independent Manager is hereby
designated as a “manager” of the Company within the meaning of the Act.
 
“Lender” shall mean Lehman Brothers Holdings Inc., a Delaware corporation, its
successors and assigns.
 

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 “Loan Documents” means the documents evidencing, securing or otherwise relating
to the Senior Loan and/or the Mezzanine loan.
 
“Loans” means collectively, the Senior Loan and the Mezzanine Loan.
 
“Management Agreement” means the agreement of the Independent Manager in the
form attached hereto as Schedule C. The Management Agreement shall be deemed
incorporated into, and a part of, this Agreement
 
“Material Action” means to consolidate or merge the Company with or into any
Person, or sell, transfer, dispose of or encumber (except with respect to the
Lender) all or substantially all of the assets of the Company or, to the fullest
extent permitted by law, dissolve, wind-up, or liquidate the Company or acquire
all or substantially all of the assets of any Person.
 
“Members” means, collectively, Lightstone 1407 Manager LLC and LVP 1407 Broadway
LLC, each a Delaware limited liability company, as the initial members of the
Company, and includes any Person admitted as an additional member of the Company
or a substitute member of the Company pursuant to the provisions of this
Agreement, each in its capacity as a member of the Company; provided, however,
the term “Member” shall not include the Special Member. Each Member is hereby
designated as a “manager” of the Company within the meaning of the Act.
 
“Mezzanine Loan” means that certain mezzanine loan made by Lender to Mezz LLC.
 
“Mezzanine Note” means that certain mezzanine promissory note in the original
principal amount of $__________________ made by Mezz LLC to Lender in connection
with the Mezzanine Loan.
 
“Notes” means collectively, the Senior Note and the Mezzanine Note.
 
“Obligations” shall mean the indebtedness, liabilities and obligations of the
Company, as the sole member of Mezz LLC under or in connection with the Loan
Documents or any related document in effect as of any date of determination.
 
“Officer” means an officer of the Company described in Section 11.
 
“Person” means any individual, corporation, partnership, joint venture, limited
liability company, limited liability partnership, association, joint stock
company, trust, unincorporated organization, or other organization, whether or
not a legal entity, and any governmental authority.
 
“Property” means that certain real property located at 1407 Broadway, New York,
New York.
 
“Rating Agency” has the meaning assigned to that term in the Loan Documents.
 
“Rating Agency Condition” means, with respect to any action, that each Rating
Agency shall have been given ten days prior notice thereof and that each of the
Rating Agencies shall have notified the Company in writing that such action will
not result in a reduction or withdrawal, downgrade or qualification of the then
current rating by such Rating Agency of the Loan or any pool or loans of which
the Loan forms a part, or of any of the securities issued in connection with the
Securitization (as defined in the Loan Documents).
 

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“Special Member” means, upon such person's admission to the Company as a member
of the Company pursuant to Section 5, a person acting as Independent Manager, in
such person's capacity as a member of the Company. A Special Member shall only
have the rights and duties expressly set forth in this Agreement.
 
“Senior Loan” means that certain mortgage loan made by Lender to Property Owner.
 
“Senior Note” means that certain promissory note in the original principal
amount of $__________________ made by Property Owner to Lender in connection
with the Senior Loan.
 
“Subsidiaries” means collectively, Mezz LLC and Property Owner. Each
individually is also a “Subsidiary”.
 
B. Rules of Construction
 
Definitions in this Agreement apply equally to both the singular and plural
forms of the defined terms. The words “include” and “including” shall be deemed
to be followed by the phrase “without limitation.” The terms “herein,” “hereof'
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Section, paragraph or subdivision. The Section
titles appear as a matter of convenience only and shall not affect the
interpretation of this Agreement. All Section, paragraph, clause, Exhibit or
Schedule references not attributed to a particular document shall be references
to such parts of this Agreement.

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SCHEDULE B

Members

Name
 
Mailing Address
 
Agreed Value of Capital Contribution
 
Percentage Interest
Lightstone 1407 Manager LLC
 
326 Third Street
Lakewood, NJ 08701
 
$_____
 
51%
LVP 1407 Broadway LLC
 
326 Third Street
Lakewood, NJ 08701
 
$_____
 
49%

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SCHEDULE C

Management Agreement
 
January ____, 2007
 
______________________
c/o The Lightstone Group LLC
326 Third Street
Lakewood, NJ 08701
 
RE: Management Agreement - 1407 Broadway Mezz II LLC

Ladies and Gentlemen:

For good and valuable consideration, each of the undersigned Persons, who have
been designated as the Managing Member and Independent Manager of 1407 Broadway
Mezz II LLC, a Delaware limited liability company (the “Company”), in accordance
with the Limited Liability Company Agreement of the Company, dated as of the
date hereof, as it may be amended or restated from time to time (the “LLC
Agreement”), hereby agree as follows:
 
1.  Each of the undersigned accepts such Person's rights and authority as the
Managing Member or Independent Manager (as applicable) under the LLC Agreement
and agrees to perform and discharge such Person's duties and obligations as the
Managing Member or Independent Manager (as applicable) under the LLC Agreement,
and further agrees that such rights, authorities, duties and obligations under
the LLC Agreement shall continue until such Person's successor as the Managing
Member or Independent Manager (as applicable) is designated or until such
Person's resignation or removal as the Managing Member or Independent Manager
(as applicable) in accordance with the LLC Agreement. Each of the undersigned
agrees and acknowledges that it has been designated as a “manager” of the
Company within the meaning of the Delaware Limited Liability Company Act.
 
2.  So long as any Obligation is outstanding, each of the undersigned agrees,
solely in its capacity as a creditor of the Company on account of any
indemnification or other payment owing to the undersigned by the Company, not to
acquiesce, petition or otherwise invoke or cause the Company to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining a case against the Company under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Company or any
substantial part of the property of the Company, or ordering the winding up or
liquidation of the affairs of the Company.
 
3.  THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES SHALL BE
GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
 

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Initially capitalized terms used and not otherwise defined herein have the
meanings set forth in the LLC Agreement.
 
This Management Agreement may be executed in any number of counterparts, each of
which shall be deemed an original of this Management Agreement and all of which
together shall constitute one and the same instrument.
 
IN WITNESS WHEREOF, the undersigned have executed this Management Agreement as
of the day and year first above written.

       
LIGHTSTONE 1407 MANAGER LLC
 
By: Lightstone Holdings LLC,
its managing member
 
   
   
    By:      

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David Lichtenstein
President
 

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Michelle A. Dreyer

 

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SCHEDULE D
 
INDEPENDENT MANAGER

Michelle A. Dreyer
 

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SCHEDULE E

OFFICERS

OFFICERS 
 
     TITLE
 
   
David Lichtenstein 
 
    President
 
   
Michael Schurer 
 
    Secretary

 

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