FIRST AMENDMENT
TO
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LIGHTSTONE VALUE PLUS REIT LP
 
THIS FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
LIGHTSTONE VALUE PLUS REIT LP (this “Amendment”) is made as of June 26, 2008 by
and among Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
corporation (the “REIT”), as the General Partner of Lightstone Value Plus REIT
LP., a Delaware limited partnership (the “Partnership”), Lightstone Value Plus
REIT LLC, a Delaware limited liability company, as the Initial Limited Partner
and sole existing limited partner of the Partnership, Lightstone SLP, LLC, a
Delaware limited liability company, as Special General Partner of the
Partnership, Arbor Mill Run JRM LLC, a Delaware limited liability company
(“Arbor JRM”) and Arbor National CJ, LLC, a New York limited liability company
(“Arbor CJ”). Capitalized terms used but not otherwise defined in this Amendment
shall have the meanings given to such terms in the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of April 22, 2005,
by and among the REIT, the Initial Limited Partner and Special General Partner
and the other parties signatory thereto (the “Partnership Agreement”).
 
WITNESSETH:
 
WHEREAS, on the date hereof, Arbor JRM has contributed a 22.08% common interest
in Mill Run L.L.C., a Delaware limited liability company (“Mill Run”),
representing all of its membership interest in Mill Run, to the Partnership (the
“Arbor JRM Contribution”) pursuant to that certain Contribution and Conveyance
Agreement dated as of the date hereof by and between Arbor JRM and the
Partnership (the “Arbor JRM Contribution Agreement”);
 
WHEREAS, on the date hereof, Arbor CJ has contributed a 0.46% common interest in
Mill Run, representing all of its membership interest in Mill Run, to the
Partnership (the “Arbor CJ Contribution”) pursuant to that certain Contribution
and Conveyance Agreement dated as of the date hereof by and between Arbor CJ and
the Partnership (the “Arbor CJ Contribution Agreement”);
 
WHEREAS, AR Prime Holdings LLC, a Delaware limited liability company (“AR
Prime”), the REIT and the Partnership are parties to that certain Contribution
and Conveyance Agreement dated as the date hereof (the “AR Prime Contribution
Agreement”) pursuant to which, upon the closing of the AR Prime Contribution
Agreement, AR Prime will contribute its 25% membership interest in Prime Outlets
Acquisition Company LLC, a Delaware limited liability company (“POAC”),
representing all of its membership interest in POAC, to the Partnership (the
“POAC Contribution”);
 

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WHEREAS, pursuant to each of the Arbor JRM Contribution Agreement, the Arbor CJ
Contribution Agreement and the AR Prime Contribution Agreement, and in exchange
for each of the Arbor JRM Contribution, the Arbor CJ Contribution and the POAC
Contribution, respectively, the Partnership has agreed to issue to Arbor JRM and
Arbor CJ, respectively, on the date hereof, and to AR Prime, upon the closing of
the POAC Contribution, certain common Limited Partner Interests in the
Partnership as well as certain preferred Limited Partner Interests represented
by a newly designated preferred class of Limited Partner Interest of the
Partnership with the rights, privileges and preferences set forth on Exhibit A
hereto (the “Series A Preferred Units”); and
 
WHEREAS, the parties to this Amendment desire to amend the Partnership Agreement
to reflect the creation of the Series A Preferred Units and the rights,
privileges and preferences thereof.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows.
 
1. Pursuant to Section 4.3 of the Partnership Agreement, the Partnership
Agreement is hereby amended (i) to create the Series A Preferred Units with the
rights, privileges and preferences set forth on Exhibit A attached hereto and
(ii) to admit each of Arbor JRM and Arbor CJ as a Limited Partner of the
Partnership as of the date hereof in accordance with the provisions of the Arbor
JRM Contribution Agreement and the Arbor CJ Contribution Agreement,
respectively, and, upon and as of closing of the transactions contemplated by
the POAC Contribution Agreement, to admit AR Prime as a Limited Partner of the
Partnership effective as of the closing date of the POAC Contribution in
accordance with the provisions of the AR Prime Contribution Agreement.
 
2. Section 5.1 of the Partnership Agreement is hereby amended to provide that,
notwithstanding anything in the Partnership Agreement to the contrary,
distributions payable with respect to the Series A Preferred Units as provided
in Section 4 of Exhibit A attached hereto or, in the event of a Liquidation (as
defined in Exhibit A attached hereto) that is not a Liquidating Event, as
provided in Section 5 of Exhibit A attached hereto, shall have priority over all
of the other distributions to Partners pursuant to Section 5.1 of the
Partnership Agreement. 
 
3. Article 6 and Exhibit B of the Partnership Agreement are hereby amended to
provide that, notwithstanding anything in the Partnership Agreement to the
contrary, allocations of Net Income and Net Loss to holders of Series A
Preferred Units in any year shall be limited as provided in Section 4(F) of
Exhibit A attached hereto. 
 
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4. Section 13.2 of the Partnership Agreement is hereby amended to provide that,
notwithstanding anything in the Partnership Agreement to the contrary,
distributions payable with respect to the Series A Preferred Units as provided
in Section 5 of Exhibit A attached hereto shall have priority over all of the
other distributions to Partners following a Liquidating Event, including any
distributions pursuant to Section 13.2(a)(iii)(D).
 
5. The Partnership Agreement is hereby amended to the fullest extent necessary
to effect all of the matters contemplated by this Amendment, including but not
limited to the terms set forth on Exhibit A hereto, and including, without
limitation, the voting rights of the holders of Series A Preferred Units and
restrictions on the General Partner and the Partnership that are set forth in
Section 8 of Exhibit A attached hereto. Except as specifically provided for in
this Amendment, the provisions of the Partnership Agreement shall remain in full
force and effect.
 
6. The execution, delivery and effectiveness of this Amendment shall not operate
(a) as an amendment or modification of any provision, right or obligation of any
Partner under the Partnership Agreement except as specifically set forth in this
Amendment or (b) as a waiver or consent to any subsequent action or transaction.
 
7. This Amendment shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.
 
8. This Amendment contains the entire understanding among the parties with
respect to the subject matter hereof and supersedes any other prior written or
oral understanding or agreements among their with respect thereto.
 
9. This Amendment may be executed in one or more counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
and the same agreement.
 
10. This Amendment shall become effective when each party hereto shall have
received a counterpart hereof signed by all of the other parties hereto.
 
[SIGNATURE PAGE TO FOLLOW]
 
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IN WITNESS WHEREOF, each of the undersigned has caused this Amendment to be duly
executed on its behalf as of the date first above written.
 

       
GENERAL PARTNER:
 
LIGHTSTONE VALUE PLUS REAL ESTATE
INVESTMENT TRUST, INC.
 
   
   
  By:    

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David Lichtenstein
Chief Executive Officer and President

 

       
LIMITED PARTNER:

LIGHTSTONE VALUE PLUS REIT LLC
 
   
   
  By:    

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David Lichtenstein
Authorized Person

     

       
SPECIAL GENERAL PARTNER:
 
LIGHTSTONE SLP, LLC
 
   
   
  By:    

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David Lichtenstein
Authorized Person

 

       
ARBOR JRM:

ARBOR MILL RUN JRM LLC
 
   
   
  By:    

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Name:
  Title:

 
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ARBOR CJ:

ARBOR NATIONAL CJ, LLC
 
   
   
  By:    

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Name:   Title:

 
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EXHIBIT A
 
TERMS OF SERIES A PREFERRED UNITS
 
In accordance with Section 4.3 of the Partnership Agreement, set forth below are
the terms and conditions of the Series A Preferred Units established by the
Partnership on June 26, 2008.
 
1. Definitions. For purposes of the Series A Preferred Units, the following
terms shall have the meanings indicated in this Section 1. Capitalized terms
used but not otherwise defined in this Exhibit A shall have the meanings set
forth in Article I of the Partnership Agreement, as amended by the Amendment to
which this Exhibit A is attached.
 
“Common Units” shall mean any class or series of Partnership Interest that does
not have a priority or preference in the payment of distributions in the
distribution of assets upon any Liquidation, including but not limited to all
partnership Interests issued to the General partner or to the Special General
Partner.
 
“Estimated Market Price” shall have the meaning set forth in Section 6(A) of
this Exhibit A.
 
“Liquidation” shall mean the occurrence of any Liquidating Event or any lease or
transfer of all or substantially all of the Partnership’s property or assets.
 
“Lockout Date” shall mean June 26, 2013.
 
“Series A Distribution Payment Date” shall mean with respect each calendar
quarter a date that is no later than 30 days after the end of such calendar
quarter.
 
“Series A Distribution Period” shall mean quarterly distribution periods
commencing on January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding Series A
Distribution Period.
 
“Series A Distribution Record Date” shall have the meaning set forth in Section
6(C) of this Exhibit A.
 
“Series A Junior Units” shall mean Common Units and any Partnership Units of any
other class or series now or hereafter issued and outstanding that are not
Series A Senior Units, Series A Preferred Units or Series A Parity Units.
 
“Series A Liquidation Preference” shall have the meaning set forth in Section
5(A) of this Exhibit A.
 
“Series A Parity Units” shall mean any class or series of Limited Partner
Interest now or hereafter issued and outstanding, whether or not the
distribution rates thereof shall be different from those of the Series A
Preferred Units, if the holders of such class or series and the Series A
Preferred Units shall be entitled to (i) the receipt of distributions in
proportion to their respective amounts of accrued and unpaid distributions per
unit and (ii) amounts distributable upon Liquidation in proportion to their
respective liquidation preferences, in each case without preference or priority
one over the other.
 
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“Series A Senior Units” shall mean any class or series of Partnership Interest
of the Partnership hereafter issued and outstanding, if the holders of such
class or series shall be entitled to the receipt of distributions prior to a
Liquidation or of amounts distributable upon any event of Liquidation, in
preference or priority to the holders of Series A Preferred Units.
 
2. Number of Preferred Units and Designation. This series of preferred
Partnership Interests shall be designated as the 4.6316% Series A Preferred
Limited Partner Interests (the “Series A Preferred Units”). The number of units
which shall initially constitute such series shall be 80,000 units.
 
3. Ranking. The Series A Preferred Units shall, with respect to the payment of
distributions and the right to receive the Series A Liquidation Preference upon
a Liquidation, rank junior to all Series A Senior Units; rank senior to all
Series A Junior Units, and rank in parity with all Series A Parity Units.
 
4. Distributions.
 
(A) Subject to the preferential rights of the holders of any Series A Senior
Units, the holders of Series A Preferred Units shall be entitled to receive,
when, as and if declared by the General Partner, cumulative preferential
distributions payable in cash in an amount per unit equal to an annual rate of
4.6316% payable in arrears shall be calculated daily and shall be computed on
the actual number of days elapsed over a month of 30 days and a year of 360
days; provided, however, that in the event that the Series A Preferred Units are
not redeemed by the Partnership on the Lockout Date or within fifteen (15) days
thereafter, the annual distribution rate applicable to the Series A Preferred
Units shall increase from 4.6316% to fifteen percent (15%) per annum for so long
as the Series A Preferred Units remain outstanding. The distributions shall
begin to accrue and shall be fully cumulative from the day of issuance of any
such Series A Preferred Units and shall be payable quarterly, when, as and if
declared by the General Partner, in arrears, on each Series A Distribution
Payment Date. Each such distribution shall be payable to the holders of record
of Series A Preferred Units as they appear in the records of the Partnership at
the close of business on such record date, not less than 10 nor more than 30
days preceding such Series A Distribution Payment Dates thereof, as shall be
fixed by the General Partner. Accrued and unpaid distributions for any past
Series A Distribution Periods may be declared and paid at any time and for such
interim periods, without reference to any regular Series A Distribution Payment
Date, to holders of record on such date, not less than 10 nor more than 30 days
preceding the payment date thereof, as may be fixed by the General Partner. Any
distribution payment made on Series A Preferred Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to Series
A Preferred Units which remains payable.
 
(B) The amount of distributions payable for any Series A Distribution Period
shorter than a full calendar quarter on the Series A Preferred Units shall be
computed by dividing the number of days in such period by 360 and multiplying
the result by the product of the annual distribution rate (i.e., 4.6316%)
multiplied by the Series A Liquidation Preference (i.e., $1,000.00 per Series A
Preferred Unit). Holders of Series A Preferred Units shall not be entitled to
any distributions, whether payable in cash, property or shares, in excess of
cumulative distributions, as herein provided, on the Series A Preferred Units.
No interest, or sum of money in lieu of interest, shall be payable in respect of
any distribution payment or payments on the Series A Preferred Units which may
be in arrears.
 
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(C) So long as any Series A Preferred Units are outstanding, no distributions,
except as described in the immediately following sentence, shall be declared or
paid or set apart for payment on any class or series of Series A Junior Units
for any period unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series A Preferred Units for
all Series A Distribution Periods terminating on or prior to the distribution
payment date on such class or series of Series A Junior Units.
 
(D) So long as any Series A Preferred Units are outstanding, no distributions,
except as described in the immediately following sentence, shall be declared or
paid or set apart for payment on any class or series of Series A Parity Units
for any period unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Series A Preferred Units for
all Series A Distribution Periods terminating on or prior to the distribution
payment date on such class or series of Series A Parity Units. When
distributions are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all distributions declared upon Series A Preferred
Units and all distributions declared upon any other class or series of Series A
Parity Units shall be declared ratably in proportion to the respective amounts
of distributions accumulated and unpaid on the Series A Preferred Units and
accumulated and unpaid on such Series A Parity Units.
 
(E) No distributions on Series A Preferred Units shall be declared by the
General Partner or paid or set apart for payment by the Partnership at such time
as the terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, prohibits such declaration, payment or
setting apart for payment or provides that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration or payment shall be restricted or prohibited by law.
 
(F) Subject at all times to Section 2 and Section 3(a), (b), (e) and (f) of
Exhibit B to the Partnership Agreement, with respect to any Partnership Year,
the holders of Series A Preferred Units shall be allocated Net Income, Net Loss
and other allocable Partnership items of income, gain, loss or expense, only
with respect to and to the extent of the amounts actually distributed to such
holder of Series A Preferred Units for such Partnership Year (but in no event
distributed later than 30 days after the end of that Partnership Year) pursuant
to this Section 4 on account of the annual return accrued on the Series A
Preferred Units, but none of such items shall be allocated to the holders of
Series A Preferred Units on account of any other distributions (all such other
distributions representing a return of contributed capital).
 
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5. Liquidation Preference.
 
(A) In the event of any Liquidation, subject to the prior preferences and other
rights of any Series A Senior Units, before any payment or distribution of the
assets of the Partnership (whether capital or surplus) shall be made to or set
apart for the holders of Series A Junior Units, the holders of the Series A
Preferred Units shall be entitled to receive One Thousand Dollars ($1,000.00)
(the “Series A Liquidation Preference”) per Series A Preferred Unit plus an
amount equal to all distributions (whether or not earned or declared) accrued
and unpaid thereon to the date of final distribution to such holders; but such
holders shall not be entitled to any further payment. If, upon any Liquidation,
the assets of the Partnership, or proceeds thereof, distributable among the
holders of the Series A Preferred Units and all Series A Parity Units shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other units of any class or series of Series A Parity Units,
then such assets, or the proceeds thereof, shall be distributed among the
holders of Series A Preferred Units and any such other Series A Parity Units
ratably in accordance with the respective amounts that would be payable on such
Series A Preferred Units and any such other Series A Parity Units if all amounts
payable thereon were paid in full.
 
(B) Subject to the rights of the holders of any Series A Parity Units or Series
A Senior Units, upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the holders of the
Series A Preferred Units, as provided in this Section 5, the holders of Series A
Preferred Units shall have no other claim to the remaining assets of the
Partnership and any other series or class or classes of Series A Junior Units
shall, subject to the respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets remaining to be paid or distributed,
and the holders of the Series A Preferred Units shall not be entitled to share
therein.
 
6. Conversion.
 
(A) Unless such Series A Preferred Units have previously been redeemed pursuant
to Section 8 hereof, at the option of the holder thereof, any Series A Preferred
Units may be converted, in whole or in part, at any time and from time to time
after the Lockout Date, into such number of Common Units obtained by dividing
the aggregate Series A Liquidation Preference (including for this purpose any
distributions accrued and unpaid in respect of any prior Series A Distribution
Periods but not the then-current Series A distribution Period) of such Series A
Preferred Units by the estimated fair market value of one common share in the
REIT (the “Estimated Market Value”) as determined by Robert A. Stanger & Co.,
Inc. or another nationally recognized independent valuation firm with expertise
in valuing the securities of real estate investment trusts, reasonably
acceptable to the Partnership and holders owning at least sixty six and two
thirds percent (66 and 2/3%) of Series A Preferred Units.
 
(B) In order to exercise the conversion right, the holder of each applicable
Series A Preferred Unit shall surrender the certificate representing such Series
A Preferred Unit, duly endorsed or assigned to the Partnership in blank, to the
Partnership, accompanied by written notice to the Partnership that the holder
thereof elects to convert such Series A Preferred Units.
 
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(C) Holders of Series A Preferred Units at the close of business on the record
date (a “Series A Distribution Record Date”) in respect if any Series A
Distribution Payment Date shall be entitled to receive the distribution payable
on such units on the corresponding Series A Distribution Payment Date
notwithstanding the conversion thereof following such Series A Distribution
Record Date and prior to such Series A Distribution Payment Date.
 
(D) Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificate for the Series A
Preferred Units shall have been surrendered and such notice received by the
Partnership as aforesaid.
 
(E) No fractional units or scrip representing fractions of Common Units shall be
issued upon conversion of the Series A Preferred Units. Instead of any
fractional interest in a Common Unit that would otherwise be deliverable upon
the conversion of a Series A Preferred Unit, the Partnership shall pay to the
holder of such Series A Preferred Unit an amount equal in cash based upon the
then Estimated Market Price. If more than one Series A Preferred Unit shall be
surrendered for conversion at one time by the same holder, the number of Common
Units issuable upon conversion thereof shall be computed on the basis of the
aggregate number of Series A Preferred Units so surrendered.
 
7. Redemption. The Series A Preferred Units shall have no mandatory redemption
or maturity date. The Series A Preferred Units shall not be redeemable by the
Partnership prior to the Lockout Date. On or after the Lockout Date, the Series
A Preferred Units may be redeemed at the option of the Partnership (which notice
may be delivered prior to the Lockout Date as long as the redemption does not
occur prior to the Lockout Date), in whole but not in part, on thirty (30) days’
prior written notice at the option of the Partnership, at a redemption price per
Series A Preferred Unit equal to the sum of the Series A Liquidation Preference
plus an amount equal to all distributions (whether or not earned or declared)
accrued and unpaid thereon to the date of redemption, and the redemption price
shall be payable in cash. During any redemption notice period, the holders of
the Series A Preferred Units shall retain any conversion rights with respect to
the Series A Preferred Units. The Series A Preferred Units shall not be subject
to any sinking fund or other obligation of the Partnership to redeem or retire
the Series A Preferred Units.
 
8. Voting.
 
(A) Other than as expressly provided in below in this Section 8, the Series A
Preferred Units shall not have any voting rights or powers, and the consent of
the holders thereof, shall not be required for the taking of any Partnership
action.
 
(B) As long as any of the Series A Preferred Units shall remain outstanding, the
Partnership shall not, and the General Partner shall not have the authority to
cause the Partnership to, take any of the following actions without the prior
written consent of holders owning at least sixty-six and two-thirds percent (66
and 2/3%) of the Series A Preferred Units then issued and outstanding, voting as
a single class, in person or by proxy:
 
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(1) Issue any Series A Senior Units or additional Series A Preferred Units,
except for Series A Preferred Units that are issued to AR Prime pursuant to the
AR Prime Contribution Agreement; provided, however, nothing in this clause
8(B)(1) shall prohibit the Partnership from issuing Series A Junior Units or
Series A Parity Units.
 
(2) Issue any Series A Parity Units if (x) the liquidation preference for such
units exceeds the value of the consideration received by the Partnership for the
issuance of such units, as determined by the Board of Directors of the REIT in
its sole discretion, (y) the rates at which distributions are payable on such
units are calculated on a base amount that is higher than the liquidation
preference for such units, or (z) the distribution payment dates for such units
are not the same as those for the Series A Preferred Units.
 
(3) Redeem or repurchase any Series A Junior Units.
 
(4) Redeem or repurchase any Series A Parity Units on or after the Lockout Date,
unless concurrently therewith all of the Series A Preferred Units are being
redeemed.
 
(5) Redeem or repurchase any Series A Party Units prior to the Lockout Date,
unless the full cumulative distributions have been or contemporaneously are
declared and paid or set apart for payment for any past Series A Distribution
Periods; provided that in the case of a repurchase, Series A Parity Units may
not be purchased by the Partnership at a price higher than the redemption price
for such Series A Parity Units or if no redemption price is provided for, the
liquidation preference for such Series A Parity Units, plus any accrued and
unpaid distributions thereon to the extent not otherwise included in the
calculation of the liquidation preference for such Series A Parity Units.
 
(6) (x) Effectuate amendments to the Partnership Agreement (other than
amendments to this Exhibit A) that would materially adversely affect the terms
and conditions of, or the rights, privileges or preferences of the holders of
the Series A Preferred Units or (y) effectuate amendments to any provisions set
forth in this Amendment that would adversely affect the terms and conditions of,
or the rights, privileges or preferences of the holders of the Series A
Preferred Units.
 
(C) In the event that the Series A Preferred Units have not been redeemed by the
Partnership on the Lockout Date or within fifteen (15) days thereafter, from and
after such date the Partnership shall not, and the General Partner shall not
have the authority to cause the Partnership to, take any of the following
actions without the prior written consent of holders owning at least sixty-six
and two-thirds percent (66 and 2/3%) of the Series A Preferred Units then issued
and outstanding, voting as a single class in person or by proxy:
 
(1) Issue any Partnership Interests other than Common Units.
 
(2) Purchase or otherwise acquire any direct or indirect interest in real
property, except that the Partnership shall be permitted to make purchases or
acquisitions of interests in real property where the sole consideration for such
purchases or acquisitions is exclusively the issuance of Common Units.
Notwithstanding the foregoing, the Partnership shall be permitted to consummate
any purchase or acquisition from a Person other than the REIT Advisor, the
Special General Partner or any of their respective Affiliates provided that such
purchase or acquisition (i) was the subject of an executed purchase agreement
dated at least 90 days prior to the Lockout Date or (ii) is a follow-on
investment in existing real property owned by the Partnership that involves an
acquisition (a) of property adjoining property already owned by the Partnership
or (b) a greater ownership interest in property already owned by the
Partnership; provided that, in the case of (a) and (b) above, such purchase or
acquisition is being effected in order to protect, preserve or enhance the
Partnership’s existing investment.
 
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(3) Sell, transfer, lease as an entirety, or otherwise dispose of any direct or
indirect interest in real property; provided, however, that the Partnership
shall be permitted to sell, transfer, lease or otherwise dispose of any real
property to a Person other than the REIT Advisor, the Special General Partner or
any of their respective Affiliates if such transaction (i) was the subject of a
binding executed purchase agreement dated at least 90 days prior to the Lockout
Date, or (ii) none of the net proceeds of such transaction (after customary
third party transaction costs, other than those payable to Person the REIT
Advisor, the Special General Partner or any of their respective Affiliates)
shall be distributed to any holders of Series A Junior Units and all of such net
proceeds shall instead either (x) be applied to redeem the Series A Preferred
Units at the closing of such transaction or (y) be held in a segregated account
which may be used solely for the redemption of the Series A Preferred Units.
 
(4) Lend money to or guarantee the obligation of, any person other than direct
or indirect subsidiaries of the REIT or the Partnership, in excess of $500,000
per annum in the aggregate; provided that the Partnership shall be permitted to
make any loan or guarantee that is required to be made pursuant to a binding
executed agreement dated at least 90 days prior to the Lockout Date; provided,
further, that any such loan or guarantee permitted by the previous proviso shall
not be permitted to be made to the REIT Advisor, the Special General Partner or
any of their respective Affiliates.
 
(5) Effectuate a merger, consolidation or recapitalization of the Partnership or
a conversion of the Partnership to an entity other than a Delaware limited
partnership.
 
(6) Enter into any new agreement or transaction, or modify or waive the terms
of, or agree to terminate, any existing agreement or transaction, with the REIT
Advisor, the Special General Partner or any of their respective Affiliates;
provided, however, that the foregoing restriction shall not apply to the annual
renewal of the advisory agreement with affiliates of the Partnership and the
annual renewal of the management agreements with affiliates of the Partnership;
and provided, further, that in addition to the renewal or extension of the term
of any such advisory and management agreement, additional amendments or
modifications to such agreements may be made as long as such amendments or
modifications (including, without limitation with respect to fees payable
pursuant to such agreements) are determined by the Board of Directors of the
REIT to be market provisions and amendments as evidenced by a report produced or
compiled by Robert A Stanger & Co., Inc. or another independent, nationally
recognized valuation firm selected by the Board of Directors of the REIT.
 
(D) Notwithstanding anything in this Section 8 to the contrary, no consent of
the holders of the Series A Preferred Units shall be required with respect to
any transaction if (x) prior to the closing of such transaction the Partnership
has given written notice that it intends to fully redeem all of the Series A
Preferred Units and (y) at the closing of such transaction the Series A
Preferred Units are fully redeemed by the Partnership.
 
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(E) The Partnership shall not, and the General Partner shall not have the
authority to cause the Partnership to, enter into any binding agreement to take
any action that would violate the provisions of this Section 8 (a “Restricted
Agreement”); provided, however, that the General Partner shall have the
authority to cause the Partnership to enter into a Restricted Agreement if, upon
the closing of the transaction contemplated by such Restricted Agreement, the
Series A Preferred Units will be redeemed in full by the Partnership.
 
9. Transfers. Prior to the Lockout Date, no Series A Preferred Unit shall be
transferred, sold, assigned, conveyed, gifted, pledged, encumbered,
hypothecated, mortgaged, exchanged or otherwise disposed of by law or otherwise
(collectively, a “Transfer”) without the prior written consent of the General
Partner, which may be withheld or denied by the General Partner it is sole and
absolute discretion; provided, however, that notwithstanding anything in the
Partnership Agreement to the contrary but subject to the limitations set forth
in Sections 11.3 (c), (d), and (e) of the Partnership Agreement as in effect as
of June 26, 2008, prior to the Lockout Date there shall be no approval required
for, and no restrictions whatsoever on, any Transfer of Series A Preferred Units
to Arbor Realty Trust, Inc., Arbor Commercial Mortgage, LLC or any of their
respective controlled Affiliates, and there shall be no approval required for,
or restrictions on, the pledge of any Series A Preferred Units to the REIT.
Notwithstanding anything in the Partnership Agreement to the contrary, (i) from
and after the Lockout Date, the only restrictions in the Partnership Agreement
on the Transfer of Series A Preferred Units are those set forth in Sections 11.3
(c), (d), and (e) of the Partnership Agreement as in effect as of June 26, 2008
and (ii) any Transfer in contravention of the terms of this Exhibit A shall be
void and ineffectual and shall not be binding upon, or recognized by the
Partnership.
 
10. Opt-in to Article 8 of the Uniform Commercial Code. Pursuant to and in
accordance with 6 Del. Code Section 8-103(c), all Series A Preferred Units shall
be considered and treated as “securities” (within the meaning of Del. Code
Section 8-102(a)(15)) governed by Article 8 of the Delaware Uniform Commercial
Code. All Series A Preferred Units shall upon issuance be evidenced and
represented by Certificates of Series A Preferred Units issued by the
Partnership to each holder of Series A Preferred Units. Such Certificate of
Series A Preferred Interest is intended to be and shall be considered a
“security certificate” within the meaning of 6 Del. Code Section 8-102(a)(16).
The Series A Preferred Units represented or evidenced by such Certificate are
intended to be treated and shall be considered “certificated securities” within
the meaning of 6 Del. Code Section 8-102(a)(4). The General Partner and the
officers thereof are hereby authorized, empowered and directed to execute and
deliver any such Certificate and such Certificates shall be delivered by the
Partnership to the applicable holder concurrently with the date of issuance.
 
11. Miscellaneous.
 
(A) Series A Preferred Units will not have any designations, preferences,
conversion or other rights, voting powers, restrictions, limitations as to
distributions, qualifications or terms and conditions of redemption, other than
those specifically set forth herein, in the Partnership Agreement, and as may be
provided under applicable law.
 
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(B) The headings of the various subdivisions herein are for convenience only and
will not affect the meaning if interpretation of any of the provisions herein.
 
(C) The preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption of the Series A Preferred Units may be waived, and any of such
provisions of the Series A Preferred Units may be amended, with the approval of
holders of at least sixty-six and two-thirds percent (66 and 2/3%) of the issued
outstanding Series A Preferred Units, voting as a single class in person or by
proxy.
 
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12. Severability of Provisions. Whenever possible, each provision hereof shall
be interpreted in a manner as to be effective and valid under applicable law,
but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased, the such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.
 
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