AGREEMENT
      OF LIMITED PARTNERSHIP

     

    OF

     

    LIGHTSTONE
      VALUE PLUS REIT II LP

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      	
               

            	
                
                

            	
               

            	
                

            	
              Page

            
	
              ARTICLE
                1 DEFINED TERMS

            	
                

            	
              1

            
	 	 
	
              ARTICLE
                2 ORGANIZATIONAL MATTERS

            	
                

            	
              10

            
	
                          2.1  

            	
                

            	
              Formation

            	
                

            	
              10

            
	
              2.2  

            	
                

            	
              Name

            	
                

            	
              11

            
	
              2.3  

            	
                

            	
              Registered
                Office and Agent; Principal Office

            	
                

            	
              11

            
	
              2.4  

            	
                

            	
              Power
                of Attorney

            	
                

            	
              11

            
	
              2.5  

            	
                

            	
              Term

            	
                

            	
              12

            
	 	 
	
              ARTICLE
                3 PURPOSE

            	
                

            	
              12

            
	
              3.1  

            	
                

            	
              Purpose
                and Business

            	
                

            	
              12

            
	
              3.2  

            	
                

            	
              Powers

            	
                

            	
              12

            
	 	 
	
              ARTICLE
                4 CAPITAL CONTRIBUTIONS

            	
                

            	
              13

            
	
              4.1  

            	
                

            	
              Capital
                Contributions of the Partners

            	
                

            	
              13

            
	
              4.2  

            	
                

            	
              Additional
                Funds; Restrictions on the General Partner

            	
                

            	
              13

            
	
              4.3  

            	
                

            	
              Issuance
                of Additional Partnership Interests; Admission of Additional Limited
                Partners

            	
                

            	
              14

            
	
              4.4  

            	
                

            	
              Contribution
                of Proceeds of Issuance of REIT Stock

            	
                

            	
              14

            
	
              4.5  

            	
                

            	
              Repurchase
                of REIT Stock; Shares-In-Trust

            	
                

            	
              15

            
	
              4.6  

            	
                

            	
              No
                Third-Party Beneficiary

            	
                

            	
              15

            
	
              4.7  

            	
                

            	
              No
                Interest; No Return

            	
                

            	
              15

            
	
              4.8  

            	
                

            	
              No
                Preemptive Rights

            	
                

            	
              15

            
	 	 
	
              ARTICLE
                5 DISTRIBUTIONS

            	
                

            	
              15

            
	
              5.1  

            	
                

            	
              Regular
                Distributions

            	
                

            	
              15

            
	
              5.2  

            	
                

            	
              Qualification
                as a REIT

            	
                

            	
              16

            
	
              5.3  

            	
                

            	
              Withholding

            	
                

            	
              16

            
	
              5.4  

            	
                

            	
              Additional
                Partnership Interests

            	
                

            	
              17

            
	
              5.5  

            	
                

            	
              Distributions
                Upon Liquidation

            	
                

            	
              17

            
	 	 
	
              ARTICLE
                6 ALLOCATIONS

            	
                

            	
              17

            
	
              6.1  

            	
                

            	
              Allocations

            	
                

            	
              17

            
	
              6.2  

            	
                

            	
              Revisions
                to Allocations to Reflect Issuance of Partnership
                Interests

            	
                

            	
              17

            
	 	 
	
              ARTICLE
                7 MANAGEMENT AND OPERATIONS OF BUSINESS

            	
                

            	
              17

            
	
              7.1  

            	
                

            	
              Management

            	
                

            	
              17

            
	
              7.2  

            	
                

            	
              Certificate
                of Limited Partnership

            	
                

            	
              20

            
	
              7.3  

            	
                

            	
              Reimbursement
                of the General Partner

            	
                

            	
              20

            
	
              7.4  

            	
                

            	
              Outside
                Activities of the General Partner

            	
                

            	
              20

            
	
              7.5  

            	
                

            	
              Contracts
                with Affiliates

            	
                

            	
              21

            
	
              7.6  

            	
                

            	
              Indemnification

            	
                

            	
              21

            
	
              7.7  

            	
                

            	
              Liability
                of the General Partner

            	
                

            	
              22

            
	
              7.8  

            	
                

            	
              Other
                Matters Concerning the General Partner

            	
                

            	
              23

            
	7.9  	   	
              Restrictions
                on Indemnification and Limitation of Liability

            	 	23
	
              7.10  

            	
                

            	
              Title
                to Partnership Assets

            	
                

            	
              24
                

            
	
              7.11  

            	
                

            	
              Reliance
                by Third Parties

            	
                

            	
              24

            
	
              7.12  

            	
                  

            	
              Loans
                By Third Parties.

            	
                

            	
              24

            
	 	 
	
              ARTICLE
                8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

            	
                

            	
              25

            
	
              8.1  

            	
                

            	
              Limitation
                of Liability

            	
                

            	
              25

            
	
              8.2  

            	
                

            	
              Management
                of Business

            	
                

            	
              25

            
	
              8.3  

            	
                

            	
              Outside
                Activities of Limited Partners

            	
                

            	
              25

            
	
              8.4  

            	
                

            	
              Return
                of Capital

            	
                

            	
              25

            
	
              8.5  

            	
                

            	
              Rights
                of Limited Partners Relating to the Partnership

            	
                

            	
              25

            
	
              8.6  

            	
                

            	
              Exchange
                Rights Agreements

            	
                

            	
              26

            
	 	 
	
              ARTICLE
                9 BOOKS, RECORDS, ACCOUNTING AND REPORTS

            	
                

            	
              26

            
	
                          9.1  

            	
                

            	
              Records
                and Accounting

            	
                

            	
              26

            
	
              9.2  

            	
                

            	
              Fiscal
                Year

            	
                

            	
              26

            
	
              9.3  

            	
                

            	
              Reports

            	
                

            	
              26

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
                
                

            	
               

            	
                

            	
              Page

            
	
              ARTICLE
                10 TAX MATTERS

            	
                

            	
              27

            
	
              10.1  

            	
                

            	
              Preparation
                of Tax Returns

            	
                

            	
              27

            
	
              10.2  

            	
                

            	
              Tax
                Elections

            	
                

            	
              27

            
	
              10.3  

            	
                

            	
              Tax
                Matters Partner

            	
                

            	
              27

            
	
              10.4  

            	
                

            	
              Organizational
                Expenses

            	
                

            	
              28

            
	
              10.5  

            	
                

            	
              Withholding

            	
                

            	
              28

            
	 	 
	
              ARTICLE
                11 TRANSFERS AND WITHDRAWALS

            	
                

            	
              29

            
	
              11.1  

            	
                

            	
              Transfer

            	
                

            	
              29

            
	
              11.2  

            	
                

            	
              Transfer
                of the General Partner’s General Partner Interest

            	
                

            	
              29

            
	
              11.3  

            	
                

            	
              Limited
                Partners’ Rights to Transfer

            	
                

            	
              30

            
	
              11.4  

            	
                

            	
              Substituted
                Limited Partners

            	
                

            	
              31

            
	
              11.5  

            	
                

            	
              Substituted
                Associate General Partner

            	
                

            	
              31

            
	
              11.6  

            	
                

            	
              Assignees

            	
                

            	
              32

            
	
              11.7  

            	
                

            	
              General
                Provisions

            	
                

            	
              32

            
	 	 
	
              ARTICLE
                12 ADMISSION OF PARTNERS

            	
                

            	
              33

            
	
              12.1  

            	
                

            	
              Admission
                of Successor General Partner

            	
                

            	
              33

            
	
              12.2  

            	
                

            	
              Admission
                of Additional Limited Partners

            	
                

            	
              34

            
	
              12.3  

            	
                

            	
              Amendment
                of Agreement and Certificate of Limited Partnership

            	
                

            	
              34

            
	 	 
	
              ARTICLE
                13 DISSOLUTION, LIQUIDATION AND TERMINATION

            	
                

            	
              34

            
	
              13.1  

            	
                

            	
              Dissolution

            	
                

            	
              34

            
	
              13.2  

            	
                

            	
              Winding
                Up

            	
                

            	
              35

            
	
              13.3  

            	
                

            	
              Return
                of Associate General Partner Capital Contributions

            	
                

            	
              36

            
	
              13.4  

            	
                

            	
              No
                Obligation to Contribute Deficit

            	
                

            	
              36

            
	
              13.5  

            	
                

            	
              Rights
                of Limited Partners

            	
                

            	
              36

            
	
              13.6  

            	
                

            	
              Notice
                of Dissolution

            	
                

            	
              37

            
	
              13.7  

            	
                

            	
              Termination
                of Partnership and Cancellation of Certificate of Limited
                Partnership

            	
                

            	
              37

            
	
              13.8  

            	
                

            	
              Reasonable
                Time for Winding-Up

            	
                

            	
              37

            
	
              13.9  

            	
                

            	
              Waiver
                of Partition

            	
                

            	
              37

            
	 	 
	
              ARTICLE
                14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

            	
                

            	
              37

            
	
              14.1  

            	
                

            	
              Amendments

            	
                

            	
              37

            
	
              14.2  

            	
                

            	
              Meetings
                of the Partners

            	
                

            	
              38

            
	 	 
	
              ARTICLE
                15 GENERAL PROVISIONS

            	
                

            	
              38

            
	
              15.1  

            	
                

            	
              Addresses
                and Notice

            	
                

            	
              38

            
	
              15.2  

            	
                

            	
              Titles
                and Captions

            	
                

            	
              39

            
	
              15.3  

            	
                

            	
              Pronouns
                and Plurals

            	
                

            	
              39

            
	
              15.4  

            	
                

            	
              Further
                Action

            	
                

            	
              39

            
	
              15.5  

            	
                

            	
              Binding
                Effect

            	
                

            	
              39

            
	
              15.6  

            	
                

            	
              Creditors

            	
                

            	
              39

            
	
              15.7  

            	
                

            	
              Waiver

            	
                

            	
              39

            
	
              15.8  

            	
                

            	
              Counterparts

            	
                

            	
              39

            
	
              15.9  

            	
                

            	
              Applicable
                Law

            	
                

            	
              39

            
	
              15.10

            	
                

            	
              Invalidity
                of Provisions

            	
                

            	
              39

            
	
              15.11

            	
                

            	
              Entire
                Agreement

            	
                

            	
              39

            
	
              15.12

            	
                

            	
              Merger

            	
                

            	
              39

            
	
              15.13

            	
                

            	
              No
                Rights as Stockholders

            	
                

            	
              39

            
	 	 	 
	
              EXHIBITS

            	
                

            	
               

            	
                

            	
               

            
	 	 	 
	
              Exhibit A -

            	
                
                

            	
              Partners’
                Contributions and Partnership Interests

            	
                
                

            	
               

            
	
              Exhibit B -

            	
                
                

            	
              Allocations

            	
                

            	
               

            
	
              Exhibit C -

            	
                
                

            	
              Exchange
                Rights Agreement for Partnership Units

            	
                

            	
               

            
	
              Exhibit D -

            	
               
                 

            	
              Certificate
                of Limited Partnership

            	
                

            	
               

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FOR
      ALL
      INVESTORS:

     

    THE
      PARTNERSHIP UNITS ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR
      QUALIFIED UNDER THE APPLICABLE STATE SECURITIES LAWS, IN RELIANCE UPON
      EXEMPTIONS FROM REGISTRATION AND QUALIFICATION PROVIDED IN THE SECURITIES ACT
      AND THE APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
      AND
      QUALIFICATION OR REGISTRATION UNDER THE APPLICABLE STATE SECURITIES LAWS, OR
      AN
      OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION OR
      QUALIFICATION IS NOT REQUIRED.

     

    IN
      ADDITION, THE PARTNERSHIP UNITS ISSUED UNDER THIS AGREEMENT MAY BE SOLD OR
      TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
      HEREIN.

     

    IN
      MAKING
      AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE
      COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
      THE PARTNERSHIP UNITS OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
      OR
      STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
      AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
      MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
      OFFENSE.

     

    THE
      PARTNERSHIP UNITS OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
      AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
      PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
      THAT
      THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
      INDEFINITE PERIOD OF TIME.

     

    FOR
      NEW
      YORK INVESTORS:

     

    THIS
      AGREEMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS ISSUANCE
      AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
      ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
      UNLAWFUL.

     

    THIS
      AGREEMENT DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
      STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE
      CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. STATEMENTS CONTAINED
      HEREIN AS TO THE CONTENTS OF DOCUMENTS GOVERNING THIS INVESTMENT ARE SUMMARIES
      AND ARE NOT COMPLETE COPIES OF THE DOCUMENTS, AND, ACCORDINGLY, REFERENCE SHOULD
      BE MADE TO THE DOCUMENTS THEMSELVES FOR A MORE COMPLETE UNDERSTANDING OF THE
      INVESTMENT. HOWEVER, THIS PARTNERSHIP AGREEMENT CONTAINS A FAIR SUMMARY OF
      THE
      MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.

     

    FOR
      FLORIDA INVESTORS:

     

    THE
      PARTNERSHIP UNITS OFFERED HEREBY WILL BE SOLD TO, AND ACQUIRED BY, THE PURCHASER
      IN A TRANSACTION EXEMPT UNDER SECTION 517.061(11) OF THE FLORIDA SECURITIES
      AND
      INVESTOR PROTECTION ACT. THAT SECTION PROVIDES THAT WHEN SALES ARE MADE TO
      FIVE
      OR MORE PERSONS, ANY SALE MADE PURSUANT TO SUCH SECTION IS VOIDABLE AT THE
      OPTION OF THE PURCHASER WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF
      CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER,
      OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT
      PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS
      LATER.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AGREEMENT
      OF LIMITED PARTNERSHIP

    OF

    LIGHTSTONE
      VALUE PLUS REIT II LP

     

    THIS
      AGREEMENT OF LIMITED PARTNERSHIP OF LIGHTSTONE VALUE PLUS REIT II LP (this
      “Agreement”),
      dated
      as of April 30, 2008, is entered into by and among LIGHTSTONE VALUE PLUS REAL
      ESTATE INVESTMENT TRUST II, INC., a Maryland corporation, as general partner
      (the “ General
      Partner”),
      LIGHTSTONE VALUE PLUS REIT II LLC, a Delaware limited liability company, as
      limited Partner (the “ Initial
      Limited Partner”)
      and,
      LIGHTSTONE SLP II, LLC, a Delaware limited liability company, as associate
      general partner (the “Associate
      General Partner”),
      and
      the Limited Partners party hereto from time to time.

     

    WHEREAS,
      the General Partner and the Associate General Partner have formed Lightstone
      Value Plus REIT II LP (the “Partnership”)
      as a
      limited partnership pursuant to the Revised Uniform Limited Partnership Act
      of
      the State of Delaware and have filed a certificate of limited partnership with
      the Secretary of State of the State of Delaware;

     

    NOW
      THEREFORE, in consideration of the mutual covenants herein contained, and other
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties do hereby agree as follows:

     

    ARTICLE
      1

     

    DEFINED
      TERMS

     

    The
      following definitions shall be for all purposes, unless otherwise clearly
      indicated to the contrary, applied to the terms used in this
      Agreement.

     

    “Act”
      means
      the Delaware Revised Uniform Limited Partnership Act, as amended from time
      to
      time, and any successor to such statute.

    


    “Acquisition
      Expenses”
      means
      expenses including but not limited to legal fees and expenses, travel and
      communications expenses, costs of appraisals, nonrefundable option payments
      on
      property not acquired, accounting fees and expenses, title insurance premiums
      and miscellaneous expenses related to selection and acquisition of properties,
      whether or not acquired.

    


    “Acquisition
      Fees”
means
      the total of all fees and commissions paid by any Person to any other Person
      in
      connection with making or investing in Mortgages or the purchase, development
      or
      construction of a Property, including real estate commissions, selection fees,
      nonrecurring management fees, loan fees, points or any other fees of a similar
      nature.

     

    “Additional
      General Partner”
      means a
      Person that has executed and delivered an additional general partner signature
      page in the form attached hereto, has been admitted to the Partnership as a
      General Partner pursuant to Section 4.3 hereof and that is shown as such on
      the
      books and records of the Partnership.

     

    “Adjusted
      Capital Account Deficit”
      means
      with respect to any Partner, the negative balance, if any, in such Partner’s
      Capital Account as of the end of any relevant fiscal year, determined after
      giving effect to the following adjustments:

     

    (a)
      credit to such Capital Account any portion of such negative balance which such
      Partner (i) is treated as obligated to restore to the Partnership pursuant
      to
      the provisions of Section 1.704-1(b)(2)(ii)(c) of the Regulations, or (ii)
      is
      deemed to be obligated to restore to the Partnership pursuant to the penultimate
      sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations;
      and

     

    (b)
      debit
      to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4),
      (5) and (6) of the Regulations.

     

    “Adjusted
      Contribution”
      means
      the Capital Contributions of any Partner reduced by the total distributions
      to
      such Partner from Capital Events. With respect to the General Partner, the
      Adjusted Contribution shall include the difference, if any, between gross
      proceeds from the future issuance of REIT Stock, if any, and the proceeds
      actually received by the General Partner.

     

    “
      Advisory
      Agreement”
means
      the Advisory Agreement among the Partnership and the General Partner, as
      advisees, and the Initial General Partner, as advisor.

     

    “
      Affiliate”
      means,

     

    (a)
      with
      respect to any individual Person, any member of the Immediate Family of such
      Person or a trust established for the benefit of such member, or

     

    (b)
      with
      respect to any Entity, any Person which, directly or indirectly through one
      or
      more intermediaries, controls, is controlled by, or is under common control
      with, any such Entity. For purposes of this definition, “control,” when used
      with respect to a any Person, means the power to direct the management and
      policies of such Person, directly or indirectly, whether through the ownership
      of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Agreement”
      means
      this Agreement of Limited Partnership, as originally executed and as amended,
      modified, supplemented or restated from time to time, as the context
      requires.

     

    “Articles
      of Incorporation”
      means
      the General Partner’s Articles of Incorporation, filed with the Maryland State
      Department of Assessments and Taxation, or other organizational document
      governing the General Partner, as amended, modified, supplemented or restated
      from time to time.

    


    “Asset
      Management Fee”
means
      quarterly fees for the Initial Limited Partner’s management of the General
      Partner’s Assets; provided, however, that the total of all such asset management
      fees shall not exceed 0.2375% of the average, at the end of each calendar month
      during the calendar quarter in respect of which such asset management fee is
      being calculated, of the aggregate book value of the Company’s Assets invested
      in equity interests and loans secured by real estate, before reserves for
      depreciation or bad debt or other similar non-cash reserves.

    


    “Assets”
means
      any Property, Mortgage or other investment (other than investments in bank
      accounts, money market funds or other current assets) owned by the General
      Partner, directly or indirectly through one or more of its Affiliates, by the
      General Partner and any other investment made, directly or indirectly through
      one or more of its Affiliates.

     

    “Assignee”
      means a
      Person to whom one or more Partnership Units have been transferred in a manner
      permitted under this Agreement, but who has not become a Substituted Limited
      Partner, and who has the rights set forth in Section 11.5.

    


    “Associate
      General Partner”
      means,
      Lightstone SLP II, LLC, a Delaware limited liability company.

     

    “Associate
      General Partner Capital Contributions”
      means
      all Capital Contributions made by the Associate General Partner through purchase
      of Associate Partnership Units from time to time.

     

    “Associate
      General Partner Interest”
      means a
      Partnership Interest of the Associate General Partner in the Partnership and
      includes any and all benefits to which the Associate General Partner may be
      entitled, as provided in this Agreement, together with all obligations of the
      Associate General Partner to comply with the terms and provisions of this
      Agreement. An Associate General Partner Interest may be expressed as a number
      of
      Partnership Units.

     

    “
      Associate
      Partnership Units”
means
      the Partnership Units issued to the Associate General Partner pursuant to
      Section 4.1(b).

     

    “Available
      Cash”
      means,
      with respect to the applicable period of measurement (i.e., any period beginning
      on the first day of the fiscal year, quarter or other period commencing
      immediately after the last day of the fiscal year, quarter or other applicable
      period for purposes of the prior calculation of Available Cash for or with
      respect to which a distribution has been made, and ending on the last day of
      the
      fiscal year, quarter or other applicable period immediately preceding the date
      of the calculation), the excess, if any, as of such date, of

     

    (a)
      the
      gross cash receipts of the Partnership for such period from all sources
      whatsoever, including, without limitation, the following:

     

    (i)
      all
      rents, revenues, income and proceeds derived by the Partnership from its
      operations, including, without limitation, distributions received by the
      Partnership from any Entity in which the Partnership has an
      interest;

     

    (ii)
      all
      proceeds and revenues received by the Partnership on account of any sales of
      any
      Partnership property or as a refinancing of or payment of principal, interest,
      costs, fees, penalties or otherwise on account of any borrowings or loans made
      by the Partnership or financings or refinancings of any property of the
      Partnership;

     

    (iii)
      the
      amount of any insurance proceeds and condemnation awards received by the
      Partnership;

     

    (iv)
      all
      capital contributions and loans received by the Partnership from its
      Partners;

     

    (v)
      all
      cash amounts previously reserved by the Partnership, to the extent such amounts
      are no longer needed for the specific purposes for which such amounts were
      reserved; and

     

    (vi)
      the
      proceeds of liquidation of the Partnership’s property in accordance with this
      Agreement;

     

    over

     

    (b)
      the
      sum of the following:

     

    (i)
      all
      operating costs and expenses, including taxes and other expenses of the
      properties directly and indirectly held by the Partnership and capital
      expenditures made during such period (without deduction, however, for any
      capital expenditures, charges for Depreciation or other expenses not paid in
      cash or expenditures from reserves described in (viii) below); 

     

    (ii)
      all
      costs and expenses expended or paid during such period in connection with the
      sale or other disposition, or financing or refinancing, of the property directly
      or indirectly held by the Partnership or the recovery of insurance or
      condemnation proceeds;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (iii)
      all
      fees provided for under this Agreement;

     

    (iv)
      all
      debt service, including principal and interest, paid during such period on
      all
      indebtedness (including under any line of credit) of the
      Partnership;

     

    (v)
      all
      capital contributions, advances, reimbursements, loans or similar payments
      made
      to any Person in which the Partnership has an interest;

     

    (vi)
      all
      loans made by the Partnership in accordance with the terms of this
      Agreement;

     

    (vii)
      all
      reimbursements to the General Partner or its Affiliates during such period;
      and

     

    (viii)
      the amount of any new reserve or increase in reserves established during such
      period which the General Partner determines is necessary or appropriate in
      its
      sole and absolute discretion.

     

    Notwithstanding
      the foregoing, Available Cash shall not include any cash received or reductions
      in reserves, or take into account any disbursements made or reserves
      established, after commencement of the dissolution and liquidation of the
      Partnership.

    


    “Average
      Invested Assets”
means,
      for a specified period, the average of the aggregate book value of the assets
      of
      the General Partner and the Partnership invested, directly or indirectly in
      equity interests in and loans secured by real estate, before deducting
      depreciation, bad debts or other non-cash reserves, computed by taking the
      average of such values at the end of each month during such period.

     

    “
      Business
      Combination”
has
      the
      meaning set forth in Section 7.1(a)(iii)(C).

     

    “Capital
      Account”
      means
      with respect to any Partner, the Capital Account maintained for such Partner
      in
      accordance with the following provisions:

     

    (a)
      to
      each Partner’s Capital Account there shall be credited

     

    (i)
      such
      Partner’s Capital Contributions;

     

    (ii)
      such
      Partner’s distributive share of Net Income and any items in the nature of income
      or gain which are specially allocated to such Partner pursuant to Paragraphs
      1
      and 2 of Exhibit B and

     

    (iii)
      the
      amount of any Partnership liabilities assumed by such Partner or which are
      secured by any asset distributed to such Partner;

     

    (b)
      to
      each Partner’s Capital Account there shall be debited

     

    (i)
      the
      amount of cash and the Gross Asset Value of any property distributed to such
      Partner pursuant to any provision of this Agreement,

     

    (ii)
      such
      Partner’s distributive share of Net Losses and any items in the nature of
      expenses or losses which are specially allocated to such Partner pursuant to
      Paragraphs 1 and 2 of Exhibit B and

     

    (iii)
      the
      amount of any liabilities of such Partner assumed by the Partnership or which
      are secured by any asset contributed by such Partner to the Partnership;
      and

     

    (c)
      in
      the event all or a portion of a Partnership Interest is transferred in
      accordance with the terms of this Agreement, the transferee shall succeed to
      the
      Capital Account of the transferor to the extent it relates to the transferred
      Partnership Interest.

     

    The
      foregoing provisions and the other provisions of this Agreement relating to
      the
      maintenance of Capital Accounts are intended to comply with Sections 1.704-1(b)
      and 1.704-2 of the Regulations, and shall be interpreted and applied in a manner
      consistent with such Regulations. In the event the General Partner shall
      reasonably determine that it is prudent to modify the manner in which the
      Capital Accounts, or any debits or credits thereto (including, without
      limitation, debits or credits relating to liabilities which are secured by
      contributed or distributed assets or which are assumed by the Partnership,
      the
      General Partner, the Associate General Partner or any Limited Partner) are
      computed in order to comply with such Regulations, the General Partner may
      make
      such modification; provided
      that it would not cause the amounts distributable to any Partner pursuant to
      Article 13 hereof upon the dissolution of the Partnership to vary from the
      amount contemplated as set forth in Section 2(g) of Exhibit B.

     

    “Capital
      Contribution”
      means,
      with respect to any Partner, any cash, cash equivalents or the Gross Asset
      Value
      of property which such Partner contributes or is deemed to contribute to the
      Partnership pursuant to Article 4 hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Capital
      Event”
      means
      any Partnership transaction not in the ordinary course of its business
      including, without limitation, principal payments, prepayments, the incurrence
      of prepayment penalties, refinancing, sales, exchanges, foreclosures, or other
      dispositions of property directly or indirectly owned by the Partnership and
      recoveries of damage awards and insurance proceeds not used to rebuild (other
      than the receipt of contributions to the capital of the Partnership and business
      or rental interruption insurance proceeds not used to rebuild).

     

    “Certificate”
      means
      the Certificate of Limited Partnership relating to the Partnership to be filed
      in the form of Exhibit D hereto as soon as practicable after the date hereof
      in
      the office of the Delaware Secretary of State, as amended from time to time
      in
      accordance with the terms hereof and the Act.

     

    “
      Charter”
means
      the Articles of Incorporation of the General Partner dated as of April 28,
      2008,
      as amended from time to time.

     

    “Code”
      means
      the Internal Revenue Code of 1986, as amended and in effect from time to time,
      as interpreted by the applicable regulations thereunder. Any reference herein
      to
      a specific section or sections of the Code shall be deemed to include a
      reference to any corresponding provision of future law.

     

    “Common
      Stock”
      means a
      share of the common stock of the General Partner, $.01 par value. Common Stock
      may be issued in one or more classes or series in accordance with the terms
      of
      the Articles of Incorporation. If there is more than one class or series of
      Common Stock, the term “Common Stock” shall, as the context requires, be deemed
      to refer to the class or series of Common Stock that correspond to the class
      or
      series of Partnership Interests for which the reference to Common Stock is
      made.

     

    “Common
      Stock Amount”
      has the
      meaning set forth in the Exchange Rights Agreements.

     

    “Consent”
      means
      the consent or approval of a proposed action by a Partner given in accordance
      with Section 14.2 hereof.

     

    “Consent
      of the Limited Partners”
      means
      the Consent of Limited Partners (excluding for this purpose any Partnership
      Interests held by the General Partner and the Associate General Partner, any
      other Person of which they own or control more than fifty percent (50%) of
      the
      voting interests and any Person directly or indirectly owning or controlling
      more than fifty percent (50%) of the outstanding voting interests of the General
      Partner or Associate General Partner) holding Percentage Interests that are
      greater than fifty percent (50%) of the aggregate Percentage Interest of all
      Limited Partners who are not excluded for the purposes hereof.

    


    “Contract
      Purchase Price”
means
      the amount actually paid or allocated in respect of the purchase, development,
      construction or improvement of a Property or the amount of funds advanced with
      respect to a Mortgage, or the amount actually paid or allocated in respect
      of
      the purchase of other Assets, in each case exclusive of Acquisition Fees and
      Acquisition Expenses, but in each case including any indebtedness assumed or
      incurred in respect of such Property.

     

    “Contributed
      Property”
      means
      each property, partnership interest, contract right or other asset, in such
      form
      as may be permitted by the Act, contributed or deemed contributed to the
      Partnership by any Partner, including any interest in any successor partnership
      occurring as a result of a termination of the Partnership pursuant to Section
      708 of Code.

     

    “
      Cumulative
      Non-Compound Return”
means
      the percentage resulting from dividing: (i) the total amount of dividends and
      distributions paid by the General Partner to the Stockholders or the total
      amount of distributions made by the Partnership to the Limited Partners or
      Associate General Partner, as applicable, in each case reduced by distributions
      from the sale or financing of properties, from the Effective Date until the
      Distribution Date, by (ii)
      the
      product of (a) the average adjusted investor capital for such period (calculated
      on a daily basis), and (b) the number of years (including the fractions thereof)
      elapsed from the Effective Date until the Distribution Date (based on a year
      of
      365 days). 

     

    “Debt”
      means,
      as to any Person, as of any date of determination, (a) all indebtedness of
      such
      Person for borrowed money or for the deferred purchase price of property or
      services; (b) all amounts owed by such Person to banks or other Persons in
      respect of reimbursement obligations under letters of credit, surety bonds
      and
      other similar instruments guaranteeing payment or other performance of
      obligations by such Person; (c) all indebtedness for borrowed money or for
      the
      deferred purchase price of property or services secured by any lien on any
      property owned by such Person, to the extent attributable to such Person’s
      interest in such property, even though such Person has not assumed or become
      liable for the payment thereof; and (d) obligations of such Person incurred
      in
      connection with entering into a lease which, in accordance with generally
      accepted accounting principles, should be capitalized.

     

    “Depreciation”
      means,
      with respect to any asset of the Partnership for any fiscal year or other
      period, the depreciation, depletion, amortization or other cost recovery
      deduction, as the case may be, allowed or allowable for federal income tax
      purposes in respect of such asset for such fiscal year or other period;
      provided, however, that except as otherwise provided in Section 1.704-2 of
      the
      Regulations, if there is a difference between the Gross Asset Value (including
      the Gross Asset Value, as increased pursuant to paragraph (d) of the definition
      of Gross Asset Value) and the adjusted tax basis of such asset at the beginning
      of such fiscal year or other period, Depreciation for such asset shall be an
      amount that bears the same ratio to the beginning Gross Asset Value of such
      asset as the federal income tax depreciation, depletion, amortization or other
      cost recovery deduction for such fiscal year or other period bears to the
      beginning adjusted tax basis of such asset; provided, further, that if the
      federal income tax depreciation, depletion, amortization or other cost recovery
      deduction for such asset for such fiscal year or other period is zero,
      Depreciation of such asset shall be determined with reference to the beginning
      Gross Asset Value of such asset using any reasonable method selected by the
      General Partner.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Disposition
      Fees”
means
      a
      real estate disposition fee upon Sale of one or more Properties, in an amount
      equal to the lesser of (i) one-half (1/2) of the brokerage commission paid,
      or
      (ii) three percent (3%) of the sales price of such Property or Properties.
      

     

    “
      Distribution
      Date”
has
      the
      meaning set forth in Section 5.1(b).

     

    “Effective
      Date”
      means
      the date of first closing of the offering pursuant to the Registration Statement
      on Form S-11.

     

    “Entity”
      means
      any general partnership, limited partnership, corporation, joint venture, trust,
      business trust, real estate investment trust, limited liability company, limited
      liability partnership, cooperative or association.

     

    “ERISA”
      means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time (or any corresponding provisions of succeeding laws).

     

    “Exchange
      Factor”
      has the
      meaning set forth in the Exchange Rights Agreements.

     

    “Exchange
      Right”
      has the
      meaning set forth in the Exchange Rights Agreements.

     

    “Exchange
      Rights Agreements”
      has the
      meaning set forth in Section 8.6.

     

    “
      First
      Level Return”
has
      the
      meaning set forth in Section 5.1(b)(i).

      

    “General
      Partner”
      means
      Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
      corporation, and any successor as general partner of the Partnership. General
      Partners mean the General Partner and the Associate General
      Partner.

     

    “General
      Partner Interest”
      means a
      Partnership Interest held by the General Partner, in its capacity as general
      partner. A General Partner Interest may be expressed as a number of Partnership
      Units.

    


    “GP
      Net Income”
      means
      for any period, the General Partnership and the Partnership’s total revenues
      applicable to such period, less the total expenses applicable to such period
      other than additions to reserves for depreciation, bad debts or other similar
      non-cash reserves and excluding any gain from the sale of the
      Assets.

    


    “GP
      Net Sales Proceeds”
means
      in the case of a transaction described in clause (i) (A) of the definition
      of
      Sale, the proceeds of any such transaction less the amount of selling expenses
      incurred by or on behalf of the General Partner, including all real estate
      commissions, closing costs and legal fees and expenses. In the case of a
      transaction described in clause (i) (B) of such definition, GP Net Sales
      Proceeds means the proceeds of any such transaction less the amount of selling
      expenses incurred by or on behalf of the General Partner, including any legal
      fees and expenses and other selling expenses incurred in connection with such
      transaction. In the case of a transaction described in clause (i) (C) of such
      definition, GP Net Sales Proceeds means the proceeds of any such transaction
      actually distributed to the General Partner from the joint venture less the
      amount of any selling expenses, including legal fees and expenses incurred
      by or
      on behalf of the General Partner (other than those paid by the joint venture).
      In the case of a transaction or series of transactions described in clause
      (i)
      (D) of the definition of Sale, GP Net Sales Proceeds means the proceeds of
      any
      such transaction (including the aggregate of all payments under a Mortgage
      on or
      in satisfaction thereof other than regularly scheduled interest payments) less
      the amount of selling expenses incurred by or on behalf of the General Partner,
      including all commissions, closing costs and legal fees and expenses. In the
      case of a transaction described in clause (i) (E) of such definition, GP Net
      Sales Proceeds means the proceeds of any such transaction less the amount of
      selling expenses incurred by or on behalf of the General Partner, including
      any
      legal fees and expenses and other selling expenses incurred in connection with
      such transaction. In the case of a transaction described in clause (ii) of
      the
      definition of Sale, GP Net Sales Proceeds means the proceeds of such transaction
      or series of transactions less all amounts generated thereby which are
      reinvested in one or more Assets within 180 days thereafter and less the amount
      of any real estate commissions, closing costs, and legal fees and expenses
      and
      other selling expenses incurred by or allocated to the General Partner in
      connection with such transaction or series of transactions. GP Net Sales
      Proceeds shall also include any amounts that the General Partner determines,
      in
      its discretion, to be economically equivalent to proceeds of a Sale. GP Net
      Sales Proceeds shall not include any reserves established by the General Partner
      in its sole discretion. 

     

    “Gross
      Asset Value”
      means,
      with respect to any asset of the Partnership, such asset’s adjusted basis for
      federal income tax purposes, except as follows:

     

    (a)
      the
      initial Gross Asset Value of any asset contributed by a Partner to the
      Partnership shall be the gross fair market value of such asset, without
      reduction for liabilities, as determined by the contributing Partner and the
      Partnership on the date of contribution thereof;

     

    (b)
      if
      the General Partner determines that an adjustment is necessary or appropriate to
      reflect the relative economic interests of the Partners, the Gross Asset Values
      of all Partnership assets shall be adjusted in accordance with Sections
      1.704-1(b)(2)(iv)(f) and (g) of the Regulations to equal their respective gross
      fair market values, without reduction for liabilities, as reasonably determined
      by the General Partner, as of the following times:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (i)
      a
      Capital Contribution (other than a de
      minimis
      Capital
      Contribution) to the Partnership by a new or existing Partner as consideration
      for a Partnership Interest; or

     

    (ii)
      the
      distribution by the Partnership to a Partner of more than a de
      minimis
      amount
      of Partnership assets as consideration for the repurchase of a Partnership
      Interest; or

     

    (iii)
      the
      liquidation of the Partnership within the meaning of Section
      1.704-1(b)(2)(ii)(g) of the Regulations;

     

    (c)
      the
      Gross Asset Values of Partnership assets distributed to any Partner shall be
      the
      gross fair market values of such assets (taking Section 7701(g) of the Code
      into
      account) without reduction for liabilities, as determined by the General Partner
      as of the date of distribution; and

     

    (d)
      the
      Gross Asset Values of Partnership assets shall be increased (or decreased)
      to
      reflect any adjustments to the adjusted basis of such assets pursuant to
      Sections 734(b) or 743(b) of the Code, but only to the extent that such
      adjustments are taken into account in determining Capital Accounts pursuant
      to
      Section 1.704-1(b)(2)(iv)(m) of the Regulations (as set forth in Exhibit B);
      provided, however, that Gross Asset Values shall not be adjusted pursuant to
      this paragraph (d) to the extent that the General Partner determines that an
      adjustment pursuant to paragraph (b) above is necessary or appropriate in
      connection with a transaction that would otherwise result in an adjustment
      pursuant to this paragraph (d).

     

    At
      all
      times, Gross Asset Values shall be adjusted by any Depreciation taken into
      account with respect to the Partnership’s assets for purposes of computing Net
      Income and Net Loss.

    


    “Guidelines”
means
      the Statement of Policy Regarding Real Estate Investment Trusts as adopted
      by
      the North American Securities Administrators Association on May 7, 2007.


     

    “
      Incapacity”
or
“
      Incapacitated”
      means,

     

    (a)
      as to
      any individual Partner, death, total physical disability or entry by a court
      of
      competent jurisdiction adjudicating him incompetent to manage his person or
      his
      estate;

     

    (b)
      as to
      any corporation which is a Partner, the filing of a certificate of dissolution,
      or its equivalent, for the corporation or the revocation of its
      charter;

     

    (c)
      as to
      any partnership which is a Partner, the dissolution and commencement of winding
      up of the partnership;

     

    (d)
      as to
      any estate which is a Partner, the distribution by the fiduciary of the estate’s
      entire interest in the Partnership;

     

    (e)
      as to
      any trustee of a trust which is a Partner, the termination of the trust (but
      not
      the substitution of a new trustee); or

     

    (f)
      as to
      any Partner, the bankruptcy of such Partner, which shall be deemed to have
      occurred when

     

    (i)
      the
      Partner commences a voluntary proceeding seeking liquidation, reorganization
      or
      other relief under any bankruptcy, insolvency or other similar law now or
      hereafter in effect; 

     

    (ii)
      the
      Partner is adjudged as bankrupt or insolvent, or a final and nonappealable
      order
      for relief under any bankruptcy, insolvency or similar law now or hereafter
      in
      effect has been entered against the Partner;

     

    (iii)
      the
      Partner executes and delivers a general assignment for the benefit of the
      Partner’s creditors;

     

    (iv)
      the
      Partner files an answer or other pleading admitting or failing to contest the
      material allegations of a petition filed against the Partner in any proceeding
      of the nature described in clause (ii) above;

     

    (v)
      the
      Partner seeks, consents to or acquiesces in the appointment of a trustee,
      receiver or liquidator for the Partner or for all or any substantial part of
      the
      Partner’s properties;

     

    (vi)
      any
      proceeding seeking liquidation, reorganization or other relief of or against
      such Partner under any bankruptcy, insolvency or other similar law now or
      hereafter in effect has not been dismissed within one hundred twenty (120)
      days
      after the commencement thereof;

     

    (vii)
      the
      appointment without the Partner’s consent or acquiescence of a trustee, receiver
      or liquidator has not been vacated or stayed within ninety (90) days of such
      appointment; or

     

    (viii)
      an
      appointment referred to in clause (vii) which has been stayed is not vacated
      within ninety (90) days after the expiration of any such stay.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Indemnitee”
      means

     

    (a)
      any
      Person made a party to a proceeding by reason of its status as

     

    (i)
      the
      General Partner,

     

    (ii)
      the
      Associate General Partner,

     

    (iii)
      a
      Limited Partner,

     

    (iv)
      an
      investment advisor to the General Partner,

     

    (v)
      a
      trustee, director or officer of the Partnership, the General Partner, the
      Associate General Partner or the investment advisor to the General Partner,
      or

     

    (vi)
      a
      director, trustee, member or officer of any other Entity, each Person serving
      in
      such capacity at the request of the Partnership or the General Partner,
      or

     

    (b)
      his
      or its liabilities, pursuant to a loan guarantee or otherwise, for any
      indebtedness of the Partnership or any Subsidiary of the Partnership (including,
      without limitation, any indebtedness which the Partnership or any Subsidiary
      of
      the Partnership has assumed or taken assets subject to); and

     

    (c)
      such
      other Persons (including Affiliates of the General Partner, the Associate
      General Partner, a Limited Partner or the Partnership) as the General Partner
      may designate from time to time (whether before or after the event giving rise
      to potential liability), in its sole and absolute discretion.

     

    “Initial
      Limited Partner”
      means
      the Lightstone Value Plus REIT II LLC.

     

    “IRS”
      shall
      mean the Internal Revenue Service of the United States.

     

    “Lien”
      means
      any lien, security interest, mortgage, deed of trust, charge, claim,
      encumbrance, pledge, option, right of first offer or first refusal and any
      other
      right or interest of others of any kind or nature, actual or contingent, or
      other similar encumbrance of any nature whatsoever.

     

    “Limited
      Partner”
      means,
      prior to the admission of the first Additional Limited Partner to the
      Partnership, the Initial Limited Partner, and thereafter any Person named as
      a
      Limited Partner in Exhibit A, as such Exhibit may
      be
      amended from time to time, upon the execution and delivery by such Person of
      an
      additional limited partner signature page, or any Substituted Limited Partner
      or
      Additional Limited Partner, in such Person’s capacity as a Limited Partner of
      the Partnership.

     

    “Limited
      Partner Interest”
      means a
      Partnership Interest of a Limited Partner in the Partnership representing a
      fractional part of the Partnership Interests of all Partners and includes any
      and all benefits to which the holder of such a Partnership Interest may be
      entitled, as provided in this Agreement, together with all obligations of such
      Person to comply with the terms and provisions of this Agreement. A Limited
      Partner Interest may be expressed as a number of Partnership Units.

     

    “Liquidating
      Event”
      has the
      meaning set forth in Section 13.1 hereof.

     

    “Liquidator”
      has the
      meaning set forth in Section 13.2 hereof.

    


    “Mortgage”
means
      ,
      in connection with mortgage financing provided, invested in, participated in
      or
      purchased by the General Partner, all of the notes, deeds of trust, security
      interests or other evidences of indebtedness or obligations, which are secured
      or collateralized by Property owed by the borrowers under such notes, deeds
      of
      trust, security interests or other evidences of indebtedness or
      obligations.

     

    “Net
      Income”
      or
“Net
      Loss”
      means,
      for each fiscal year or other applicable period, an amount equal to the
      Partnership’s taxable income or loss for such year or period as determined for
      federal income tax purposes by the General Partner, determined in accordance
      with Section 703(a) of the Code (for this purpose, all items of income, gain,
      loss or deduction required to be stated separately pursuant to Section 703(a)
      of
      the Code shall be included in taxable income or loss), adjusted as
      follows:

     

    (a)
      by
      including as an item of gross income any tax-exempt income received by the
      Partnership and not otherwise taken into account in computing Net Income or
      Net
      Loss;

     

    (b)
      by
      treating as a deductible expense any expenditure of the Partnership described
      in
      Section 705(a)(2)(B) of the Code (or which is treated as a Section 705(a)(2)(B)
      expenditure pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations) and
      not
      otherwise taken into account in computing Net Income or Net Loss, including
      amounts paid or incurred to organize the Partnership (unless an election is made
      pursuant to Section 709(b) of the Code) or to promote the sale of interests
      in
      the Partnership and by treating deductions for any losses incurred in connection
      with the sale or exchange of Partnership property disallowed pursuant to Section
      267(a)(1) or 707(b) of the Code as expenditures described in Section
      705(a)(2)(B) of the Code;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (c)
      by
      taking into account Depreciation in lieu of depreciation, depletion,
      amortization and other cost recovery deductions taken into account in computing
      taxable income or loss;

     

    (d)
      by
      computing gain or loss resulting from any disposition of Partnership property
      with respect to which gain or loss is recognized for federal income tax purposes
      by reference to the Gross Asset Value of such property rather than its adjusted
      tax basis;

     

    (e)
      in
      the event of an adjustment of the Gross Asset Value of any Partnership asset
      which requires that the Capital Accounts of the Partnership be adjusted pursuant
      to Sections 1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations, by taking
      into
      account the amount of such adjustment as if such adjustment represented
      additional Net Income or Net Loss pursuant to Exhibit B; and

     

    (f)
      by
      not taking into account in computing Net Income or Net Loss items separately
      allocated to the Partners pursuant to Paragraphs 1 and 2 of Exhibit
      B.

     

    “Net
      Investment”
      means
      (i) as it relates to the Stockholders, the original issue price paid by such
      stockholders for the purchase of Common Stock; (ii) as it relates to the Limited
      Partners the total amount of Capital Contributions; and (iii) as it relates
      to
      the Associate General Partner the Associate General Partner Capital
      Contributions; in each case reduced by distributions from the sale or financing
      of properties.

     

    “Nonrecourse
      Deductions”
      has the
      meaning set forth in Sections 1.704-2(b)(1) and 1.704-2(c) of the
      Regulations. 

     

    “Nonrecourse
      Liabilities”
      has the
      meaning set forth in Section 1.704-2(b)(3) of the Regulations.

     

    “
      Offering
      Expenses”
means
      all of the costs and expenses of the offering of the Common Stock (including
      organizational expenses, dealer manager fees and selling commissions relating
      thereto), paid by the Associate General Partner on behalf of the General
      Partner.

    


    “Organization
      and Offering Expenses”
means
      any and all costs and expenses incurred by and to be paid from the assets of
      the
      General Partner in connection with the formation, qualification and registration
      of the General Partner, and the marketing and distribution of Shares, including,
      without limitation, total underwriting and brokerage discounts and commissions
      (including fees of the underwriters’ attorneys), expenses for printing,
      engraving, amending, supplementing, mailing and distributing costs, salaries
      of
      employees while engaged in sales activity, telephone and other
      telecommunications costs, all advertising and marketing expenses (including
      the
      costs related to investor and broker-dealer sales meetings), charges of transfer
      agents, registrars, trustees, escrow holders, depositories, experts, fees,
      expenses and taxes related to the filing, registration and qualification of
      the
      sale of its shares under federal and state laws, including taxes and fees,
      accountants’ and attorneys’ fees.

     

    “Partner”
      means
      the General Partner, the Associate General Partner or a Limited Partner, and
      “Partners” means the General Partner, the Associate General Partner and the
      Limited Partners collectively.

     

    “Partner
      Minimum Gain”
      means an
      amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership
      Minimum Gain that would result if such Partner Nonrecourse Debt were treated
      as
      a Nonrecourse Liability, determined in accordance with Regulations Section
      1.704-2(i)(3).

     

    “Partner
      Nonrecourse Debt”
      has the
      meaning set forth in Regulations Section 1.704-2(b)(4).

     

    “Partner
      Nonrecourse Deductions”
      has the
      meaning set forth in Regulations Section 1.704-2(i)(2), and the amount of
      Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for
      a
      Partnership taxable year shall be determined in accordance with the rules of
      Regulations Section 1.704-2(i)(2).

     

    “Partnership”
      means
      the limited partnership formed under the Act and pursuant to this Agreement,
      and
      any successor thereto.

     

    “Partnership
      Interest”
      means an
      ownership interest in the Partnership representing a Capital Contribution by
      either a Limited Partner, the Associate General Partner or the General Partner
      and includes any and all benefits to which the holder of such a Partnership
      Interest may be entitled as provided in this Agreement, together with all
      obligations of such Person to comply with the terms and provisions of this
      Agreement. A Partnership Interest may be expressed as a number of Partnership
      Units.

     

    “Partnership
      Minimum Gain”
      has the
      meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of
      Partnership Minimum Gain, as well as any net increase or decrease in a
      Partnership Minimum Gain, for a Partnership taxable year shall be determined
      in
      accordance with the rules of Regulations Section 1.704-2(d).

     

    “Partnership
      Record Date”
      means
      the record date established by the General Partner for the distribution of
      Available Cash pursuant to Section 5.1 hereof, which record date shall be the
      same as the record date established by the General Partner for a distribution
      to
      its stockholders of some or all of its portion of such
      distribution.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Partnership
      Unit”
      means a
      fractional, undivided share of the Partnership Interests of all Partners issued
      pursuant to Sections 4.1, 4.2 and 4.3 and includes any classes or series of
      Partnership Units established after the date hereof. The number of Partnership
      Units outstanding and the Percentage Interests in the Partnership represented
      by
      such Partnership Units are set forth in Exhibit A, as such Exhibit may be
      amended from time to time. The ownership of Partnership Units shall be evidenced
      by such form of certificate for Partnership Units as the General Partner adopts
      from time to time unless the General Partner determines that the Partnership
      Units shall be uncertificated securities.

     

    “Partnership
      Year”
      means
      the fiscal year of the Partnership, as set forth in Section 9.2
      hereof.

     

    “Percentage
      Interest”
      means,
      as to a Partner, the fractional part of the Partnership Interests owned by
      such
      Partner and expressed as a percentage as specified in Exhibit A, as such Exhibit
      may be amended from time to time. The Associate General Partner Interest shall
      not be considered in the computation of the Partners’ Percentage
      Interest. 

     

    “Permitted
      Partners”
      has the
      meaning set forth in subparagraph 1(b) of Exhibit B.

     

    “Permitted
      Transferee”
      means
      any person to whom Partnership Units are Transferred in accordance with Section
      11.3 of this Agreement.

     

    “Person”
      means an
      individual or Entity.

     

    “Precontribution
      Gain”
      has the
      meaning set forth in subparagraph 3(c) of Exhibit B.

    


    “Property”
means
      land, rights in land (including leasehold interests), and any buildings,
      structures, improvements, furnishings, fixtures and equipment located on or
      used
      in connection with land and rights or interests in land acquired by the General
      Partner, directly or indirectly through joint venture arrangements or other
      partnership or investment interests.

     

    “Quarter”
      means
      each of the three-month periods ending on March 31, June 30, September 30 and
      December 31.

     

    “Registration
      Statement”
      means
      the Registration Statement on Form S-11 to be filed by the General Partner
      with
      the Securities and Exchange Commission, and any amendments at any time made
      thereto.

     

    “Regulations”
      means
      the final, temporary or proposed Income Tax Regulations promulgated under the
      Code, as such regulations may be amended from time to time (including
      corresponding provisions of succeeding regulations).

     

    “REIT”
      means a
      real estate investment trust as defined in Section 856 of the Code.

     

    “REIT
      Requirements”
      has the
      meaning set forth in Section 5.2.

     

    “REIT
      Stock”
      has the
      meaning set forth in the Exchange Rights Agreement.

     

    “REIT
      Stock Amount”
      has the
      meaning set forth in the Exchange Rights Agreement. 

     

    “Restricted
      Partner”
      has the
      meaning set forth in Section 1(b) of Exhibit B.

    


    “Sale”
means
      (i) any transaction or series of transactions whereby: (A) the General Partner
      or the Partnership directly or indirectly (except as described in other
      subsections of this definition) sells, grants, transfers, conveys, or
      relinquishes its ownership of any Property or portion thereof, including the
      lease of any Property consisting of a building only, and including any event
      with respect to any Property which gives rise to a significant amount of
      insurance proceeds or condemnation awards; (B) the General Partner or the
      Partnership directly or indirectly (except as described in other subsections
      of
      this definition) sells, grants, transfers, conveys, or relinquishes its
      ownership of all or substantially all of the interest of the General Partner
      or
      the Operating Partnership in any Joint Venture in which it is a co-venturer
      or
      partner; (C) any joint venture in which the General Partner or the Partnership
      as a co-venturer or partner directly or indirectly (except as described in
      other
      subsections of this definition) sells, grants, transfers, conveys, or
      relinquishes its ownership of any Property or portion thereof, including any
      event with respect to any Property which gives rise to insurance claims or
      condemnation awards; or (D) the General Partner or the Partnership directly
      or
      indirectly (except as described in other subsections of this definition) sells,
      grants, conveys or relinquishes its interest in any Mortgage or portion thereof
      (including with respect to any Mortgage, all payments thereunder or in
      satisfaction thereof other than regularly scheduled interest payments) of
      amounts owed pursuant to such Mortgage and any event which gives rise to a
      significant amount of insurance proceeds or similar awards; or (E) the General
      Partner or the Partnership directly or indirectly (except as described in other
      subsections of this definition) sells, grants, transfers, conveys, or
      relinquishes its ownership of any other Asset not previously described in this
      definition or any portion thereof, but (ii) not including any transaction or
      series of transactions specified in clause (i) (A) through (E) above in which
      the proceeds of such transaction or series of transactions are reinvested in
      one
      or more Assets within 180 days thereafter.

     

    “Second
      Level Return”
has
      the
      meaning set forth in Section 5.1(b)(iii).

     

    “SLP
      Distribution”
has
      the
      meaning set forth in Section 5.1(b)(ii).

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Sponsor”
means
      any Person which (i) is directly or indirectly instrumental in organizing,
      wholly or in part, the General Partner, (ii) will manage or participate in
      the
      management of the General Partner, and any Affiliate of any such Person, other
      than a Person whose only relationship with the General Partner is that of an
      independent property manager and whose only compensation is as such, (iii)
      takes
      the initiative, directly or indirectly, in founding or organizing the General
      Partner, either alone or in conjunction with one or more other Persons, (iv)
      receives a material participation in the General Partner in connection with
      the
      founding or organizing of the business of the General Partner, in consideration
      of services or property, or both services and property, (v) has a substantial
      number of relationships and contacts with the General Partner, (vi) possesses
      significant rights to control Properties, (vii) receives fees for providing
      services to the General Partner which are paid on a basis that is not customary
      in the industry, or (viii) provides goods or services to the General Partner
      on
      a basis which was not negotiated at arm’s-length with the General Partner. The
      term “Sponsor” shall not include third parties wholly independent of the General
      Partner, such as attorneys, accountants and underwriters whose only compensation
      is for professional services.

     

    “Stockholder”
means
      a
      holder of Common Stock.

     

    “Stock
      Option Plans”
      means,
      collectively, any and all plans adopted from time to time by the General Partner
      pursuant to which REIT Stock is issued, or options to acquire REIT Stock are
      granted, to employees or directors of the General Partner, employees of the
      Partnership or employees of their respective Affiliates in consideration for
      services or future services. 

     

    “Subsidiary”
      means,
      with respect to any Person, any corporation, partnership, limited liability
      company or other entity of which a majority of 

     

    (a)
      the
      voting power of the voting equity securities; and/or

     

    (b)
      the
      outstanding equity interests (whether or not voting), is owned, directly or
      indirectly, by such Person.

     

    “Substituted
      Limited Partner”
      means a
      Person who is admitted as a Limited Partner to the Partnership pursuant to
      Section 11.4 hereof.

     

    “Substituted
      Associate General Partner”
      means a
      Person who is admitted as an Associate General Partner to the Partnership
      pursuant to Section 11.5 hereof.

     

    “Tax
      Items”
      has the
      meaning set forth in Exhibit B.

     

    “Terminating
      Capital Transaction”
      means
      any sale or other disposition (other than a deemed disposition pursuant to
      Section 708(b)(1)(B) and the regulations thereunder) of all or substantially
      all
      of the assets of the Partnership or a related series of transactions that,
      taken
      together, result in the sale or other disposition of all or substantially all
      of
      the assets of the Partnership.

    


    “Total
      Operating Expenses”
means
      all costs and expenses paid or incurred by the General Partner, as determined
      under generally accepted accounting principles, that are in any way related
      to
      the operation of the General Partner or its business, including advisory fees,
      but excluding (i) the expenses of raising capital such as Organization and
      Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing,
      registration, and other fees, printing and other such expenses and tax incurred
      in connection with the issuance, distribution, transfer, registration and
      Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash
      expenditures such as depreciation, amortization and bad debt reserves, (v)
      incentive fees paid in compliance with the Guidelines; (vi) Acquisition Fees
      and
      Acquisition Expenses, (vii) real estate commissions on the Sale of Property,
      and
      (viii) other fees and expenses connected with the acquisition, disposition,
      management and ownership of real estate interests, mortgage loans or other
      property (including the costs of foreclosure, insurance premiums, legal
      services, maintenance, repair, and improvement of property).

    


    “Transfer”
      as a
      noun, means any sale, assignment, conveyance, pledge, hypothecation, gift,
      encumbrance or other transfer, and as a verb, means to sell, assign, convey,
      pledge, hypothecate, give, encumber or otherwise transfer.

     

    Certain
      additional terms and phrases have the meanings set forth in Exhibit
      B.


     

    ARTICLE
      2

     

    ORGANIZATIONAL
      MATTERS

     

    2.1
      Formation

     

    The
      General Partner, the Initial Limited Partner and the Associate General Partner
      are hereby authorized to form the Partnership by filing the Certificate as
      soon
      as practicable after the date hereof in the office of the Delaware Secretary
      of
      State. The Partnership is a limited partnership organized pursuant to the
      provision of the Act and upon the terms and conditions set forth in this
      Agreement. Except as expressly provided herein to the contrary, the rights
      and
      obligations of the Partners and the administration and termination of the
      Partnership shall be governed by the Act. The Partnership Interest of each
      Partner shall be personal property for all purposes.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    2.2
      Name

     

    The
      name
      of the Partnership is Lightstone Value Plus REIT II LP. The Partnership’s
      business may be conducted under any other name or names deemed advisable by
      the
      General Partner, including the name of the General Partner or any Affiliate
      thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or
      letters shall be included in the Partnership’s name where necessary for the
      purposes of complying with the laws of any jurisdiction that so requires. The
      General Partner in its sole and absolute discretion may change the name of
      the
      Partnership and shall notify the Limited Partners of such change in the next
      regular communication to the Limited Partners.

     

    2.3
      Registered
      Office and Agent; Principal Office

     

    The
      address of the registered office of the Partnership in the State of Delaware
      and
      the name and address of the registered agent for service of process on the
      Partnership in the State of Delaware is the Corporation Service Company, 2711
      Centerville Road Suite 400, Wilmington, Delaware 19808. The principal office
      of
      the Partnership shall be 326 Third Street, Lakewood, New Jersey 08701, or such
      other place as the General Partner may from time to time designate by notice
      to
      the Limited Partners. The Partnership may maintain offices at such other place
      or places within or outside the State of Delaware as the General Partner deems
      advisable.

     

    2.4
      Power
      of Attorney

     

    (a)
      Each
      Limited Partner, Associate General Partner and each Assignee who accepts
      Partnership Units (or any rights, benefits or privileges associated therewith)
      is deemed to irrevocably constitute and appoint the General Partner, any
      Liquidator, and authorized officers and attorneys-in-fact of each, and each
      of
      those acting singly, in each case with full power of substitution, as its true
      and lawful agent and attorney-in-fact, with full power and authority in its
      name, place and stead to:

     

    (i)
      execute, swear to, acknowledge, deliver, file and record in the appropriate
      public offices

     

    (A)
      all
      certificates, documents and other instruments (including, without limitation,
      this Agreement and the Certificate and all amendments or restatements thereof)
      that the General Partner or the Liquidator deems appropriate or necessary to
      form, qualify or continue the existence or qualification of the Partnership
      as a
      limited partnership (or a partnership in which the Limited Partners have limited
      liability) in the State of Delaware and in all other jurisdictions in which
      the
      Partnership may or plans to conduct business or own property, including, without
      limitation, any documents necessary or advisable to convey any Contributed
      Property to the Partnership;

     

    (B)
      all
      instruments that the General Partner or any Liquidator deems appropriate or
      necessary to reflect any amendment, change, modification or restatement of
      this
      Agreement in accordance with its terms;

     

    (C)
      all
      conveyances and other instruments or documents that the General Partner or
      any
      Liquidator deems appropriate or necessary to reflect the dissolution and
      liquidation of the Partnership pursuant to the terms of this Agreement,
      including, without limitation, a certificate of cancellation;

     

    (D)
      all
      instruments relating to the admission, withdrawal, removal or substitution
      of
      any Partner pursuant to, or other events described in, Article 11, 12 or 13
      hereof or the Capital Contribution of any Partner;

     

    (E)
      all
      certificates, documents and other instruments relating to the determination
      of
      the rights, preferences and privileges of Partnership Interest; and

     

    (F)
      amendments to this Agreement as provided in Article 14 hereof; and

     

    (ii)
      execute, swear to, seal, acknowledge and file all ballots, consents, approvals,
      waivers, certificates and other instruments appropriate or necessary, in the
      sole and absolute discretion of the General Partner or any Liquidator, to make,
      evidence, give, confirm or ratify any vote, consent, approval, agreement or
      other action which is made or given by the Partners hereunder or is consistent
      with the terms of this Agreement or appropriate or necessary, in the sole
      discretion of the General Partner or any Liquidator, to effectuate the terms
      or
      intent of this Agreement.

     

    Nothing
      contained herein shall be construed as authorizing the General Partner or any
      Liquidator to amend this Agreement except in accordance with Article 14 hereof
      or as may be otherwise expressly provided for in this Agreement. 

     

    (b)
      (i)
      The foregoing power of attorney is hereby declared to be irrevocable and a
      power
      coupled with an interest, in recognition of the fact that each of the Partners
      will be relying upon the power of the General Partner and any Liquidator to
      act
      as contemplated by this Agreement in any filing or other action by it on behalf
      of the Partnership, and it shall survive and not be affected by the subsequent
      Incapacity of any Limited Partner, Associate General Partner or Assignee and
      the
      Transfer of all or any portion of such Limited Partner’s, Associate General
      Partner’s or Assignee’s Partnership Units and shall extend to such Limited
      Partner’s, Associate General Partner’s or Assignee’s heirs, successors, assigns
      and personal representatives.

     

    (ii)
      Each
      such Limited Partner, Associate General Partner or Assignee hereby agrees to
      be
      bound by any representation made by the General Partner or any Liquidator,
      acting in good faith pursuant to such power of attorney, and each such Limited
      Partner, Associate General Partner or Assignee hereby waives any and all
      defenses which may be available to contest, negate or disaffirm the action
      of
      the General Partner or any Liquidator, taken in good faith under such power
      of
      attorney.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (iii)
      Each Limited Partner, Associate General Partner or Assignee shall execute and
      deliver to the General Partner or the Liquidator, within fifteen (15) days
      after
      receipt of the General Partner’s or Liquidator’s request therefor, such further
      designation, powers of attorney and other instruments as the General Partner
      or
      the Liquidator, as the case may be, deems necessary to effectuate this Agreement
      and the purposes of the Partnership.

     

    2.5
      Term

     

    The
      term
      of the Partnership shall commence on the date hereof and shall continue until
      December 31, 2099, unless the Partnership is dissolved sooner pursuant to the
      provisions of Article 13 or as otherwise provided by law.

     

    ARTICLE
      3

     

    PURPOSE

     

    3.1
      Purpose
      and Business

     

    (a)
      The
      purpose and nature of the business to be conducted by the Partnership is to
      conduct any business that may be lawfully conducted by a limited partnership
      organized pursuant to the Act including, without limitation, to engage in the
      following activities:

     

    (i)
      to
      acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease,
      transfer, encumber, convey, exchange, and otherwise dispose of or deal with
      the
      properties described in the prospectus contained in the Registration
      Statement;

     

    (ii)
      to
      acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease,
      transfer, encumber, convey, exchange, and otherwise dispose of or deal with
      real
      and personal property of all kinds;

     

    (iii)
      to
      enter into any partnership, joint venture, corporation, limited liability
      company, trust or other similar arrangement to engage in any of the
      foregoing;

     

    (iv)
      to
      undertake such other activities as may be necessary, advisable, desirable or
      convenient to the business of the Partnership; and

     

    (v)
      to
      engage in such other ancillary activities as shall be necessary or desirable
      to
      effectuate the foregoing purposes;

     

    provided,
      however, that such business shall be limited to and conducted in such a manner
      as to permit the General Partner at all times to be classified as a REIT, unless
      the General Partner determines not to qualify as a REIT or ceases to qualify
      as
      a REIT for any reason not related to the business conducted by the
      Partnership.

     

    (b)
      The
      Partnership shall have all powers necessary or desirable to accomplish the
      purposes enumerated.

     

    3.2
      Powers

     

    (a)
      The
      Partnership is empowered to do any and all acts and things necessary,
      appropriate, proper, advisable, incidental to or convenient for the furtherance
      and accomplishment of the purposes and business described herein and for the
      protection and benefit of the Partnership including, without limitation, full
      power and authority to enter into, perform, and carry out contracts of any
      kind,
      to borrow money and to issue evidences of indebtedness, whether or not secured
      by mortgage, trust deed, pledge or other Lien, and, directly or indirectly,
      to
      acquire, own, improve, develop and construct real property, and lease, sell,
      transfer and dispose of real property; provided, that the Partnership shall
      not
      take, or refrain from taking, any action which, in the judgment of the General
      Partner, in its sole and absolute discretion,

     

    (i)
      could
      adversely affect the ability of the General Partner to continue to qualify
      as a
      REIT, unless the General Partner otherwise ceases to qualify as a
      REIT;

     

    (ii)
      could subject the General Partner to any additional taxes under Section 857
      or
      Section 4981 of the Code; or

     

    (iii)
      could violate any law or regulation of any governmental body or agency having
      jurisdiction over the General Partner or its securities, unless such action
      (or
      inaction) shall have been specifically consented to by the General Partner
      in
      writing.

     

    (b)
      The
      General Partner also is empowered to do any and all acts and things necessary,
      appropriate or advisable to ensure that the Partnership will not be classified
      as a “publicly traded partnership” for the purposes of Section 7704 of the Code,
      including but not limited to imposing restrictions on exchanges of Partnership
      Units.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      4

     

    CAPITAL
      CONTRIBUTIONS

     

    4.1
      Capital
      Contributions of the Partners

     

    (a)
      The
      General Partner and Initial Limited Partner have made or shall make at the
      Effective Date, if applicable, the Capital Contributions as set forth in Exhibit
      A to this Agreement.

     

    (b)
      The
      Associate General Partner shall make, at each closing of the offering, the
      appropriate portion of Associate General Partner Capital Contributions required
      to be made pursuant to the agreement among the Partnership, the Associate
      General Partner and David Lichtenstein, dated April 1, 2005. In consideration
      thereof, the Partnership will issue, concurrently herewith, Associate
      Partnership Units to the Associate General Partner.

     

    (c)
      To
      the extent the Partnership acquires any property by the merger of any other
      Person into the Partnership or the contribution of assets by any other Person,
      Persons who receive Partnership Interests in exchange for their interests in
      the
      Person merging into or contributing assets to the Partnership shall become
      Partners and shall be deemed to have made Capital Contributions as provided
      in
      the applicable merger agreement or contribution agreement and as set forth
      in
      Exhibit A, as amended to reflect such deemed Capital Contributions.

     

    (d)
      Each
      Partner shall own Partnership Units in the amounts set forth for such Partner
      in
      Exhibit A and shall have a Percentage Interest in the Partnership as set forth
      in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from
      time
      to time by the General Partner to the extent necessary to reflect accurately
      exchanges, additional Capital Contributions, the issuance of additional
      Partnership Units or similar events having an effect on any Partner’s Percentage
      Interest.

     

    (e)
      The
      General Partner shall adjust the amount of the Associate General Partner
      Contributions in Exhibit A to reflect all Offering Expenses paid by the
      Associate General Partner from time to time. The Associate General Partner
      shall
      provide the General Partner with evidence of payment of Offering Expenses as
      such expenses are incurred.

     

    (f)
      The
      number of Partnership Units held by the General Partner, in its capacity as
      general partner, shall be deemed to be the General Partner
      Interest.

     

    (g)
      Except as provided in Sections 4.2 and 10.5, the Partners shall have no
      obligation to make any additional Capital Contributions or provide any
      additional funding to the Partnership (whether in the form of loans, repayments
      of loans or otherwise) and no Partner shall have any obligation to restore
      any
      deficit that may exist in its Capital Account, either upon a liquidation of
      the
      Partnership or otherwise.

     

    4.2
      Additional
      Funds; Restrictions on the General Partner

     

    (a)     
       (i) The sums of money required to finance the business and affairs of the
      Partnership shall be derived from the initial Capital Contributions made to
      the
      Partnership by the Partners as set forth in Section 4.1 and from funds generated
      from the operation and business of the Partnership, including, without
      limitation, rents and distributions directly or indirectly received by the
      Partnership from any Subsidiary.

     

    (ii)
      In
      the event additional financing is needed from sources other than as set forth
      in
      Section 4.2(a)(i) for any reason, the General Partner may, in its sole and
      absolute discretion, in such amounts and at such times as it solely shall
      determine to be necessary or appropriate,

     

    (A)
      cause
      the Partnership to issue additional Partnership Interests and admit additional
      Limited Partners to the Partnership in accordance with Section 4.3;

     

    (B)
      make
      additional Capital Contributions to the Partnership (subject to the provisions
      of Section 4.2(b));

     

    (C)
      cause
      the Partnership to borrow money, enter into loan arrangements, issue debt
      securities, obtain letters of credit or otherwise borrow money on a secured
      or
      unsecured basis;

     

    (D)
      make
      a loan or loans to the Partnership (subject to Section 4.2(b)); or

     

    (E)
      sell
      any assets or properties directly or indirectly owned by the
      Partnership.

     

    (iii)
      In
      no event shall the Associate General Partner or any Limited Partners be required
      to make any additional Capital Contributions or any loan to, or otherwise
      provide any financial accommodation for the benefit of, the
      Partnership.

     

    (b)
      The
      General Partner shall not issue any debt securities, any preferred stock or
      any
      common stock (including additional REIT Stock (other than (i) as payment of
      the
      REIT Stock Amount or (ii) in connection with the conversion or exchange of
      securities of the General Partner solely in conversion or exchange for other
      securities of the General Partner)) or rights, options, warrants or convertible
      or exchangeable securities containing the right to subscribe for or purchase
      any
      of the foregoing (collectively, “ Securities”),
      other
      than to all holders of REIT Stock, unless the General Partner shall

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (i)
      in
      the case of debt securities, lend to the Partnership the proceeds of or
      consideration received for such Securities on the same terms and conditions,
      including interest rate and repayment schedule, as shall be applicable with
      respect to or incurred in connection with the issuance of such Securities and
      the proceeds of, or consideration received from, any subsequent exercise,
      exchange or conversion thereof (if applicable);

     

    (ii)
      in
      the case of equity Securities senior or junior to the REIT Stock as to dividends
      and distributions on liquidation, contribute to the Partnership the proceeds
      of
      or consideration (including any property or other non-cash assets) received
      for
      such Securities and the proceeds of, or consideration received from, any
      subsequent exercise, exchange or conversion thereof (if applicable), and
      receive from the Partnership, interests in the Partnership in consideration
      therefor with the same terms and conditions, including dividend, dividend
      priority and liquidation preference, as are applicable to such Securities;
      and

     

    (iii)
      in
      the case of REIT Stock or other equity Securities on a parity with the REIT
      Stock as to dividends and distributions on liquidation, (including, without
      limitation, REIT Stock or other Securities issued as a stock award or upon
      exercise of options issued under the Stock Option Plans), contribute to the
      Partnership the proceeds of or consideration (including any property or other
      non-cash assets, including services) received for such Securities and the
      proceeds of, or consideration received from, any subsequent exercise, exchange
      or conversion thereof (if applicable), and receive from the Partnership a number
      of additional Partnership Units in consideration therefor equal to the product
      of

     

    (A)
      the
      number of shares of REIT Stock or other equity Securities issued by the General
      Partner, multiplied by

     

    (B)
      a
      fraction the numerator of which is one and the denominator of which is the
      Exchange Factor in effect on the date of such contribution.

     

    4.3
      Issuance
      of Additional Partnership Interests; Admission of Additional Limited
      Partners

     

    (a)
      In
      addition to any Partnership Interests issuable by the Partnership pursuant
      to
      Section 4.2, the General Partner is authorized to cause the Partnership to
      issue
      additional Partnership Interests (or options therefor) in the form of
      Partnership Units or other Partnership Interests in one or more series or
      classes, or in one or more series of any such class senior or junior to the
      Partnership Units to any Persons at any time or from time to time, on such
      terms
      and conditions, as the General Partner shall establish in each case in its
      sole
      and absolute discretion subject to Delaware law, including, without limitation,
      (i) the allocations of items of Partnership income, gain, loss, deduction and
      credit to each class or series of Partnership Interests, (ii) the right of
      each
      class or series of Partnership Interests to share in Partnership distributions,
      and (iii) the rights of each class or series of Partnership Interest upon
      dissolution and liquidation of the Partnership; provided,
      that
      , no
      such Partnership Interests shall be issued to the General Partner unless either
      (a) the Partnership Interests are issued in connection with the grant, award,
      or
      issuance of REIT Stock or other equity interests in the General Partner having
      designations, preferences and other rights such that the economic interests
      attributable to such REIT Stock or other equity interests are substantially
      similar to the designations, preferences and other rights (except voting rights)
      of the Partnership Interests issued to the General Partner in accordance with
      this Section 4.3(a) or (b) the additional Partnership Interests are issued
      to
      all Partners holding Partnership Interests in the same class in proportion
      to
      their respective Percentage Interests in such class, without any approval being
      required from any Limited Partner or any other Person; and provided, however,
      that

     

    (i)
      such
      issuance does not cause the Partnership to become, with respect to any employee
      benefit plan subject to Title I of ERISA or Section 4975 of the Code, a “party
      in interest” (as defined in Section 3(14) of ERISA) or a “disqualified person”
(as defined in Section 4975(e) of the Code); and

     

    (ii)
      such
      issuance would not cause any portion of the assets of the Partnership to
      constitute assets of any employee benefit plan pursuant to Section 2510.3-101
      of
      the regulations of the United States Department of Labor.

     

    (b)
      Subject to the limitations set forth in Section 4.3(a), the General Partner
      may
      take such steps as it, in its sole and absolute discretion, deems necessary
      or
      appropriate to admit any Person as a Limited Partner of the Partnership or
      to
      issue any Partnership Interests, including, without limitation, amending the
      Certificate, Exhibit A or any other provision of this Agreement.

     

    4.4
      Contribution
      of Proceeds of Issuance of REIT Stock 

     

    In
      connection with any offering, grant, award, or issuance of REIT Stock or
      securities, rights, options, warrants or convertible or exchangeable securities
      pursuant to Section 4.2, the General Partner shall make aggregate
      Capital Contributions to the Partnership of the proceeds raised in connection
      with such offering, grant, award, or issuance, including any property issued
      to
      the General Partner pursuant to a merger or contribution agreement in exchange
      for Common Stock; provided, however, that if the proceeds actually received
      by
      the General Partner are less than the gross proceeds of such offering, grant,
      award, or issuance as a result of any underwriter’s discount, commission, or fee
      or other expenses paid or incurred in connection with such offering, grant,
      award, or issuance, then the General Partner shall be deemed to have made a
      Capital Contribution to the Partnership in the amount of the gross proceeds
      of
      such issuance and the Partnership shall be deemed simultaneously to have paid
      pursuant to Section 7.3(c) for the amount of such underwriter’s discount or
      other expenses.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    4.5
      Repurchase
      of REIT Stock; Shares-In-Trust

     

    (a)
      In
      the event that the General Partner shall elect to purchase from its stockholders
      REIT Stock for the purpose of delivering such REIT Stock to satisfy an
      obligation under any distribution reinvestment program adopted by the General
      Partner, any employee stock purchase plan adopted by the General Partner, or
      any
      other obligation or arrangement undertaken by the General Partner in the future,
      the purchase price paid by the General Partner for such REIT Stock and any
      other
      expenses incurred by the General Partner in connection with such purchase shall
      be considered expenses of the Partnership and shall be reimbursed to the General
      Partner, subject to the condition that:

     

    (i)
      if
      such REIT Stock subsequently is to be sold by the General Partner, the General
      Partner shall pay to the Partnership any proceeds received by the General
      Partner from the sale of such REIT Stock (provided that an exchange of REIT
      Stock for Partnership Units pursuant to the applicable Exchange Rights Agreement
      would not be considered a sale for such purposes); and

     

    (ii)
      if
      such REIT Stock is not re-transferred by the General Partner within 30 days
      after the purchase thereof, the General Partner shall cause the Partnership
      to
      cancel a number of Partnership Units held by the General Partner (as applicable)
      equal to the product of

     

    (x)
      the
      number of shares of such REIT Stock, multiplied by

     

    (y)
      a
      fraction, the numerator of which is one and the denominator of which is the
      Exchange Factor in effect on the date of such cancellation.

     

    (b)
      In
      the event the General Partner purchases Shares-in-Trust (as from time to time
      defined in the Articles of Incorporation, as may be amended from time to time),
      the Partnership will purchase from the General Partner a number of Partnership
      Units equal to the product of

     

    (i)
      the
      number of Shares-in-Trust purchased by the General Partner, multiplied
      by

     

    (ii)
      a
      fraction, the numerator of which is one and the denominator of which is the
      Exchange Factor in effect on the date of such purchase.

     

    4.6
      No
      Third-Party Beneficiary

     

    No
      creditor or other third party having dealings with the Partnership shall have
      the right to enforce the right or obligations of any Partner to make Capital
      Contributions or loans or to pursue any other right or remedy hereunder or
      at
      law or in equity, it being understood and agreed that the provisions of this
      Agreement shall be solely for the benefit of, and may be enforced solely by,
      the
      parties hereto and their respective successors and assigns.

     

    4.7
      No
      Interest; No Return

     

    (a)
      No
      Partner shall be entitled to interest on its Capital Contribution or on such
      Partner’s Capital Account.

     

    (b)
      Except as provided herein or by law, no Partner shall have any right to demand
      or receive the return of its Capital Contribution from the
      Partnership. 

     

    4.8
      No
      Preemptive Rights

     

    Subject
      to any preemptive rights that may be granted pursuant to Section 4.3 hereof,
      no
      Person shall have any preemptive or other similar right with respect
      to

     

    (a)
      additional Capital Contributions or loans to the Partnership; or

     

    (b)
      issuance or sale of any Partnership Units or other Partnership
      Interests.

     

    ARTICLE
      5

     

    DISTRIBUTIONS

     

    5.1
      Regular
      Distributions

     

    (a)
      Except for distributions pursuant to Section 13.2 in connection with the
      dissolution and liquidation of the Partnership, and subject to the provisions
      of
      Sections 5.1(b), 5.3, 5.4, 5.5 and 12.2(c), the General Partner shall cause
      the
      Partnership to distribute, at such times as the General Partner shall determine,
      an amount of Available Cash, determined by the General Partner in its sole
      discretion to the Limited Partners and the General Partner, as of the applicable
      Partnership Record Date, in accordance with each such Partner’s respective
      Percentage Interest. This section 5.1(a) is not applicable to the Associate
      General Partner. Distributions to the Associate General Partner should be made
      exclusively pursuant to Section 5.1(b). In no event may any such Partner receive
      a distribution of Available Cash with respect to a Partnership Unit if such
      Partner is entitled to receive a distribution out of such Available Cash with
      respect to REIT Stock for which such a Partnership Unit has been
      exchanged.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (b)
      Except for distributions pursuant to Section 13.2 in connection with the
      dissolution and liquidation of the Partnership, and subject to the provisions
      of
      Sections 5.1(a), 5.3, 5.4, 5.5 and 12.2(c), the General Partner shall cause
      the
      Partnership to distribute, at such times as the General Partner shall determine
      (each a “ Distribution
      Date”),
      an
      amount of Available Cash, determined by the General Partner in its sole
      discretion to the Associate General Partner, the Limited Partners and General
      Partner, as of the applicable Partnership Record Date, in accordance with the
      following provisions:

     

    (i)
      100%
      of Available Cash will be distributed to the General Partner and Limited
      Partners in accordance with Section 5.1(a) above until
      the
      Limited Partners receive distributions from the Partnership and the Stockholders
      receive dividends from the General Partner in an amount equal to a Cumulative
      Non-Compounded Return of 7% per year on their Net Investment (“ First
      Level Return”);

     

    (ii)
      100%
      of Available Cash will be distributed to the Associate General Partner if at
      the
      Distribution Date, the Limited Partners and the Stockholders have received
      First
      Level Returns, until
      the
      Associate General Partner receives distributions from the Partnership in an
      amount equal to a Cumulative Non-Compound Return of 7% per year on its Net
      Investment (“ SGP
      Distribution”);

     

    (iii)
      70%
      of Available Cash will be distributed to the General Partner and Limited
      Partners in accordance with Section 5.1(a) above and 30% of Available Cash
      will
      be distributed to the Associate General Partner, if at the Distribution Date
      (1)
      the Limited Partners and the Stockholders have received First Level Returns,
      and
      (2) the Associate General Partner has received the SGP Distribution,
until
      the
      Limited Partners receive distributions from the Partnership and Stockholders
      receive dividends from the General Partner in an amount equal to a Cumulative
      Non-Compounded return of 12% per year on their Net Investment (“ Second
      Level Return”);
      and


     

    (iv)
      60%
      of Available Cash will be distributed to the General Partner and Limited
      Partners in accordance with Section 5.1(a) above and 40% of Available Cash
      will
      be distributed to the Associate General Partner, if at the Distribution Date
      the
      Limited Partners and Stockholders have received Second Level Returns.
 

    


    (c)
      Notwithstanding anything to the contrary in this Section 5, in no event will
      the
      Acquisition Fees, Acquisition Expenses and Asset Management Fee paid to the
      Initial Limited Partner, plus the subordinated payments payable by the
      Partnership to the Sponsor (“Program Structure”) exceed the sum of (i) an amount
      equal to 6 percent of the gross Contract Purchase Price of all Properties
      acquired by the General Partner; (ii) an amount determined annually
      (“Asset
      Management Amount”)
      equal
      in the aggregate to the greater of 2 percent of the Average Invested Assets
      or
      25 percent of the GP Net Income after reducing such Asset Management Amount
      by
      those Total Operating Expenses as defined in the Guidelines that exclude the
      asset management amount; (iii) an amount equal to the Disposition Fees, if
      any,
      but not to exceed 3 percent of the contract sales price of all Properties sold
      by the General Partner; and (iv) an amount equal to 15 percent of the GP Net
      Sales Proceeds, if any, remaining after the payment to the shareholders of
      the
      General Partner in the aggregate of an amount equal to 100 percent of the
      original issue price of their shares plus an amount equal to 6 percent of the
      original issue price of the General Partner’s shares per annum, cumulative
      (“Guideline
      Structure”).
      For
      purposes of determining compliance with this undertaking, the comparison between
      the Program Structure and the Guideline Structure shall be determined on an
      annual basis at the end of each fiscal year of the General Partner
      (“Comparison
      Date”).
      To
      the extent that at the Comparison Date the Program Structure amount exceeds
      the
      Guideline Structure amount, the Sponsor shall return such excess to the
      shareholders within 30 days after the Comparison Date.

     

    5.2
      Qualification
      as a REIT

     

    The
      General Partner shall use its best efforts to cause the Partnership to
      distribute sufficient amounts under this Article 5 to enable the General Partner
      to pay dividends to the Stockholders that will enable the General Partner
      to

     

    (a)
      satisfy the requirements for qualification as a REIT under the Code and
      Regulations (“REIT Requirements”), and

     

    (b)
      avoid
      any federal income or excise tax liability;

     

    provided,
      however
      , the
      General Partner shall not be bound to comply with this covenant to the extent
      such distributions would

     

    (x)
      violate applicable Delaware law or

     

    (y)
      contravene the terms of any notes, mortgages or other types of debt obligations
      to which the Partnership may be subject in conjunction with borrowed
      funds.

     

    5.3
      Withholding

     

    With
      respect to any withholding tax or other similar tax liability or obligation
      to
      which the Partnership may be subject as a result of any act or status of any
      Partner or to which the Partnership becomes subject with respect to any
      Partnership Unit, the Partnership shall have the right to withhold amounts
      of
      Available Cash distributable to such Partner or with respect to such Partnership
      Units, to the extent of the amount of such withholding tax or other similar
      tax
      liability or obligation pursuant to the provisions contained in Section
      10.5.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    5.4
      Additional
      Partnership Interests

     

    If
      the
      Partnership issues Partnership Interests in accordance with Section 4.2 or
      4.3,
      the distribution priorities set forth in Section 5.1 shall be amended, as
      necessary, to reflect the distribution priority of such Partnership Interests
      and corresponding amendments shall be made to the provisions of Exhibit
      B.

     

    5.5
      Distributions
      Upon Liquidation 

     

    Proceeds
      from a Terminating Capital Transaction and any other cash received or reductions
      in reserves made after commencement of the liquidation of the Partnership shall
      be distributed to the Partners in accordance with Section 13.2.

     

    ARTICLE
      6

     

    ALLOCATIONS

     

    6.1
      Allocations

     

    The
      Net
      Income, Net Loss and other Partnership items shall be allocated pursuant to
      the
      provisions of Exhibit B.

     

    6.2
      Revisions
      to Allocations to Reflect Issuance of Partnership
      Interests

     

    If
      the
      Partnership issues Partnership Interests to the General Partner, Associate
      General Partner or any additional Limited Partner pursuant to Article IV, the
      General Partner shall make such revisions to this Article 6 and Exhibit B as
      it
      deems necessary to reflect the terms of the issuance of such Partnership
      Interests, including making preferential allocations to classes of Partnership
      Interests that are entitled thereto. Such revisions shall not require the
      consent or approval of any other Partner. 

     

    ARTICLE
      7

     

    MANAGEMENT
      AND OPERATIONS OF BUSINESS

     

    7.1
      Management

     

    (a)  
          (i) Except as otherwise expressly provided in this
      Agreement, full, complete and exclusive discretion to manage and control the
      business and affairs of the Partnership are and shall be vested in the General
      Partner, and no Limited Partner shall have any right to participate in or
      exercise control or management power over the business and affairs of the
      Partnership. Except as provided, any action taken by the General Partner in
      connection with management of the Partnership requires the consent of the
      Associate General Partner.

     

    (ii)
      The
      General Partner may not be removed by the Associate General Partner or the
      Limited Partners with or without cause.

     

    (iii)
      In
      addition to the powers now or hereafter granted a general partner of a limited
      partnership under applicable law or which are granted to the General Partner
      under any other provision of this Agreement, the General Partner, subject to
      Section 7.11, shall have full power and authority to do all things deemed
      necessary or desirable by it to conduct the business of the Partnership, to
      exercise all powers set forth in Section 3.2 hereof and to effectuate the
      purposes set forth in Section 3.1 hereof, including, without
      limitation:

     

    (A)
      (1)
      the making of any expenditures, the lending or borrowing of money, including,
      without limitation, making prepayments on loans and borrowing money to permit
      the Partnership to make distributions to its Partners in such amounts as will
      permit the General Partner (so long as the General Partner qualifies as a REIT)
      to avoid the payment of any federal income tax (including, for this purpose,
      any
      excise tax pursuant to Section 4981 of the Code) and to make distributions
      to
      its stockholders in amounts sufficient to permit the General Partner to maintain
      REIT status,

     

    (2)
      the
      assumption or guarantee of, or other contracting for, indebtedness and other
      liabilities,

     

    (3)
      the
      issuance of evidence of indebtedness (including the securing of the same by
      deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s
      assets) and

     

    (4)
      the
      incurring of any obligations it deems necessary for the conduct of the
      activities of the Partnership, including the payment of all expenses associated
      with the General Partner;

     

    (B)
      the
      making of tax, regulatory and other filings, or rendering of periodic or other
      reports to governmental or other agencies having jurisdiction over the business
      or assets of the Partnership or the General Partner;

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (C)
      the
      acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
      exchange of all or substantially all of the assets of the Partnership (including
      the exercise or grant of any conversion, option, privilege, or subscription
      right or other right available in connection with any assets at any time held
      by
      the Partnership) or the merger, consolidation or other combination (a “
Business
      Combination”)
      of the
      Partnership with or into another Entity on such terms as the General Partner
      deems proper, provided that the General Partner shall be required to send to
      the
      Associate General Partner and each Limited Partner a notice of such proposed
      Business Combination no less than 15 days prior to the record date for the
      vote
      of the General Partner’s stockholders on such Business Combination, if
      any;

     

    (D)
      the
      use of the assets of the Partnership (including, without limitation, cash on
      hand) for any purpose consistent with the terms of this Agreement and on any
      terms it sees fit, including, without limitation,

     

    (1)
      the
      financing of the conduct of the operations of the General Partner, the
      Partnership or any of the Partnership’s Subsidiaries, 

     

    (2)
      the
      lending of funds to other Persons (including, without limitation, the
      Subsidiaries of the Partnership and/or the General Partner) and the repayment
      of
      obligations of the Partnership and its Subsidiaries and any other Person in
      which it has an equity investment, and

     

    (3)
      the
      making of capital contributions to its Subsidiaries;

     

    (E)
      the
      expansion, development, construction, leasing, repair, alteration, demolition
      or
      improvement of any property in which the Partnership or any Subsidiary of the
      Partnership owns an interest;

     

    (F)
      the
      negotiation, execution, and performance of any contracts, conveyances or other
      instruments that the General Partner considers useful or necessary to the
      conduct of the Partnership’s operations or the implementation of the General
      Partner’s powers under this Agreement, including contracting with contractors,
      developers, consultants, accountants, legal counsel, other professional advisors
      and other agents and the payment of their expenses and compensation out of
      the
      Partnership’s assets;

     

    (G)
      the
      distribution of Partnership cash or other Partnership assets in accordance
      with
      this Agreement;

     

    (H)
      holding, managing, investing and reinvesting cash and other assets of the
      Partnership;

     

    (I)
      the
      collection and receipt of revenues and income of the Partnership;

     

    (J)
      the
      establishment of one or more divisions of the Partnership, the selection and
      dismissal of employees of the Partnership (including, without limitation,
      employees having titles such as “president,” “vice president,” “secretary” and
“treasurer” of the Partnership), and agents, outside attorneys, accountants,
      consultants and contractors of the Partnership, and the determination of their
      compensation and other terms of employment or engagement;

     

    (K)
      the
      maintenance of such insurance for the benefit of the Partnership and the
      Partners and directors and officers thereof as it deems necessary or
      appropriate;

     

    (L)
      the
      formation of, or acquisition of an interest (including non-voting interests
      in
      entities controlled by Affiliates of the Partnership or third parties) in,
      and
      the contribution of property to, any further Entities or other relationships
      that it deems desirable, including, without limitation, the acquisition of
      interests in, and the contributions of funds or property to, or making of loans
      to, its Subsidiaries and any other Person from time to time, or the incurrence
      of indebtedness on behalf of such Persons or the guarantee of the obligations
      of
      such Persons; provided that, as long as the General Partner has determined
      to
      elect to qualify as a REIT or to continue to qualify as a REIT, the Partnership
      may not engage in any such formation, acquisition or contribution that would
      cause the General Partner to fail to qualify as a REIT;

     

    (M)
      the
      control of any matters affecting the rights and obligations of the Partnership,
      including

     

    (1)
      the
      settlement, compromise, submission to arbitration or any other form of dispute
      resolution, or abandonment of, any claim, cause of action, liability, debt
      or
      damages, due or owing to or from the Partnership,

     

    (2)
      the
      commencement or defense of suits, legal proceedings, administrative proceedings,
      arbitration or other forms of dispute resolution, and

     

    (3)
      the
      representation of the Partnership in all suits or legal proceedings,
      administrative proceedings, arbitrations or other forms of dispute resolution,
      the incurring of legal expenses, and the indemnification of any Person against
      liabilities and contingencies to the extent permitted by law;

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (N)
      the
      undertaking of any action in connection with the Partnership’s direct or
      indirect investment in its Subsidiaries or any other Person (including, without
      limitation, the contribution or loan of funds by the Partnership to such
      Persons);

     

    (O)
      the
      determination of the fair market value of any Partnership property distributed
      in kind using such reasonable method of valuation as the General Partner, in
      its
      sole discretion, may adopt;

     

    (P)
      the
      exercise, directly or indirectly, through any attorney-in-fact acting under
      a
      general or limited power of attorney, of any right, including the right to
      vote,
      appurtenant to any asset or investment held by the Partnership;

     

    (Q)
      the
      exercise of any of the powers of the General Partner enumerated in this
      Agreement on behalf of or in connection with any Subsidiary of the Partnership
      or any other Person in which the Partnership has a direct or indirect interest,
      or jointly with any such Subsidiary or other Person;

     

    (R)
      the
      exercise of any of the powers of the General Partner enumerated in this
      Agreement on behalf of any Person in which the Partnership does not have an
      interest pursuant to contractual or other arrangements with such
      Person;

     

    (S)
      the
      making, execution and delivery of any and all deeds, leases, notes, mortgages,
      deeds of trust, security agreements, conveyances, contracts, guarantees,
      warranties, indemnities, waivers, releases or legal instruments or agreements
      in
      writing necessary or appropriate, in the judgment of the General Partner, for
      the accomplishment of any of the foregoing;

     

    (T)
      the
      issuance of additional Partnership Units in connection with Capital
      Contributions by Additional Limited Partners and additional Capital
      Contributions by Partners pursuant to Article 4 hereof;

     

    (U)
      the
      opening of bank accounts on behalf of, and in the name of, the Partnership
      and
      its Subsidiaries; and

     

    (V)
      the
      amendment and restatement of Exhibit A to reflect accurately at all times the
      Capital Contributions and Percentage Interests of the Partners as the same
      are
      adjusted from time to time to the extent necessary to reflect redemptions,
      Capital Contributions, the issuance of Partnership Units, the admission of
      any
      Additional Limited Partner or any Substituted Limited Partner or otherwise,
      which amendment and restatement, notwithstanding anything in this Agreement
      to
      the contrary, shall not be deemed an amendment of this Agreement, as long as
      the
      matter or event being reflected in Exhibit A otherwise is authorized by this
      Agreement.

     

    (b)   
         (i) The Associate General Partner and each of the Limited
      Partners agree that the General Partner is authorized to execute, deliver and
      perform the above-mentioned agreements and transactions on behalf of the
      Partnership without any further act, approval or vote of the Partners,
      notwithstanding any other provision of this Agreement to the fullest extent
      permitted under the Act or other applicable law, rule or
      regulation.

     

    (ii)
      The
      execution, delivery or performance by the General Partner or the Partnership
      of
      any agreement authorized or permitted under this Agreement shall not constitute
      a breach by the General Partner of any duty that the General Partner may owe
      the
      Partnership or the Limited Partners or any other Persons under this Agreement
      or
      of any duty stated or implied by law or equity.

     

    (c)
      At
      all times from and after the date hereof, the General Partner at the expense
      of
      the Partnership, may or may not, cause the Partnership to obtain and
      maintain

     

    (i)
      casualty, liability and other insurance on the properties of the
      Partnership;

     

    (ii)
      liability insurance for the Indemnitees hereunder; and 

     

    (iii)
      such other insurance as the General Partner, in its sole and absolute
      discretion, determines to be appropriate and reasonable.

     

    (d)
      At
      all times from and after the date hereof, the General Partner may cause the
      Partnership to establish and maintain at any and all times working capital
      accounts and other cash or similar balances in such amount as the General
      Partner, in its sole and absolute discretion, deems appropriate and reasonable
      from time to time.

     

    (e)  
          (i) In exercising its authority under this Agreement,
      the General Partner may, but shall be under no obligation to, take into account
      the tax consequences to any Partner (including the General Partner) of any
      action taken (or not taken) by it. The General Partner and the Partnership
      shall
      not have liability to the Associate General Partner or any Limited Partner
      for
      monetary damages or otherwise for losses sustained, liabilities incurred or
      benefits not delivered by the Associate General Partner or such Limited Partner
      in connection with such decisions, provided that the General Partner has acted
      in good faith pursuant to its authority under this Agreement. The Limited
      Partners expressly acknowledge that the General Partner is acting on behalf
      of
      the Partnership, the General Partner, and the General Partner’s stockholders,
      collectively.

     

    
      
        
        

      

      
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    (ii)
      The
      General Partner and the Partnership shall not have liability to the Associate
      General Partner or any Limited Partner under any circumstances as a result
      of an
      income tax liability incurred by the Associate General Partner or such Limited
      Partner as a result of an action (or inaction) by the General Partner taken
      pursuant to its authority under and in accordance with this
      Agreement.

     

    7.2
      Certificate
      of General Partnership

     

    (a)
      The
      General Partner has previously filed the Certificate with the Secretary of
      State
      of Delaware as required by the Act.

     

    (b)  
          (i) The General Partner shall use all reasonable efforts
      to cause to be filed such other certificates or documents as may be reasonable
      and necessary or appropriate for the formation, continuation, qualification
      and
      operation of a limited partnership (or a partnership in which the limited
      partners have limited liability) in the State of Delaware and any other state,
      or the District of Columbia, in which the Partnership may elect to do business
      or own property.

     

    (ii)
      To
      the extent that such action is determined by the General Partner to be
      reasonable and necessary or appropriate, the General Partner shall file
      amendments to and restatements of the Certificate and do all of the things
      to
      maintain the Partnership as a limited partnership (or a partnership in which
      the
      limited partners have limited liability) under the laws of the State of Delaware
      and each other state, or the District of Columbia, in which the Partnership
      may
      elect to do business or own property.

     

    (iii)
      Subject to the terms of Section 8.5(a)(iv) hereof, the General Partner shall
      not
      be required, before or after filing, to deliver or mail a copy of the
      Certificate or any amendment thereto to the Associate General Partner or any
      Limited Partner.

     

    7.3
      Reimbursement
      of the General Partner

     

    (a)
      Except as provided in this Section 7.3 and elsewhere in this Agreement
      (including the provisions of Articles 5 and 6 regarding distributions, payments,
      and allocations to which it may be entitled), the General Partner shall not
      be
      compensated for its services as general partner of the Partnership.

     

    (b)  
          (i) The Partnership shall be responsible for and shall
      pay all expenses relating to the Partnership’s organization, the ownership of
      its assets and its operations. The General Partner shall be reimbursed on a
      monthly basis, or such other basis as it may determine in its sole and absolute
      discretion, for all expenses that it incurs on behalf of the Partnership
      relating to the ownership and operation of the Partnership’s assets, or for the
      benefit of the Partnership, including all expenses associated with compliance
      by
      the General Partner and the Initial Limited Partner with laws, rules and
      regulations promulgated by any regulatory body, expenses related to the
      operations of the General Partner and to the management and administration
      of
      any Subsidiaries of the General Partner or the Partnership or Affiliates of
      the
      Partnership, such as auditing expenses and filing fees and any and all salaries,
      compensation and expenses of officers and employees of the General Partner,
      but
      excluding any portion of expenses reasonably attributable to assets not owned
      by
      or for the benefit of, or to operations not for the benefit of, the Partnership
      or Affiliates of the Partnership; provided, that the amount of any such
      reimbursement shall be reduced by any interest earned by the General Partner
      with respect to bank accounts or other instruments or accounts held by it in
      its
      name.

     

    (ii)
      Such
      reimbursement shall be in addition to any reimbursement made as a result of
      indemnification pursuant to Section 7.6 hereof.

     

    (iii)
      The
      General Partner shall determine in good faith the amount of expenses incurred
      by
      it related to the ownership and operation of, or for the benefit of, the
      Partnership. If certain expenses are incurred for the benefit of the Partnership
      and other entities (including the General Partner), such expenses will be
      allocated to the Partnership and such other entities in such a manner as the
      General Partner in its reasonable discretion deems fair and reasonable. All
      payments and reimbursements hereunder shall be characterized for federal income
      tax purposes as expenses of the Partnership incurred on its behalf, and not
      as
      expenses of the General Partner.

     

    (c)   
         (i) Expenses incurred by the General Partner relating to the
      organization or reorganization of the Partnership and the General Partner the
      issuance of Common Stock in connection with the Consolidation and any issuance
      of additional Partnership Interests, REIT Stock or rights, options, warrants,
      or
      convertible or exchangeable securities pursuant to Section 4.2 hereof and all
      costs and expenses associated with the preparation and filing of any periodic
      reports by the General Partner under federal, state or local laws or regulations
      (including, without limitation, all costs, expenses, damages, and other payments
      resulting from or arising in connection with litigation related to any of the
      foregoing) are primarily obligations of the Partnership.

     

    (ii)
      To
      the extent the General Partner pays or incurs such expenses, the General Partner
      shall be reimbursed for such expenses.

     

    7.4
      Outside
      Activities of the General Partner

     

    The
      General Partner and any Affiliates of the General Partner may acquire Limited
      Partner Interests and shall be entitled to exercise all rights of a Limited
      Partner relating to such Limited Partner Interests.

     

    
      
        
        

      

      
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    7.5
      Contracts
      with Affiliates

     

    (a)  
          (i) The Partnership may lend or contribute funds or
      other assets to its Subsidiaries or other Persons in which it has an equity
      investment and such Subsidiaries and Persons may borrow funds from the
      Partnership, on terms and conditions established in the sole and absolute
      discretion of the General Partner.

     

    (ii)
      The
      foregoing authority shall not create any right or benefit in favor of any
      Subsidiary or any other Person.

     

    (b)
      Except as provided in Section 7.4, the Partnership may Transfer assets to
      Entities in which it is or thereby becomes a participant upon such terms and
      subject to such conditions consistent with this Agreement and applicable law
      as
      the General Partner, in its sole and absolute discretion, may
      determine.

     

    (c)
      Except as expressly permitted by this Agreement, neither the General Partner
      nor
      any of its Affiliates shall sell, Transfer or convey any property to, or
      purchase any property from, the Partnership, directly or indirectly, except
      pursuant to transactions that are determined by the General Partner in good
      faith to be fair and reasonable. 

     

    (d)
      The
      General Partner, in its sole and absolute discretion and without the approval
      of
      the Associate General Partner or the Limited Partners, may propose and adopt,
      on
      behalf of the Partnership, employee benefit plans, stock option plans, and
      similar plans funded by the Partnership for the benefit of employees of the
      Partnership, the General Partner, any Subsidiaries of the Partnership or any
      Affiliate of any of them in respect of services performed, directly or
      indirectly, for the benefit of the Partnership and Associate General Partner,
      the General Partner, any Subsidiaries of the Partnership or any Affiliate of
      any
      of them.

     

    (e)
      The
      General Partner is expressly authorized to enter into, in the name and on behalf
      of the Partnership, a “right of first opportunity” or “right of first offer”
arrangement, non-competition agreements and other conflict avoidance agreements
      with various Affiliates of the Partnership and the General Partner, on such
      terms as the General Partner and Associate General Partner in their absolute
      discretion, believe are advisable.

     

    7.6
      Indemnification

     

    (a)
      (i)
      The Partnership shall indemnify each Indemnitee from and against any and all
      losses, claims, damages, liabilities, joint or several, expenses (including,
      without limitation, reasonable attorneys’ fees and other legal fees and
      expenses), judgments, fines, settlements, and other amounts arising from any
      and
      all claims, demands, actions, suits or proceedings, civil, criminal,
      administrative or investigative (collectively, “Claims”), that relate to the
      operations of the Partnership or the General Partner as set forth in this
      Agreement, in which such Indemnitee may be involved, or is threatened to be
      involved, as a party or otherwise, so long as (x) the course of conduct which
      gave rise to the Claim was taken, in the reasonable determination of the
      Indemnitee made in good faith, in the best interests of the Partnership or
      the
      General Partner, (y) such Claim was not the result of negligence or misconduct
      by the Indemnitee and (z) such indemnification is not satisfied or recoverable
      from the assets of the stockholders of the General Partner. Notwithstanding
      the
      foregoing, no Indemnitee shall be indemnified for any Claim arising from or
      out
      of an alleged violation of federal or state securities laws unless (x) there
      has
      been a successful adjudication on the merits of each count involving alleged
      securities law violations as to such Indemnitee, (y) such allegations have
      been
      dismissed with prejudice on the merits by a court of competent jurisdiction
      as
      to such Indemnitee, or (z) a court of competent jurisdiction approves a
      settlement of such allegations against such Indemnitee and finds that
      indemnification of the settlement and the related costs should be made, and
      the
      court considering the request for indemnification has been advised of the
      position of the Securities and Exchange Commission and of the published position
      of any state securities regulatory authority in which the REIT Stock was offered
      or sold as to indemnification for violations of securities law.

     

    (ii)
      Without limitation, the foregoing indemnity shall extend to any liability of
      any
      Indemnitee, pursuant to a loan guaranty (except a guaranty by a limited partner
      of nonrecourse indebtedness of the Partnership or as otherwise provided in
      any
      such loan guaranty), contractual obligation for any indebtedness or other
      obligation or otherwise for any indebtedness of the Partnership or any
      Subsidiary of the Partnership (including, without limitation, any indebtedness
      which the Partnership or any Subsidiary of the Partnership has assumed or taken
      subject to), and the General Partner is hereby authorized and empowered, on
      behalf of the Partnership, to enter into one or more indemnity agreements
      consistent with the provisions of this Section 7.6 in favor of any Indemnitee
      having or potentially having liability for any such indebtedness.

     

    (iii)
      Any
      indemnification pursuant to this Section 7.6 shall be made only out of the
      assets of the Partnership, and neither the General Partner nor the Associate
      General Partner or any Limited Partner shall have any obligation to contribute
      to the capital of the Partnership, or otherwise provide funds, to enable the
      Partnership to fund its obligations under this Section 7.6. 

     

    (b)
      Subject to Section 7.9(c), reasonable expenses incurred by an Indemnitee who
      is
      a party to a proceeding shall be paid or reimbursed by the Partnership in
      advance of the final disposition of any and all claims, demands, actions, suits
      or proceedings, civil, criminal, administrative or investigative made or
      threatened against an Indemnitee upon receipt by the Partnership of (i) a
      written affirmation by the Indemnitee of the Indemnitee’s good faith belief that
      the standard of conduct necessary for indemnification by the Partnership as
      authorized in this Section 7.6 has been met; and (ii) a written undertaking
      by
      or on behalf of the Indemnitee to repay the amount if it shall ultimately be
      determined that the standard of conduct has not been met.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c)
      The
      indemnification provided by this Section 7.6 shall continue as to an Indemnitee
      who has ceased to serve in such capacity unless otherwise provided in a written
      agreement pursuant to which such Indemnities are indemnified.

     

    (d)
      The
      Partnership may, but shall not be obligated to, purchase and maintain insurance,
      on behalf of the Indemnities and such other Persons as the General Partner
      shall
      determine, against any liability that may be asserted against or expenses that
      may be incurred by such Person in connection with the Partnership’s activities,
      regardless of whether the Partnership would have the power to indemnify such
      Person against such liability under the provisions of this
      Agreement.

     

    (e)
      For
      purposes of this Section 7.6, the Partnership shall be deemed to have requested
      an Indemnitee to serve as fiduciary of an employee benefit plan whenever the
      performance by such Indemnitee of its duties to the Partnership also imposes
      duties on, or otherwise involves services by, such Indemnitee to the plan or
      participants or beneficiaries of the plan; excise taxes assessed on an
      Indemnitee with respect to an employee benefit plan pursuant to applicable
      law
      shall constitute fines within the meaning of this Section 7.6; and actions
      taken
      or omitted by the Indemnitee with respect to an employee benefit plan in the
      performance of its duties for a purpose reasonably believed by it to be in
      the
      interest of the participants and beneficiaries of the plan shall be deemed
      to be
      for a purpose which is not opposed to the best interests of the
      Partnership.

     

    (f)
      In no
      event may an Indemnitee subject any of the Partners (other than the General
      Partner) to personal liability by reason of the indemnification provisions
      set
      forth in this Agreement.

     

    (g)
      An
      Indemnitee shall not be denied indemnification in whole or in part under this
      Section 7.6 because the Indemnitee had an interest in the transaction with
      respect to which the indemnification applies if the transaction was otherwise
      permitted by the terms of this Agreement.

     

    (h)   
         (i) The provisions of this Section 7.6 are for the benefit of
      the Indemnitees, their heirs, successors, assigns and administrators and shall
      not be deemed to create any rights for the benefit of any other
      Persons.

     

    (ii)
      Any
      amendment, modification or repeal of this Section 7.6 or any provision hereof
      shall be prospective only and shall not in any way affect the Partnership’s
      liability to any Indemnitee under this Section 7.6, as in effect immediately
      prior to such amendment, modification, or repeal with respect to claims arising
      from or relating to matters occurring, in whole or in part, prior to such
      amendment, modification or repeal, regardless of when such claims may arise
      or
      be asserted.

     

    (i)
      If
      and to the extent any payments to the General Partner pursuant to this Section
      7.6 constitute gross income to the General Partner (as opposed to the repayment
      of advances made on behalf of the Partnership), such amounts shall constitute
      guaranteed payments within the meaning of Section 707(c) of the Code, shall
      be
      treated consistently therewith by the Partnership and all Partners, and shall
      not be treated as distributions for purposes of computing the Partners’ Capital
      Accounts.

     

    (j)
      Notwithstanding anything to the contrary in this Agreement, the General Partner
      shall not be entitled to indemnification hereunder for any loss, claim, damage,
      liability or expense for which the General Partner is obligated to indemnify
      the
      Partnership under any other agreement between the General Partner and the
      Partnership. 

     

    7.7
      Liability
      of the General Partner

     

    Subject
      to Section 7.9:

     

    (a)
      Notwithstanding anything to the contrary set forth in this Agreement, neither
      the General Partner nor the investment advisor of the General Partner, nor
      any
      of their respective officers and directors, shall be liable for monetary damages
      to the Partnership, any Partners or any Assignees for losses sustained or
      liabilities incurred as a result of errors in judgment or mistakes of fact
      or
      law or of any act or omission unless the General Partner or its investment
      advisor, as the case may be, acted in bad faith and the act or omission was
      material to the matter giving rise to the loss, liability or benefit not
      derived.

     

    (b)   
         (i) The Associate General Partner and the Limited Partners
      expressly acknowledge that the General Partner (and its investment advisor)
      is
      acting on behalf of the Partnership and the shareholders of the General Partner
      collectively, that the General Partner (and its investment advisor), subject
      to
      the provisions of Section 7.1(e) hereof, is under no obligation to consider
      the
      separate interest of the Associate General Partner or the Limited Partners
      (including, without limitation, the tax consequences to the Associate General
      Partner, the Limited Partners or Assignees) in deciding whether to cause the
      Partnership to take (or decline to take) any actions, and that the General
      Partner (and its investment advisor) shall not be liable for monetary damages
      for losses sustained, liabilities incurred, or benefits not derived by Limited
      Partners or the Associate General Partner in connection with such decisions;
      provided that the General Partner (and its investment advisor) has acted in
      good
      faith.

     

    
      
        
        

      

      
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    (ii)
      With
      respect to any indebtedness of the Partnership which the Associate General
      Partner or any Limited Partner may have guaranteed, the General Partner (and
      its
      investment advisor) shall have no duty to keep such indebtedness
      outstanding.

     

    (c)  
          (i) Subject to its obligations and duties as General
      Partner set forth in Section 7.1(a) hereof, the General Partner may exercise
      any
      of the powers granted to it by this Agreement and perform any of the duties
      imposed upon it hereunder either directly or by or through its agent, including
      its investment advisor.

     

    (ii)
      The
      General Partner shall not be responsible for any misconduct or negligence on
      the
      part of any such agent appointed by the General Partner in good
      faith.

     

    (d)
      The
      Limited Partners expressly acknowledge that in the event of any conflict in
      the
      fiduciary duties owed by the General Partner to its stockholders and by the
      General Partner, in its capacity as a general partner of the Partnership, to
      the
      Associate General Partner or the Limited Partners, the General Partner may
      act
      in the best interests of the General Partner’s stockholders without violating
      its fiduciary duties to the Associate General Partner and the Limited Partners,
      and that the General Partner shall not be liable for monetary damages for losses
      sustained, liabilities incurred, or benefits not derived by the Associate
      General Partner or the Limited Partners in connection with any such
      violation.

     

    (e)
      Any
      amendment, modification or repeal of this Section 7.7 or any provision hereof
      shall be prospective only and shall not in any way affect the limitations on
      the
      General Partner’s and its officers’ and directors’ liability to the Partnership
      and the Limited Partners under this Section 7.7 as in effect immediately prior
      to such amendment, modification or repeal with respect to claims arising from
      or
      relating to matters occurring, in whole or in part, prior to such amendment,
      modification or repeal, regardless of when such claims may arise or be
      asserted.

     

    7.8
      Other
      Matters Concerning the General Partner

     

    Subject
      to Section 7.9:

     

    (a)
      The
      General Partner may rely and shall be protected in acting, or refraining from
      acting, upon any resolution, certificate, statement, instrument, opinion,
      report, notice, request, consent, order, bond, debenture, or other paper or
      document believed by it in good faith to be genuine and to have been signed
      or
      presented by the proper party or parties.

     

    (b)
      The
      General Partner may consult with legal counsel, accountants, appraisers,
      management consultants, investment bankers, architects, engineers, environmental
      consultants and other consultants and advisers
      selected by it, and any act taken or omitted to be taken in reliance upon the
      opinion of such Persons as to matters which such General Partner reasonably
      believes to be within such Person’s professional or expert competence shall be
      conclusively presumed to have been done or omitted in good faith and in
      accordance with such opinion.

     

    (c)  
          (i) The General Partner shall have the right, in respect
      of any of its powers or obligations hereunder, to act through any of its duly
      authorized officers and duly appointed attorneys-in-fact.

     

    (ii)
      Each
      such attorney shall, to the extent provided by the General Partner in the power
      of attorney, have full power and authority to do and perform each and every
      act
      and duty which is permitted or required to be done by the General Partner
      hereunder.

     

    (d)
      Notwithstanding any other provisions of this Agreement or the Act, any action
      of
      the General Partner on behalf of the Partnership or any decision of the General
      Partner to refrain from acting on behalf of the Partnership, undertaken in
      the
      good faith belief that such action or omission is necessary or advisable in
      order

     

    (i)
      to
      protect the ability of the General Partner to continue to qualify as a REIT;
      or

     

    (ii)
      to
      avoid the General Partner incurring any taxes under Section 857 or Section
      4981
      of the Code,

     

    is
      expressly authorized under this Agreement and is deemed approved by the
      Associate General Partner and all of the Limited Partners.

     

    7.9
      Restrictions
      on Indemnification and Limitation of Liability

     

    (a)
      The
      Partnership shall not indemnify Indemnitees for any liability loss suffered
      by
      the Indemnitees, nor shall it hold harmless for any loss or liability suffered
      by the Partnership, any Indemnitee, unless all of the following conditions
      are
      met: (i) the Indemnitees determined, in good faith, that the course of conduct
      which caused the loss or liability was in the best interests of the Partnership,
      (ii) the Indemnitee were acting on behalf of the Partnership or performing
      services for the Partnership, (iii) such liability or loss or expense was not
      the result of negligence or misconduct on the part of Indemnitees and (iv)
      such
      indemnification or agreement to hold harmless shall be recoverable only out
      of
      the net assets of the Partnership and not from stockholders or the General
      Partner.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b)
      Notwithstanding anything to the contrary in subsection (a), the Partnership
      shall not indemnify Indemnitees or any persons acting as a broker-dealer for
      any
      losses, liabilities or expenses arising from or out of an alleged violation
      of
      federal or state securities laws by such party unless one or more of the
      following conditions are met: (i) there has been a successful adjudication
      on
      the merits of each count involving alleged securities law violations as to
      the
      particular Indemnitee, (ii) such claims have been dismissed with prejudice
      on
      the merits by a court of competent jurisdiction as to the particular Indemnitee
      or (iii) a court of competent jurisdiction approves a settlement of the claims
      against a particular Indemnitee and finds that indemnification of the settlement
      and related costs should be made, and the court considering the matter has
      been
      advised of the position of the Securities and Exchange Commission and the
      published position of any state securities regulatory authority as to
      indemnification for violations of securities law.

     

    (c)
      The
      Partnership will advance amounts to Indemnitees for legal expenses and other
      costs incurred as a result of any legal action for which indemnification is
      being sought is permissible only if all of the following conditions are
      satisfied: (i) the legal action relates to acts or omissions with respect to
      the
      performance of duties or services on behalf of the Partnership, (ii) the legal
      action is initiated by a third party who is not a Stockholder or is initiated
      by
      a Stockholder acting in his or her capacity as such and a court of competent
      jurisdiction specifically approves the advancement and (iii) the Indemnitees
      undertake in writing to repay the advanced funds to the Partnership, together
      with the applicable legal rate of interest thereon, in cases in which such
      Indemnitees are found not to be entitled to indemnification. 

     

    7.10
      Title
      to Partnership Assets

     

    (a)
      Title
      to Partnership assets, whether real, personal or mixed and whether tangible
      or
      intangible, shall be deemed to be owned by the Partnership as an entity, and
      no
      Partner, individually or collectively, shall have any ownership interest in
      such
      Partnership assets or any portion thereof.

     

    (b)  
          (i) Title to any or all of the Partnership assets may be
      held in the name of the Partnership, the General Partner or one or more
      nominees, as the General Partner may determine, including Affiliates of the
      General Partner.

     

    (ii)
      The
      General Partner hereby declares and warrants that any Partnership asset for
      which legal title is held in the name of the General Partner or any nominee
      or
      Affiliate of the General Partner shall be held by the General Partner for the
      use and benefit of the Partnership in accordance with the provisions of this
      Agreement; provided
      , that
      the General Partner shall use its best efforts to cause beneficial and record
      title to such assets to be vested in the Partnership as soon as reasonably
      practicable.

     

    (iii)
      All
      Partnership assets shall be recorded as the property of the Partnership in
      its
      books and records, irrespective of the name in which legal title to such
      Partnership assets is held.

     

    7.11
      Reliance
      by Third Parties

     

    (a)
      Notwithstanding anything to the contrary in this Agreement, any Person dealing
      with the Partnership shall be entitled to assume that the General Partner has
      full power and authority, without consent or approval of any other Partner
      or
      Person, to encumber, sell or otherwise use in any manner any and all assets
      of
      the Partnership and to enter into any contracts on behalf of the Partnership,
      and take any and all actions on behalf of the Partnership, and such Person
      shall
      be entitled to deal with the General Partner as if the General Partner were
      the
      Partnership’s sole party in interest, both legally and
      beneficially.

     

    (b)
      The
      Associate General Partner and each Limited Partner hereby waives any and all
      defenses or other remedies which may be available against such Person to
      contest, negate or disaffirm any action of the General Partner in connection
      with any such dealing. 

     

    (c)
      In no
      event shall any Person dealing with the General Partner or its representatives
      be obligated to ascertain that the terms of this Agreement have been complied
      with or to inquire into the necessity or expediency of any act or action of
      the
      General Partner or its representatives.

     

    (d)
      Each
      and every certificate, document or other instrument executed on behalf of the
      Partnership by the General Partner or its representatives shall be conclusive
      evidence in favor of any and every Person relying thereon or claiming thereunder
      that

     

    (i)
      at
      the time of the execution and delivery of such certificate, document or
      instrument, this Agreement was in full force and effect;

     

    (ii)
      the
      Person executing and delivering such certificate, document or instrument was
      duly authorized and empowered to do so for and on behalf of the Partnership;
      and

     

    (iii)
      such certificate, document or instrument was duly executed and delivered in
      accordance with the terms and provisions of this Agreement and is binding upon
      the Partnership.

     

    7.12
      Loans
      By Third Parties.

     

    The
      Partnership may incur Debt, or enter into similar credit, guarantee, financing
      or refinancing arrangements for any purpose (including, without limitation,
      in
      connection with any acquisition of property) with any Person upon such terms
      as
      the General Partner determines appropriate.

     

    
      
        
        

      

      
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    ARTICLE
      8

     

    RIGHTS
      AND OBLIGATIONS OF LIMITED PARTNERS AND THE ASSOCIATE GENERAL
      PARTNER

     

    8.1
      Limitation
      of Liability

     

    No
      Limited Partners shall have any liability under this Agreement except as
      expressly provided in this Agreement, including Section 10.5 hereof, or under
      the Act.

     

    8.2
      Management
      of Business

     

    (a)
      No
      Limited Partner or Assignee (other than the General Partner, any of their
      Affiliates or any officer, director, employee, agent or trustee of the General
      Partner, the Partnership or any of their Affiliates, in their capacity as such)
      shall take part in the operation, management or control (within the meaning
      of
      the Act) of the Partnership’s business, transact any business in the
      Partnership’s name or have the power to sign documents for or otherwise bind the
      Partnership.

     

    (b)
      The
      transaction of any such business by the General Partner, the Associate General
      Partner, any of its Affiliates or any officer, director, employee, partner,
      agent or trustee of the General Partner, the Associate General Partner, the
      Partnership or any of their Affiliates, in their capacity as such, shall not
      affect, impair or eliminate the limitations, the Limited Partners or Assignees
      under this Agreement.

     

    8.3
      Outside
      Activities of Limited Partners and the Associate General
      Partner

     

    (a)
      Subject to any agreements entered into pursuant to Section 7.5 hereof and any
      other agreements entered into by the Associate General Partner, a Limited
      Partner or its Affiliates with the Partnership or any of its Subsidiaries,
      the
      Associate General Partner and any Limited Partner and any officer, director,
      employee, agent, trustee, Affiliate or shareholder of the Associate General
      Partner or any Limited Partner shall be entitled to and may have business
      interests and engage in business activities in addition to those relating to
      the
      Partnership, including business interests and activities that are in direct
      competition with the Partnership or that are enhanced by the activities of
      the
      Partnership.

     

    (b)
      Neither the Partnership nor any Partners shall have any rights by virtue of
      this
      Agreement in any business ventures of the Associate General Partner or any
      Limited Partner or Assignee.

     

    (c)
      Neither the Associate General Partner or the Limited Partners nor any other
      Person shall have any rights by virtue of this Agreement or the Partnership
      relationship established hereby in any business ventures of any other Person
      and
      such Person shall have no obligation pursuant to this Agreement to offer any
      interest in any such business ventures to the Partnership, the Associate General
      Partner, any Limited Partner or any such other Person, even if such opportunity
      is of a character which, if presented to the Partnership, the Associate General
      Partner, any Limited Partner or such other Person, could be taken by such
      Person.

     

    8.4
      Return
      of Capital

     

    (a)
      Except pursuant to the Exchange Rights Agreements or pursuant to Section 13.3
      hereof, neither the Associate General Partner nor Limited Partner shall be
      entitled to the withdrawal or return of its Capital Contribution, except to
      the
      extent of distributions made pursuant to this Agreement or upon termination
      of
      the Partnership as provided herein.

     

    (b)
      Except as provided in Articles 5 and 13 hereof, no Limited Partner or Assignee
      shall have priority over any other Limited Partner, the Associate General
      Partner or Assignee, either as to the return of Capital Contributions or as
      to
      profits, losses or distributions.

     

    (c)
      Except as provided in Articles 5 and 13 hereof, the Associate General Partner
      shall not have priority over any General Partner or Assignee, either as to
      the
      return of Capital Contributions or as to profits, losses or
      distributions.

     

    8.5
      Rights
      of Limited Partners Relating to the Partnership

     

    (a)
      In
      addition to the other rights provided by this Agreement or by the Act, and
      except as limited by Section 8.5(b) hereof, each Limited Partner shall have
      the
      right, for a purpose reasonably related to the Associate General Partner or
      such
      Limited Partner’s interest as a limited partner in the Partnership, upon written
      demand with a statement of the purpose of such demand and at such General
      Partner’s own expense (including such reasonable copying and administrative
      charges as the General Partner may establish from time to time):

     

    (i)
      to
      obtain a copy of the most recent annual and quarterly reports filed with the
      Securities and Exchange Commission by the General Partner pursuant to the
      Securities Exchange Act of 1934;

     

    (ii)
      to
      obtain a copy of the Partnership’s federal, state and local income tax returns
      for each Partnership Year;

     

    (b)
      Notwithstanding any other provision of this Section 8.5, the General Partners
      may keep confidential from the Limited Partners, for such period of time as
      the
      General Partners determine in their sole and absolute discretion to be
      reasonable, any information that

     

    
      
        
        

      

      
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    (i)
      the
      General Partners reasonably believe to be in the nature of trade secrets or
      other information, the disclosure of which the General Partners in good faith
      believe are not in the best interests of the Partnership or could damage the
      Partnership or its business; or

     

    (ii)
      the
      Partnership is required by law or by agreements with an unaffiliated third
      party
      to keep confidential.

     

    8.6
      Exchange
      Rights Agreements

     

    (a)
      The
      Limited Partners have been granted the right, but not the obligation, to
      exchange all or a portion of their Partnership Units for cash or, at the option
      of the General Partner, for shares of REIT Stock on the terms and subject to
      the
      conditions and restrictions contained in certain Exchange Rights
      Agreements between
      the General Partners and the Limited Partners (as amended from time to time,
      the
“ Exchange
      Rights Agreements”).
      The
      form of Exchange Rights Agreement governing the exchange of Partnership Units
      shall be substantially in the form attached hereto as Exhibit C, with such
      changes as may be agreed to by the General Partner.

     

    (b)
      The
      Limited Partners and all successors, assignees and transferees (whether by
      operation of law, including by merger or consolidation, dissolution or
      liquidation of an entity that is a Limited Partner, or otherwise) shall be
      bound
      by the provisions of the Exchange Rights Agreement to which they are
      parties.

     

    ARTICLE
      9

     

    BOOKS,
      RECORDS, ACCOUNTING AND REPORTS

     

    9.1
      Records
      and Accounting

     

    (a)
      The
      General Partner shall keep or cause to be kept at the principal office of the
      Partnership those records and documents required to be maintained by the Act
      and
      other books and records deemed by the General Partner to be appropriate with
      respect to the Partnership’s business, including, without limitation, all books
      and records necessary for the General Partner to comply with applicable REIT
      Requirements and to provide to the Limited Partners any information, lists
      and
      copies of documents required to be provided pursuant to Sections 8.5(a) and
      9.3
      hereof.

     

    (b)
      Any
      records maintained by or on behalf of the Partnership in the regular course
      of
      its business may be kept on, or be in the form of, punch cards, magnetic tape,
      photographs, micrographics or any other information storage device, provided
      that the records so maintained are convertible into clearly legible written
      form
      within a reasonable period of time.

     

    (c)
      The
      books of the Partnership shall be maintained, for financial and tax reporting
      purposes, on an accrual basis in accordance with generally accepted accounting
      principles, or such other basis as the General Partner determines to be
      necessary or appropriate.

     

    9.2
      Fiscal
      Year

     

    The
      fiscal year of the Partnership shall be the calendar year.

     

    9.3
      Reports

     

    (a)
      As
      soon as practicable, but in no event later than the date on which the General
      Partner mails its annual report to its stockholders, the General Partner shall
      cause to be mailed to the Associate General Partner and each Limited Partner
      as
      of the close of the Partnership Year, an annual report containing financial
      statements of the Partnership, or of the General Partner, if such statements
      are
      prepared on a consolidated basis with the Partnership, for such Partnership
      Year, presented in accordance with the standards of the Public Accounting
      Oversight Board (United States), such statements to be audited by a nationally
      recognized firm of independent public accountants selected by the General
      Partner in its sole discretion.

     

    (b)
      If
      and to the extent that the General Partner mails quarterly reports to its
      stockholders, then as soon as practicable, but in no event later than the date
      such reports are mailed, the General Partner shall cause to be mailed to each
      Limited Partner a report containing unaudited financial statements as of the
      last day of the calendar quarter of the Partnership, or of the General Partner,
      if such statements are prepared on a consolidated basis with the Partnership,
      and such other information as may be required by applicable law or regulation,
      or as the General Partner determines to be appropriate.

     

    (c)
      Notwithstanding the foregoing, the General Partner may deliver to the Associate
      General Partner and the Limited Partners each of the reports described above,
      as
      well as any other communications that it may provide hereunder, by E-mail or
      by
      any other electronic means.

     

    
      
        
        

      

      
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    ARTICLE
      10

     

    TAX
      MATTERS

     

    10.1
      Preparation
      of Tax Returns

     

    The
      General Partner shall arrange for the preparation and timely filing of all
      returns of Partnership income, gains, deductions, losses and other items
      required of the Partnership for federal and state income tax purposes and shall
      use all reasonable efforts to furnish, within ninety (90) days of the close
      of
      each taxable year, the tax information reasonably required by the Associate
      General Partner and the Limited Partners for federal and state income tax
      reporting purposes.

     

    10.2
      Tax
      Elections

     

    (a)
      Except as otherwise provided herein, the General Partner shall, in its sole
      and
      absolute discretion, determine whether to make any available election pursuant
      to the Code.

     

    (b)
      The
      General Partner shall elect a permissible method (which need not be the same
      method for each item or property) of eliminating the disparity between the
      book
      value and the tax basis for each item of property contributed to the Partnership
      or to a Subsidiary of the Partnership pursuant to the regulations promulgated
      under the provisions of Section 704(c) of the Code.

     

    (c)
      The
      General Partner shall have the right to seek to revoke any tax election it
      makes, including, without limitation, the election under Section 754 of the
      Code, upon the General Partner’s determination, in its sole and absolute
      discretion, that such revocation is in the best interests of the
      Partners.

     

    10.3
      Tax
      Matters Partner

     

    (a)     (i)
      The General Partner shall be the “tax matters partner” of the Partnership for
      federal income tax purposes.

     

    (ii)
      Pursuant to Section 6230(e) of the Code, upon receipt of notice from the
      Internal Revenue Service of the beginning of an administrative proceeding with
      respect to the Partnership, the tax matters partner shall furnish the Internal
      Revenue Service with the name, address, taxpayer identification number, and
      profit interest of each of the Associate General Partner and the Limited
      Partners and the Assignees; provided, that such information is provided to
      the
      Partnership by the Associate General Partner, the Limited Partners and the
      Assignees.

     

    (iii)
      The
      tax matters partner is authorized, but not required:

     

    (A)
      to
      enter into any settlement with the Internal Revenue Service with respect to
      any
      administrative or judicial proceedings for the adjustment of Partnership items
      required to be taken into account by a Partner for income tax purposes (such
      administrative proceedings being referred to as a “tax audit” and such judicial
      proceedings being referred to as “judicial review”), and in the settlement
      agreement the tax matters partner may expressly state that such agreement shall
      bind all Partners, except that such settlement agreement shall not bind any
      Partner

     

    (1)
      who
      (within the time prescribed pursuant to the Code and Regulations) files a
      statement with the Internal Revenue Service providing that the tax matters
      partner shall not have the authority to enter into a settlement agreement on
      behalf of such Partner; or

     

    (2)
      who
      is a “notice partner” (as defined in Section 6231(a)(8) of the Code) or a member
      of a “notice group” (as defined in Section 6223(b)(2) of the Code);

     

    (B)
      in
      the event that a notice of a final administrative adjustment at the Partnership
      level of any item required to be taken into account by a Partner for tax
      purposes (a “final adjustment”) is mailed to the tax matters partner, to seek
      judicial review of such final adjustment, including the filing
      of
      a petition for readjustment with the Tax Court or the filing of a complaint
      for
      refund with the United States Claims Court or the District Court of the United
      States for the district in which the Partnership’s principal place of business
      is located;

     

    (C)
      to
      intervene in any action brought by any other Partner for judicial review of
      a
      final adjustment;

     

    (D)
      to
      file a request for an administrative adjustment with the Internal Revenue
      Service and, if any part of such request is not allowed by the Internal Revenue
      Service, to file an appropriate pleading (petition or complaint) for judicial
      review with respect to such request;

     

    (E)
      to
      enter into an agreement with the Internal Revenue Service to extend the period
      for assessing any tax which is attributable to any item required to be taken
      account of by a Partner for tax purposes, or an item affected by such item;
      and

     

    (F)
      to
      take any other action on behalf of the Partners or the Partnership in connection
      with any tax audit or judicial review proceeding to the extent permitted by
      applicable law or regulations.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    The
      taking of any action and the incurring of any expense by the tax matters partner
      in connection with any such proceeding, except to the extent required by law,
      is
      a matter in the sole and absolute discretion of the tax matters partner and
      the
      provisions relating to indemnification of the General Partner set forth in
      Section 7.6 of this Agreement shall be fully applicable to the tax matters
      partner in its capacity as such.

     

    (b)     
       (i) The tax matters partner shall receive no compensation for its
      services.

     

    (ii)
      All
      third party costs and expenses incurred by the tax matters partner in performing
      its duties as such (including legal and accounting fees and expenses) shall
      be
      borne by the Partnership.

     

    (iii)
      Nothing herein shall be construed to restrict the Partnership from engaging
      an
      accounting firm to assist the tax matters partner in discharging its duties
      hereunder, so long as the compensation paid by the Partnership for such services
      is reasonable.

     

    10.4
      Organizational
      Expenses

     

    The
      Partnership shall elect to deduct expenses, if any, incurred by it in organizing
      the Partnership ratably over a fifteen year period as provided in Section 709
      of
      the Code.

     

    10.5
      Withholding

     

    (a)
      The
      Associate General Partner and each Limited Partner hereby authorizes the
      Partnership to withhold from, or pay on behalf of or with respect to, the
      Associate General Partner and such Limited Partner any amount of federal, state,
      local, or foreign taxes that the General Partner determines that the Partnership
      is required to withhold or pay with respect to any amount distributable or
      allocable to the Associate General Partner and such Limited Partner pursuant
      to
      this Agreement, including, without limitation, any taxes required to be withheld
      or paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of
      the
      Code.

     

    (b)    
        (i) Any amount paid on behalf of or with respect to the Associate
      General Partner or a Limited Partner shall constitute a loan by the Partnership
      to the Associate General Partner or such Limited Partner, which loan shall
      be
      repaid by the Associate General Partner or such Limited Partner as the case
      may
      be within fifteen (15) days after notice from the General Partner that such
      payment must be made unless

     

    (A)
      the
      Partnership withholds such payment from a distribution which would otherwise
      be
      made to the Associate General Partner or the Limited Partner, as applicable;
      or

     

    (B)
      the
      General Partner determines, in its sole and absolute discretion, that such
      payment may be satisfied out of the available funds of the Partnership which
      would, but for such payment, be distributed to the Associate General Partner
      or
      the Limited Partner, as applicable.

     

    (ii)
      Any
      amounts withheld pursuant to the foregoing clauses (i)(A) or (B) shall be
      treated as having been distributed to the Associate General Partner or the
      Limited Partner, as applicable.

     

    (c)     
       (i) The Associate General Partner and each Limited Partner hereby
      unconditionally and irrevocably grants to the Partnership a security interest
      in
      the Associate General Partner’s and such Limited Partner’s Partnership Interest,
      as the case may be, to secure the Associate General Partner’s and such Limited
      Partner’s obligation to pay to the Partnership any amounts required to be paid
      pursuant to this Section 10.5.

     

    (ii)
      (A)
      In the event that the Associate General Partner or a Limited Partner fails
      to
      pay when due any amounts owed to the Partnership pursuant to this Section 10.5,
      the General Partner may, in its sole and absolute discretion, elect to make
      the
      payment to the Partnership on behalf of such defaulting Associate General
      Partner or Limited Partner, and in such event shall be deemed to have loaned
      such amount to such defaulting Associate General Partner or Limited Partner
      and
      shall succeed to all rights and remedies of the Partnership as against such
      defaulting Associate General Partner or Limited Partner, as
      applicable.

     

    (B)
      Without limitation, in such event, the General Partner shall have the right
      to
      receive distributions that would otherwise be distributable to such defaulting
      Associate General Partner or Limited Partner until such time as such loan,
      together with all interest thereon, has been paid in full, and any such
      distributions so received by the General Partner shall be treated as having
      been
      distributed to the defaulting Associate General Partner or Limited Partner
      and
      immediately paid by the defaulting Associate General Partner or Limited Partner
      to the General Partner in repayment of such loan.

     

    (iii)
      Any
      amount payable by the Associate General Partner or a Limited Partner hereunder
      shall bear interest at the highest base or prime rate of interest published
      from
      time to time by any of Citibank, N.A. and J.P. Morgan Chase & Co., plus four
      (4) percentage points, but in no event higher than the maximum lawful rate
      of
      interest on such obligation, such interest to accrue from the date such amount
      is due (i.e., fifteen (15) days after demand) until such amount is paid in
      full.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (iv)
      The
      Associate General Partner and each Limited Partner shall take such actions
      as
      the Partnership or the General Partner shall request in order to perfect or
      enforce the security interest created hereunder.

     

    ARTICLE
      11

     

    TRANSFERS
      AND WITHDRAWALS

     

    11.1
      Transfer

     

    (a)   
         (i) The term “Transfer,” when used in this Article 11 with
      respect to a Partnership Interest or a Partnership Unit, shall be deemed to
      refer to a transaction by which the General Partner purports to assign all
      or
      any part of its General Partner Interest to another Person, the Associate
      General Partner purports to assign all or any part of its Associate General
      Partner Interest to another Person or a Limited Partner purports to assign
      all
      or any part of its Limited Partner Interest to another Person, and includes
      a
      sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
      or any other disposition by law or otherwise.

     

    (ii)
      The
      term “Transfer” when used in this Article 11 does not include any exchange of
      Partnership Units for cash or REIT Stock pursuant to the Exchange Rights
      Agreement.

     

    (b)  
         (i) No Partnership Interest shall be Transferred, in whole or
      in part, except in accordance with the terms and conditions set forth in this
      Article 11.

     

    (ii)
      Any
      Transfer or purported Transfer of a Partnership Interest not made in accordance
      with this Article 11 shall be null and void. 

     

    11.2
      Transfer
      of the General Partner’s General Partner Interest

     

    (a)
      The
      General Partner may not Transfer any of its General Partner Interest or withdraw
      as General Partner, or Transfer any of its Limited Partner Interest,
      except

     

    (i)
      if
      holders of at least two-thirds of the Limited Partner Interests consent to
      such
      Transfer or withdrawal,

     

    (ii)
      if
      such Transfer is to an entity which is wholly owned by the General Partner
      and
      is a Qualified REIT Subsidiary as defined in Section 856(i) of the Code,
      or

     

    (iii)
      in
      connection with a transaction described in Section 11.2(c) or 11.2(d) (as
      applicable)

     

    (b)
      In
      the event the General Partner withdraws as general partner of the Partnership
      in
      accordance with Section 11.2(a), the General Partner’s General Partner Interest
      shall immediately be converted into a Limited Partner Interest.

     

    (c)
      Except as otherwise provided in Section 11.2(d), the General Partner shall
      not
      engage in any merger, consolidation or other combination of the General Partner
      with or into another Person (other than a merger in which the General Partner
      is
      the surviving entity) or sale of all or substantially all of its assets, or
      any
      reclassification, or any recapitalization of outstanding REIT Stock (other
      than
      a change in par value, or from par value to no par value, or as a result of
      a
      subdivision or combination of REIT Stock) (a “ Transaction”),
      unless

     

    (i)
      in
      connection with the Transaction all Limited Partners will either receive, or
      will have the right to elect to receive, for each Partnership Unit an amount
      of
      cash, securities, or other property equal to the product of the Exchange Factor
      and the amount of cash, securities or other property or value paid in the
      Transaction to or received by a holder of one share of REIT Stock corresponding
      to such Partnership Unit in consideration of one share of REIT Stock at any
      time
      during the period from and after the date on which the Transaction is
      consummated; provided that if, in connection with the Transaction, a purchase,
      tender or exchange offer (“Offer”) shall have been made to and accepted by the
      holders of more than 50% of the outstanding REIT Stock, each holder of
      Partnership Units shall be given the option to exchange its Partnership Units
      for the amount of cash, securities, or other property which a Limited Partner
      would have received had it

     

    (A)
      exercised its Exchange Right and

     

    (B)
      sold,
      tendered or exchanged pursuant to the Offer the REIT Stock received upon
      exercise of the Exchange Right immediately prior to the expiration of the
      Offer.

     

    The
      foregoing is not intended to, and does not, affect the ability of (i) a
      stockholder of the General Partner to sell its stock in the General Partner
      or
      (ii) the General Partner to perform its obligations (under agreement or
      otherwise) to such stockholders (including the fulfillment of any obligations
      with respect to registering the sale of stock under applicable securities
      laws).

     

    (d)
      (i)
      Notwithstanding Section 11.2(c), the General Partner may merge into or
      consolidate with another entity if immediately after such merger or
      consolidation

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (A)
      substantially all of the assets of the successor or surviving entity (the
“Surviving General Partner”), other than Partnership Units held by the General
      Partner, are contributed to the Partnership as a Capital Contribution in
      exchange for Partnership Units with a fair market value equal to the value
      of
      the assets so contributed as determined by the Surviving General Partner in
      good
      faith and

     

    (B)
      the
      Surviving General Partner expressly agrees to assume all obligations of the
      General Partner hereunder.

     

    (ii)
      (A)
      Upon such contribution and assumption, the Surviving General Partner shall
      have
      the right and duty to amend this Agreement and the Exchange Rights Agreement
      as
      set forth in this Section 11.2(d). 

     

    (B)   
       (1) The Surviving General Partner shall in good faith arrive at a new
      method for the calculation of the Exchange Factor for a Partnership Unit after
      any such merger or consolidation so as to approximate the existing method for
      such calculation as closely as reasonably possible.

     

    (2)
      Such
      calculation shall take into account, among other things, the kind and amount
      of
      securities, cash and other property that was receivable upon such merger or
      consolidation by a holder of REIT Stock or options, warrants or other rights
      relating thereto, and which a holder of Partnership Units could have acquired
      had such Partnership Units been redeemed for REIT Stock immediately prior to
      such merger or consolidation.

     

    (C)
      Such
      amendment to this Agreement shall provide for adjustment to such method of
      calculation, which shall be as nearly equivalent as may be practicable to the
      adjustments provided for with respect to the Exchange Factor.

     

    (iii)
      The
      above provisions of this Section 11.2(d) shall similarly apply to successive
      mergers or consolidations permitted hereunder.

     

    11.3
      Limited
      Partners’ and Associate General Partner’s Rights to
      Transfer

     

    (a)
      Subject to the provisions of Sections 11.3(c), 11.3(d), 11.3(e), 11.4 and 11.6,
      a Limited Partner and the Associate General Partner may, without the consent
      of
      the General Partner, Transfer all or any portion of its Limited Partner Interest
      or Associate General Partner Interest, as the case may be, or any of such
      Limited Partner’s or Associate General Partner’s economic right as a Limited
      Partner or Associate General Partner, as applicable. In order to effect such
      transfer, the Limited Partner or Associate General Partner, as applicable,
      must
      deliver to the General Partner a duly executed copy of the instrument making
      such transfer and such instrument must evidence the written acceptance by the
      assignee of all of the terms and conditions of this Agreement and represent
      that
      such assignment was made in accordance with all applicable laws and
      regulations.

     

    (b)     
       (i) If a Limited Partner or Associate General Partner is Incapacitated,
      the executor, administrator, trustee, committee, guardian, conservator or
      receiver of such Limited Partner’s or Associate General Partner’s estate shall
      have all of the rights of a Limited Partner or Associate General Partner, as
      the
      case may be, but not more rights than those enjoyed by other Limited Partners
      or
      Associate General Partner respectively, for the purpose of settling or managing
      the estate and such power as the Incapacitated Limited Partner or Associate
      General Partner possessed to Transfer all or any part of his or its interest
      in
      the Partnership.

     

    (ii)
      The
      Incapacity of a Limited Partner or Associate General Partner, in and of itself,
      shall not dissolve or terminate the Partnership.

     

    (c)
      The
      General Partner may prohibit any Transfer by a Limited Partner or Associate
      General Partner of its Partnership Units if, in the opinion of legal counsel
      to
      the Partnership, such Transfer would require filing of a registration statement
      under the Securities Act of 1933, as amended, or would otherwise violate any
      federal or state securities laws or regulations applicable to the Partnership
      or
      the Partnership Units.

     

    (d)
      No
      Transfer by a Limited Partner or Associate General Partner of its Partnership
      Units may be made to any Person if

     

    (i)
      in
      the opinion of legal counsel of the Partnership, it would adversely affect
      the
      ability of the General Partner to continue to qualify as a REIT or would subject
      the General Partner to any additional taxes under Section 857 or Section 4981
      of
      the Code;

     

    (ii)
      in
      the opinion of legal counsel for the Partnership, it would result in the
      Partnership being treated as an association taxable as a corporation for federal
      income tax purposes;

     

    (iii)
      such Transfer would cause the Partnership to become, with respect to any
      employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as
      defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in
      Section 4975(c) of the Code);

     

    (iv)
      such
      Transfer would, in the opinion of legal counsel for the Partnership, cause
      any
      portion of the assets of the Partnership to constitute assets of any employee
      benefit plan pursuant to Department of Labor Regulations Section
      2510.2-101;

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    (v)
      such
      Transfer would subject the Partnership to regulation under the Investment
      Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
      Retirement Income Security Act of 1974, each as amended;

     

    (vi)
      without the consent of the General Partner, which consent may be withheld in
      its
      sole and absolute discretion, such Transfer is a sale or exchange, and such
      sale
      or exchange would, when aggregated with all other sales and exchanges during
      the
      12-month period ending on the date of the proposed Transfer, result in 50%
      or
      more of the interests in Partnership capital and profits being sold or exchanged
      during such 12-month period; or

     

    (vii)
      such Transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning of
      Section 7704 of the Code.

     

    (e)
      No
      transfer of any Partnership Units may be made to a lender to the Partnership
      or
      any Person who is related (within the meaning of Regulations Section 1.752-4(b))
      to any lender to the Partnership whose loan constitutes a nonrecourse liability
      (within the meaning of Regulations Section 1.752-1(a)(2)), without the consent
      of the General Partner, which may be withheld in its sole and absolute
      discretion, provided that as a condition to such consent the lender will be
      required to enter into an arrangement with the Partnership and the General
      Partner to exchange for the Cash Amount (as such term is defined in the Exchange
      Rights Agreement) any Partnership Units in which a security interest is held
      simultaneously with the time at which such lender would be deemed to be a
      partner in the Partnership for purposes of allocating liabilities to such lender
      under Section 752 of the Code.

     

    (f)
      Any
      Transfer in contravention of any of the provisions of this Section 11.3 shall
      be
      void and ineffectual and shall not be binding upon, or recognized by, the
      Partnership.

     

    11.4
      Substituted
      Limited Partners

     

    (a)    
        (i) No Limited Partner shall have the right to substitute a
      Permitted Transferee for a Limited Partner in its place.

     

    (ii)
      The
      General Partner shall, however, have the right to consent to the admission
      of a
      Permitted Transferee of the Partnership Interest of a Limited Partner pursuant
      to this Section 11.4 as a Substituted Limited Partner, which consent may be
      given or withheld by the General Partner in its sole and absolute
      discretion.

     

    (iii)
      The
      General Partner’s failure or refusal to permit such transferee to become a
      Substituted Limited Partner shall not give rise to any cause of action against
      the Partnership or any Partner.

     

    (b)
      A
      transferee who has been admitted as a Substituted Limited Partner in accordance
      with this Article 11 shall have all the rights and powers and be subject to
      all the restrictions and liabilities of a Limited Partner under this
      Agreement.

     

    (c)   
         (i) No Permitted Transferee will be admitted as a Substituted
      Limited Partner unless such transferee has furnished to the General
      Partner

     

    (A)
      evidence of acceptance in form satisfactory to the General Partner of all of
      the
      terms and conditions of this Agreement and the Exchange Rights Agreement,
      including, without limitation, the power of attorney granted in Section 2.4
      hereof, and 

     

    (B)
      such
      other documents or instruments as may be required in the reasonable discretion
      of the General Partner in order to effect such Person’s admission as a
      Substituted Limited Partner.

     

    (ii)
      Upon
      the admission of a Substituted Limited Partner, the General Partner shall amend
      Exhibit A to reflect the name, address, number of Partnership Units, and
      Percentage Interest of such Substituted Limited Partner and to eliminate or
      adjust, if necessary, the name, address and interest of the predecessor of
      such
      Substituted Limited Partner.

     

    11.5
      Substituted
      Associate General Partners

     

    (a)   
         (i) No Associate General Partner shall have the right to
      substitute a Permitted Transferee for an Associate General Partner in its
      place.

     

    (ii)
      The
      General Partner shall, however, have the right to consent to the admission
      of a
      Permitted Transferee of the Partnership Interest of an Associate General Partner
      pursuant to this Section 11.5 as a Substituted Associate General Partner, which
      consent may be given or withheld by the General Partner in its sole and absolute
      discretion.

     

    (iii)
      The
      General Partner’s failure or refusal to permit such transferee to become a
      Substituted Associate General Partner shall not give rise to any cause of action
      against the Partnership or any Partner.

     

    (b)
      A
      transferee who has been admitted as a Substituted Associate General Partner
      in
      accordance with this Article 11 shall have all the rights and powers and be
      subject to all the restrictions and liabilities of an Associate General Partner
      under this Agreement.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (c)       (i)
      No Permitted Transferee will be admitted as a Substituted Associate General
      Partner unless such transferee has furnished to the General Partner

     

    (A)
      evidence of acceptance in form satisfactory to the General Partner of all of
      the
      terms and conditions of this Agreement and the Exchange Rights Agreement,
      including, without limitation, the power of attorney granted in Section 2.4
      hereof, and

     

    (B)
      such
      other documents or instruments as may be required in the reasonable discretion
      of the General Partner in order to effect such Person’s admission as a
      Substituted Associate General Partner.

     

    (ii)
      Upon
      the admission of a Substituted Associate General Partner, the General Partner
      shall amend Exhibit A to reflect the name, address, number of Partnership Units,
      and Percentage Interest of such Substituted Associate General Partner and to
      eliminate or adjust, if necessary, the name, address and interest of the
      predecessor of such Substituted Associate General Partner.

     

    11.6
      Assignees

     

    (a)
      If
      the General Partner, in its sole and absolute discretion, does not consent
      to
      the admission of any transferee as a Substituted Limited Partner or Substituted
      Associate General Partner, as applicable, as described in Section 11.4(a),
      such
      transferee shall be considered an Assignee for purposes of this
      Agreement.

     

    (b)
      An
      Assignee shall be deemed to have had assigned to it, and shall be entitled
      to
      receive distributions from the Partnership and the share of Net Income, Net
      Losses and any other items of gain, loss, deduction or credit of the Partnership
      attributable to the Partnership Units assigned to such transferee, but shall
      not
      be deemed to be a holder of Partnership Units for any other purpose under this
      Agreement, and shall not be entitled to vote such Partnership Units in any
      matter presented to the Limited Partners and Associate General Partner, for
      a
      vote (such Partnership Units being deemed to have been voted on such matter
      in
      the same proportion as all other Partnership Units held by Limited Partners
      and
      the Associate General Partner are voted). 

     

    (c)
      In
      the event any such transferee desires to make a further assignment of any such
      Partnership Units, such transferee shall be subject to all of the provisions
      of
      this Article 11 to the same extent and in the same manner as any Limited Partner
      or Associate General Partner desiring to make an assignment of Partnership
      Units.

     

    11.7
      General
      Provisions

     

    (a)
      No
      Limited Partner or Associate General Partner may withdraw from the Partnership
      other than as a result of a permitted Transfer of all of such Limited Partner’s
      or Associate General Partner’s Partnership Units in accordance with this Article
      11 or, as it relates to the Limited Partners, pursuant to exchange of all of
      its
      Partnership Units pursuant to the applicable Exchange Rights
      Agreement.

     

    (b)     
       (i) Any Limited Partner or Associate General Partner, which shall Transfer
      all of its Partnership Units in a Transfer permitted pursuant to this Article
      11
      shall cease to be a Limited Partner or Associate General Partner, as applicable,
      upon the admission of all Assignees of such Partnership Units as Substituted
      Limited Partners or Substituted Associate General Partner, as
      applicable.

     

    (ii)
      Similarly, any Limited Partner which shall Transfer all of its partnership
      Units
      pursuant to an exchange of all of its Partnership Units pursuant to an Exchange
      Rights Agreement shall cease to be a Limited Partner.

     

    (c)
      Other
      than pursuant to the Exchange Rights Agreement or with the consent of the
      General Partner, transfers pursuant to this Article 11 may only be made as
      of
      the first day of a fiscal quarter of the Partnership.

     

    (d)   
         (i) If any Partnership Interest is transferred or assigned
      during the Partnership’s fiscal year in compliance with the provisions of this
      Article 11 or exchanged pursuant to the applicable Exchange Rights Agreement
      on
      any day other than the first day of a Partnership Year, then Net Income, Net
      Losses, each item thereof and all other items attributable to such interest
      for
      such Partnership Year shall be divided and allocated between the transferor
      Partner and the transferee Partner by taking into account their varying
      interests during the Partnership Year in accordance with Section 706(d) of
      the
      Code, using the interim closing of the books method.

     

    (ii)
      Solely for purposes of making such allocations, each of such items for the
      calendar month in which the Transfer or assignment occurs shall be allocated
      to
      the transferee Partner, and none of such items for the calendar month in which
      an exchange occurs shall be allocated to the exchanging Partner, provided,
      however, that the General Partner may adopt such other conventions relating
      to
      allocations in connection with transfers, assignments, or exchanges as it
      determines are necessary or appropriate.

     

    (iii)
      All
      distributions of Available Cash attributable to Partnership Units, with respect
      to which the Partnership Record Date is before the date of such Transfer,
      assignment, or exchange of such Partnership Units, shall be made to the
      transferor Partner or the exchanging Partner, as the case may be, and in the
      case of a Transfer or assignment other than an exchange, all distributions
      of
      Available Cash thereafter attributable to such Partnership Units shall be made
      to the transferee Partner.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (e)
      In
      addition to any other restrictions on transfer herein contained, including
      without limitation the provisions of this Article 11, in no event may any
      Transfer or assignment of a Partnership Interest by any Partner (including
      pursuant to Section 8.6) be made without the express consent of the General
      Partner, in its sole and absolute discretion, (i) to any person or entity who
      lacks the legal right, power or capacity to own a Partnership Interest; (ii)
      in
      violation of applicable law; (iii) of any component portion of a Partnership
      Interest, such as the Capital Account, or rights to distributions, separate
      and
      apart from all other components of a Partnership Interest; (iv) if in the
      opinion of legal counsel to the Partnership such transfer would cause a
      termination of the Partnership for federal or state income tax purposes (except
      as a result of the exchange for REIT Stock of all Partnership Units held by
      all
      Limited Partners or pursuant to a transaction expressly permitted under Section
      7.11 or Section 11.2); (v) if in the opinion of counsel to the Partnership,
      such
      transfer would cause the Partnership to cease to be classified as a partnership
      for federal income tax
      purposes
      (except as a result of the exchange for REIT Stock of all Partnership Units
      held
      by all Limited Partners or pursuant to a transaction expressly permitted under
      Section 7.11 or Section 11.2); (vi) if such transfer requires the registration
      of such Partnership Interest pursuant to any applicable federal or state
      securities laws; (vii) if such transfer is effectuated through an “established
      securities market” or a “secondary market” (or the substantial equivalent
      thereof) within the meaning of Section 7704 of the Code or such transfer causes
      the Partnership to become a “publicly traded partnership,” as such term is
      defined in Section 469(k)(2) or Section 7704(b) of the Code (provided that
      this
      clause (vii) shall not be the basis for limiting or restricting in any manner
      the exercise of the Exchange Right under Section 8.6 unless, and only to the
      extent that, outside tax counsel provides to the General Partner an opinion
      to
      the effect that, in the absence of such limitation or restriction, there is
      a
      significant risk that the Partnership will be treated as a “publicly traded
      partnership” and, by reason thereof, taxable as a corporation); (viii) such
      transfer could adversely affect the ability of the General Partner to remain
      qualified as a REIT; or (ix) if in the opinion of legal counsel of the
      transferring Partner (which opinion and counsel are reasonably satisfactory
      to
      the Partnership), or legal counsel of the Partnership, such transfer would
      adversely affect the ability of the General Partner to continue to qualify
      as a
      REIT or subject the General Partner to any additional taxes under Section 857
      or
      Section 4981 of the Code, in the event that the General Partner has elected
      to
      be qualified as a REIT.

     

    (f)
      The
      General Partner shall monitor the transfers of interests in the Partnership
      to
      determine (i) if such interests are being traded on an “established securities
      market” or a “secondary market (or the substantial equivalent thereof)” within
      the meaning of Section 7704 of the Code; and (ii) whether additional transfers
      of interests would result in the Partnership being unable to qualify for at
      least one of the “safe harbors” set forth in Regulations Section 1.7704-1 (or
      such other guidance subsequently published by the IRS setting forth safe harbors
      under which interests will not be treated as “readily tradable on a secondary
      market (or the substantial equivalent thereof)” within the meaning of Section
      7704 of the Code) (the “Safe Harbors”). The General Partner shall take all steps
      reasonably necessary or appropriate to prevent any trading of interests or
      any
      recognition by the Partnership of transfers made on such markets and, except
      as
      otherwise provided herein, to insure that at least one of the Safe Harbors
      is
      met; provided, however, that the foregoing shall not authorize the General
      Partner to limit or restrict in any manner the right of any holder of a
      Partnership Unit to exercise the Exchange Right in accordance with the terms
      of
      the applicable Exchange Rights Agreement unless, and only to the extent that,
      outside tax counsel provides to the General Partner an opinion to the effect
      that, in the absence of such limitation or restriction, there is a significant
      risk that the Partnership will be treated as a “publicly traded partnership”
and, by reason thereof, taxable as a corporation.

     

    ARTICLE
      12

     

    ADMISSION
      OF PARTNERS

     

    12.1
      Admission
      of Successor General Partner

     

    (a)   
         (i) A successor to all of the General Partner Interest
      pursuant to Section 11 hereof who is proposed to be admitted as a successor
      General Partner shall be admitted to the Partnership as the General Partner,
      effective immediately following such transfer and the admission of such
      successor General Partner as a general partner of the Partnership upon the
      satisfaction of the terms and conditions set forth in Section
      12.1(b).

     

    (ii)
      Any
      such transferee shall carry on the business of the Partnership without
      dissolution.

     

    (b)
      A
      Person shall be admitted as a substitute or successor General Partner of the
      Partnership only if the following terms and conditions are
      satisfied:

     

    (i)
      the
      Person to be admitted as a substitute or additional General Partner shall have
      accepted and agreed to be bound by all the terms and provisions of this
      Agreement by executing a counterpart thereof
      and such other documents or instruments as may be required or appropriate in
      order to effect the admission of such Person as a General Partner;

     

    (ii)
      if
      the Person to be admitted as a substitute or additional General Partner is
      a
      corporation or a partnership it shall have provided the Partnership with
      evidence satisfactory to counsel for the Partnership of such Person’s authority
      to become a General Partner and to be bound by the terms and provisions of
      this
      Agreement; and

     

    (iii)
      counsel for the Partnership shall have rendered an opinion (relying on such
      opinions from other counsel as may be necessary) that the admission of the
      person to be admitted as a substitute or additional General Partner is in
      conformity with the Act, that none of the actions taken in connection with
      the
      admission of such Person as a substitute or additional General Partner will
      cause

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (A)
      the
      Partnership to be classified other than as a partnership for federal income
      tax
      purposes, or

     

    (B)
      the
      loss of any Limited Partner’s limited liability.

     

    (c)
      In
      the case of such admission on any day other than the first day of a Partnership
      Year, all items attributable to the General Partner Interest for such
      Partnership Year shall be allocated between the transferring General Partner
      and
      such successor as provided in Section 11.6(d) hereof.

     

    12.2
      Admission
      of Additional Limited Partners

     

    (a)
      A
      Person who makes a Capital Contribution to the Partnership in accordance with
      this Agreement shall be admitted to the Partnership as an Additional Limited
      Partner only upon furnishing to the General Partner

     

    (i)
      evidence of acceptance in form satisfactory to the General Partner of all of
      the
      terms and conditions of this Agreement and the applicable Exchange Rights
      Agreement, including, without limitation, the power of attorney granted in
      Section 2.4 hereof, and

     

    (ii)
      such
      other documents or instruments as may be required in the discretion of the
      General Partner in order to effect such Person’s admission as an Additional
      Limited Partner.

     

    (b)    
        (i) Notwithstanding anything to the contrary in this Section 12.2,
      no Person shall be admitted as an Additional Limited Partner without the consent
      of the General Partner, which consent may be given or withheld in the General
      Partner’s sole and absolute discretion.

     

    (ii)
      The
      admission of any Person as an Additional Limited Partner shall become effective
      on the date upon which the name of such Person is recorded on the books and
      records of the Partnership, following the consent of the General Partner to
      such
      admission.

     

    (c)   
         (i) If any Additional Limited Partner is admitted to the
      Partnership on any day other than the first day of a Partnership Year, then
      Net
      Income, Net Losses, each item thereof and all other items allocable among
      Partners and Assignees for such Partnership Year shall be allocated among such
      Additional Limited Partner and all other Partners and Assignees by taking into
      account their varying interests during the Partnership Year in accordance with
      Section 706(d) of the Code, using the interim closing of the books
      method.

     

    (ii)  (A)
      Solely for purposes of making such allocations, each of such items for the
      calendar month in which an admission of any Additional Limited Partner occurs
      shall be allocated among all of the Partners and Assignees, including such
      Additional Limited Partner.

     

    (B)
      distributions of Available Cash with respect to which the Partnership Record
      Date is before the date of such admission shall be made solely to Partners
      and
      Assignees, other than the Additional Limited Partner, and all distributions
      of
      Available Cash thereafter shall be made to all of the Partners and Assignees,
      including such Additional Limited Partner. 

     

    (d)
      Upon
      the admission of the first Additional Limited Partner to the Partnership, the
      Initial Limited Partner’s original interest in the Partnership shall
      automatically, and without further action on the part of the Initial Limited
      Partner or the Partnership, be withdrawn.

     

    12.3
      Amendment
      of Agreement and Certificate of Limited Partnership

     

    For
      the
      admission to the Partnership of any Partner, the General Partner shall take
      all
      steps necessary and appropriate under the Act to amend the records of the
      Partnership and, if necessary, to prepare as soon as practical an amendment
      of
      this Agreement (including an amendment of Exhibit A) and, if required by law,
      shall prepare and file an amendment to the Certificate and may for this purpose
      exercise the power of attorney granted pursuant to Section 2.4
      hereof.

     

    ARTICLE
      13

     

    DISSOLUTION,
      LIQUIDATION AND TERMINATION

     

    13.1
      Dissolution

     

    (a)
      The
      Partnership shall not be dissolved by the admission of Substituted Limited
      Partners, Additional Limited Partners or Substituted Associate General Partner
      or by the admission of a successor General Partner in accordance with the terms
      of this Agreement. Upon the withdrawal of the General Partner, any successor
      General Partner shall continue the business of the Partnership.

     

    (b)
      The
      Partnership shall dissolve, and its affairs shall be wound up, only upon the
      first to occur of any of the following (“ Liquidating
      Events”):

     

    (i)
      the
      expiration of its term as provided in Section 2.5 hereof;

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (ii)
      an
      event of withdrawal of the General Partner, as defined in the Act (other than
      an
      event of bankruptcy), unless, within ninety (90) days after such event of
      withdrawal, the Associate General Partner and a “majority in interest” (as
      defined below) of the remaining Partners Consent in writing to continue the
      business of the Partnership and to the appointment, effective as of the date
      of
      withdrawal, of a successor General Partner;

     

    (iii)
      an
      election to dissolve the Partnership made by the General Partner, with the
      consent of the Associate General Partner and the Consent of the Limited Partners
      holding at least a majority of the Percentage Interest of the Limited Partners
      (including Limited Partner Interests held by the General Partner);

     

    (iv)
      entry of a decree of judicial dissolution of the Partnership pursuant to the
      provisions of the Act;

     

    (v)
      the
      sale of all or substantially all of the assets and properties of the
      Partnership;

     

    (vi)
      a
      final and non-appealable judgment is entered by a court of competent
      jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
      final and non-appealable order for relief is entered by a court with appropriate
      jurisdiction against the General Partner, in each case under any federal or
      state bankruptcy or insolvency laws as now or hereafter in effect, unless prior
      to the entry of such order or judgment and the Associate General Partner and
      a
“majority in interest” (as defined below) of the remaining Partners Consent in
      writing to continue the business of the Partnership and to the appointment,
      effective as of a date prior to the date of such order or judgment, of a
      substitute General Partner.

     

    As
      used
      herein, a “majority in interest” shall refer to Partners (excluding the General
      Partner and the Associate General Partner) who hold more than fifty percent
      (50%) of the outstanding Percentage Interests not held by the General Partner
      and the Associate General Partner. 

     

    13.2
      Winding
      Up

     

    (a)   
         (i) Upon the occurrence of a Liquidating Event, the
      Partnership shall continue solely for the purposes of winding up its affairs
      in
      an orderly manner, liquidating its assets, and satisfying the claims of its
      creditors and Partners.

     

    (ii)
      No
      Partner shall take any action that is inconsistent with, or not necessary to
      or
      appropriate for, the winding up of the Partnership’s business and
      affairs.

     

    (iii)
      The
      General Partner, or, in the event there is no remaining General Partner, any
      Person elected unanimously by the Associate General Partner and Limited Partners
      holding at least a “majority in interest” (the General Partner or such other
      Person being referred to herein as the “ Liquidator”),
      shall
      be responsible for overseeing the winding up and dissolution of the Partnership
      and shall take full account of the Partnership’s liabilities and property and
      the Partnership property shall be liquidated as promptly as is consistent with
      obtaining the fair value thereof, and the proceeds therefrom (which may, to
      the
      extent determined by the General Partner, include shares of common stock or
      other securities of the General Partner) shall be applied and distributed in
      the
      following order:

     

    (A)
      First, to the payment and discharge of all of the Partnership’s debts and
      liabilities to creditors other than the Partners;

     

    (B)
      Second, to the payment and discharge of all of the Partnership’s debts and
      liabilities to the General Partner;

     

    (C)
      Third, to the payment and discharge of all of the Partnership’s debts and
      liabilities to the other Partners; and

     

    (D)
      the
      balance, if any, as follows:

     

    (1)
      100%
      of all sums distributable by the Partnership shall be paid to the General
      Partner and Limited Partners in accordance with each Partner’s respective
      Percentage Interest until the Limited Partners receive distributions from the
      Partnership in an amount equal to the sum of the First Level Return and Net
      Investment and the Stockholders receive dividends from the General Partner
      equal
      to the sum of the First Level Return and the Net Investment;

     

    (2)
      100%
      of all sums distributable by the Partnership shall be paid to the Associate
      General Partner until the Associate Limiter Partner receives distributions
      from
      the Partnership in an amount equal to the sum of the SLP Distribution and the
      Net Investment;

     

    (3)
      30%
      of all sums distributable by the Partnership shall be paid to the Associate
      General Partner, and 70% of all sums distributable by the Partnership shall
      be
      paid to the General Partner and Limited Partners in accordance with each
      Partner’s respective Percentage Interest until the Limited Partners receive
      distributions from the Partnership in an amount equal to the sum of the Second
      Level Return and Net Investment and the Stockholders receive dividends from
      the
      General Partner equal to the sum of the Second Level Return and the Net
      Investment; and

     

    (4)
      40%
      of all sums distributable by the Partnership shall be paid to the Associate
      General Partner, and 60% of all sums distributable by the Partnership shall
      be
      paid to the General Partner and Limited Partners in accordance with each
      Partner’s respective Percentage Interest after the General Partner and the
      Limited Partners receive the distributions described in
      13.2(a)(iii)(D)(3).

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (5)
      All
      amounts distributed by the Partnership pursuant to Article 5 should be taken
      into account for purposes of this Section 13.2(a)(iii)D.

     

    (iv)
      The
      General Partner shall not receive any additional compensation for any services
      performed pursuant to this Article 13. 

     

    (v)
      Any
      distributions pursuant to this Section 13.2(a) shall be made by the end of
      the
      Partnership’s taxable year in which the liquidation occurs (or, if later, within
      90 days after the date of the liquidation).

     

    (b)   
         (i) Notwithstanding the provisions of Section 13.2(a) hereof
      which require liquidation of the assets of the Partnership, but subject to
      the
      order of priorities set forth therein, if prior to or upon dissolution of the
      Partnership the Liquidator determines that an immediate sale of part or all
      of
      the Partnership’s assets would be impractical or would cause undue loss to the
      Partners, the Liquidator may, in its sole and absolute discretion, defer for
      a
      reasonable time the liquidation of any asset except those necessary to satisfy
      liabilities of the Partnership (including to those Partners as creditors) or
      distribute to the Partners, in lieu of cash, as tenants in common and in
      accordance with the provisions of Section 13.2(a) hereof, undivided interests
      in
      such Partnership assets as the Liquidator deems not suitable for
      liquidation.

     

    (ii)
      Any
      such distributions in kind shall be made only if, in the good faith judgment
      of
      the Liquidator, such distributions in kind are in the best interests of the
      Partners, and shall be subject to such conditions relating to the disposition
      and management of such properties as the Liquidator deems reasonable and
      equitable and to any agreements governing the operation of such properties
      at
      such time.

     

    (iii)
      The
      Liquidator shall determine the fair market value of any property distributed
      in
      kind using such reasonable method of valuation as it may adopt.

     

    (c)
      In
      the discretion of the Liquidator, a pro rata portion of the distributions that
      would otherwise be made to the General Partner, the Associate General Partner
      and Limited Partners pursuant to this Article 13 may be:

     

    (A)
      distributed to a trust established for the benefit of the General Partner,
      the
      Associate General Partner and Limited Partners for the purposes of liquidating
      Partnership assets, collecting amounts owed to the Partnership, and paying
      any
      contingent or unforeseen liabilities or obligations of the Partnership or the
      General Partner arising out of or in connection with the Partnership; the assets
      of any such trust shall be distributed to the General Partner, the Associate
      General Partner and Limited Partners from time to time, in the reasonable
      discretion of the Liquidator, in the same proportions as the amount distributed
      to such trust by the Partnership would otherwise have been distributed to the
      General Partner, the Associate General Partner and Limited Partners pursuant
      to
      this Agreement; or

     

    (B)
      withheld or escrowed to provide a reasonable reserve for Partnership liabilities
      (contingent or otherwise) and to reflect the unrealized portion of any
      installment obligations owed to the Partnership, provided that such withheld
      or
      escrowed amounts shall be distributed to the General Partner, the Associate
      General Partner and Limited Partners in the manner and order of priority set
      forth in Section 13.2(a), as soon as practicable.

     

    13.3
      Return
      of Associate General Partner Capital Contributions.

     

    (a)
      In
      the event the Advisory Agreement is terminated pursuant to the provisions of
      Section 17 thereof, the Associate General Partner shall receive a distribution
      equivalent to the Associate General Partner Contributions.

     

    (b)
      The
      amount due under Section 13.3(a) shall be payable by the Partnership immediately
      upon termination of the Advisory Agreement. The Partnership shall pay interest
      on unpaid amounts at a rate equal to six per cent (6.0%) per annum.

     

    13.4
      No
      Obligation to Contribute Deficit

     

    If
      any
      Partner has a deficit balance in his Capital Account (after giving effect to
      all
      contributions, distributions and allocations for all taxable years, including
      the year during which such liquidation occurs), such Partner
      shall have no obligation to make any contribution to the capital of the
      Partnership with respect to such deficit, and such deficit shall not be
      considered a debt owed to the Partnership or to any other Person for any purpose
      whatsoever.

     

    13.5
      Rights
      of Limited Partners

     

    (a)
      Except as otherwise provided in this Agreement, each Limited Partner and the
      Associate General Partner shall look solely to the assets of the Partnership
      for
      the return of its Capital Contributions and shall have no right or power to
      demand or receive property other than cash from the Partnership.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (b)
      Except as otherwise provided in this Agreement, no Limited Partner shall have
      priority over any other Partner as to the return of its Capital Contributions,
      distributions, or allocations.

     

    13.6
      Notice
      of Dissolution

     

    In
      the
      event a Liquidating Event occurs or an event occurs that would, but for the
      provisions of an election or objection by one or more Partners pursuant to
      Section 13.1, result in a dissolution of the Partnership, the General Partner
      shall, within thirty (30) days thereafter, provide written notice thereof to
      each of the Partners.

     

    13.7
      Termination
      of Partnership and Cancellation of Certificate of Limited
      Partnership

     

    Upon
      the
      completion of the liquidation of the Partnership’s assets, as provided in
      Section 13.2 hereof, the Partnership shall be terminated, a certificate of
      cancellation shall be filed, and all qualifications of the Partnership as a
      foreign general partnership in jurisdictions other than the state of Delaware
      shall be canceled and such other actions as may be necessary to terminate the
      Partnership shall be taken.

     

    13.8
      Reasonable
      Time for Winding-Up

     

    A
      reasonable time shall be allowed for the orderly winding-up of the business
      and
      affairs of the Partnership and the liquidation of its assets pursuant to Section
      13.2 hereof in order to minimize any losses otherwise attendant upon such
      winding-up, and the provisions of this Agreement shall remain in effect among
      the Partners during the period of liquidation.

     

    13.9
      Waiver
      of Partition

     

    Each
      Partner hereby waives any right to partition of the Partnership
      property.

     

    ARTICLE
      14

     

    AMENDMENT
      OF PARTNERSHIP AGREEMENT; MEETINGS

     

    14.1
      Amendments

     

    (a)   
         (i) The General Partner shall have the power, without the
      consent of the Limited Partners or the Associate General Partner, to amend
      this
      Agreement except as set forth in Section 14.1(b) hereof.

     

    (ii)
      The
      General Partner shall provide notice to the Limited Partners and the Associate
      General Partner when any action under this Section 14.1(a) is taken in the
      next
      regular communication to the Limited Partners and the Associate General
      Partner.

     

    (b)
      Notwithstanding Section 14.1(a) hereof, this Agreement shall not be amended
      with
      respect to

     

    (i)
      any
      Partner adversely affected without the Consent of such Partner adversely
      affected if such amendment would: 

     

    (A)
      convert a Limited Partner’s interest in the Partnership into an Associate
      General Partner Interest or a General Partner Interest;

     

    (B)
      modify the limited liability of a Limited Partner in a manner adverse to such
      Limited Partner; or

     

    (C)
      amend
      this Section 14.1(b)(i).

     

    (ii)
      any
      General Partner adversely affected without the Consent of General Partners
      holding more than fifty percent (50%) of the outstanding Percentage Interests
      of
      the General Partners adversely affected if such amendment would:

     

    (A)
      alter
      or change Exchange Rights;

     

    (B)
      create an obligation to make Capital Contributions not contemplated in this
      Agreement;

     

    (C)
      alter
      or change the terms of this Agreement or the Exchange Rights Agreement regarding
      the rights of the limited partners with respect to Business
      Combinations;

     

    (D)
      alter
      or change the distribution and liquidation rights provided in Section 5 and
      13
      hereto, except as otherwise permitted under this Agreement; or

     

    (E)
      amend
      this Section 14.1(b)(ii).

     

    (iii)
      the
      Associate General Partner without its Consent if such amendment would alter
      or
      change any of its rights under this Agreement.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    Section
      14.1(b)(i) does not require unanimous consent of all Partners adversely affected
      unless the amendment is to be effective against all Partners adversely
      affected.

     

    14.2
      Meetings
      of the Partners

     

    (a)   
         (i) Meetings of the Partners may be called by the General
      Partner and shall be called upon the receipt by the General Partner of a written
      request by Limited Partners holding 25 percent or more of the Partnership
      Interests.

     

    (ii)
      The
      request shall state the nature of the business to be transacted.

     

    (iii)
      Notice of any such meeting shall be given to all Partners not less than seven
      (7) days nor more than thirty (30) days prior to the date of such
      meeting.

     

    (iv)
      Partners may vote in person or by proxy at such meeting.

     

    (v)
      Whenever the vote or Consent of the Associate General Partner or the Limited
      Partners is permitted or required under this Agreement, such vote or Consent
      may
      be given at a meeting of the Partners or may be given in accordance with the
      procedure prescribed in Section 14.1(a) hereof.

     

    (vi)
      Except as otherwise expressly provided in this Agreement, the Consent of holders
      of a majority of the Percentage Interests held by Partners (including the
      General Partner) shall control. The Associate General Partner shall have the
      right to veto any decision taken pursuant to this Section 14.2(a)(vi), if such
      decision could reasonably be expected to adversely affect the Associate General
      Partner Interest or any of its rights under this Agreement.

     

    (b)   
         (i) Subject to Section 14.2(a)(vi), any action required or
      permitted to be taken at a meeting of the Partners may be taken without a
      meeting if a written consent setting forth the action so taken is signed by
      a
      majority of the Percentage Interests of the Partners (or such other percentage
      as is expressly required by this Agreement).

     

    (ii)
      Such
      consent may be in one instrument or in several instruments, and shall have
      the
      same force and effect as a vote of a majority of the Percentage Interests of
      the
      Partners (or such other percentage as is expressly required by this
      Agreement).

     

    (iii)
      Such consent shall be filed with the General Partner.

     

    (iv)
      An
      action so taken shall be deemed to have been taken at a meeting held on the
      effective date of the consent as certified by the General Partner.

     

    (c)   
         (i) Each Limited Partner and the Associate General Partner may
      authorize any Person or Persons to act for him by proxy on all matters in which
      a Limited Partner is entitled to participate, including waiving notice of any
      meeting, or voting or participating at a meeting.

     

    (ii)
      Every proxy must be signed by the Partner or an attorney-in-fact and a copy
      thereof delivered to the Partnership.

     

    (iii)
      No
      proxy shall be valid after the expiration of eleven (11) months from the date
      thereof unless otherwise provided in the proxy.

     

    (iv)
      Every proxy shall be revocable at the pleasure of the Partner executing it,
      such
      revocation to be effective upon the General Partner’s receipt of written notice
      of such revocation from the Partner executing such proxy.

     

    (d)   
         (i) Each meeting of the Partners shall be conducted by the
      General Partner or such other Person as the General Partner may appoint pursuant
      to such rules for the conduct of the meeting as the General Partner or such
      other Person deems appropriate.

     

    (ii)
      Meetings of Partners may be conducted in the same manner as meetings of the
      stockholders of the General Partner and may be held at the same time, and as
      part of, meetings of the stockholders of the General Partner.

     

    ARTICLE
      15

    GENERAL
      PROVISIONS

     

    15.1
      Addresses
      and Notice

     

    Any
      notice, demand, request or report required or permitted to be given or made
      to a
      Partner or Assignee under this Agreement shall be in writing and shall be deemed
      given or made when delivered in person or five days after being sent by first
      class United States mail or by overnight delivery or via facsimile to the
      Partner or Assignee at the address set forth in Exhibit A or such other address
      of which the Partner shall notify the General Partner in writing.
      Notwithstanding the foregoing, the General Partner may elect to deliver any
      such
      notice, demand, request or report by E-mail or by any other electronic means,
      in
      which case such communication shall be deemed given or made one day after being
      sent.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    15.2
      Titles
      and Captions

     

    All
      article or section titles or captions in this Agreement are for convenience
      of
      reference only, shall not be deemed part of this Agreement and shall in no
      way
      define, limit, extend or describe the scope or intent of any provisions hereof.
      Except as specifically provided otherwise, references to “Articles” and
“Sections” are to Articles and Sections of this Agreement.

     

    15.3
      Pronouns
      and Plurals

     

    Whenever
      the context may require, any pronoun used in this Agreement shall include the
      corresponding masculine, feminine or neuter forms, and the singular form of
      nouns, pronouns and verbs shall include the plural and vice versa.

     

    15.4
      Further
      Action

     

    The
      parties shall execute and deliver all documents, provide all information and
      take or refrain from taking action as may be necessary or appropriate to achieve
      the purposes of this Agreement. 

     

    15.5
      Binding
      Effect

     

    This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their heirs, executors, administrators, successors, legal representatives
      and permitted assigns.

     

    15.6
      Creditors

     

    Other
      than as expressly set forth herein with respect to the Indemnities, none of
      the
      provisions of this Agreement shall be for the benefit of, or shall be
      enforceable by, any creditor of the Partnership.

     

    15.7
      Waiver

     

    No
      failure by any party to insist upon the strict performance of any covenant,
      duty, agreement or condition of this Agreement or to exercise any right or
      remedy consequent upon a breach thereof shall constitute waiver of any such
      breach or any other covenant, duty, agreement or condition.

     

    15.8
      Counterparts

     

    This
      Agreement may be executed in counterparts, all of which together shall
      constitute one agreement binding on all of the parties hereto, notwithstanding
      that all such parties are not signatories to the original or the same
      counterpart. Each party shall become bound by this Agreement immediately upon
      affixing its signature hereto.

     

    15.9
      Applicable
      Law

     

    This
      Agreement 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, provided, however, that causes of action for violations of federal
      or state securities laws shall not be governed by this Section
      15.9.

     

    15.10
      Invalidity
      of Provisions

     

    If
      any
      provision of this Agreement is or becomes invalid, illegal or unenforceable
      in
      any respect, the validity, legality and enforceability of the remaining
      provisions contained herein shall not be affected thereby.

     

    15.11
      Entire
      Agreement

     

    This
      Agreement contains the entire understanding and agreement among the Partners
      with respect to the subject matter hereof and supersedes any other prior written
      or oral understandings or agreements among them with respect
      thereto.

     

    15.12
      Merger

     

    Subject
      to Section 4.2 herein, the Partnership may merge with, or consolidate into,
      any
      Person or Entity in accordance with Section 17-211 of the Act.

     

    15.13
      No
      Rights as Stockholders

     

    Nothing
      contained in this Agreement shall be construed as conferring upon the holders
      of
      the Partnership Units any rights whatsoever as stockholders of the General
      Partner, including, without limitation, any right to receive dividends or other
      distributions made to shareholders or to vote or to consent or receive notice
      as
      shareholders in respect to any meeting or shareholders for the election of
      directors of the General Partner or any other matter.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    Signature
      Page to Agreement of Limited Partnership of Lightstone Value Plus REIT II
      LP,

    by
      and among the undersigned and the other parties thereto.

    

      
        	 	
                GENERAL
                  PARTNER:

              
	 	 
	 	
                LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST

                II
                  , INC.

              
	 	 
	 	
                By:    

              	
                /
                  S
                  / David Lichtenstein

              
	 	 	
                Name:   

              	
                David
                  Lichtenstein

              
	 	 	
                Title:

              	
                Chief Executive Officer, President and Chairman of the Board of

                Directors

              
	 	 
	 	
                LIMITED
                  PARTNER:

              
	 	 
	 	
                LIGHTSTONE
                  VALUE PLUS REIT II LLC

              
	 	 
	 	
                By:

              	
                /
                  S
                  / David Lichtenstein

              
	 	 	
                Name:

              	
                David
                  Lichtenstein

              
	 	 	
                Title:

              	
                Authorized
                  Person

              
	 	 
	 	
                ASSOCIATE GENERAL
                  PARTNER:

              
	 	 
	 	
                LIGHTSTONE
                  SLP II, LLC

              
	 	 
	 	
                By:

              	
                /
                  S
                  / David Lichtenstein

              
	 	 	
                Name:

              	
                David
                  Lichtenstein

              
	 	 	
                Title:

              	
                Authorized
                  Person

              


      

    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    Corporate/Limited
      Liability Company Additional Limited Partner Signature Page to Agreement of
      Limited Partnership of Lightstone Value Plus REIT II LP, by and among the
      undersigned and the other parties thereto.

     

    
      	
              Dated:            
                , 200

            	
              [Name
                of Corporation/LLC]

            
	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            


    

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Individual
      Additional Limited Partner Signature Page to Agreement of Limited Partnership
      of
      Lightstone Value Plus REIT II LP, by and among the undersigned and the other
      parties thereto.

     

    
      	
              By:

            	 
	 	
              Name:

            


    

     

    Dated:
                              
, 200

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    Partnership
      Limited Partner Signature Page to Agreement of Limited Partnership of Lightstone
      Value Plus REIT II LP, by and among the undersigned and the other parties
      thereto.

     

    
      	
              Dated:                         ,
                200

            	
              [Name
                of LP]

            
	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            


    

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

     

    Partners’
      Contributions and Partnership Interests

    

      
        	
                Name and Address of Partner

              	
                  

              	
                Type of

                Interest

              	
                  

              	
                Capital Contribution

              	
                 

              	
                Number of

                Partnership Units

                (“OPUs”)

              	
                  

              	
                Percentage

                Interest

              	
                  

              	
                Security

                Interests

              	 
	
                Lightstone Value
                  Plus Real Estate Investment Trust II, Inc.

              	
                  

              	
                General

                Partnership

                Interest

              	
                  

              	
                $200,000

              	
                 

              	
                20,000

              	
                  

              	
                99.01%

              	
                   

              	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
                Lightstone
                  Value Plus REIT II LLC

              	
                  

              	
                Limited

                Partnership

                Interest

              	
                  

              	
                $2,000

              	
                 

              	
                200

              	
                  

              	
                0.99%

              	
                  

              	 	
                 

              
	 	 	 	 	 	 	 	 	 	 	 	 
	
                Lightstone
                  SLP II, LLC

              	
                  

              	
                Associate

                General

                Partnership

                Interest

              	
                  

              	
                [Amount will equal

                the offering expenses

                of Lightstone Value

                Plus
                  Real Estate

                Investment

                Trust
                  II, Inc.]

              	
                 

              	
                1
                  Associate

                Partnership Unit

                For
                  each

                $100,000

                Contributed

              	
                  

              	
                Not applicable

              	
                  

              	
                 

              	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

    Exhibit
      B

     

    Allocations

     

    1.
      Allocation
      of Net Income and Net Loss
      . Except
      as otherwise provided in this Agreement, Net Income, Net Loss and, to the extent
      necessary, individual items of income, gain, loss or deduction, of the
      Partnership shall be allocated among the Partners in a manner such that the
      Capital Account of each Partner, immediately after making such allocation,
      is,
      as nearly as possible, equal proportionately to (i) the distributions that
      would
      be made to such Partner pursuant to Section 5.1, Regular Distributions, and
      Article 13, Dissolution, Liquidation and Termination, if the Partnership were
      dissolved, its affairs wound up and its assets sold for cash equal to their
      Gross Asset Value, all Partnership liabilities were satisfied (limited with
      respect to each nonrecourse liability to the Gross Asset Value of the assets
      securing such liability), and the net assets of the Partnership were distributed
      in accordance with Section 5.1 and Article 13 to the Partners immediately after
      making such allocation, minus (ii) such Partner’s share of Partnership minimum
      gain (within the meaning of Regulation Section 1.704-2(d)) and Partner
      nonrecourse debt minimum gain (within the meaning of Regulation Section
      1.704-2(i)(5)), computed immediately prior to the hypothetical sale of
      assets.

     

    2.
      Associate
      Allocations
      .
      Notwithstanding any provisions of paragraph 1 of this Exhibit B, the following
      special allocations shall be made.

     

    (a)
      Minimum
      Gain Chargeback (Nonrecourse Liabilities)
      . Except
      as otherwise provided in Section 1.704-2(f) of the Regulations, if there is
      a
      net decrease in Partnership Minimum Gain for any Partnership fiscal year, each
      Partner shall be specially allocated items of Partnership income and gain for
      such year (and, if necessary, subsequent years) in an amount equal to such
      Partner’s share of the net decrease in Partnership Minimum Gain to the extent
      required by Regulations Section 1.704-2(f). The items to be so allocated shall
      be determined in accordance with Sections 1.704-2(f) and (i) of the Regulations.
      This subparagraph 2(a) is intended to comply with the minimum gain chargeback
      requirement in said section of the Regulations and shall be interpreted
      consistently therewith. Allocations pursuant to this subparagraph 2(a) shall
      be
      made in proportion to the respective amounts required to be allocated to each
      Partner pursuant hereto.

     

    (b)
      Partner
      Minimum Gain Chargeback
      . Except
      as otherwise provided in Section 1.704-2(i)(4) of the Regulations, if there
      is a
      net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse
      Debt
      during any fiscal year, each Partner who has a share of the Partner Minimum
      Gain
      attributable to such Partner Nonrecourse Debt, determined in accordance with
      Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items
      of
      Partnership income and gain for such year (and, if necessary, subsequent years)
      in an amount equal to that Partner’s share of the net decrease in the Partner
      Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and
      in
      the manner required by Section 1.704-2(i) of the Regulations. The items to
      be so
      allocated shall be determined in accordance with Sections 1.704-2(i)(4) and
      (j)(2) of the Regulations. This subparagraph 2(b) is intended to comply with
      the
      minimum gain chargeback requirement with respect to Partner Nonrecourse Debt
      contained in said section of the Regulations and shall be interpreted
      consistently therewith. Allocations pursuant to this subparagraph 2(b) shall
      be
      made in proportion to the respective amounts required to be allocated to each
      Partner pursuant hereto.

     

    (c)
      Qualified
      Income Offset
      . In the
      event a Partner unexpectedly receives any adjustments, allocations or
      distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) of
      the
      Regulations, and such Partner has an Adjusted Capital Account Deficit, items
      of
      Partnership income (including gross income) and gain shall be specially
      allocated to such Partner in an amount and manner sufficient to eliminate the
      Adjusted Capital Account Deficit as quickly as possible as required by the
      Regulations. This subparagraph 2(c) is intended to constitute a “qualified
      income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
      be interpreted consistently therewith.

     

    (d)
      Other
      Chargeback of Impermissible Negative Capital Account
      . To the
      extent any Partner has an Adjusted Capital Account Deficit at the end of any
      Partnership fiscal year, each such Partner shall be specially allocated items
      of
      Partnership income (including gross income) and gain in the amount of
      such
      excess
      as quickly as possible, provided that an allocation pursuant to this paragraph
      2(d) shall be made if and only to the extent that such Partner would have an
      Adjusted Capital Account Deficit after all other allocations provided for in
      this Exhibit B have been tentatively made as if this paragraph 2(d) were not
      in
      the Agreement.

     

    (e)
      Nonrecourse
      Deductions
      .
      Nonrecourse Deductions for any fiscal year or other applicable period shall
      be
      allocated to the Partners in accordance with their respective Percentage
      Interests.

     

    (f)
      Partner
      Nonrecourse Deductions
      .
      Partner Nonrecourse Deductions for any fiscal year or other applicable period
      with respect to a Partner Nonrecourse Debt shall be specially allocated to
      the
      Partner that bears the economic risk of loss for such Partner Nonrecourse Debt
      (as determined under Sections 1.704-2(b)(4) and 1.704-2(i)(1) of the
      Regulations).

     

    (g)
      Section
      754 Adjustment
      . To the
      extent an adjustment to the adjusted tax basis of any asset of the Partnership
      pursuant to Section 734(b) of the Code or Section 743(b) of the Code is
      required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations, to be
      taken into account in determining Capital Accounts, the amount of such
      adjustment to the Capital Accounts shall be treated as an item of gain (if
      the
      adjustment increases the basis of the asset) or loss (if the adjustment
      decreases such basis) and such gain or loss shall be specially allocated among
      the Partners in a manner consistent with the manner in which each of their
      respective Capital Accounts are required to be adjusted pursuant to such section
      of the Regulations.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (h)
      Gross
      Income Allocation
      . There
      shall be specially allocated to the General Partner an amount of Partnership
      income and gain during each Partnership Year or portion thereof, before any
      other allocations are made hereunder, which is equal to the excess, if any,
      of
      the cumulative distributions of cash made to the General Partner under Section
      7.3(b) hereof over the cumulative allocations of Partnership income and gain
      to
      the General Partner pursuant to this Section 2(i) of this Exhibit
      B.

     

    3.
      Tax
      Allocations.

     

    (a)
      Items
      of Income or Loss
      . Except
      as is otherwise provided in this Exhibit B, an allocation of Partnership Net
      Income or Net Loss to a Partner shall be treated as an allocation to such
      Partner of the same share of each item of income, gain, loss, deduction and
      item
      of tax-exempt income or Section 705(a)(2)(B) expenditure (or item treated as
      such expenditure pursuant to Regulations Section 1.704-1(b)(2)(iv)(i)) (“Tax
      Items”) that is taken into account in computing Net Income or Net
      Loss.

     

    (b)
      Section
      1245/1250 Recapture
      . If any
      portion of gain from the sale of Partnership assets is treated as gain which
      is
      ordinary income by virtue of the application of Code Sections 1245 or 1250
      (“Affected Gain”), then such Affected Gain shall be allocated among the Partners
      in the same proportion that the depreciation and amortization deductions giving
      rise to the Affected Gain were allocated. This subparagraph 3(b) shall not
      alter
      the amount of Net Income (or items thereof) allocated among the Partners, but
      merely the character of such Net Income (or items thereof). For purposes hereof,
      in order to determine the proportionate allocations of depreciation and
      amortization deductions for each fiscal year or other applicable period, such
      deductions shall be deemed allocated on the same basis as Net Income and Net
      Loss for such respective period.

     

    (c)
      Precontribution
      Gain, Revaluations
      . With
      respect to any Contributed Property, the Partnership shall use any permissible
      method contained in the Regulations promulgated under Section 704(c) of the
      Code
      selected by the General Partner, in its sole discretion, to take into account
      any variation between the adjusted basis of such asset and the fair market
      value
      of such asset as of the time of the contribution (“Precontribution Gain”). Each
      Partner hereby agrees to report income, gain, loss and deduction on such
      Partner’s federal income tax return in a manner consistent with the method used
      by the Partnership. If any asset has a Gross Asset Value which is different
      from
      the Partnership’s adjusted basis for such asset for federal income tax purposes
      because the Partnership has revalued such asset pursuant to Regulations Section
      1.704-1(b)(2)(iv)(f), the allocations of Tax Items shall be made in accordance
      with the principles of Section 704(c) of the Code and the Regulations and the
      methods of allocation promulgated thereunder. The intent of this
      subparagraph 3(c) is that each Partner who contributed to the capital of the
      Partnership a Contributed Property will bear, through reduced allocations of
      depreciation, increased allocations of gain or other items, the tax detriments
      associated with any Precontribution Gain. This subparagraph 3(c) is to be
      interpreted consistently with such intent.

     

    (d)
      Excess
      Nonrecourse Liability Safe Harbor
      .
      Pursuant to Regulations Section 1.752-3(a)(3), solely for purposes of
      determining each Partner’s proportionate share of the “excess nonrecourse
      liabilities” of the Partnership (as defined in Regulations Section
      1.752-3(a)(3)), the Partners’ respective interests in Partnership profits shall
      be determined under any permissible method reasonably determined by the General
      Partner; provided, however, that each Partner who has contributed an asset
      to
      the Partnership shall be allocated, to the extent possible, a share of “excess
      nonrecourse liabilities” of the Partnership which results in such Partner being
      allocated nonrecourse liabilities in an amount which is at least equal to the
      amount of income pursuant to Section 704(c) of the Code and the Regulations
      promulgated thereunder (the “Liability Shortfall”). In the event there is an
      insufficient amount of nonrecourse liabilities to allocate to each Partner
      an
      amount of nonrecourse liabilities equal to the Liability Shortfall, then an
      amount of nonrecourse liabilities in proportion to, and to the extent of, the
      Liability Shortfall shall be allocated to each Partner.

     

    (e)
      References
      to Regulations
      . Any
      reference in this Exhibit B or the Agreement to a provision of proposed and/or
      temporary Regulations shall, in the event such provision is modified or
      renumbered, be deemed to refer to the successor provision as so modified or
      renumbered, but only to the extent such successor provision applies to the
      Partnership under the effective date rules applicable to such successor
      provision.)

     

    (f)
      Successor
      Partners
      . For
      purposes of this Exhibit B, a transferee of a Partnership Interest shall be
      deemed to have been allocated the Net Income, Net Loss and other items of
      Partnership income, gain, loss, deduction and credit allocable to the
      transferred Partnership Interest that previously have been allocated to the
      transferor Partner pursuant to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      C

     

    EXCHANGE
      RIGHTS AGREEMENT

     

    THIS
      EXCHANGE RIGHTS AGREEMENT (this “Agreement”),
      dated
      as of
                    ,
      2008, is entered into by and among Lightstone Value Plus Real Estate Investment
      Trust II, Inc., a Maryland corporation (the “Company”),
      Lightstone Value Plus REIT II LP, a Delaware limited partnership (the
“Operating
      Partnership”),
      and
      the Persons whose names are set forth on Exhibit A attached hereto (as it may
      be
      amended from time to time).

     

    RECITALS:

     

    (c)
      The
      Company, together with certain other limited partners, has formed the Operating
      Partnership pursuant to the Agreement of Limited Partnership of the Operating
      Partnership dated April 30, 2008 (as such agreement may be amended or amended
      and restated from time to time, the “ Partnership
      Agreement”).

     

    (d)
      Pursuant to the Partnership Agreement, the Limited Partners (as defined below)
      directly or indirectly hold units of limited partnership interest (“
Partnership
      Units”)
      in the
      Operating Partnership.

     

    (e)
      The
      Operating Partnership has agreed to provide the Limited Partners with certain
      direct or indirect rights to exchange their Partnership Units for cash or,
      at
      the election of the Company, for shares of the Company’s common stock, $0.01 par
      value per share (the “ REIT
      Stock”).

     

    Accordingly,
      the parties hereto do hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINED
      TERMS

     

    The
      following definitions shall be for all purposes, unless otherwise clearly
      indicated to the contrary, applied to the terms used in this
      Agreement.

     

    “
      Assignee”
means
      a
      Person to whom one or more Partnership Units have been transferred in a manner
      permitted under the Partnership Agreement, but who has not become a substituted
      Limited Partner in accordance therewith.

     

    “
      Business
      Day”
means
      any day except a Saturday, Sunday or other day on which commercial banks in
      New
      York, New York are authorized or required by law to close.

     

    “
      Cash
      Amount”
means
      an amount of cash per Partnership Unit equal to the Value on the Valuation
      Date
      of the REIT Stock Amount.

     

    “
      Exchange
      Factor”
means
      1.0, provided, that in the event that the Company (i) declares or pays a
      dividend on its outstanding REIT Stock in REIT Stock or makes a distribution
      to
      all holders of its outstanding REIT Stock in REIT Stock; (ii) subdivides its
      outstanding REIT Stock; or (iii) combines its outstanding REIT Stock into a
      smaller number of shares of REIT Stock, the Exchange Factor shall be adjusted
      by
      multiplying the Exchange Factor by a fraction, the numerator of which shall
      be
      the number of shares of REIT Stock issued and outstanding on the record date
      for
      such dividend, contribution, subdivision or combination (assuming for such
      purpose that such dividend, distribution, subdivision or combination has
      occurred as of such time), and the denominator of which shall be the actual
      number of shares of REIT Stock (determined without the above assumption) issued
      and outstanding on the record date for such dividend, distribution, subdivision
      or combination. Any adjustment to the Exchange Factor shall become effective
      immediately after the effective date of such event retroactive to the record
      date, if any, for such event. 

     

    “
      Exchanging
      Partner”
has
      the
      meaning set forth in Section 2.1 hereof.

     

    “
      Exchange
      Right”
has
      the
      meaning set forth in Section 2.1 hereof.

     

    “
      Lien”
means
      any lien, security interest, mortgage, deed of trust, charge, claim,
      encumbrance, pledge, option, right of first offer or first refusal and any
      other
      right or interest of others of any kind or nature, actual or contingent, or
      other similar encumbrance of any nature whatsoever.

     

    “
      Limited
      Partner”
means
      any Person, other than the Company, named as a Limited Partner on Exhibit A,
      as
      such Exhibit may be amended from time to time.

     

    “
      Notice
      of Exchange”
means
      the Notice of Exchange substantially in the form of Exhibit B to this
      Agreement.

     

    “
      Offering”
means
      the offering of the Company’s common stock, par value $.01 per share, pursuant
      to a registration statement on Form S-11 filed with the Securities and Exchange
      Commission.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “
      Person”
shall
      mean an individual, partnership, corporation, limited liability company, trust,
      estate, or unincorporated organization, or other entity, or a government or
      agency or political subdivision thereof.

     

    “
      REIT
      Stock Amount”
means
      that number of shares of REIT Stock equal to the product of the number of
      Partnership Units offered for exchange by an Exchanging Partner, multiplied
      by
      the Exchange Factor as of the Valuation Date, provided, that in the event the
      Company or the Operating Partnership issues to all holders of REIT Stock rights,
      options, warrants or convertible or exchangeable securities entitling the
      stockholders to subscribe for or purchase REIT Stock, or any other securities
      or
      property (collectively, the “rights”), then the REIT Stock Amount shall also
      include such rights that a holder of that number of shares of REIT Stock would
      be entitled to receive.

     

    “
      SEC”
means
      the Securities and Exchange Commission.

     

    “
      Specified
      Exchange Date”
means
      the tenth (10th) Business Day after receipt by the Operating Partnership and
      the
      Company of a Notice of Exchange; provided, however, that if the Operating
      Partnership has more than 99 partners, as determined in accordance with the
      provisions of Treasury Regulation Section 1.7704-1(h), then the Specified
      Exchange Date shall mean the thirty-first (31st) calendar day after receipt
      by
      the Operating Partnership and the Company of a Notice of Exchange.

     

    “
      Valuation
      Date”
means
      the date of receipt by the Operating Partnership and the Company of a Notice
      of
      Exchange or, if such date is not a Business Day, the first Business Day
      thereafter.

     

    “
      Value”
means,
      with respect to shares of REIT Stock, the average of the daily market price
      for
      the five (5) consecutive trading days immediately preceding the Valuation Date.
      The market price for each such trading day shall be:

     

    (i)
      if
      the REIT Stock are listed or admitted to trading on the New York Stock Exchange
      (the “NYSE”), any other national securities exchange or the Nasdaq Stock Market
      (“Nasdaq”), the closing price on such day, or if no such sale takes place on
      such day, the average of the closing bid and asked prices on such day;
      or

     

    (ii)
      if
      the REIT Stock are not listed or admitted to trading on the NYSE, any national
      securities exchange or Nasdaq, the last reported sale price on such day;
      or

     

    (iii)
      if
      no sale takes place on such day, the average of the closing bid and asked prices
      on such day, as reported by a reliable quotation source designated by the
      Company or if the REIT Stock is not then traded on any market, as determined
      in
      good faith by the Company’s Independent Directors (as defined by the Company’s
      charter).

     

    In
      the
      event the REIT Stock Amount includes rights that a holder of REIT Stock would
      be
      entitled to receive, then the Value of such rights shall be determined by the
      independent directors of the Company acting in good faith on the basis of such
      quotations and other information as they consider, in their reasonable judgment,
      appropriate.

     

    ARTICLE
      II

     

    EXCHANGE
      RIGHT

     

    2.1
      Exchange
      Right.
      (a)
      Subject to Sections 2.2, 2.3, 2.4 and 2.5 hereof, and subject to any limitations
      under applicable law, the Operating Partnership hereby grants to each Limited
      Partner and each Limited Partner hereby accepts the right (the “ Exchange
      Right”),
      exercisable (i) on or after the date that is one (1) year after the closing
      of
      the Offering or (ii) upon the liquidation of the Operating Partnership or the
      sale of all or substantially all of the assets of the Operating Partnership,
      to
      exchange on a Specified Exchange Date all or a portion of the Partnership Units
      held by such Limited Partner at an exchange price equal to and in the form
      of
      the Cash Amount.

     

    (b)
      The
      Exchange Right shall be exercised pursuant to a Notice of Exchange delivered
      to
      the Operating Partnership, with a copy delivered to the Company, by the Limited
      Partner who is exercising the Exchange Right (the “ Exchanging
      Partner”);
      provided, however, that the Company, on behalf of the Operating Partnership,
      may
      elect, after a Notice of Exchange is delivered, to satisfy the Exchange Right
      which is the subject of such notice in accordance with Section 2.2.

     

    (c)
      A
      Limited Partner may exercise the Exchange Right from time to time with respect
      to part or all of the Partnership Units that it owns, as selected by the Limited
      Partner, provided that, except as provided in the Agreement, a Limited Partner
      may not exercise the Exchange Right for less than one thousand (1,000)
      Partnership Units unless such Limited Partner then holds less than one thousand
      (1,000) Partnership Units, in which event the Limited Partner must exercise
      the
      Exchange Right for all of the Partnership Units held by such Limited
      Partner.

     

    (d)
      An
      Exchanging Partner shall have no right with respect to any Partnership Units
      so
      exchanged to receive any distributions paid after the Specified Exchange Date
      with respect to such Partnership Units.

     

    (e)
      Any
      Assignee of a Limited Partner may exercise the rights of such Limited Partner
      pursuant to this Article 2, and such Limited Partner shall be deemed to have
      assigned such rights to such Assignee and shall be bound by the exercise of
      such
      rights by such Assignee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f)
      In
      connection with any exercise of such rights by an Assignee on behalf of a
      Limited Partner, the Cash Amount or the REIT Stock Amount, as the case may
      be,
      shall be satisfied by the Operating Partnership or the Company, as the case
      may
      be, directly to such Assignee and not to such Limited Partner.

     

    2.2
      Option
      of Company to Exchange for REIT Stock
      . (a)
      Notwithstanding the provisions of Section 2.1, the Company may, on behalf of
      the
      Operating Partnership, in its sole and absolute discretion (subject to the
      limitations on ownership and transfer of REIT Stock set forth in the Company’s
      charter), elect to assume directly and satisfy an Exchanging Partner’s Exchange
      Right by exchanging REIT Stock and rights equal to the REIT Stock Amount on
      the
      Specified Exchange Date for the Partnership Units offered for exchange by the
      Exchanging Partner, whereupon the Company shall acquire the Partnership Units
      offered for exchange by the Exchanging Partner and shall be treated for all
      purposes of the Partnership Agreement as the owner of such Partnership Units.
      Unless the Company, in its sole and absolute discretion, shall exercise its
      right to assume directly and satisfy the Exchange Right, the Company shall
      not
      have any obligation to the Exchanging Partner or to the Operating Partnership
      with respect to the Exchanging Partner’s exercise of the Exchange Right. If the
      Company shall exercise its right to satisfy the Exchange Right in the manner
      described in the first sentence of this Section 2.2 and shall fully perform
      its
      obligations in connection therewith, the Operating Partnership shall have no
      right or obligation to pay any amount to the Exchanging Partner with respect
      to
      such Exchanging Partner’s exercise of the Exchange Right, and each of the
      Exchanging Partner, the Operating Partnership and the Company shall, for federal
      income tax purposes, treat the transaction between the Company and the
      Exchanging Partner as a sale of the Exchanging Partner’s Partnership Units to
      the Company. Nothing contained in this Section 2.2 shall imply any right of
      the
      Company to require any Limited Partner to exercise the Exchange Right afforded
      to such Limited Partner pursuant to Section 2.1.

     

    (b)
      In
      the event the Company shall elect to satisfy, on behalf of the Operating
      Partnership, an Exchanging Partner’s Exchange Right by exchanging REIT Stock for
      the Partnership Units offered for exchange,

     

    (i)
      the
      Company hereby agrees so to notify the Exchanging Partner within five (5)
      Business Days after the receipt by the Company of such Notice of
      Exchange,

     

    (ii)
      each
      Exchanging Partner hereby agrees to execute such documents and instruments
      as
      the Company may reasonably require in connection with the issuance of REIT
      Stock
      upon exercise of the Exchange Right, and

     

    (iii)
      the
      Company hereby agrees to deliver stock certificates representing fully paid
      and
      nonassessable shares of REIT Stock.

     

    2.3
      Prohibition
      of Exchange for REIT Stock
      .
      Notwithstanding anything herein to the contrary, the Company shall not be
      entitled to satisfy an Exchanging Partner’s Exchange Right pursuant to Section
      2.2 if the delivery of REIT Stock to such Limited Partner by the Company
      pursuant to Section 2.2 (regardless of the Operating Partnership’s obligations
      to the Limited Partner under Section 2.1)

     

    (a)
      would
      be prohibited under the Articles of Incorporation of the Company,

     

    (b)
      if
      the Company has elected REIT status, would otherwise jeopardize the REIT status
      of the Company, or

     

    (c)
      would
      cause the acquisition of the REIT Stock by the Limited Partner to be
“integrated” with any other distribution of REIT Stock by the Company for
      purposes of complying with the registration provisions of the Securities
      Act.

     

    2.4
      Payment
      Date
      . Any
      Cash Amount to be paid to an Exchanging Partner shall be paid on the Specified
      Exchange Date; provided,
      however
      , that
      the Operating Partnership may elect to cause the Specified Exchange Date to
      be
      delayed for up to an additional 180 days to the extent required for the Company
      to cause additional REIT Shares to be issued to provide financing to be used
      to
      make such payment of the Cash Amount by the Operating Partnership.

     

    2.5
      Expiration
      of Exchange Right
      . The
      Exchange Right shall expire with respect to any Partnership Units for which
      an
      Exchange Notice has not been delivered to the Operating Partnership and the
      Company on or before December 31, 2040.

     

    2.6
      Effect
      of Exchange
      . (a)
      Any exchange of Partnership Units pursuant to this Article 2 shall be deemed
      to
      have occurred as of the Specified Exchange Date for all purposes, including
      without limitation the payment of distributions or dividends in respect of
      Partnership Units or REIT Stock, as applicable.

     

    (b)
      Any
      Partnership Units acquired by the Company pursuant to an exercise by any Limited
      Partner of an Exchange Right shall be deemed to be acquired by and reallocated
      or reissued to the Company.

     

    (c)
      The
      Company, as general partner of the Operating Partnership, shall amend the
      Partnership Agreement to reflect each such exchange and reallocation or
      reissuance of Partnership Units and each corresponding recalculation of the
      Partnership Units of the Limited Partners.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      III

     

    OTHER
      PROVISIONS

     

    3.1
      Covenants
      of the Company
      . (a) At
      all times during the pendency of the Exchange Right, the Company shall reserve
      for issuance such number of shares of REIT Stock as may be necessary to enable
      the Company to issue such shares in full payment of the REIT Stock Amount in
      regard to all Partnership Units held by Limited Partners which are from time
      to
      time outstanding.

     

    (b)
      During the pendency of the Exchange Right, the Company shall deliver to Limited
      Partners in a timely manner all reports filed by the Company with the SEC to
      the
      extent the Company also transmits such reports to its stockholders and all
      other
      communications transmitted from time to time by the Company to its stockholders
      generally.

     

    (c)
      The
      Company shall notify each Limited Partner, upon request, of the then current
      Exchange Factor and such notice will include a reasonable explanation of the
      Exchange Factor calculation to be applied at such time.

     

    3.2
      Fractional
      Shares
      . (a) No
      fractional shares of REIT Stock shall be issued upon exchange of Partnership
      Units.

     

    (b)
      The
      number of full shares of REIT Stock which shall be issuable upon exchange of
      Partnership Units (or the cash equivalent amount thereof if the Cash Amount
      is
      paid) shall be computed on the basis of the aggregate amount of Partnership
      Units so surrendered.

     

    (c)
      Instead of any fractional shares of REIT Stock which would otherwise be issuable
      upon exchange of any Partnership Units, the Operating Partnership shall pay
      a
      cash adjustment in respect of such fraction in an amount equal to the Cash
      Amount of a Partnership Unit multiplied by such fraction.

     

    3.3
      Investment
      Representations and Warranties
      . By
      delivering to the Company a Notice of Exchange, each Exchanging Partner will
      be
      deemed to represent and warrant to the Company and the Operating Partnership
      that such Exchanging Partner is aware of the Company’s option to exchange such
      Exchanging Partner’s Partnership Units for REIT Stock pursuant to Section 2.2
      hereof and that:

     

    (a)
      (i)
      Such Exchanging Partner has received and reviewed

     

    (A)
      a
      copy of the prospectus contained in the Registration Statement on Form S-11
      filed by the Company in connection with the Offering, any prospectus contained
      in any Registration Statement subsequently filed by the Company, and any
      supplement or amendment thereto (each, a “ Prospectus”),
      and

     

    (B)
      if
      the Company is filing reports under the Securities Exchange Act of 1934, as
      amended, copies of all reports and other filings (the “ SEC
      Reports”),
      including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
      Current Reports on Form 8-K, made by the Company with the SEC pursuant to the
      Securities Exchange Act of 1934, as amended, and the rules and regulations
      thereunder,

     

    and
      understands the risks of, and other considerations relating to, an investment
      in
      REIT Stock.

     

    (ii)
      Such
      Exchanging Partner, by reason of its business and financial experience, together
      with the business and financial experience of those persons, if any, retained
      by
      it to represent or advise it with respect to its investment in REIT
      Stock,

     

    (A)
      has
      such knowledge, sophistication and experience in financial and business matters
      and in making investment decisions of this type that it is capable of evaluating
      the merits and risks of and of making an informed investment decision with
      respect to an investment in REIT Stock, 

     

    (B)
      is
      capable of protecting its own interest or has engaged representatives or
      advisors to assist it in protecting its interests and

     

    (C)
      is
      capable of bearing the economic risk of such investment.

     

    (iii)
      (A)
      Such Exchanging Partner is an “accredited investor” as defined in Rule 501 of
      the regulations promulgated under the Securities Act.

     

    (B)
      If
      such Exchanging Partner has retained or retains a person to represent or advise
      it with respect to its investment in REIT Stock, such Exchanging Partner will
      advise the Company of such retention and, at the Company’s request, such
      Exchanging Partner shall, prior to or at delivery of the REIT Stock
      hereunder,

     

    (I)
      acknowledge in writing such representation and

     

    (II)
      cause such representative or advisor to deliver a certificate to the Company
      containing such representations as may be reasonably requested by the
      Company.

     

    (b)     
       (i) Such Exchanging Partner understands that an investment in the Company
      involves substantial risks.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)
      Such
      Exchanging Partner has been given the opportunity to make a thorough
      investigation of the activities of the Company and has been furnished with
      materials relating to the Company and its activities, including, without
      limitation, each Prospectus and the SEC Reports.

     

    (iii)
      Such Exchanging Partner has relied and is making its investment decision based
      upon the Prospectus/Consent Solicitation Statement relating to the Consolidation
      and any subsequent Prospectus, the SEC Reports and other written information
      provided to the Exchanging Partner by or on behalf of the Company and, as
      applicable, such Exchanging Partner’s position as a director or executive
      officer of the Company.

     

    (c)   
         (i) The REIT Stock to be issued to such Exchanging Partner
      hereunder will be acquired by such Exchanging Partner for its own account,
      for
      investment only and not with a view to, or with any intention of, a distribution
      or resale thereof, in whole or in part, or the grant of any participation
      therein.

     

    (ii)
      Such
      Exchanging Partner was not formed for the specific purpose of acquiring an
      interest in the Company.

     

    (d)   
         (i) Such Exchanging Partner acknowledges that

     

    (A)
      the
      shares of REIT Stock to be issued to such Exchanging Partner hereunder have
      not
      been registered under the Securities Act or state securities laws by reason
      of a
      specific exemption or exemptions from registration under the Securities Act
      and
      applicable state securities laws and, the certificates representing such shares
      of REIT Stock will bear a legend to such effect,

     

    (B)
      the
      Company’s and the Operating Partnership’s reliance on such exemptions is
      predicated in part on the accuracy and completeness of the representations
      and
      warranties of such Exchanging Partner contained herein,

     

    (C)
      the
      REIT Stock to be issued to such Exchanging Partner hereunder may not be resold
      or otherwise distributed unless registered under the Securities Act and
      applicable state securities laws, or unless an exemption from registration
      is
      available,

     

    (D)
      there
      may be no market for unregistered shares of REIT Stock, and

     

    (E)
      the
      Company has no obligation or intention to register such REIT Stock under the
      Securities Act or any state securities laws or to take any action that would
      make available any exemption from the registration requirements of such laws,
      except as provided in the Registration Rights Agreement entered into by the
      Company and the Exchanging Partner (the “ Registration
      Rights Agreement”). 

     

    (ii)
      Such
      Exchanging Partner acknowledges that because of the restrictions on transfer
      or
      assignment of such REIT Stock to be issued hereunder, such Exchanging Partner
      may have to bear the economic risk of its investment in REIT Stock issued
      hereunder for an indefinite period of time, although the holder of any such
      REIT
      Stock will be afforded certain rights to have such REIT Stock registered under
      the Securities Act and applicable state securities laws pursuant to the
      Registration Rights Agreement.

     

    (e)
      The
      address set forth under such Exchanging Partner’s name in the Notice of Exchange
      is the address of the Exchanging Partner’s principal place of business or, if a
      natural person, the address of the Exchanging Partner’s residence, and such
      Exchanging Partner has no present intention of becoming a resident of any
      country, state or jurisdiction other than the country and state in which such
      principal place of business or residence is situated.

     

    ARTICLE
      IV

     

    GENERAL
      PROVISIONS

     

    4.1
      Addresses
      and Notice
      . Any
      notice, demand, request or report required or permitted to be given or made
      to
      the Operating Partnership, the Company, a Limited Partner or Assignee, as the
      case may be, under this Agreement shall be in writing and shall be deemed given
      or made when delivered in person or when sent by first class United States
      mail
      or by other similarly reliable means of written communication to the Operating
      Partnership, the Company, a Limited Partner or Assignee, as the case may be,
      (i)
      at the address listed on the records of the Operating Partnership, with respect
      to a Limited Partner or Assignee, and (ii) at 3333 New Hyde Park Road, Suite
      100, New Hyde Park, New York 11042, Attn: President, with respect to the
      Operating Partnership or the Company.

     

    4.2
      Titles
      and Captions
      . All
      article or section titles or captions in this Agreement are for convenience
      only. They shall not be deemed part of this Agreement and in no way define,
      limit, extend or describe the scope or intent of any provisions hereof. Except
      as specifically provided otherwise, references to “Articles” and “Sections” are
      to Articles and Sections of this Agreement.

     

    4.3
      Pronouns
      and Plurals
      .
      Whenever the context may require, any pronoun used in this Agreement shall
      include the corresponding masculine, feminine or neuter forms, and the singular
      form of nouns, pronouns and verbs shall include the plural and vice
      versa.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.4
      Further
      Action and Additional Restrictions
      . The
      parties shall execute and deliver all documents, provide all information and
      take or refrain from taking action as may be necessary or appropriate to achieve
      the purposes of this Agreement.

     

    4.5
      Binding
      Effect
      . This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective heirs, executors, administrators, successors, legal
      representatives and permitted assigns.

     

    4.6
      Waiver
      . No
      failure by any party to insist upon the strict performance of any covenant,
      duty, agreement or condition of this Agreement or to exercise any right or
      remedy consequent upon a breach thereof shall constitute waiver of any such
      breach or any other covenant, duty, agreement or condition.

     

    4.7
      Counterparts
      . This
      Agreement may be executed in counterparts, all of which together shall
      constitute one agreement binding on all of the parties hereto, notwithstanding
      that all such parties are not signatories to the original or the same
      counterpart. Each party shall become bound by this Agreement immediately upon
      affixing its signature hereto.

     

    4.8
      Applicable
      Law
      . This
      Agreement 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
      law thereof. 

     

    4.9
      Invalidity
      of Provisions
      . If any
      provision of this Agreement is or becomes invalid, illegal or unenforceable
      in
      any respect, the validity, legality and enforceability of the remaining
      provisions contained herein shall not be affected thereby.

     

    4.10
      Entire
      Agreement
      . This
      Agreement contains the entire understanding and agreement among the Limited
      Partners, the Operating Partnership and the Company with respect to the subject
      matter hereof and supersedes any other prior written or oral understandings
      or
      agreements among them with respect thereto.

     

    4.11
      Amendment
      . This
      Agreement may be amended from time to time with the consent of the Company
      by a vote of the Limited Partners in the same manner as the
      Partnership Agreement (in accordance with Section 14.1(a) thereof) may be
      amended as provided therein, provided,
      however
      , that
      the Company shall vote its limited partnership interests in proportion to the
      votes of the other Limited Partners.

     

    [Signature
      page follows.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above.

     

    
      	 	
              THE
                COMPANY:

            
	 	 
	 	
              LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST II,

              INC.

            
	 	 
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 
	 	
              OPERATING
                PARTNERSHIP:

            
	 	 
	 	
              LIGHTSTONE
                VALUE PLUS REIT II LP

            
	 	 
	 	
              BY:

            	
              LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT

              TRUST,
                II INC., its general partner

            
	 	 	 
	 	 	
              By:

            	 
	 	 	 	
              Name:

            
	 	 	 	
              Title:

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A - Exchange Rights Agreement

     

    Name
      and
      Address of Limited Partner

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B – Exchange Rights Agreement

     

    Notice
      of Exchange

     

    The
      undersigned Limited Partner hereby irrevocably (i) exchanges
            
Partnership Units in Lightstone Value Plus REIT II LP, in accordance with the
      terms of the Exchange Rights Agreement, dated as of
            ,
      200     (the “ Exchange
      Rights Agreement”),
      and
      the Exchange Right referred to therein; (ii) surrenders such Partnership Units
      and all right, title and interest therein; and (iii) directs that the Cash
      Amount or REIT Stock Amount (as determined by the Company) deliverable upon
      exercise of the Exchange Right be delivered to the address specified below,
      and
      if REIT Stock is to be delivered, such REIT Stock will be registered or placed
      in the name(s) and at the address(es) specified below.

     

    The
      undersigned hereby represents, warrants, and certifies that the undersigned
      (a)
      has marketable and unencumbered title to such Partnership Units, free and clear,
      other than any encumbrance arising pursuant to the Partnership Agreement, of
      the
      rights or interests of any other person or entity; (b) has the full right,
      power, and authority to exchange and surrender such Partnership Units as
      provided herein; and (c) has obtained the consent or approval of all persons
      or
      entities, if any, (other than consent or approval that may be required of the
      Company or the Operating Partnership) having the right to consent or approve
      such exchange and surrender on the part of the undersigned.

     

    The
      undersigned hereby makes the representations and warranties contained in Section
      3.3 of the Exchange Rights Agreement as if such representations and warranties
      had been set forth in full in this Notice of Exchange.

     

    
      	
              Dated:          ________________________________

            	 	 
	 	 	 
	 	 	 
	 	 	
              Name
                of Limited Partner (Please Print)

            
	 	 	 
	
              Signature
                guaranteed by:

            	 	 
	 	 	 
	 	 	
              (Signature
                of Limited Partner) 

            
	 	 	
               

            
	 	 	 
	 	 	
              (Street
                Address)

            
	 	 	 
	 	 	
              (City)
                (State)                        
                (Zip Code)

            
	 	 	 
	 	 	
              If
                REIT Stock is to be issued, issue to:

            
	 	 	 
	 	 	
              Name:                                     _____________________

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D

     

    Certificate
      of Limited Partnership