EXECUTION
COPY








CONTRIBUTION
AGREEMENT




DATED
AS OF DECEMBER 8, 2009










TABLE OF
CONTENTS




PageARTICLE
      1 CERTAIN DEFINITIONS
                        
                        2Section
      1.1
                        Certain
      Definitions
                        
                        2ARTICLE
      2 THE CONTRIBUTIONS
                        
                        20Section
      2.1
                        Contributions
                        
                        21Section
      2.2
                        Closing
      of the Contributions
                        
                        21Section
      2.3
                        Aggregate
      Consideration Value
                        
                        21Section
      2.4
                        Contribution
      of Unit Consideration to New Company
                        
                        25Section
      2.5
                        ***
                        
                        26Section
      2.6
                        Book
      Entry; No Fractional Units
                        
                        26Section
      2.7
                        Purchase
      and Sale of St. Augustine Interests and St. Augustine Land
                        
                        26ARTICLE
      3 REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP
      COMPANIES
                        
                        27Section
      3.1
                        Organization
      and Qualification; Subsidiaries
                        
                        27Section
      3.2
                        Capitalization
      of the Group Companies
                        
                        27Section
      3.3
                        Authority
                        
                        30Section
      3.4
                        Financial
      Statements; Indebtedness
                        
                        31Section
      3.5
                        Consents
      and Approvals; No Violations
                        
                        32Section
      3.6
                        Material
      Contracts
                        
                        33Section
      3.7
                        Absence
      of Changes
                        
                        34Section
      3.8
                        Litigation
                        
                        34Section
      3.9
                        Compliance
      with Applicable Law
                        
                        35Section
      3.10
                        Employee
      Benefit Plans
                        
                        35Section
      3.11
                        Environmental
      Matters
                        
                        37Section
      3.12
                        Intellectual
      Property
                        
                        38Section
      3.13
                        Labor
      Matters
                        
                        39Section
      3.14
                        Tax
      Matters
                        
                        40Section
      3.15
                        Brokers
                        
                        42Section
      3.16
                        Real
      and Personal Property
                        
                        42Section
      3.17
                        No
      Undisclosed Liabilities
                        
                        49Section
      3.18
                        Transactions
      with Affiliates
                        
                        49Section
      3.19
                        Insurance
                        
                        49Section
      3.20
                        Investment
      Company Act Status
                        
                        49Section
      3.21
                        No
      Other Representations and Warranties Regarding the Group
      Companies
                        
                        49ARTICLE
      4 REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS AND LVP
      REIT
                        
                        50Section
      4.1
                        Organization
                        
                        50Section
      4.2
                        Authority
                        
                        50Section
      4.3
                        Consents
      and Approvals; No Violations
                        
                        51Section
      4.4
                        Title
                        
                        51





***
Certain portions have been omitted based upon a request for confidential
treatment to the Securities and Exchange Commission.  The information
omitted has been filed separately with the Commission.








Section
      4.5
                Accredited
      Investor
                
                51Section
      4.6
                Brokers
                
                51Section
      4.7
                Acknowledgment
                
                51Section
      4.8
                No
      Other Representations and Warranties Regarding the
      Contributors
                
                52ARTICLE
      5 REPRESENTATIONS AND WARRANTIES OF PARENT REIT, PARENT OP AND PARENT
      SUB
                
                52Section
      5.1
                Organization
                
                52Section
      5.2
                Authority
                
                52Section
      5.3
                Consents
      and Approvals; No Violations
                
                53Section
      5.4
                Capitalization
                
                53Section
      5.5
                SEC
      Documents
                
                54Section
      5.6
                Brokers
                
                54Section
      5.7
                ***
                
                55Section
      5.8
                Tax
      Matters
                
                55Section
      5.9
                Certain
      Activities
                
                55Section
      5.10
                New
      Company
                
                55Section
      5.11
                Acknowledgement
                
                56Section
      5.12
                No
      Other Representations and Warranties Regarding Parent REIT, Parent OP and
      Parent Sub
                
                57ARTICLE
      6 COVENANTS
                
                57Section
      6.1
                Conduct
      of Business of the Group Companies
                
                57Section
      6.2
                Pre-Closing
      Tax Matters
                
                61Section
      6.3
                Access
      to Information
                
                62Section
      6.4
                Efforts
      to Consummate
                
                63Section
      6.5
                ***
                
                64Section
      6.6
                Public
      Announcements
                
                64Section
      6.7
                Indemnification
                
                64Section
      6.8
                Documents
      and Information
                
                65Section
      6.9
                ***
                
                65Section
      6.10
                Employee
      Benefit Matters
                
                65Section
      6.11
                Notification
                
                67Section
      6.12
                Transactions
      in Parent Common Stock
                
                68Section
      6.13
                Exclusivity
                
                68Section
      6.14
                Use
      of Prime Retail Mark
                
                69Section
      6.15
                Parent
      OP Agreement
                
                69Section
      6.16
                ***
                
                70ARTICLE
      7 CERTAIN AFFILIATE MATTERS
                
                70Section
      7.1
                Termination
      of Agreements; Resignations of Affiliates
                
                70Section
      7.2
                Release
                
                71ARTICLE
      8 CONDITIONS TO CONSUMMATION OF THE CONTRIBUTIONS
                
                73Section
      8.1
                Conditions
      to the Obligations of the Contributors, Parent REIT, Parent OP and Parent
      Sub
                
                73





***
Certain portions have been omitted in connection with an application for
confidential treatment therefor.




[Type
text]








Section
      8.2
                Other
      Conditions to the Obligations of Parent REIT, Parent OP and Parent
      Sub
                
                73Section
      8.3
                Other
      Conditions to the Obligations of the Contributors
                
                75Section
      8.4
                Frustration
      of Closing Conditions
                
                76ARTICLE
      9 TERMINATION; AMENDMENT; WAIVER
                
                76Section
      9.1
                Termination
                
                76Section
      9.2
                Effect
      of Termination
                
                77Section
      9.3
                Amendment
                
                78Section
      9.4
                Extension;
      Waiver
                
                78ARTICLE
      10 SURVIVAL; INDEMNIFICATION
                
                78Section
      10.1
                Survival
                
                78Section
      10.2
                Indemnification
                
                79Section
      10.3
                Indemnification
      Procedures
                
                81Section
      10.4
                Limitations
      on Indemnification Obligations
                
                83Section
      10.5
                The
      Representative
                
                85Section
      10.6
                Exclusive
      Remedy
                
                86Section
      10.7
                Manner
      of Payment; Escrow
                
                86ARTICLE
      11 REPRESENTATIVE OF THE CONTRIBUTORS
                
                88Section
      11.1
                Authorization
      of Representative
                
                88ARTICLE
      12 MISCELLANEOUS
                
                90Section
      12.1
                Entire
      Agreement; Assignment
                
                91Section
      12.2
                Notices
                
                91Section
      12.3
                Governing
      Law
                
                93Section
      12.4
                Fees
      and Expenses
                
                93Section
      12.5
                Construction;
      Interpretation
                
                93Section
      12.6
                Exhibits,
      Annexes and Schedules
                
                93Section
      12.7
                Parties
      in Interest
                
                94Section
      12.8
                Severability
                
                94Section
      12.9
                Counterparts;
      Facsimile Signatures
                
                94Section
      12.10
                Obligations
      Joint and Several
                
                94Section
      12.11
                Knowledge
      of the Company
                
                94Section
      12.12
                Waiver
      of Jury Trial
                
                94Section
      12.13
                Jurisdiction
      and Venue
                
                95Section
      12.14
                Waiver
      of Conflicts
                
                95Section
      12.15
                Limitation
      on Damages; Remedies
                
                95Section
      12.16
                Specific
      Performance
                
                96





***
Certain portions have been omitted in connection with an application for
confidential treatment therefor.




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EXHIBITS


***
            ———————





ANNEXES:


***
            ——————





***
Certain portions have been omitted in connection with an application for
confidential treatment therefor.




[Type
text]







CONTRIBUTION
AGREEMENT




THIS CONTRIBUTION AGREEMENT(this “Agreement”), dated as
of December 8, 2009, is made by and among Simon Property Group, Inc., a Delaware
corporation (“Parent
REIT”), Simon Property Group, L.P., a Delaware limited partnership
(“ParentOP”), Marco Capital
Acquisition, LLC, a Delaware limited liability company and a wholly owned
subsidiary of Parent OP (“Parent Sub,” and
together with Parent REIT and Parent OP, the “Parent Parties”),
Lightstone Value Plus REIT, LP, a Delaware limited partnership (“LVP OP”), Pro-DFJV
Holdings LLC, a Delaware limited liability company (“Pro-DFJV”),
Lightstone Holdings, LLC, a Delaware limited liability company (“Lightstone
Holdings”), Lightstone Prime, LLC, a Delaware limited liability company
(“Lightstone
Prime”), BRM, LLC, a New Jersey limited liability company (“BRM”), Lightstone
Real Property Ventures Limited Liability Company, a New Jersey limited liability
company (“LRPV”), PR Lightstone
Manager, LLC, a Delaware limited liability company (“PR Manager”), Prime
Outlets Acquisition Company LLC, a Delaware limited liability company (the
“Company”) and
solely for purposes of Section 4.3(b), Section 6.13, Section 6.16, Section 7.2(b), Article 10 (with
respect to any alleged breach of Section 4.3(b),Section 6.13, Section 6.16 or Section 7.2(b)),
Article 11 and
Article 12,
Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland corporation
(“LVP REIT”).
Capitalized terms used but not otherwise defined herein have the meanings
ascribed to such terms in Article
1.




WHEREAS, Lightstone Holdings,
Pro-DFJV, LVP OP, BRM, LRPV and PR Manager own the membership interests in
Ewell, Mill Run and Barceloneta, in each case as set forth opposite their
respective names on Annex A (such
membership interests, the “Other Group Companies
Contributed Interests”);




WHEREAS, Lightstone Prime, LVP
OP and Pro-DFJV own all of the outstanding membership interests in the Company,
in each case as set forth opposite their respective names on Annex B (such
membership interests, the “Company Contributed
Interests” and, with the Other Group Companies Contributed Interests, the
“Contributed
Interests”);




WHEREAS, LVP OP owns all of
the outstanding membership interests of St. Augustine (the “St. Augustine
Interests”) and a related parcel of unimproved land described on Annex C (with all
structures, improvements and fixtures located thereon and all rights of way,
other rights, privileges, licenses, easements and appurtenances belonging or
appertaining thereto, the “St. Augustine
Land”);




WHEREAS, certain of the
Contributors have agreed to enter into this Agreement to, subject to the terms
and conditions hereof, contribute all of the Company Contributed Interests to
Parent Sub;




WHEREAS, certain of the
Contributors have agreed to enter into this Agreement to, subject to the terms
and conditions hereof, contribute all of the Other Group Companies Contributed
Interests to Parent Sub;





WHEREAS, LVP OP has agreed to
enter into this Agreement to, subject to the terms and conditions hereof, sell
all of the St. Augustine Interests and the St. Augustine Land to Parent Sub;
and




WHEREAS, concurrently with the
execution hereof, Parent OP and Parent Sub have entered into a master purchase
and sale agreement in the form attached as Exhibit A (the “LP Purchase
Agreement”) with each of the members of Mill Run and Ewell that is not a
Contributor (collectively, the “Other Members”),
pursuant to which Parent Sub has agreed, subject to the terms and conditions of
the LP Purchase Agreement, to purchase, concurrently with the Closing, all of
the membership interests of Mill Run and Ewell owned by the Other
Members.




NOW, THEREFORE, in
consideration of the premises and the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:




ARTICLE
1


CERTAIN
DEFINITIONS




Section
1.1       Certain
Definitions




As used
in this Agreement, the following terms have the respective meanings set forth
below.




“Accounting Firm” has
the meaning set forth in Section
2.3(d)(ii).




“Actual Adjustment”
means (a) the Aggregate Consideration Value as finally determined pursuant to
Section
2.3(d),minus (b) the
Estimated Aggregate Consideration Value.  For the avoidance of doubt, the
Actual Adjustment may be a positive amount or a negative amount.




“Actual Value” has the
meaning set forth in Section
2.3(d)(iii)(C).




“Affiliate” means,
with respect to any Person, any other Person who directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms “controlled” and
“controlling”
have meanings correlative thereto.




“Aggregate Consideration
Dispute Notice” has the meaning set forth in Section
2.3(d)(ii).




“Aggregate Consideration
Value” means (i) the Enterprise Value, increased by
(ii) the Net Working Capital Adjustment (if a positive number), decreased by (iii)
the absolute value of the Net Working Capital Adjustment (if a negative number),
decreased by
(iv) the amount of Closing Date Funded Indebtedness, decreased by
(v) the Company Transaction Expenses, decreased by (vi) the
Minority Cash Amount, decreased by (vii) the St. Augustine Cash Amount. 
For the avoidance of doubt, no item (or element thereof) shall be included more
than once in any of the foregoing clauses in the calculation of the Aggregate
Consideration Value.  For illustrative purposes, attached as Schedule 1.1(A) is a
hypothetical calculation of the Aggregate Consideration Value.


2


“Aggregate Unit Value”
means the product of (i) the Parent Closing Price and (ii) the number of
Parent OP Common Units constituting the Unit Consideration.




“Agreement” has the
meaning set forth in the preamble to this Agreement.




“Alternate Financing”
has the meaning set forth in Section
6.5(c).




“Applicable Percentage
Interest” means, with respect to any Contributor, the percentage interest
set forth opposite such Contributor’s name on Annex D (as such
Annex D may be
updated from time to time prior to Closing, with notice to the Parent Parties,
by the Representative).




“Barceloneta” means PR
Barceloneta LLC, a New Jersey limited liability company.




“BRM” has the meaning
set forth in the preamble to this Agreement.




“Brokerage Agreements”
has the meaning set forth in Section
3.16(i).




“Budget” means the
operating budget of the Group Companies for the year-ended December 31, 2010
(or, in respect of any period prior to January 1, 2010, the operating budget of
the Group Companies for the year ended December 31, 2009), in each case as set
forth in Schedule
1.1(B).




“Business Day” means a
day, other than a Saturday or Sunday, on which commercial banks in New York City
and Indianapolis, Indiana are open for the general transaction of
business.




“Claim” has the
meaning set forth in Section
11.1(a)(iv).




“Claim Arbitrator” has
the meaning set forth in Section
2.3(f)(ii).




“Closing” has the
meaning set forth in Section
2.2.




“Closing Date” has the
meaning set forth in Section
2.2.




“Closing Date Funded
Indebtedness” means the Funded Indebtedness as of immediately prior to
the Closing (and determined without giving effect to the Contemplated
Transactions).




“CMBS Transfer
Restrictions” means restrictions on transfer or alienation or similar
encumbrances contained in the terms of any Funded Indebtedness.




“Code” means the
United States Internal Revenue Code of 1986, as amended.




“Company” has the
meaning set forth in the preamble to this Agreement.


3


***1




“Company Contributed
Interests” has the meaning set forth in the recitals to this
Agreement.




“Company Ground
Leases” has the meaning set forth in Section
3.16(b).




“Company Intellectual
Property” has the meaning set forth in Section
3.12(a).




“Company IP Licenses”
has the meaning set forth in Section
3.12(b).




“Company Knowledge
Parties” means the persons set forth on Annex F.




“Company Leases” has
the meaning set forth in Section
3.16(f).




“Company LLC
Agreement” means the Company’s limited liability agreement (as amended
from time to time).




“Company Material Adverse
Effect” means a material adverse effect upon the financial condition,
business, or results of operations of the Group Companies, taken as a whole;
provided, however, that any
adverse effect arising from or related to the following shall not be taken into
account in determining whether a “Company Material Adverse Effect” has occurred
or would reasonably be expected to occur: (i) conditions affecting or changes in
the national, international or any regional economy in general, the financial,
credit, securities or banking markets or conditions in general (including any
disruption thereof), interest rates, currency or exchange rates or the price of
any commodity, security or market index (unless such matters have a materially
disproportionate impact on the Group Companies, taken as a whole, relative to
other participants in the industries and markets in which the Group Companies
participate), (ii) any national, international or regional political or social
conditions, including, without limitation, the engagement by the United States
in hostilities, whether or not pursuant to the declaration of a national
emergency or war, the occurrence of any military or terrorist attack upon the
United States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the United
States, the occurrence or results of any primary or general elections, the
occurrence or threatened occurrence of any earthquakes, floods, hurricanes,
tropical storms, fires or other natural disasters or any national or
international calamity (except to the extent directed at or physically impacting
any of the Group Companies or their respective properties or assets), (iii)
seasonal fluctuations in the business of any Group Company consistent in scope
with seasonal fluctuations over the preceding five (5) years, (iv) generally
applicable changes in legal or regulatory conditions, (v) changes or proposed
changes in any Laws, including changes or proposed changes in Laws applicable to
any Group Company or any of their respective properties, assets or liabilities,
or in applicable accounting or Tax regulations or principles or interpretations
thereof, including GAAP, (vi) any matter set forth in the Company Schedules or
the 2008 Audited Financial Statements (other than any change in the footnotes
thereto from the 2008 Unaudited Financial Statements), (vii) any change that is
generally applicable to any industry or market in which any of the Group
Companies operates, including any weakening of the real estate or retail
shopping industries in general (unless such changes have a materially
disproportionate impact on the Group Companies, taken as a whole, relative to
other participants in the industries and markets in which the Group Companies
participate); (viii) the announcement, performance or existence of this
Agreement, the identity of the parties hereto or any of their respective
Affiliates, representatives or financing sources, the taking of any action to
the extent required by this Agreement, the failure to take any action prohibited
by this Agreement, or the pendency or contemplated consummation of Contemplated
Transactions, including the loss of any current or prospective tenants, lessees,
customers, employees, financing sources, investors, landlords, partners,
suppliers or vendors of any Group Company due to any of the foregoing in this
clause (viii),
(ix) any failure by any Group Company to meet any projections, forecasts or
revenue or earnings predictions for any period, provided, however, that the facts or
occurrences giving rise or contributing to such failure may, unless otherwise
excluded by another clause in this definition of “Company Material Adverse
Effect,” be deemed to constitute, or be taken into account in determining
whether there has been, a “Company Material Adverse Effect” or whether a
“Company Material Adverse Effect” would be reasonably likely to occur; (x) any
actions taken, or not taken, with the written consent or written waiver, or at
the written request, of Parent REIT, Parent OP or Parent Sub; (xi) any Known
Claim (including the matters underlying such Known Claim), the value of which
was not disputed by the Contributors or, if disputed, was included in the
process of calculating a Known Claim; or (xii) any matter for which any Person,
other than the Group Companies, shall have liability following the Closing
pursuant to the terms of the Tax Matters Agreements.





1Certain portions have been
omitted in connection with an application for confidential treatment
therefor.


4


“Company Membership
Interests” has the meaning ascribed to the term “Membership Interests” in
the Company LLC Agreement.




“Company Owned Intellectual
Property” has the meaning set forth in Section
3.12(a).




“Company Permits” has
the meaning set forth in Section
3.9(a).




“Company Released
Matters” has the meaning set forth in Section
7.2(a).




“Company Released
Parties” has the meaning set forth in Section
7.2(a).




“Company Releasing
Parties” has the meaning set forth in Section
7.2(a).




“Company Schedules”
has the meaning set forth in Article
3.




“Company Title Insurance
Policies” has the meaning set forth in Section
3.16(q).




“Company Transaction
Expenses” means, without duplication, (i) the expenses of the Group
Companies incurred in connection with the negotiation and consummation of this
Agreement and the other Transaction Documents (or any alternative transaction)
that are either payable as of immediately prior to, at or after the Closing or
that are contingent upon the consummation of the Contemplated Transactions,
including attorney fees, financial advisor fees, accountant fees, and including,
for the avoidance of doubt, the fees and expenses of the Persons set forth on
Schedule 1.1(C), (ii) the Company
Consent Fees, (iii) the Company Transaction Taxes and (iv) the Severance,
Employment and Shut-Down Costs.


5


“Company Transaction
Taxes” means any Transaction Taxes (a) payable by the Group Companies at
or after the Closing and/or (b) paid or payable by Parent OP or any Affiliate
thereof (other than any Group Company) prior to, at or after the
Closing.




“Confidentiality
Agreement” means the confidentiality agreement, dated August 19, 2009, by
and between the Company and Parent REIT.




“Contemplated
Transactions” means the Contributions and the other transactions
contemplated by this Agreement and the other Transaction Documents.




“Contract” means any
written loan agreement, indenture, letter of credit (including related letter of
credit application and reimbursement obligation), mortgage, security agreement,
pledge agreement, deed of trust, bond, note, guarantee, surety obligation,
warranty, franchise, power of attorney, purchase order, lease and other
agreement, license, contract, binding arrangement or understanding, obligation,
or instrument, in each case as amended, supplemented, waived or otherwise
modified.




“Contributed
Interests” has the meaning set forth in the recitals to this
Agreement.




“Contributions” has
the meaning set forth in Section
2.1.




“Contributor Released
Matters” has the meaning set forth in Section
7.2(b).




“Contributor Released
Parties” has the meaning set forth in Section
7.2(b).




“Contributor Releasing
Parties” has the meaning set forth in Section
7.2(b).




“Contributors” means
Lightstone Holdings, Lightstone Prime, BRM, LRPV, PR Manager, LVP OP and
Pro-DFJV.




“DL Parties” means
Lightstone Holdings, Lightstone Prime, BRM, LRPV and PR Manager.




***2




“Employee” means each
current (including those on layoff, disability or leave of absence, whether paid
or unpaid), former, or retired employee, officer, consultant, independent
contractor providing individual services, agent or director of a Group Company
or the Prime Manager.




“Employee Agreement”
means each management, employment, severance, consulting, non-compete,
confidentiality, change-in-control or similar agreement or contract between any
Group Company and any Employee pursuant to which any Group Company or the Prime
Manager has or may have any liability as of the date hereof.







2
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


6


“Employee Benefit
Plan” means each plan, program, policy, contract, agreement or other
arrangement providing for compensation, severance, termination pay, performance
awards, stock or stock-related awards, collective bargaining, bonus, incentive,
deferred compensation, profit sharing, pension, retirement benefits, fringe
benefits or other employee benefits of any kind, funded or unfunded, written or
oral, including, without limitation, each “employee benefit plan,” within the
meaning of Section 3(3) of ERISA and each “multi-employer plan” within the
meaning of Sections 3(37) or 4001(a)(3) of ERISA and all other material employee
benefit plans, agreements, programs, policies or other arrangements, whether or
not subject to ERISA, maintained or contributed to, or required to be maintained
or contributed to, by any Group Company or any ERISA Affiliate for the benefit
of any Employee of any Group Company or the Prime Manager as of the date
hereof.




“Enterprise Value”
means two billion, three hundred twenty five million dollars ($2,325,000,000),
subject to adjustment pursuant to Section
2.3(a).




“Environmental Laws”
has the meaning set forth in Section
3.11(a)(i).




“Environmental
Permits” has the meaning set forth in Section
3.11(a)(ii).




“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.




“ERISA Affiliate”
means each trade or business which is a member of a “controlled group of
corporations,” under “common control” or an “affiliated service group” with any
of the Group Companies or the Prime Manager within the meaning of Sections
414(b), (c) or (m) of the Code, or required to be aggregated with any of the
Group Companies or the Prime Manager under Section 414(o) of the Code, or is
under “common control” with any of the Group Companies or the Prime Manager,
within the meaning of Section 4001(a)(14) of ERISA.




“Escrow Account” means
the escrow account established pursuant to the Escrow Agreement.




“Escrow Agent” means
an escrow agent to be mutually agreed upon by Parent OP and the Representative
in good faith.




“Escrow Agreement”
means an escrow agreement to be entered into on the Closing Date by the
Representative, Parent OP and the Escrow Agent in a form as the Representative,
Parent OP and the Escrow Agent shall reasonably agree in good faith, which
agreement shall not modify any of the rights or obligations of the parties
hereto in any material respect and which agreement shall provide that the
Representative and Parent OP shall each bear 50% of the fees and expenses of the
Escrow Agent.




“Escrow Cash” means
the sum of the Working Capital Escrow Amount and the Known Claims Escrow
Amount.




“Escrow Units” has the
meaning set forth in Section
2.3(c)(i).




“Estimated Aggregate
Consideration Value” means a good faith estimate of the Aggregate
Consideration Value prepared by the Company.  In connection with
determining the Estimated Aggregate Consideration Value, the Company (a) shall
use the actual Enterprise Value, the actual Minority Cash Amount and the actual
St. Augustine Cash Amount and (b) shall estimate the amount of (i) the Net
Working Capital Adjustment, (ii) Closing Date Funded Indebtedness, and (iii)
Company Transaction Expenses.


7


“Ewell” means Ewell
Holdings, LLC, a Delaware limited liability company.




“Exculpated Parties”
has the meaning set forth in Section
6.7(a).




“Existing Company Lease
Documents” has the meaning set forth in Section
3.16(f).




“Financial Statements”
has the meaning set forth in Section
3.4(a).




***3




“Fixed Rate Debt” has
the meaning set forth in Section
3.4(f).




***4




“Fraud” means, with
respect to a Contributor, an actual and intentional fraud with respect to (i)
the making of the representations and warranties in Article 3 or (ii) the
intentional failure to provide notice to the Parent Parties in breach of Section 6.11, provided, that such
actual and intentional fraud of a Contributor shall only be deemed to exist if
any of the Company Knowledge Parties had actual knowledge (as opposed to imputed
or constructive knowledge) that (x) the representations and warranties in Article 3, as
qualified by the Company Schedules, were actually and intentionally breached in
any material respect when made or (y) the obligations to provide notice to the
Parent Parties pursuant to Section 6.11 were
actually and intentionally not complied with in any material
respect.




“Funded Indebtedness”
means, as of any time, without duplication, the outstanding principal amount of,
and accrued and unpaid interest on, any obligations of any Group Company
consisting of (a) indebtedness for borrowed money, whether secured or
unsecured, or indebtedness issued in substitution or exchange for borrowed money
or for the deferred purchase price of property or services (but excluding any
trade payables and accrued expenses arising in the ordinary course of business
and included in the calculation of current liabilities for purposes of Net
Working Capital), (b) indebtedness evidenced by any note, bond, debenture
or other debt security, (c) obligations under any interest rate, currency or
other hedging agreements (valued at the termination value thereof), (d) the
outstanding shares of Prime Retail Series C Preferred, including all accrued and
unpaid dividends thereon, (e) obligations under capitalized leases, (f) the
obligation set forth on Schedule 1.1(F) to
the extent unpaid, and (g) the deferred purchase price for real properties or
Persons owning real properties (which, for the avoidance of doubt, shall not
include any amounts required to be paid to exercise any real property purchase
options), in each case, as of such date.  Notwithstanding the foregoing,
“Funded Indebtedness” shall not include any (i) obligations under operating
leases, (ii) undrawn letters of credit, (iii) LIBOR breakage fees and (iv) and
obligations of a Group Company to any other Group Company.







3
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


4
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


8


“GAAP” means United
States generally accepted accounting principles.




“Governing Documents”
means the legal document(s) by which any Person (other than an individual)
establishes its legal existence or which govern its internal affairs.  For
example, the “Governing Documents” of a corporation are its certificate of
incorporation and by-laws, the “Governing Documents” of a limited partnership
are its limited partnership agreement and certificate of limited partnership and
the “Governing Documents” of a limited liability company are its operating
agreement and certificate of formation.




“Governmental Entity”
means any United States, non-United States or supranational (a) federal, state,
local, municipal or other government, (b) governmental or quasi-governmental
entity of any nature (including, without limitation, any governmental agency,
branch, department, official, or entity and any court or other tribunal) or (c)
body exercising or entitled to exercise any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature,
including, without limitation, any arbitral tribunal.




***5




***6




“Group Companies”
means, collectively, the Company, Ewell, Mill Run, Barceloneta, St. Augustine,
and each of their respective Subsidiaries.




“Group Company
Information” has the meaning set forth in Section
6.13(b).




“Hazardous Substances”
means any pollutant, contaminant, material, waste or toxic substance that is
regulated under Environmental Laws, including asbestos or any substance
containing asbestos, polychlorinated biphenyls, petroleum or petroleum products
(including crude oil and any fraction thereof) and radon, mold, fungus and other
hazardous biological materials.




“High Value” has the
meaning set forth in Section
2.3(d)(iii)(B).




“Indemnified Party”
has the meaning set forth in Section
10.3(a).




“Intellectual
Property” means (a) patents, patent applications and statutory invention
registrations; (b) trademarks, service marks, trade dress, logos, trade names,
corporate names, brand names, domain names and other source identifiers; (c)
copyrights, mask works and software; and (d) trade secrets, confidential and
proprietary information and know-how.




“IRS” means the United
States Internal Revenue Service.




“Known Claim” has the
meaning set forth in Section
2.3(f)(i).







5
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


6
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


9


“Known Claims Escrow
Amount” has the meaning set forth in Section
2.3(f)(iii).




“Latest Balance Sheet”
has the meaning set forth in Section
3.4(a)(ii).




“Law” or “law”means, with respect to
any Person, any applicable law (including common law), treaty, statute,
ordinance, rule or regulation enacted or promulgated by any Governmental Entity
having jurisdiction over such Person, its properties, assets or activities, all
as in effect from time to time.




“Leased Real Property”
means the real property leased by or subject to a written agreement to lease or
sublease or other use or occupancy contract, in each case by any Group Company
as tenant; provided, however, that any
real property as to which any Group Company is a ground lessee under a ground
lease shall constitute “Owned Real Property” and not “Leased Real
Property.”




“Leasing Plan” means
the leasing plan for each of the Group Companies and Owned Real Properties set
forth in Schedule
1.1(D).




“Lender” has the
meaning set forth in Section
5.7.




“Lien” means any
mortgage, pledge, security interest, encumbrance, lien or charge.  For the
avoidance of doubt, the term “Lien” shall not be deemed to include any license
of Intellectual Property rights.




“Lightstone Holdings”
has the meaning set forth in the preamble to this Agreement.




“Lightstone Prime” has
the meaning set forth in the preamble to this Agreement.




“Loss” has the meaning
set forth in Section
10.2(a).




“Low Value” has the
meaning set forth in Section
2.3(d)(iii)(A).




“LP Purchase
Agreement” has the meaning set forth in the recitals to this
Agreement.




“LRPV” has the meaning
set forth in the preamble to this Agreement.




“LVP OP” has the
meaning set forth in the preamble to this Agreement.




“LVP REIT” has the
meaning set forth in the preamble to this Agreement.




***7




“Management Employees”
means all current employees of the Prime Manager, including those on short-term
disability (and expected to not go on long-term disability) or short-term leave
of absence, whether paid or unpaid, but not on a layoff or long-term disability,
providing individual service at a Group Company or at the Prime
Manager.







7
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


10


“Material Company
Leases” has the meaning set forth in Section
3.16(g).




“Material Contracts”
has the meaning set forth in Section
3.6(a).




“Member Guarantees”
means the guarantees by the DL Parties of the obligations of Parent OP under the
Financing in the forms attached to this Agreement as Exhibit
B.




“Member Indemnitee”
has the meaning set forth in Section
10.2(c).




“Mill Run” means Mill
Run, L.L.C., a New Jersey limited liability company.




“Mill Run Letter
Agreement” means that certain letter agreement, dated as of the date
hereof, between Parent OP and Mill Run.




“Minority Cash Amount”
means the aggregate amount of cash paid or payable by Parent OP pursuant to the
LP Purchase Agreement.




“Net Working Capital”
means, with respect to the Group Companies, the net book value of those current
assets of the Group Companies as of immediately prior to the Closing (without
giving effect to the Contemplated Transactions) that are included in the line
item categories of current assets specifically identified on Exhibit C, less the net book
value of those current liabilities of the Group Companies as of immediately
prior to the Closing (without giving effect to the Contemplated Transactions)
that are included in the line item categories of current liabilities
specifically identified on Exhibit C, in each
case, without duplication, and as determined in a manner strictly consistent
with the principles used in the preparation of the Financial Statements (the
“Accounting
Principles”); provided, that Pre-Signing Allowances and Commissions shall
be treated as current liabilities (without regard to whether they would
constitute current liabilities in accordance with GAAP) and Post-Signing
Allowances and Commissions shall not be treated as current liabilities (without
regard to whether they would constitute current liabilities in accordance with
GAAP).  Notwithstanding anything to the contrary contained herein, in no
event shall “Net Working Capital” (including the determination of current assets
and current liabilities) include any amounts to the extent included in the
calculation of Closing Date Funded Indebtedness or Company Transaction
Expenses.




“Net Working Capital
Adjustment” means (a) the amount by which Net Working Capital as of
immediately prior to the Closing exceeds Target Net Working Capital or (b) the
amount by which Net Working Capital as of immediately prior to the Closing is
less than Target Net Working Capital, in each case, if applicable; provided, that any
amount which is calculated pursuant to clause (b) above
shall be deemed to be a negative number.




“New Company” has the
meaning set forth in the recitals.




“New Company
Agreement” means the limited liability companyagreement of New Company
in the form attached as Exhibit E hereto
pursuant to which New Company will hold the Parent OP Common Units to be issued
to the Contributors and the Escrow Account hereunder.


11


“New Company Common
Units” means the Company Units, as defined in the New Company Agreement,
each of which is exchangeable and redeemable for the Parent OP Common Unit
contributed to the New Company in exchange for the issuance of the Company Unit,
as set forth herein and in the New Company Agreement.




“New Company Manager”
has the meaning set forth in the recitals.




“New Facility” has the
meaning set forth in Section
6.5(c).




“NOI Waiver” has the
meaning set forth in Section
2.3(a).




“Non-Excluded
Representation” means, (a) with respect to the representations and
warranties of the Company in Article 3, each
representation and warranty in Article 3 except for
the representations and warranties in Section 3.4(b) and
Section 3.7(a)
and (b) with respect to the representations and warranties of the Parent Parties
in Article 5,
each representation and warranty in Article 5 except for
the representations and warranties in Section 5.5(b) and
Section
5.9(a).




“Off Balance Sheet
Arrangements” means, with respect to any Person, any obligation or
liability that does not appear as a liability on the balance sheet of such
Person and that constitutes (a) any repurchase obligation or liability,
contingent or otherwise, of such Person with respect to any accounts or notes
receivable sold, transferred or otherwise disposed of by such Person, (b) any
repurchase obligation or liability, contingent or otherwise, of such Person with
respect to property or assets leased by such Person as lessee, (c) obligations,
liabilities and indebtedness of such Person arising under any interest rate,
currency or commodity hedge, cap, collar, swap, derivative or similar
transaction and (d) obligations, contingent or otherwise, of such Person under
any “synthetic” lease, tax retention operating lease, off balance sheet loan or
similar off balance sheet financing if the transaction giving rise to such
obligation (i) is considered indebtedness for borrowed money for tax purposes
but is classified as an operating lease or (ii) does not (and is not required
pursuant to GAAP to) appear as a liability on the balance sheet of such
Person.




“Order” means any
decisions, injunctions, judgments, decrees or orders (whether temporary,
preliminary or permanent) entered, issued, made or rendered by any Governmental
Entity of competent jurisdiction.




“Other Group
Companies” means Ewell, Mill Run, Barceloneta and St.
Augustine.




“Other Group Companies
Contributed Interests” has the meaning set forth in the recitals to this
Agreement.




“Other Members” has
the meaning set forth in the recitals to this Agreement.




“Overage Rent” means,
with respect to any Company Lease that provides for the payment of additional or
escalation rent based upon (a) a percentage of a tenant’s gross sales during a
specified annual or other period or (b) increases in real estate taxes,
operating expenses, labor costs, cost of living indices or porter’s
wages.


12


“Owned Real
Properties” has the meaning set forth in Section
3.16(b).




“Parent Assumable
Claim” has the meaning set forth in Section
10.3(b).




“Parent Closing Price”
means an amount equal to the volume-weighted (based on daily trading volume)
average of the per share daily closing price of a share of Parent Common Stock
quoted on The New York Stock Exchange, as reported by The Wall Street Journal(or,
if not reported therein, such other authoritative source as the Parties shall
otherwise agree), for the ten (10) trading days ending on and including the date
that is three (3) trading days prior to the Closing Date; provided, that
(a) if the Parent Closing Price as finally determined is equal to or
greater than $81.29 (the “Maximum Price”), the
Parent Closing Price shall equal the Maximum Price, and (b) if the Parent
Closing Price as finally determined is equal to or less than $66.51 (the “Minimum Price”), the
Parent Closing Price shall equal the Minimum Price.  The Unit
Consideration, the Parent Closing Price, the Maximum Price and the Minimum Price
shall be adjusted to reflect appropriately the effect of any stock or unit
split, reverse split, dividend or distribution (including any dividend or
distribution of securities convertible into Parent Common Stock or Parent OP
Common Units), reorganization, recapitalization, reclassification or other like
change with respect to the Parent Common Stock and/or Parent OP Common Units
occurring on or after the date hereof and prior to the Closing.  For the
avoidance of doubt, and notwithstanding the foregoing, no adjustment shall be
made in respect of any dividend or distribution in respect of the Parent Common
Stock to the extent such dividend was paid in (i) cash, (ii) Parent Common Stock
and/or (iii) Parent OP Common Units and, in each case of clause (i), clause (ii)
or clause (iii), was either included in a regular quarterly dividend or was
otherwise intended to assure Parent REIT maintains its tax status as a
REIT.




“Parent Common Stock”
has the meaning set forth in Section
5.4(a).




“Parent Indemnitee”
has the meaning set forth in Section
10.2(a).


13


“Parent Material Adverse
Effect” means a material adverse effect upon the financial condition,
business, or results of operations of Parent REIT, Parent OP and their
respective Subsidiaries, taken as a whole; provided, however, that any
adverse effect arising from or related to the following shall not be taken into
account in determining whether a “Parent Material Adverse Effect” has occurred
or would reasonably be expected to occur: (i) conditions affecting or changes in
the national, international or any regional economy in general, the financial,
credit, securities or banking markets or conditions in general (including any
disruption thereof), interest rates, currency or exchange rates or the price of
any commodity, security or market index (unless such matters have a materially
disproportionate impact on Parent REIT, Parent OP and their respective
Subsidiaries, taken as a whole, relative to other participants in the industries
and markets in which Parent REIT, Parent OP and their respective Subsidiaries
participate), (ii) any national, international or regional political or social
conditions, including, without limitation, the engagement by the United States
in hostilities, whether or not pursuant to the declaration of a national
emergency or war, the occurrence of any military or terrorist attack upon the
United States, or any of its territories, possessions, or diplomatic or consular
offices or upon any military installation, equipment or personnel of the United
States, the occurrence or results of any primary or general elections, the
occurrence or threatened occurrence of any earthquakes, floods, hurricanes,
tropical storms, fires or other natural disasters or any national or
international calamity (except to the extent directed at or physically impacting
Parent REIT, Parent OP or any of their respective Subsidiaries, or their
respective properties or assets), (iii) seasonal fluctuations in the business of
Parent REIT, Parent OP or any of their respective Subsidiaries consistent in
scope with seasonal fluctuations over the preceding five (5)years, (iv) generally
applicable changes in legal or regulatory conditions, (v) changes or proposed
changes in any Laws, including changes or proposed changes in Laws applicable to
Parent REIT, Parent OP or any of their respective Subsidiaries or any of their
respective properties, assets or liabilities, or in applicable accounting or Tax
regulations or principles or interpretations thereof, including GAAP, (vi) any
matter disclosed in the Parent SEC Reports prior to the date hereof (without
giving effect to any amendment to any such Parent SEC Report filed on or after
the date hereof and excluding any disclosures that contain general cautionary,
predictive or forward-looking statements set forth in any section of a Parent
SEC Report entitled “risk factors” or constituting “forward-looking statements”
or any other similar sections of such filings), (vii) any change that is
generally applicable to any industry or market in which Parent REIT, Parent OP
or any of their respective Subsidiaries operate, including any weakening of the
real estate or retail shopping industries in general (unless such changes have a
materially disproportionate impact on Parent REIT, Parent OP and their
respective Subsidiaries, taken as a whole, relative to other participants in the
industries and markets in which Parent REIT, Parent OP and their respective
Subsidiaries participate); (viii) the announcement, performance or
existence of this Agreement, the identity of the parties hereto or any of their
respective Affiliates, representatives or financing sources, the taking of any
action to the extent required by this Agreement, the failure to take any action
prohibited by this Agreement, or the pendency or contemplated consummation of
the Contemplated Transactions, including the loss of any current or prospective
tenants, lessees, customers, employees, financing sources, investors, landlords,
partners, suppliers or vendors of Parent REIT, Parent OP or any of their
respective Subsidiaries due to any of the foregoing in this clause (viii); provided, however, that the
exceptions set forth in this clause (viii) shall
not apply to references to “Parent Material Adverse Effect” in the
representations and warranties set forth in Section 5.3 or to the
conditions set forth in Section 8.3(a) (to
the extent related to the representations and warranties set forth in Section 5.3); (ix)
any (A) failure by Parent REIT, Parent OP or any of their respective
Subsidiaries to meet any projections, forecasts or revenue or earnings
predictions for any period or (B) any fluctuation  (including any decline)
in the market price of the Parent Common Stock or any other debt or equity
securities of Parent REIT or any of its Affiliates, provided, however, that the
facts or occurrences giving rise or contributing to such failure or fluctuation
may, unless otherwise excluded by another clause in this definition of “Parent
Material Adverse Effect,” be deemed to constitute, or be taken into account in
determining whether there has been, a “Parent Material Adverse Effect”; (x) any
actions taken, or not taken, with the written consent or written waiver, or at
the written request of, the Representative or (xi) subject to its obligations
under Section
6.4(d), any actual or proposed acquisition of securities, properties or
assets by Parent REIT, Parent OP or any of their respective Subsidiaries in the
good faith belief that such transaction was, is or will be in the best interests
of Parent REIT, Parent OP or any such Subsidiaries.




“Parent OP” has the
meaning set forth in the preamble to this Agreement.




“Parent OP Agreement”
means the Eighth Amended and Restated Limited Partnership Agreement of Parent
OP, dated as of May 8, 2008 as it may be amended from time to
time.


14


“Parent OP Common
Units” means “Partnership Units,” as defined in the Parent OP Agreement,
each of which is exchangeable for one share of Parent Common Stock as set forth
in the Parent OP Agreement.




“Parent Parties” has
the meaning set forth in the preamble to this Agreement.




“Parent Preferred
Stock” has the meaning set forth in Section
5.4(a).




“Parent REIT” has the
meaning set forth in the preamble to this Agreement.




***8




“Parent SEC Reports”
means all publicly available forms, reports, statements, certificates and other
documents filed with or furnished to the SEC by Parent REIT or Parent OP since
December 31, 2007.




“Parent Specified
Sections” has the meaning set forth in Section
8.3(a).




“Parent Sub” has the
meaning set forth in the recitals to this Agreement.




“Participation
Agreements” has the meaning set forth in Section
3.16(v).




“Paul Weiss” means
Paul, Weiss, Rifkind, Wharton & Garrison LLP.




“Permitted Liens”
means any (a) mechanics’, materialmens’ and similar Liens with respect to
amounts not yet due and payable which were incurred in the ordinary course of
business or the validity of which is being contested in good faith by
appropriate proceedings (and in connection with such contested items,
appropriate reserves in accordance with GAAP have been set forth on the books of
the Group Company that is the owner of the property (if such reserves are
required by GAAP)) and in all such cases do not adversely affect in any material
respect the current use or operation or the Group Companies’ intended use or
operation as of the date hereof of the applicable property, (b) Liens for Taxes,
assessments or other government charges not yet due and payable or the validity
of which is being contested in good faith by appropriate proceedings and, in the
case of such contested items, for which appropriate reserves in accordance with
GAAP have been set forth on the books of the Group Company that is the owner of
the property (if such reserves are required by GAAP), (c) non-monetary Liens
encumbering any of the Owned Real Property or Leased Real Property which do not
adversely affect in any material respect the current use or operation of the
Owned Real Property or Leased Real Property, including all defects, exceptions,
restrictions, easements, rights of way and encumbrances disclosed in any
existing title insurance policies made available to Parent REIT prior to the
date hereof, (d) zoning, entitlement and other land use and environmental
regulations by any Government Entity, (e) matters affecting title of any lessor
to the property demised under any Company Ground Lease as a result of that
Company Ground Lease or that do not encumber the ground leasehold interest of
any Group Company under any such Company Ground Lease, (f) any Company Leases
that are in effect as of the date hereof or as of the Closing Date and (g) Liens
that secure debt or other obligations reflected as liabilities on the Financial
Statements or specifically identified in the Company Schedules.







8
Certain portions have been
omitted in connection with an application for confidential treatment
therefor.


15


“Permitted
Qualifications” means qualifications included in the 2008 Audited
Financial Statements other than qualifications with respect to recognition of
revenues or expenses relating to ongoing operations.




“Permitted
Transaction” has the meaning set forth in Section
6.13(a).




“Person” means an
individual, partnership, corporation, limited liability company, joint stock
company, unincorporated organization or association, trust, joint venture,
association or other similar entity, whether or not a legal entity.




“Post-Signing Allowances and
Commissions” means (a) any out-of-pocket payments under any lease or
sublease (or amendment or modification of any existing lease or sublease
executed in compliance with this Agreement) executed on or after the date hereof
by any Group Company (as lessor or sublessor, as applicable) and any tenant
thereof that are required to be paid by the landlord thereunder to, or for the
benefit of, the tenant thereunder which is in the nature of a tenant inducement
or concession, including, without limitation, tenant improvement costs, design,
refurbishment and other work allowances, lease buyout costs, and moving
allowances (but excluding free rent); and (b) all brokerage commissions required
to be paid by any of the Group Companies, in each case with respect to any lease
or sublease (or amendment or modification of any existing lease or sublease
executed in compliance with this Agreement) executed on or after the date hereof
by any Group Company (including by reason of the exercise by a tenant under such
a lease or sublease of any renewal option, extension option, expansion option,
lease of additional space, right of first offer, right of first refusal or
similar right or option or the lapse or waiver by a tenant under any lease or
sublease (or amendment or modification of any existing lease or sublease
executed in compliance with this Agreement) executed by any Group Company on or
after the date hereof of any right of cancellation in each case on or after the
date hereof).




“Post-Signing Returns”
has the meaning set forth in Section
6.2(a).




“PR Manager” has the
meaning set forth in the preamble to this Agreement.




“Pre-Signing Allowances and
Commissions” means (a) any unpaid out-of-pocket payments under any lease
or sublease executed prior to the date hereof by any Group Company (as lessor or
sublessor, as applicable) and any tenant thereof that are required to be paid by
the landlord thereunder to, or for the benefit of, the tenant thereunder which
is in the nature of a tenant inducement or concession, including, without
limitation, tenant improvement costs, design, refurbishment and other work
allowances, lease buyout costs, and moving allowances (but excluding free rent);
and (b) all unpaid brokerage commissions required to be paid by any of the Group
Companies, in each case with respect to any lease or sublease executed prior to
the date hereof by any Group Company (including by reason of the exercise by a
tenant under such a lease or sublease of any renewal option, extension option,
expansion option, lease of additional space, right of first offer, right of
first refusal or similar right or option or the lapse or waiver by a tenant
under any lease or sublease executed by any Group Company prior to the date
hereof of any right of cancellation in each case on or after the date
hereof).


16


“Prime Manager” means
Prime Retail Property Management, LLC, a Delaware limited liability
company.




“Prime Retail Marks”
means the “PRIME” name and the Company Owned Intellectual Property set forth on
Schedule 3.12,
any translations, adaptations or derivations of the foregoing, and any mark or
name that incorporates, or is identical or confusingly similar to, any of the
foregoing.




“Prime Retail Series C
Preferred” means the Series C Preferred Units of Prime Retail,
L.P.




“Property Employees”
means all current employees of a Group Company, including those on short-term
disability (and expected to not go on long-term disability) or short-term leave
of absence, whether paid or unpaid, but not on a layoff or long-term disability,
providing individual services at a property of a Group Company (other than
Management Employees).




“Proposed Closing Date
Calculations” has the meaning set forth in Section
2.3(d)(i).




“Qualified Permitted
Lien” means any (a) preemptive rights (none of which will be exercised in
a manner which causes the representations and warranties in Section 3.2(f) to be
untrue), restrictions on transfer or similar encumbrances arising under the
Governing Documents of the Group Companies or under applicable federal, state or
other Laws, (b) any CMBS Transfer Restrictions, and (c) any Liens set forth in
Item 5 under “Defaults” on Schedule
3.4(f).




“Rent Roll” has the
meaning set forth in Section
3.16(h).




“Representative” has
the meaning set forth in Section
11.1(a).




“Representative Assumable
Claim” has the meaning set forth in Section
10.3(d).




“Required Consents”
has the meaning set forth in Section
8.1(b).




“Responsible Party”
has the meaning set forth in Section
10.3(a).




“Retained Management
Employees” has the meaning set forth in Section
6.10(e).




“SEC” means the United
States Securities and Exchange Commission.




“Securities Act” means
the United States Securities Act of 1933, as amended.




“September 30 Unaudited
Financial Statements” the meaning set forth in Section
3.4(a)(ii).




“Service Contracts”
has the meaning set forth in Section
3.16(j).


17


“Severance, Employment and
Shut-Down Costs” means any out-of-pocket costs or expenses (including
reasonable legal expenses) reasonably incurred, or otherwise required to be paid
by Parent REIT, Parent OP or any of their Affiliates (including any Group
Company at or after the Closing), relating to or arising out of (i) shutting
down any corporate-level offices of the Group Companies (which do not include,
for the avoidance of doubt, any property-level offices), including costs
incurred by a Group Company in order to terminate the leases set forth on Schedule 1.1(E) and
(ii) any liability or obligation, whether arising before or after the Closing
Date, relating to or arising out of (A) any Employee Benefit Plan or Employee
Agreement, (B) any employee benefit, welfare or pension or other obligation,
whether or not scheduled, of any Group Company or applicable to any Employee
that arises or is accrued on or prior to the Closing, (C) the termination of an
Employee at or prior to the Closing (including any change in control and/or
severance payments) other than liabilities under WARN as described in the
exception in Section
6.10(f) and (D) any legal action taken against Parent REIT, Parent OP or
any of their Affiliates (including any Group Company), by any Employee described
in the preceding clause (C); provided, however,
that claims arising out of any claim of employment discrimination relating to
events prior to the Closing (other than arising out of or relating to the
termination of any Employee as contemplated by Section 6.10) shall
not be included in the calculation of Severance Employment and Shut-Down
Costs.




“Special Distribution
Amount” means an amount in cash equal to eighty percent (80%) of the
Estimated Aggregate Consideration Value.




“Specified
Representations” has the meaning set forth in Section
8.2(a).




“St. Augustine” means
LVP St. Augustine Outlets LLC, a Delaware limited liability
company.




“St. Augustine Cash
Amount” means, subject to adjustment pursuant to Section 2.7(b),
(a) $19,989,529 minus (b) the amount
of any sales, use, transfer, conveyance, recordation and filing fees, Taxes and
assessments, including fees in connection with the recordation of instruments
related to the sale of the St. Augustine Interests and/or the St. Augustine Land
and other similar transaction Taxes however designated (but not including
income, franchise or gains Taxes), that are properly levied by any Taxing
Authority and are required by Law, applicable to, imposed upon or arising out of
sale of the St. Augustine Interests and/or the St. Augustine Land.




“St. Augustine
Interests” has the meaning set forth in the recitals to this
Agreement.




“St. Augustine Land”
has the meaning set forth in the recitals to this Agreement.




“Subsidiary” means,
with respect to any Person, any corporation, limited liability company,
partnership, association, or other business entity of which (a) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of such Person or a combination thereof or (b) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by such Person or one or
more Subsidiaries of such Person or a combination thereof and for this purpose,
a Person or Persons own a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of such business entity’s gains or losses or shall be a, or control
any, managing director, managing member or general partner of such business
entity (other than a corporation).  The term “Subsidiary” shall include all
Subsidiaries of such Subsidiary.


18


“Survival Period Termination
Date” has the meaning set forth in Section
10.2(d).




“Target Net Working
Capital” means zero dollars ($0.00).




“Tax” or “Taxes” means (a) any
and all federal, state, provincial, local, foreign and other taxes, levies,
fees, imposts, duties, and similar governmental charges (including any interest,
fines, assessments, penalties or additions to tax imposed in connection
therewith or with respect thereto) including, without limitation (i) taxes
imposed on, or measured by, income, franchise, profits or gross receipts, and
(ii) ad valorem, value
added, capital gains, sales, goods and services, use, real or personal property,
capital stock, license, branch, payroll, estimated withholding, employment,
social security (or similar), unemployment, compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer and
gains taxes, and customs duties and (b) any and all liability for the payment of
any amounts as a result of any express or implied obligation to indemnify any
other person, or any successor or transferee liability, in respect of any items
described in clause
(a) above.




***9




***10




“Tax Returns” means,
with respect to any Tax, any information return for such Tax, and any return,
report, statement, declaration, claim for refund, elections, disclosures,
estimates or document filed or required to be filed under the Law for such Tax,
including any schedule or attachment thereto or amendment thereto.




“Taxing Authority”
means any Governmental Entity having jurisdiction over the assessment,
determination, collection, or other imposition of any Tax.




“Terminated
Agreements” has the meaning set forth in Section
7.1(a).




***11




“Third Party Claim”
has the meaning set forth in Section
10.3(a).




“Threshold” has the
meaning set forth in Section
10.4(d).







9
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


10Certain portions have been omitted in connection with an application for
confidential treatment therefor.


11Certain portions have been omitted in
connection with an application for confidential treatment
therefor.


19


“Transaction
Documents” means this Agreement, the New Company Agreement, the LP
Purchase Agreement, the Tax Matters Agreements, the Escrow Agreement, the GPT
Sale Agreement and the Mill Run Letter Agreement.




“Transaction Taxes”
means any sales, use, transfer, conveyance, recordation and filing fees, Taxes
and assessments, including fees in connection with the recordation of
instruments related thereto and other similar transaction Taxes however
designated (but not including income, franchise or gains Taxes), that are
properly levied by any Taxing Authority and are required by Law, applicable to,
imposed upon or arising out of the Contributions.




“Treasury” means The
United States Department of the Treasury.




“Treasury Regulations”
means the Treasury regulations promulgated under the Code.




***12




“2008 Audited Financial
Statements” has the meaning set forth in Section
2.3(a).




“2008 Unaudited Financial
Statements” has the meaning set forth in Section
3.4(a)(i).




“Unit Consideration”
means the Parent OP Common Units issuable to the Contributors and the Escrow
Account pursuant to Section
2.3(c).




“WARN” means the
Federal Worker Adjustment and Retraining Notification Act, as amended, or any
similar state or local Law.




“Working Capital Escrow
Amount” means five million dollars ($5,000,000).




ARTICLE
2


THE
CONTRIBUTIONS




Section
2.1       Contributions




Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing,
(a) each of Lightstone Holdings, Pro-DFJV, LVP OP, BRM, LRPV and PR Manager
shall contribute, convey and transfer to Parent Sub all of such Contributor’s
right, title and interest in and to the Other Group Companies Contributed
Interests (the “Other
Group Companies Contributions”) and (b) each of Lightstone Prime, LVP OP
and Pro-DFJV shall contribute, convey and transfer to Parent Sub all of such
Person’s right, title and interest in and to the Company Contributed Interests
(the “Company
Contributions,” and together with the Other Group Companies
Contributions, the “Contributions”).







12
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


20


Section
2.2       Closing of theContributions




The
closing of the Contributions and the sale of the St. Augustine Interests and St.
Augustine Land pursuant to Section 2.7(a) (the
“Closing”)
shall take place at 9:00 a.m., New York time, on the fifth (5th)
Business Day after satisfaction (or valid waiver) of the conditions set forth in
Article 8
(other than any conditions that by their terms are to be satisfied at the
Closing, but subject to the satisfaction or valid waiver of such conditions at
the Closing in accordance with this Agreement) (the “Closing Date”), at
the offices of Paul Weiss, 1285 Avenue of the Americas, New York, New York
10019-6064, unless another time, date or place is agreed to in writing by Parent
OP and the Representative; provided that if on
the fifth (5th)
Business Day after satisfaction (or valid waiver) of the conditions set forth in
Article 8, a
Known Claim shall have been submitted to the Claim Arbitrator and the Claim
Arbitrator shall not have determined the aggregate value of such claim in
accordance with Section 2.3(f)(iii),
the Closing Date shall be extended until five (5) Business Days after the Known
Claim value shall have been determined by the Claim Arbitrator.




Section
2.3       Aggregate
ConsiderationValue




(a)           Determination of Final
Enterprise Value.  No later than the fourth (4th) Business Day prior
to the Closing Date, the Company shall deliver to Parent OP (i) a copy of the
audited combined consolidated balance sheet of the Group Companies (including
the St. Augustine Land) as of December 31, 2008 and the related audited combined
consolidated statements of income and cash flows for the fiscal year ended
December 31, 2008 (the “2008 Audited Financial
Statements”) together with (ii) a statement calculating the 2008 Adjusted
NOI.  If the 2008 Adjusted NOI is less than the Trigger Amount (as defined
on Schedule 2.3(a)), the Enterprise Value shall be reduced by an amount equal to
the product of (A) the difference between the Trigger Amount and the 2008
Adjusted NOI and (B) twelve (12); provided that Parent
REIT, in its sole discretion shall have the right to waive (an “NOI Waiver”) any
portion of the adjustment set forth above in respect of any amount by which 2008
Adjusted NOI is less than the Bottom Amount (as defined on Schedule 2.3(a)), in
which case, 2008 Adjusted NOI shall be deemed to equal to the Bottom
Amount.




(b)           Estimated Aggregate
Consideration Value.  No later than the second (2) Business Day
prior to the Closing Date, the Company shall deliver to Parent OP a good faith
calculation of the Estimated Aggregate Consideration Value setting forth the
amount of each of the components thereof and accompanied by reasonable
supporting work papers used by the Company in the preparation thereof.  The
Company shall consult with Parent REIT, Parent OP and the Representative in the
preparation of such calculations, shall provide Parent REIT, Parent OP and the
Representative with a draft thereof showing the components of Estimated
Aggregate Consideration Value (together with any supporting work papers) at
least four (4) Business Days prior to the Closing Date and shall take into
account the reasonable comments of Parent REIT, Parent OP and the Representative
prior to preparing the final calculation of Estimated Aggregate Consideration
Value to be delivered pursuant to this Section
2.3(b).


21


(c)           At
the Closing, subject to Section 2.4 and Section 2.6, Parent
OP shall:




(i)           issue
in the name of the Escrow Agent, for deposit on behalf of the Contributors into
the Escrow Account pursuant to the Escrow Agreement, a number of Parent OP
Common Units (the “Escrow Units”) equal
to the quotient of (a) an amount equal to ten percent (10%) of the Estimated
Aggregate Consideration Value divided by (b) the
Parent Closing Price;  and




(ii)          issue
to the Contributors, pro rata in accordance with each such Contributor’s
Applicable Percentage Interest, a number of Parent OP Common Units equal to the
quotient of (a) an amount equal to ten percent (10%) of the Estimated Aggregate
Consideration Value divided by (b) the
Parent Closing Price.




(d)           Determination
of the Final Aggregate Consideration Value.




(i)           As
soon as practicable, but no later than 120 calendar days after the Closing Date,
Parent OP shall prepare and deliver to the Representative (A) a proposed
calculation of the Net Working Capital as of immediately prior to the Closing,
(B) a proposed calculation of the amount of Closing Date Funded
Indebtedness, (C) a proposed calculation of the amount of Company Transaction
Expenses (including each of the components thereof), and (D) a proposed
calculation of the Aggregate Consideration Value, and, in each case, the
components thereof.  The proposed calculations described in the previous
sentence shall collectively be referred to herein from time to time as the
“Proposed Closing Date
Calculations.”




(ii)          If
the Representative does not give written notice of dispute (an “Aggregate Consideration
Dispute Notice”) to Parent OP by 5:00 p.m. New York City time on the
30th
calendar day following receipt of the Proposed Closing Date Calculations, the
Representative (on behalf of the Contributors) and the Parent Parties agree that
the Proposed Closing Date Calculations shall be deemed to set forth the final
Net Working Capital, Closing Date Funded Indebtedness, Company Transaction
Expenses and Aggregate Consideration Value, in each case, for allpurposes hereunder
(including, without limitation, the determination of the Actual
Adjustment).  If the Representative gives an Aggregate Consideration
Dispute Notice to Parent OP (which Aggregate Consideration Dispute Notice must
set forth, in reasonable detail, the items and amounts in dispute and all other
items and amounts not so disputed shall be deemed final) within such 30-day
period, Parent OP and the Representative shall use reasonable efforts to resolve
the dispute during the 30-day period commencing on the date Parent OP receives
the applicable Aggregate Consideration Dispute Notice from the
Representative.  If the Representative and Parent OP do not agree upon a
final resolution with respect to such disputed items within such 30-day period,
then the remaining items in dispute shall be submitted immediately to
PricewaterhouseCoopers or, if such firm is unable or unwilling to serve, to an
independent nationally-recognized accounting firm mutually acceptable to Parent
OP and the Representative (excluding their respective regularly used accounting
firms) (such accounting firm, the “Accounting
Firm”).  Parent OP and the Representative shall request the
Accounting Firm to render a determination (which determination shall be made
consistent with the terms of this Agreement for calculating the amount(s) in
dispute) with respect to the applicable dispute within 45 days after
referral of the matter to such Accounting Firm, which determination must be in
writing and must set forth, in reasonable detail, the basis therefor.  The
determination made by the Accounting Firm with respect to each of the remaining
disputed items (and only the remaining disputed items) shall not be greater than
or less than the amounts proposed by the Representative and Parent OP, as the
case may be, for each of such disputed items.  The terms of appointment and
engagement of the Accounting Firm shall be as agreed upon between the
Representative and Parent OP, and any associated engagement fees shall initially
be borne by Parent OP; provided, that such
fees shall ultimately be allocated in accordance with Section
2.3(d)(iii).  The Accounting Firm shall act as an arbitrator and not
an expert and the determination of such Accounting Firm shall constitute an
arbitral award and shall be conclusive and binding upon the Parent Parties, the
Contributors and the Representative upon which a judgment may be rendered by a
court having proper jurisdiction thereover.  Parent OP and the
Representative shall jointly revise the Proposed Closing Date Calculations as
appropriate to reflect the resolution of any objections thereto pursuant to this
Section
2.3(d)(ii), and, as revised, such Proposed Closing Date Calculations
shall be deemed to set forth the final Net Working Capital, Closing Date Funded
Indebtedness, Company Transaction Expenses and Aggregate Consideration Value, in
each case, for allpurposes hereunder
(including, without limitation, the determination of the Actual
Adjustment).  The procedures set forth in this Section 2.3 shall be
the sole and exclusive remedy with respect to the determination of the Aggregate
Consideration Value and any disputes with respect to any components
thereof.


22


(iii)         In
the event the Representative and Parent OP submit any unresolved objections to
the Accounting Firm for resolution as provided in Section 2.3(d)(ii),
the responsibility for the fees and expenses of the Accounting Firm shall be as
follows:




(A)           if
the Accounting Firm resolves all of the remaining objections in favor of Parent
OP’s position (the Aggregate Consideration Value so determined is referred to
herein as the “Low
Value”), then all of the fees and expenses of the Accounting Firm shall
be paid by Parent OP, and Parent OP and the Representative shall deliver joint
written instructions to the Escrow Agent instructing the Escrow Agent, subject
to Section
10.7(e), to deliver to Parent OP (from the Escrow Cash then remaining in
the Escrow Account) Escrow Cash equal to the amount of such payment by Parent OP
(including, for this purpose, the amount of any initial engagement fees paid by
Parent OP pursuant to Section
2.3(d)(ii));




(B)           if
the Accounting Firm resolves all of the remaining objections in favor of the
Representative’s position (the Aggregate Consideration Value so determined is
referred to herein as the “High Value”), then
Parent OP shall be responsible for all of the fees and expenses of the
Accounting Firm; and




(C)           if
the Accounting Firm neither resolves all of the remaining objections in favor of
Parent OP’s position nor resolves all of the remaining objections in favor of
the Representative’s position (the Aggregate Consideration Value so determined
is referred to herein as the “Actual Value”), then
all of the fees and expenses of the Accounting Firm shall be paid by Parent OP,
and Parent OP and the Representative shall deliver joint written instructions to
the Escrow Agent instructing the Escrow Agent, subject to Section 10.7(e), to
deliver to Parent OP (from the Escrow Cash then remaining in the Escrow Account)
Escrow Cash equal to that fraction of the fees and expenses of the Accounting
Firm paid by Parent OP (including, for this purpose, the amount of any initial
engagement fees paid by Parent OP pursuant to Section 2.3(d)(ii))
equal to (x) the difference between the High Value and the Actual Value over (y)
the difference between the High Value and the Low Value.


23


(iv)         Parent
OP shall, and shall cause each Group Company to, make its relevant financial
records available to the Representative and its accountants (subject to the
execution of customary releases and indemnity agreements) and other
representatives at reasonable times during the review by the Representative of,
and the resolution of any objections with respect to, the Proposed Closing Date
Calculations.




(e)           Adjustment
to Estimated Aggregate Consideration Value.




(i)
           If the Actual
Adjustment is a positive amount, then within three (3) Business Days after the
date on which the Aggregate Consideration Value is finally determined pursuant
to Section
2.3(d) above, Parent OP shall distribute, or cause to be distributed, out
of the proceeds of additional borrowings pursuant to the Financing which have
the benefit of the Member Guarantees, to each of the Contributors an amount in
cash equal to its Applicable Percentage Interest of such positive amount and
Parent OP and the Representative shall deliver joint written instructions to the
Escrow Agent instructing the Escrow Agent to deliver an amount in cash equal to
the Working Capital Escrow Amount to the Representative for further distribution
to the Contributors in accordance with their Applicable Percentage Interests;
and




(ii)           If
the Actual Adjustment is a negative amount, then, subject to Section 10.7(e),
within three (3) Business Days after the date on which the Aggregate
Consideration Value is finally determined pursuant to Section 2.3(d) above,
Parent OP and the Representative shall deliver joint written instructions to the
Escrow Agent instructing the Escrow Agent to deliver to Parent OP (from the
Escrow Cash in the Escrow Account) Escrow Cash equal to the absolute value of
such negative amount and, if the Working Capital Escrow Amount is greater than
the absolute value of the Actual Adjustment, to distribute the amount by which
the Working Capital Escrow Amount exceeded the absolute value of the Actual
Adjustment to the Representative for further distribution to the Contributors in
accordance with their Applicable Percentage Interests.  In the event that
the Working Capital Escrow Amount is less than the absolute value of the Actual
Adjustment, then the instruction described in the preceding sentence shall
include a joint written instruction to the Escrow Agent instructing the Escrow
Agent to deliver to Parent OP from the Escrow Units then remaining in the Escrow
Account) Escrow Units equal in value (valued at the Parent Closing Price) to the
difference between the absolute value of the Actual Adjustment and Working
Capital Escrow Amount.




(f)
           Known Claims
Escrow




(i)
           During the
period of ten (10) Business Days prior to the Closing Date, the Parent Parties
shall notify the Representative in writing, along with reasonable supporting
documentation, if they believe any representations or warranties contained in
Article 3 have
been breached (and not cured) in a manner that would give rise to a claim by the
Parent Indemnitees after the Closing pursuant to Section 10.2(a),
after giving effect to the limitations set forth Section 10.4 (other
than Section
10.4(d)) (each, a “Known Claim” and
collectively, the “Known Claims”).
Parent OP and the Representative shall attempt in good faith to agree upon the
value of each Known Claim within five (5) Business Days of the Representative’s
receipt of notice of the Known Claims.


24


(ii)           If
Parent OP and the Representative are unable to agree upon the value of any Known
Claim within the five (5) Business Day period set forth in Section 2.3(f)(i),
Parent OP and the Representative shall each promptly select an arbitrator with
expertise in the business of operating outlet centers or shopping malls, which
arbitrators shall then select and mutually-agree upon a third independent
arbitrator with similar expertise (the “Claim Arbitrator”)
and Parent OP and the Representative shall promptly submit all unresolved Known
Claims to the Claim Arbitrator, along with each party’s final estimate of the
value of the unresolved Known Claim(s) (together with such supporting
documentation as such party shall deem appropriate). Within no more than ten
(10) days after the submission of the unresolved Known Claims, the Claim
Arbitrator shall determine if each unresolved Known Claim has been property
asserted and, if so properly asserted, shall choose either the final estimate of
Parent OP or the final estimate of the Representative, selecting the final
estimate of the value of the Known Claim that the Claim Arbitrator determines to
be more reasonable, taking into account all of the factors deemed relevant by
the Claim Arbitrator.  The party submitting the majority of the estimates
of Known Claims that were not selected by the Claim Arbitrator shall pay all of
the fees and expenses of the Claim Arbitrator.  For purposes of Section 2.3(f)(iii),
the value of any Known Claim shall be equal to the amount agreed upon by Parent
OP and the Company or determined by the Claim Arbitrator.




(iii)          If,
as of the Closing Date, there shall be Known Claims which, in the aggregate,
have an aggregate value in excess of $20,000,000, an amount (the “Known Claims Escrow
Amount”) equal to (i)(A) the aggregate value of the Known Claims minus (B)
$20,000,000, or (ii) such smaller amount as shall be determined by Parent REIT
in its sole discretion, will be deposited with the Escrow Agent at the Closing
pursuant to Section
2.5(b).




(iv)         The
notification of a Known Claim, and any determination by the Claim Arbitrator
with respect to the validity or value of any Known Claim, shall be made for the
sole purpose of this Section 2.3(f) and
Section 2.5(b)
and shall not limit or otherwise affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement or the right of the Parent Indemnitees to be
indemnified and recover the full amount of any Claim pursuant to Article
10.




Section
2.4       Contribution of Unit
Consideration to New Company




The
Contributors shall be deemed to have received the Unit Consideration in exchange
for the Contributions and to have immediately contributed the Unit Consideration
to New Company in exchange for an equal number of New Company Common
Units.  In furtherance of the preceding sentence, at or promptly following
the Closing, Parent OP shall, on behalf of each of the Contributors and the
Escrow Agent, contribute the Parent OP Common Units issuable to the Contributors
and the Escrow Agent to New Company in exchange for an equal number of New
Company Common Units to be issued in the name of such Contributor or the Escrow
Agent, as applicable.  Each Contributor and the Escrow Agent has or shall
be deemed to have instructed Parent OP to make the foregoing contribution on its
behalf in accordance with the terms of this Section 2.4. 
Notwithstanding any provision of this Agreement to the contrary, in no event
shall Parent OP Common Units be delivered or registered in the name of any
Contributor or the Escrow Agent.  All references to Escrow Units in this
Agreement shall, to the extent applicable, be deemed to refer to the New Company
Common Units issued in the name of the Escrow Agent in accordance with the terms
of this Section
2.4.


25


Section
2.5       ***13




Section
2.6       Book Entry; No Fractional
Units




(a)           All
Parent OP Common Units and New Company Common Units issuable pursuant to this
Agreement shall be issued in book-entry form and shall not be represented by
certificates or scrip.




(b)           In
lieu of the issuance of any fractional Parent OP Common Units, Parent OP shall
distribute to each Contributor who otherwise would be entitled to receive such
fractional Parent OP Common Unit an amount in cash (rounded to the nearest
cent), out of the proceeds of additional borrowings pursuant to the Financing
which have the benefit of the Member Guarantees, determined by multiplying (i)
the Parent Closing Price by (ii) the fraction of a Parent OP Common Unit
(rounded to the nearest thousandth when expressed in decimal form) of a Parent
OP Common Unit which such Member would otherwise be entitled to receive pursuant
to this Article
2.




Section
2.7       Purchase and Sale of St.
AugustineInterests and St. AugustineLand




(a)           Subject
to the terms and conditions set forth in this Agreement, at the Closing, (i) LVP
OP shall sell, transfer, assign and deliver (or cause to be sold, transferred,
assigned and delivered) to Parent Sub, and Parent Sub shall purchase and
acquire, all of LVP OP’s right, title and interest in and to the St. Augustine
Interests and the St. Augustine Land and (ii) Parent Sub shall pay to LVP OP an
amount in cash equal to the St. Augustine Cash Amount.




(b)           Real
and personal property Taxes with respect to the St. Augustine Interests and St.
Augustine Land for the taxable period which includes the Closing Date shall be
prorated between LVP OP and Parent Sub, with such Taxes being borne by LVP OP
based on the ratio of the number of days in the relevant period prior to and
including the Closing Date to the total number of days in the actual taxable
period with respect to which such Taxes are assessed, irrespective of when such
Taxes are due, become a lien or are assessed, and such Taxes being borne by
Parent Sub based on the ratio of the number of days in the relevant period after
the Closing Date to the total number of days in the actual taxable period with
respect to which such Taxes are assessed, irrespective of when such Taxes are
due, become a lien or are assessed.  Following Closing, Parent Sub and LVP
OP shall cooperate to calculate and make such payments to each other to give
effect to the foregoing pro ration.







13
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


26




ARTICLE
3


REPRESENTATIONS
AND WARRANTIES


RELATING
TO THE GROUP COMPANIES




Except as
set forth in the disclosure schedules (the “Company Schedules”)
of the Company delivered to Parent REIT and Parent OP concurrently with the
execution and delivery of this Agreement (provided that any fact or condition
disclosed in any Schedule in the Company Schedules will be deemed to be
disclosed in any other Schedule in the Company Schedules and for purposes of any
other representation or warranty made elsewhere in Article 3 to the
extent that it is reasonably apparent that such disclosure is applicable to such
other Schedule in the Company Schedules (notwithstanding the omission of a
reference or cross reference thereto) or such other representation or warranty)
and assuming, in each case, the accuracy of the representations and warranties
of the Parent Parties in Article 5, the
Company hereby represents and warrants to Parent OP as follows (it being
understood that the representations and warranties in this Article 3 shall not
be deemed to have been breached as a result of (x) any action taken by a Group
Company after the date hereof (including the entry into any Contract), to the
extent such action was taken in compliance with this Agreement, (y) any action
not taken by a Group Company after the date hereof, to the extent such action
was prohibited by this Agreement, or (z) the fact that any matter described in
clause (x) or (y) above was (i) not included in the Company Schedules or (ii)
not disclosed to or made available to the Parent Parties prior to the date
hereof):




Section
3.1       Organization and
Qualification; Subsidiaries




(a)           Each
Group Company is duly organized, validly existing and in good standing (or the
equivalent thereof) under the laws of its respective jurisdiction of
organization, and has all requisite company power and authority to own, lease
and operate its properties and to carry on its businesses as presently
conducted.




(b)           Each
Group Company is duly qualified or licensed to transact business and is in good
standing (or the equivalent thereof) in each jurisdiction in which the property
owned, leased or operated by it, or the nature of the business conducted by it,
makes such qualification or licensing necessary.




(c)           The
Company has made available to Parent REIT prior to the date hereof complete and
accurate copies of the Governing Documents and, to the extent in existence, the
stock record book, the minute book and other corporate or similar organizational
records of each Group Company.  The other records (corporate, financial and
other) of each Group Company have been maintained in accordance with applicable
requirements of Law and in a manner consistent with accounting policies
appropriate for entities engaged in similar businesses.




Section
3.2       Capitalization of the Group
Companies




(a)           The
authorized membership interests of the Company consist of an unlimited number of
authorized Company Membership Interests.  All of the issued and outstanding
Company Membership Interests have been duly authorized and validly issued, and,
as of the date hereof, are owned of record and beneficially as set forth on
Schedule 3.2(a)(i)
free and clear of any preemptive rights, restrictions on transfer and Liens, in
each case other than Qualified Permitted Liens.  As of the Closing Date,
the Company Membership Interests will be owned of record and beneficially as set
forth on Schedule 3.2(a)(ii)
free and clear of any preemptive rights, restrictions on transfer and Liens, in
each case other than Qualified Permitted Liens.  Except as set forth on
Schedule 3.2(a)(i)
or Schedule 3.2(a)(ii),
there are (x) no other equity securities of the Company, (y) no
securities of the Company convertible into or exchangeable for equity securities
of the Company, and (z) no agreements, arrangements, or other
subscriptions, options, warrants, conversion rights, stock appreciation rights,
“phantom” stock, stock units, calls, claims, rights of first refusal, rights
(including preemptive rights), commitments, arrangements or agreements to which
the Company is a party or by which it is bound in any case obligating the
Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be
issued, delivered, sold, purchased, redeemed or acquired, stock or other equity
securities of the Company, or obligating the Company to grant, extend or enter
into any such subscription, option, warrant, conversion right, stock
appreciation right, call, right, commitment, arrangement or
agreement.


27


(b)           Schedule 3.2(b) sets
forth the jurisdiction of organization, the authorized capital stock or other
equity interests and the number and type of the issued and outstanding shares of
capital stock or other equity interests of each Subsidiary of the Company. 
Except as set forth on Schedule 3.2(b),
no Group Company directly or indirectly owns any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable for, at any
time, any equity or similar interest in, any corporation, partnership, limited
liability company, joint venture or other business association or entity. 
Schedule 3.2(b)
sets forth the name, owner, jurisdiction of formation or organization (as
applicable) and percentages of outstanding equity securities owned, directly or
indirectly, by each Group Company, with respect to each corporation,
partnership, limited liability company, joint venture or other business
association or entity which such Group Company owns, directly or indirectly, any
equity or equity-related securities.




(c)           Except
as set forth on Schedule 3.2(c)
or as set forth in its Governing Documents made available to Parent REIT prior
to the date hereof, all outstanding equity securities of each Subsidiary of the
Company (except to the extent such concepts are not applicable under the
applicable Law of such Subsidiary’s jurisdiction of formation or other
applicable Law) have been duly authorized and validly issued, are free and clear
of any preemptive rights, restrictions on transfer and Liens, in each case other
than Qualified Permitted Liens, and are owned, beneficially and of record, by
another Group Company.  Except as set forth on Schedule 3.2(c),
there are (x) no other equity securities of the Subsidiaries of the
Company, (y) no securities of the Subsidiaries of the Company convertible
into or exchangeable for equity securities of the Subsidiaries of the Company,
and (z) no agreements, arrangements, or other subscriptions, options,
warrants, conversion rights, stock appreciation rights, “phantom” stock, stock
units, calls, claims, rights of first refusal, rights (including preemptive
rights), commitments, arrangements or agreements to which any of the
Subsidiaries of the Company is a party or by which it is bound in any case
obligating the Subsidiaries of the Company to issue, deliver, sell, purchase,
redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed
or acquired, stock or other equity securities of the Subsidiaries of the
Company, or obligating the Subsidiaries of the Company to grant, extend or enter
into any such subscription, option, warrant, conversion right, stock
appreciation right, call, right, commitment, arrangement or
agreement.


28


(d)           Schedule 3.2(d)(i)
sets forth the authorized membership interests of each of the Other Group
Companies. All of the issued and outstanding membership interests of the Other
Group Companies have been duly authorized and validly issued, are free and clear
of any preemptive rights, restrictions on transfer and Liens, in each case other
than Qualified Permitted Liens.  As of the date hereof, the membership
interests of each Other Group Company are owned of record and beneficially as
set forth on Schedule 3.2(d)(ii)
free and clear of any preemptive rights, restrictions on transfer and Liens, in
each case other than Qualified Permitted Liens.  As of the Closing Date,
the membership interests of each Other Group Company will be owned of record and
beneficially as set forth on Schedule 3.2(d)(iii)
free and clear of any preemptive rights, restrictions on transfer and Liens, in
each case other than Qualified Permitted Liens.  Except as set forth on
Schedule 3.2(d)(i),
Schedule
3.2(d)(ii) or Schedule 3.2(d)(iii),
there are (x) no other equity securities of the Other Group Companies,
(y) no securities of the Other Group Companies convertible into or
exchangeable for equity securities of the Other Group Companies, and (z) no
agreements, arrangements, or other subscriptions, options, warrants, conversion
rights, stock appreciation rights, “phantom” stock, stock units, calls, claims,
rights of first refusal, rights (including preemptive rights), commitments,
arrangements or agreements to which any of the Other Group Companies is a party
or by which it is bound in any case obligating the Other Group Companies to
issue, deliver, sell, purchase, redeem or acquire, or cause to be issued,
delivered, sold, purchased, redeemed or acquired, stock or other equity
securities of the Other Group Companies, or obligating the Other Group Companies
to grant, extend or enter into any such subscription, option, warrant,
conversion right, stock appreciation right, call, right, commitment, arrangement
or agreement.




(e)           Schedule 3.2(e) sets
forth the jurisdiction of organization, the authorized capital stock or other
equity interests and the number and type of the issued and outstanding shares of
capital stock or other equity interests of each Subsidiary of each Other Group
Company all of which are owned beneficially and of record, directly or
indirectly, by the relevant Other Group Company or a Subsidiary thereof. 
Except as set forth on Schedule 3.2(e), no
Other Group Company directly or indirectly owns any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for, at any
time, any equity or similar interest in, any corporation, partnership, limited
liability company, joint venture or other business association or entity. 
Except as set forth on Schedule 3.2 (e)
or as set forth in its Governing Documents, all outstanding equity securities of
each Subsidiary of each Other Group Company (except to the extent such concepts
are not applicable under the applicable Law of such Subsidiary’s jurisdiction of
formation or other applicable Law) have been duly authorized and validly issued,
are free and clear of any preemptive rights, restrictions on transfer and Liens,
in each case other than Qualified Permitted Liens, and are owned, beneficially
and of record, by such Other Group Company or its Subsidiary.  Except as
set forth on Schedule 3.2(e),
there are (x) no other equity securities of the Subsidiaries of any Other
Group Company, (y) no securities of the Subsidiaries of any Other Group
Company convertible into or exchangeable for equity securities of the
Subsidiaries of any Other Group Company, and (z) no agreements,
arrangements, or other subscriptions, options, warrants, conversion rights,
stock appreciation rights, “phantom” stock, stock units, calls, claims, rights
of first refusal, rights (including preemptive rights), commitments,
arrangements or agreements to which any of the Subsidiaries of any Other Group
Company is a party or by which it is bound in any case obligating the
Subsidiaries of any Other Group Company to issue, deliver, sell, purchase,
redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed
or acquired, stock or other equity securities of the Subsidiaries of any Other
Group Company, or obligating the Subsidiaries of any Other Group Company to
grant, extend or enter into any such subscription, option, warrant, conversion
right, stock appreciation right, call, right, commitment, arrangement or
agreement.


29


(f)
           Except as set
forth on Schedule
3.2(f), upon consummation of the Contemplated Transactions, including the
execution and delivery of the documents to be delivered at the Closing, Parent
OP shall be, as direct or beneficial owner, vested with good and marketable
title in and to all of the outstanding equity interests of each Group Company,
free and clear of any preemptive rights, restrictions on transfer and Liens (in
each case other than (i) Liens created pursuant to the Financing, (ii) Liens
otherwise created by the Parent Parties or any of their Affiliates (other than a
Group Company prior to Closing) or (iii) Qualified Permitted
Liens).




(g)           Except
as set forth on Schedule 3.2(b),
Schedule 3.2(c)
or Schedule
3.2(d)(ii), no Employee (or Permitted Designee of an Employee as defined
in any Employee Agreement) has any ownership interests in any of the Group
Companies. After the Closing, there will not be any outstanding offers of an
opportunity to purchase an equity interest in any development project of any
Group Company, or any Group Company or any Owned Real Properties, in each case
with any Employees who are terminated at or prior to the Closing.




Section
3.3       Authority




(a)           The
Company has the requisite limited liability company power and authority to
execute and deliver this Agreement and the other Transaction Documents to which
it is a party and to consummate the Contemplated Transactions.  The
execution and delivery of this Agreement and the other Transaction Documents to
which it is a party and the consummation of the Contemplated Transactions that
are required to be performed by the Company have been duly authorized by all
necessary limited liability company action (including any member vote or
approval) on the part of the Company.  This Agreement and the other
Transaction Documents to which it is a party has been duly executed and
delivered by the Company and constitutes the valid, legal and binding agreement
of the Company, enforceable against the Company in accordance with their terms,
except to the extent that enforceability may be limited by (i)  applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).




(b)           Each
of Mill Run and Ewell has the requisite limited liability company power and
authority to execute and deliver the LP Purchase Agreement and to consummate the
transactions contemplated thereby.  The execution and delivery of the LP
Purchase Agreement and the consummation of the transactions contemplated thereby
that are required to be performed by Mill Run and Ewell have been duly
authorized by all necessary limited liability company action (including any
member vote or approval) on the part of Mill Run and Ewell.  The LP
Purchase Agreement has been duly executed and delivered by Mill Run and Ewell
and constitutes the valid, legal and binding agreement of Mill Run and Ewell,
enforceable against Mill Run and Ewell in accordance with its terms, except to
the extent that enforceability may be limited by (i)  applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors’ rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).  The limited liability company interests in Mill Run
and Ewell are uncertificated and have been maintained in book entry form
only.


30


Section
3.4       Financial
Statements;
Indebtedness




(a)           Attached
hereto as Schedule 3.4 are
true and complete copies of the following financial statements (such financial
statements, the “Financial
Statements”):




(i)
           the unaudited
combined consolidated balance sheet of the Group Companies (including the St.
Augustine Land) as of December 31, 2008 and the related unaudited combined
consolidated statements of income and cash flows for the fiscal year ended
December 31, 2008 (the “2008 Unaudited Financial
Statements”); and




(ii)           the
unaudited combined consolidated balance sheet of the Group Companies (including
the St. Augustine Land) as of September 30, 2009 (the “Latest Balance
Sheet”) and the related unaudited combined consolidated statements of
income and cash flows for the nine month period ending on such date (the “September 30 Unaudited
Financial Statements”).




(b)           Except
as set forth on Schedule 3.4,
each Financial Statement (x) has been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, from the
books and records of the Group Companies (including the St. Augustine Land),
except as may be indicated in the notes thereto and except for the absence of
footnotes and subject to year-end adjustments which are immaterial in amount,
and (y) fairly presents, in all material respects, the consolidated
financial position of the Group Companies as of the dates thereof, their results
of operations and cash flows for the periods then ended (subject, in the case of
the September 30 Unaudited Financial Statements, to the absence of footnotes and
to year-end adjustments which are immaterial in amount).




(c)           Each
of the Group Companies maintains internal accounting controls which provide
reasonable assurance that (i) transactions are executed with management’s
authorization; (ii) transactions are recorded as necessary to permit preparation
of the financial and statutory statements of the Group Companies and to maintain
accountability for the Group Companies’ consolidated assets; (iii) access to the
Group Companies’ assets is permitted only in accordance with management’s
authorization; and (iv) the reporting of the Group Companies’ assets is compared
with existing assets at regular intervals.  None of the Group Companies has
received or otherwise had or obtained knowledge of any material complaint,
allegation, assertion or claim, whether written or oral, regarding the
accounting or auditing practices, procedures, methodologies or methods,
including any complaint, allegation, assertion or claim that any of the Group
Companies has engaged in illegal accounting or auditing practices, in each case
which material complaint, allegation, assertion or claim remains
unresolved.




(d)           Except
as set forth on Schedule 3.4(d), none
of the Group Companies has entered into any Off Balance Sheet
Arrangements.




(e)           Except
as set forth on Schedule 3.4(e),
Schedule 3.4(f)
and Schedule
3.4(g) there is no outstanding Funded Indebtedness (except for Funded
Indebtedness incurred after the date hereof in compliance with Section 6.1(b). 
Schedule 3.4(e)
sets forth a list of all capitalized leases, letters of credit and “synthetic
loans” to which any Group Company is a party or beneficiary.


31


(f)
           Schedule 3.4(f) sets
forth a true and complete list of all Funded Indebtedness which has a fixed
interest rate (the “Fixed Rate Debt”)
(except for Funded Indebtedness incurred after the date hereof in compliance
with Section
6.1(b)).  The Company has made available true, correct and complete
copies of documents evidencing each Fixed Rate Debt to Parent REIT.  The
Group Companies have made all payments of principal, interest and any other sums
that are due and payable under, or with respect to the Fixed Rate Debt. 
Except as set forth on Schedule 3.4(f), no
Group Company, on the one hand, nor, to the knowledge of the Company, any other
party on the other hand, is in breach, default or an event of default under any
Fixed Rate Debt, which breach, default or an event of default remains uncured,
and no uncured event has occurred which with or without the lapse of time or the
giving of notice or opportunity to cure would constitute a breach, default or
event of default under any Fixed Rate Debt.




(g)           ***14




(h)           At
the Closing, the Group Companies will have possession of all books, records and
other documents (whether in paper or electronic form) pertaining to their
businesses, properties and assets (including, without limitation business plans,
financial statements, work papers and Tax Returns); provided that the
Group Companies will be deemed to have possession of electronic records
maintained by an unaffiliated third party service provider if such Group
Companies have customary access thereto in accordance with contracts disclosed
in the Company Disclosure Schedules.




Section
3.5       Consents and Approvals; No
Violations




(a)           Except
as set forth on Schedule 3.5(a), no
consent, approval, order or authorization of, or registration, declaration or
filing with, notice to or permit from any Governmental Entity is necessary for
the execution, delivery or performance of this Agreement and the other
Transaction Documents to which it is a party by the Company, or the consummation
by the Company of the Contemplated Transactions.  Neither the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party by the Company nor the consummation by the Company of the
Contemplated Transactions will (a) conflict with or result in any breach of
any provision of any Group Company’s Governing Documents, (b) except as set
forth on Schedule
3.5(a), and assuming the receipt of the Required Consents and repayment
of the Floating Rate Debt at Closing, result in a violation or breach of, or
cause acceleration, or constitute (with or without due notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration), or require any notice or consent under any of the terms,
conditions or provisions of any Contract to which any Group Company is a party
or by which it or any of their respective properties is bound or affected,
(c) conflict with or violate any Law or Order applicable to any Group
Company or any of their respective properties or assets, or (d) except as
expressly contemplated by this Agreement and the other Transaction Documents to
which it is a party, result in the creation of any Lien upon any of the assets
of any Group Company, the Company Membership Interests or any membership or
other equity interest of any Group Company.







14
Certain portions have been omitted in connection with an application for
confidential treatment therefor.


32


(b)           Without
limiting the generality of the foregoing, the Contemplated Transactions do not,
except as contemplated by the Required Consents, the terms of any Funded
Indebtedness, or the Governing Documents of the Group Companies, violate any
provision regarding direct or indirect transfers of interests in any Group
Company that are set forth in any agreement relating to the operation, financing
or ownership of any Group Company.




Section
3.6       Material
Contracts




(a)           Except
as set forth on Schedule 3.6(a)
(collectively, the “Material Contracts”)
and except for this Agreement and other Contracts entered into in compliance
with Section
6.1(b) after the date hereof, no Group Company is a party to or bound
by:




(i)           
any mortgage, deed of trust, loan agreement, letter of credit, note, bond,
debenture or indenture or other similar document in respect of indebtedness for
borrowed money, including any such document relating to Funded Indebtedness or
any Owned Real Property;




(ii)           any
agreement which would restrict it or any of its Affiliates (including Parent OP
or any of its Affiliates after the Closing) from prepaying any of their
indebtedness without penalty or premium at any time or which requires any of
them to maintain any amount of indebtedness;




(iii)          any
Off Balance Sheet Arrangement;




(iv)         any
guarantee of any indebtedness or debt securities or other obligation of another
Person (other than any Group Company), any “keep well” or other agreement to
maintain any financial statement condition of another Person or any arrangement
having the economic effect of any of the foregoing;




(v)          any
partnership agreement, limited liability company agreement, joint venture or
other similar agreement (other than the Company LLC Agreement) relating to the
formation, creation, operation, management or control of any partnership or
joint venture;




(vi)         any
agreement for the purchase or lease of materials, supplies, goods, services or
equipment that is not terminable on thirty (30) days notice by such Group
Company and that provides for or is reasonably likely to require either
(A) annual aggregate payments by, or other consideration from, such Group
Company of $100,000 or more, or (B) aggregate payments from such Group
Company of $100,000 or more over the remaining term of the
agreement;




(vii)        any
contract or agreement that restricts it or any of its Affiliates (including
Parent OP or any of its Affiliates after the Closing) from (A) engaging in any
line of business, (B) owning any properties or assets, (C) conducting any
business operations, property ownership, or property development in any
geographic area, (D) engaging in business with, or providing or acquiring
services or products from or to, any Person;


33


(viii)       any
agreement pursuant to which it manages or provides services with respect to any
real properties other than the Owned Real Properties;




(ix)          any
agreement entered into by it providing for the sale of, or option to sell, any
Owned Real Properties or the purchase of, or option to purchase, any real estate
not yet consummated as of the date hereof;




(x)           any
contract or agreement pursuant to which it agrees to indemnify or hold harmless
any director, officer or Employee (in each case other than the Governing
Documents for the Group Companies made available to Parent REIT prior to the
date hereof) or, other than indemnities provided in the ordinary course of
business, any third party;




(xi)          any
agreement pursuant to which it has potential liability in respect of any
purchase price adjustment, earn-out or contingent purchase price;
or




(xii)         any
agreement to consummate any future disposition or acquisition of assets or
properties, or any future merger or business combination with respect to any
Group Company.




(b)           Except
as set forth on Schedule 3.6(b),
each Material Contract is valid and binding on the applicable Group Company and
each other party thereto and enforceable in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting generally the enforcement of creditors’ rights and subject to general
principles of equity).  Except as set forth on Schedule3.6(b), since January
1, 2009, no Group Company has received written notice of any default under any
Material Contract and no Group Company is in, or alleged to be in, breach or
default under any of the Material Contracts and no condition or event exists
which with the giving of notice or the passage of time, or both, would
constitute a breach or default.  The Company has made available to Parent
REIT prior to the date hereof true and complete copies of each Material
Contract.




Section
3.7       Absence of
Changes




Except as
set forth on Schedule 3.7,
(a) since the date of the Latest Balance Sheet, there have not been any events,
developments or occurrences (nor have any facts become known) that, individually
or in the aggregate, have had or would reasonably be expected to have a Company
Material Adverse Effect and (b) during the period beginning on the date of the
Latest Balance Sheet and ending on the date of this Agreement, the Group
Companies have not taken, or authorized the taking of, any of the actions of the
type described in Section 6.1(b)(i),
Section
6.1(b)(ii), Section 6.1(b)(iii),
Section
6.1(b)(iv), Section 6.1(b)(v),
Section
6.1(b)(ix), Section 6.1(b)(x),
Section
6.1(b)(xi), Section 6.1(b)(xii),
Section
6.1(b)(xx), Section 6.1(b)(xxi)
or Section
6.1(b)(xxiii) which had such action been taken after the date of this
Agreement would be in violation of such foregoing subsections of Section
6.1(b).




Section
3.8       Litigation




Except as
set forth on Schedule 3.8,
there is no suit, litigation, arbitration, claim, action, proceeding or
investigation pending or threatened against any Group Company or any of their
respective properties or assets, including any facilities that are currently or
were formerly owned by any Group Company, before any Governmental Entity. 
Except as set forth on Schedule 3.8, no
Group Company (or any of its properties or assets) is subject to any outstanding
Order.


34


Section
3.9       Compliance with Applicable
Law




(a)           Except
as set forth on Schedule 3.9(a),
the Group Companies hold all permits, licenses, approvals, certificates,
variances, exemptions, orders, franchises, consents and other authorizations of
and from all, and have made all declarations and filings with, Governmental
Entities necessary for the lawful conduct of their respective businesses, as
presently conducted or intended to be conducted by such Group Company as of the
date hereof, (“Company
Permits”).  All of the Company Permits are valid and in full force
and effect and the Group Companies are in compliance with the terms of the
Company Permits.  No suspension or cancellation of any Company Permit is
pending or threatened, and no such suspension or cancellation will result from
the Contemplated Transactions.  The Company Permits collectively constitute
all of the permits necessary to permit the Group Companies to lawfully conduct
and operate their business as currently conducted and to own and use their
properties and assets in the manner in which such properties and assets are
currently owned and used.




(b)           Except
as set forth on Schedule 3.9(b),
the business of the Group Companies is, and has been at all times, operated in
compliance with all applicable Laws.  No investigation or review by any
Governmental Entity with respect to the Group Companies is pending or
threatened.




(c)           Within
the last five (5) years, none of the Group Companies or their respective
directors, officers, agents or employees acting for or on behalf of any of the
Group Companies, has, in violation of any applicable Law: (i) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form, whether in money,
property, or services (w) to obtain favorable treatment in securing business,
(x) to pay for favorable treatment for business secured, or (y) to obtain
special concessions or for special concessions already obtained, for or in
respect of any Group Company; (ii) received, directly or indirectly, any
rebates, payments, commissions, promotional allowances or any other economic
benefits, regardless of their nature or type, from any customer, governmental
employee or other person or entity with whom any Group Company will do business
directly or indirectly; or (iii) established or maintained any fund or asset
that has not been recorded in the books and records of the Group
Companies.




(d)           This
Section 3.9
does not relate to (i) environmental matters (which are the subject of Section 3.11), Tax
matters (which are the subject of Section 3.14) or real
property matters (which are the subject to Section 3.16) or (ii)
Laws expressly addressed by Section 3.10
(Employee Benefits Matters) or Section 3.13 (Labor
Matters).




Section
3.10    Employee Benefit
Plans




(a)           Schedule 3.10(a)
contains a true and complete list of each Employee Benefit Plan and each
Employee Agreement.  Neither the Group Companies nor any ERISA Affiliate
has any plan or commitment, whether legally binding or not, to establish any new
Employee Benefit Plan, to enter into any Employee Agreement or to modify or to
terminate any Employee Benefit Plan or Employee Agreement (except to the extent
required by Law or to conform any such Employee Benefit Plan or Employee
Agreement to the requirements of any applicable Law, in each case as previously
disclosed to Parent REIT and Parent OP, or as required by this Agreement), nor
has any intention to do any of the foregoing been communicated to
Employees.


35


(b)           The
Group Companies have made available to Parent REIT (i) current, accurate and
complete copies of all documents constituting each Employee Benefit Plan and
each Employee Agreement, including all amendments thereto, side letters of
understanding and trust or funding agreements with respect thereto; (ii) the two
(2) most recent annual actuarial valuations, if any, prepared for each Employee
Benefit Plan; (iii) the two (2) most recent annual reports (Series 5500 and all
schedules thereto), if any, required under ERISA in connection with each
Employee Benefit Plan or related trust; (iv) a statement of alternative form of
compliance pursuant to Department of Labor Regulation §2520.104-23, if any,
filed for each Employee Benefit Plan which is an “employee pension benefit plan”
as defined in Section 3(2) of ERISA for a select group of management or highly
compensated employees; (v) the most recent determination letter received from
the IRS, if any, for each Employee Benefit Plan and related trust which is
intended to satisfy the requirements of Section 401(a) of the Code; (vi) the
most recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
Employee Benefit Plan and (vii) IRS letters concerning the audit of the 2007
plan year of the Lightstone Group, LLC 401(k) Plan and the transfer of
administration to the Group Companies.




(c)           No
Group Company or the Prime Manager contributes to or has been obligated to
contribute during the six (6) years preceding the date hereof to any
“multiemployer plan” (as defined in Section 3(37) of ERISA) or any “defined
benefit plan” (as defined in Section 3(35) of ERISA).




(d)           Except
as set forth on Schedule 3.10(d), (i)
the Group Companies and each ERISA Affiliate have performed all obligations
required to be performed by them under each Employee Benefit Plan and Employee
Agreement and none of the Group Companies nor any ERISA Affiliate is in default
under, or in violation of, any Employee Benefit Plan; (ii) each Employee Benefit
Plan has been established and administered in accordance with its terms, and in
compliance with the applicable provisions of ERISA, the Code, the Health
Insurance Portability and Accountability Act and other applicable Laws; (iii)
each Employee Benefit Plan which is intended to be qualified within the meaning
of Code Section 401(a) has received a favorable determination letter from the
IRS as to its qualification, and, to the knowledge of the Company, nothing has
occurred that would reasonably be expected to adversely affect such
determination; (iv) no Group Company or any ERISA Affiliate has any liability or
obligation under any Employee Benefit Plan which provides medical, life
insurance or death benefits to Employees beyond termination of their employment,
except as may be required by Section 4980B of the Code, or has ever contracted
(whether in oral or written form) to any Employee (either individually or to
Employees as a group) that such Employee(s) would be provided with life
insurance, medical, severance or other employee welfare benefits upon their
retirement or termination of employment, except to the extent required by
Section 4980B of the Code; (v) no non-exempt “prohibited transaction,” within
the meaning of Section 4975 of the Code or Section 406 of ERISA, has occurred
with respect to any Employee Benefit Plan; (vi) the sponsorship of each Employee
Benefit Plan (and the administration of the Lightstone Group, LLC 401(k) Plan)
can be transferred from the Group Companies to an Affiliate other than another
Group Company without liability to the Group Companies and the Group Companies
will cease to be participating employers in any Employee Benefit Plan as of the
Closing; (vii) the Group Companies have made all payments with respect to all
periods through the date hereof which are required by each Employee Benefit
Plan, each related trust, or by Law to be made to, or with respect to, each
Employee Benefit Plan (including all insurance premiums or intercompany charges
with respect to, each Employee Benefit Plan); and (viii) the Group Companies do
not have an obligation to reimburse or indemnify any Employee with respect to
taxes under Section 409A of the Code relating to an Employee Benefit
Plan.


36


(e)           No
actions, audits, proceedings, arbitrations, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or, to the knowledge of
the Company, threatened or anticipated (other than routine claims for benefits)
against the Group Companies or any administrator, trustee or other fiduciary of
any Employee Benefit Plan with respect to any Employee Benefit Plan or Employee
Agreement, or against any Employee Benefit Plan or against the assets of any
Employee Benefit Plan.




(f)
           From and after
the Closing, the Group Companies have no liability, contingent or otherwise, to,
or with respect to, any Employee Benefit Plan.




Section
3.11    Environmental
Matters




Except as
set forth on Schedule 3.11:




(a)           (i)  No
Group Company is in violation of any applicable Law or Order relating to
pollution or occupational health and safety, protection of the environment
(including indoor or ambient air, surface water, groundwater, land surface or
subsurface) or natural resources, including laws and regulations relating to the
release or threatened release of any Hazardous Substances or to the manufacture,
management, possession, presence, generation, processing, distribution, use,
treatment, storage, disposal, transportation, abatement, removal, remediation or
handling of, or exposure to, Hazardous Substances (collectively, “Environmental Laws”)
and (ii) each Group Company holds and is in compliance with all permits,
approvals, identification numbers, licenses and other authorizations required
under any Environmental Laws to own or operate its assets and businesses as
currently owned and operated (“Environmental
Permits”).




(b)           Since
January 1, 2007, no Group Company has received any written notice of, and there
are no pending or threatened, administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to Hazardous Substances or any
Environmental Law against or affecting the Group Companies or any of the their
respective properties or assets.




(c)           There
are no Hazardous Substances at, on, under or migrating to or from, any real
property currently or formerly owned, leased or operated by any Group Company or
any of its respective predecessors, or any other location, in each case, that
could reasonably be expected to result in liability of the Group Companies under
or pursuant to any Environmental Law.


37


(d)          No
Group Company has received any written notice or claim alleging that such Group
Company is or may be in violation of, or liable under, or a potentially
responsible party pursuant to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 or any other Environmental Law and, to
the knowledge of the Company, there is no basis for any such notice or
claim.  No Group Company has entered into or agreed to any consent
decree or order or is a party to any judgment, decree or judicial order relating
to compliance with Environmental Laws, Environmental Permits or the
investigation, sampling, monitoring, treatment, remediation, removal or cleanup
of Hazardous Substances that has not been resolved in all material respects and,
to the knowledge of the Company, no investigation, litigation or other
proceeding is pending or, threatened with respect to any of the
above.  No Group Company has assumed by contract any liability under
any Environmental Law or relating to any Hazardous Substances, or is an
indemnitor in connection with any claim by any third party indemnity for any
liability under any Environmental Law or relating to any Hazardous
Substances.




(e)           To
the knowledge of the Company, there are no past or present conditions, events,
circumstances, facts, activities, practices, incidents, actions, omissions or
plans:  (x) that may reasonably be expected to interfere with or
prevent continued compliance by any Group Company with Environmental Laws and
the requirements of Environmental Permits, (y) that may result in liability of
or adversely affect any Group Company under or pursuant to any Environmental
Law, or (z)  that may form the basis of any claim, action, suit,
proceeding, hearing, investigation, inquiry or lien against or any Group Company
under or pursuant to any Environmental Law.




(f)           The
Company has made available to Parent REIT prior to the date hereof true and
complete copies and results of any material reports, studies, analyses or
monitoring in the possession of any Group Company with respect to actual or
potential liabilities of any Group Company under Environmental Laws or the
presence of Hazardous Substances at, on, under or migrating to or from, any real
property currently or formerly owned, leased or operated by any Group Company or
any of their respective predecessors.




Section
3.12     Intellectual
Property




(a)        
  Except as set forth on Schedule 3.12, the
Group Companies own, are licensed to use or otherwise have the right to use (in
each case free and clear of any Liens) all Intellectual Property required for
the operation of the business of the Group Companies (collectively, the “Company Intellectual
Property”).  Schedule 3.12 sets
forth all Intellectual Property owned by the Group Companies that is registered,
issued or the subject of a pending application for registration (collectively,
the “Company Owned
Intellectual Property”).  None of the Company Owned
Intellectual Property has been adjudged invalid or unenforceable and the Company
Owned Intellectual Property is valid and enforceable, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws.




(b)          Schedule 3.12 sets
forth all agreements (other than with respect to off-the-shelf software pursuant
to “shrink wrap” or “click wrap” license agreements) pursuant to which Company
Intellectual Property is licensed to the Group Companies by a third party or
pursuant to which any Group Company has granted to a third party the right to
use Company Owned Intellectual Property (collectively, the “Company IP
Licenses”).  Each Company IP License is valid and enforceable,
subject to any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws and none of the Group Companies or, to the Company’s knowledge, any
other party to any Company IP License is in breach thereof or default
thereunder.




38




(c)           There
are no claims pending or threatened in writing against any Group Company (i)
against the use by such Group Company of any copyrights, patents, trademarks,
trade names, service marks, trade secrets, technology, know-how or computer
software programs and applications used in the business of the Group Companies
as currently conducted, (ii) challenging the ownership, validity or
effectiveness of any of the Company Owned Intellectual Property, or (iii)
challenging the license or legally enforceable right to use of the Company IP
Licenses.  The conduct of the business of the Group Companies as
currently conducted does not infringe or otherwise violate the U.S. Intellectual
Property rights of any Person.  With respect to Intellectual Property
used by, owned by or licensed to any Group Company, the Group Company owns the
entire right, title and interest in the Company Owned Intellectual Property
purported to be owned by the Group Company and has the right to use the other
Intellectual Property in the continued operation of its business as currently
conducted.  To the knowledge of the Company, no third party is
infringing or otherwise violating the Company Owned Intellectual Property
rights.




Section
3.13     Labor
Matters




(a)           No
work stoppage or labor strike against any of the Group Companies by Employees is
pending or threatened in writing.  The Group Companies (i) are not a
party to, or to the knowledge of the Company, threatened with any organized
labor dispute or litigation relating to labor matters involving any Employees,
including, without limitation, violation of any federal, state or local labor,
safety or employment Laws (domestic or foreign), charges of unfair labor
practices or discrimination complaints; (ii) have not engaged in any unfair
labor practices within the meaning of the National Labor Relations Act or the
Railway Labor Act; or (iii) are not presently, nor have been in the past party
to, or bound by, any collective bargaining agreement or union contract with
respect to Employees and no such agreement or contract is currently being
negotiated by the Group Companies or any of their Affiliates.




(b)           No
Employees are currently represented by any labor union for purposes of
collective bargaining with any Group Company and no activities the purpose of
which is to achieve such representation of all or some of such Employees are
threatened or ongoing or have resulted in any petition for a representation
election filed with the National Labor Relations Board in the past three
months.




(c)           To
the knowledge of the Company, no Employee is in violation of any employment
contract, patent disclosure agreement, or enforceable non-competition agreement
in any material respect.




39


Section
3.14     Tax
Matters




Except as
set forth on Schedule
3.14:




(a)           Each
Group Company (i) has timely filed (or had filed on its behalf) all material Tax
Returns required to be filed by it (after giving effect to any filing extension
granted by a Governmental Entity) and (ii) has paid (or had paid on its behalf)
or will timely pay all material Taxes (whether or not shown on such Tax Returns)
that are required to be paid by it.  Each such Tax Return is true,
correct and complete in all material respects.  The Latest Balance
Sheet reflects an adequate reserve (excluding any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) for all
Taxes payable by the each Group Company for all taxable periods and portions
thereof through the date of the Latest Balance Sheet.  No Group
Company has executed or filed with the IRS or any other Governmental Entity any
agreement, waiver or other document or arrangement extending the period for
assessment or collection of material Taxes payable by a Group Company (including
any applicable statute of limitation), which waiver or extension is currently in
effect, and no power of attorney with respect to any Tax matter is currently in
force with respect to any Group Company.




(b)           Each
Group Company has since its formation been treated for U.S. federal income tax
purposes as a partnership or disregarded entity, as the case may be, and not as
a corporation or an association taxable as a corporation.




(c)           All
material deficiencies asserted or material assessments made with respect to
taxes payable by any Group Company and that have been set forth in writing to
such Group Company as a result of any examinations by the IRS or any other
Governmental Entity have been fully paid and copies of all such deficiency
notices or assessments, as well as materials relating to the settlement of such
claims have been provided or made available to representatives of Parent
REIT.  There are no other material audits, examinations or other
proceedings relating to any material Taxes payable by any Group Company by any
taxing Governmental Entity in progress.  No Group Company has received
any written notice from any Governmental Entity that it intends to conduct such
an audit, examination or other proceeding in respect of a material amount of
Taxes payable by a Group Company or make any material assessment for such
Taxes.  No Group Company is a party to any litigation or pending
litigation or administrative proceeding relating to a material amount of Taxes
payable by such Group Company (other than litigation dealing with appeals of
property tax valuations).




(d)           Each
Group Company has complied, in all material respects, with all applicable laws,
rules and regulations relating to the payment and withholding of Taxes
(including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446, and
3402 of the Code or similar provisions under any state, local, or non-U.S. Tax
law) and has duly and timely withheld and paid over to the appropriate taxing
authorities all material amounts required to be so withheld and paid over on or
prior to the due date thereof under all applicable Laws.




(e)           No
material claim has been made in writing by a taxing authority in a jurisdiction
where a Group Company does not file Tax Returns that such Group Company is or
may be subject to taxation by that jurisdiction.




(f)           No
Group Company has requested any extension of time within which to file any
material Tax Return, which material Tax Return has not yet been
filed.




(g)           No
Group Company is a party to any Tax sharing or similar agreement or arrangement,
other than any agreement or arrangement solely between two Group Companies,
pursuant to which it will have any obligation to make any payments after the
Closing. For the avoidance of doubt, a Tax Protection Agreement shall not
constitute a Tax sharing or similar agreement or arrangement.




40


(h)           No
Group Company has requested a private letter ruling from the IRS or comparable
rulings from other taxing authorities.




(i)       
    No Group Company is or has ever been a member of an
affiliated group filing a consolidated federal income tax return.




(j)        
   Other than Liens for Taxes not yet delinquent and Liens for
Taxes being contested in good faith and for which there are adequate reserves on
the financial statements of the Company (if such reserves are required pursuant
to GAAP), there are no Liens for a material amount of Taxes (other than Taxes
not yet due and payable for which adequate reserves have been made if required
pursuant to GAAP) upon any of the assets of the Group Companies.




(k)           Schedule 3.14(k)
lists each of the Tax Protection Agreements affecting the Group
Companies.  As of the date of this Agreement, no person has raised in
writing, or threatened to raise, a material claim against a Group Company for
any breach of any such Tax Protection Agreement.  Attached to Schedule 3.14(k) is a
true, correct and complete copy of each Tax Protection Agreement, including all
schedules that were attached thereto or completed in connection
therewith.




(l)        
   No Group Company is a party to any understanding or
arrangement described in Section 6662(d)(2)(c)(ii) of the Code or Treasury
Regulations Section 1.6011-4(b) or is a material advisor as defined in Section
6111(b) of the Code.




(m)       
  No Group Company has entered into any “closing agreement” as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law).




(n)          No
Group Company is a foreign person as such term is defined in the Code, and
Treasury Regulations thereunder, for purposes the Foreign Investment in Real
Property Tax Act.




(o)          No
Group Company will be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i) change in method
of accounting for a taxable period ending on or prior to the Closing Date; (ii)
“closing agreement” as described in Code §7121 (or any corresponding or similar
provision of state, local, or non-U.S. income Tax law) executed on or prior to
the Closing Date; (iii) intercompany transactions or any excess loss account
described in Treasury Regulations under Code §1502 (or any corresponding or
similar provision of state, local, or non-U.S. income Tax law); (iv) installment
sale or open transaction disposition made on or prior to the Closing Date; or
(v) prepaid amount received on or prior to the Closing Date.




(p)           The
maximum indemnity amount under the Tax Protection Agreements related to
contributions of direct or indirect interests in the Company to LVP OP does not
exceed $155 million.  The maximum indemnity amount under the Tax
Protection Agreements related to contributions of direct or indirect interests
in Mill Run to LVP OP does not exceed $37 million.  The maximum
indemnity amount under the Series C Optional Tax Indemnification does not exceed
$35 million.  For purposes of determining the maximum indemnity amount
under a Tax Protection Agreement, it is assumed that each person entitled to
protection under such Tax Protection Agreement is subject to the highest
marginal U.S. federal, state and local income Tax rates applicable to an
individual residing in New York City, New York as of the date
hereof.




41




(q)           Schedule 3.14(q)
includes a schedule of the tax basis of each property listed on Schedule
3.16(b).




(r)           Schedule 3.14(r)
outlines the impact of, and restrictions imposed by, the Tax Protection
Agreements on all Funded Indebtedness, including without limitation, a schedule
of all guarantees entered into pursuant to, or in connection with, a Tax
Protection Agreement.




Section
3.15    Brokers




No
broker, finder, financial advisor or investment banker, other than the Persons
listed as “Financial Advisor” on Schedule 1.1(C) is
entitled to any broker’s, finder’s, financial advisor’s, investment banker’s or
similar fee or commission in connection with the Contemplated Transactions based
upon arrangements made by or on behalf of any Group Company.  True and
complete copies of the engagement letters between the Group Companies and each
Person listed in Schedule 1.1(C) have
been made available to Parent REIT prior to the date hereof.




Section
3.16    Real and Personal
Property




(a)           Each
Group Company is the sole legal owner of and, except as set forth on Schedule 3.16(a),
such Group Company has good and marketable title to all items of tangible
personal property reflected on the Latest Balance Sheet as owned or leased by
such Group Company free and clear of any Liens other than Permitted Liens that
do not materially detract from the value or intended use of such
property.  All equipment and other items of tangible personal property
and assets of each Group Company (i) are in good operating condition and in a
state of good maintenance and repair, ordinary wear and tear excepted, (ii) are
usable in the regular and ordinary course of business for their intended use and
purpose and (iii) conform to all applicable Laws and Orders.




(b)           Except
as listed in Schedule
3.16(b), each Group Company (i) owns fee simple title to each of the real
properties (or the applicable portion thereof) described on Schedule 3.16(b) as
being owned in fee by such Group Company and (ii) has a valid leasehold interest
in each of the real properties (or the applicable portion thereof) described on
Schedule
3.16(b) as being ground leased by such Group Company pursuant to those
certain ground leases (together with any amendments thereto, collectively, the
“Company Ground
Leases”) described on Schedule 3.16(b) (all
such owned and leased real property interests, together with all buildings,
structures and other improvements and fixtures located on or under such real
property and all easements, rights and other appurtenances to such real
property, and for the purposes of this Section 3.16 only,
any real property owned by LVP St. Augustine Outlets LLC and the St. Augustine
Land, are referred to herein as collectively, the “Owned Real
Properties,”).  The interests of the Group Companies in the
Owned Real Properties are good, marketable and insurable and the same are owned
free and clear of all Liens except for Permitted Liens.




42




(c)           Schedule 3.16(c) sets
forth a true, correct and complete list of the Leased Real Property as of the
date hereof.  With respect to each respective lease or sublease
underlying the Leased Real Property, (i) such lease or sublease constitutes the
entire agreement to which a Group Company is a party with respect thereto; (ii)
no Group Company has assigned, sublet, transferred or conveyed any interest in
the leasehold; and (iii) such lease or sublease is in full force and effect and
is valid, binding and enforceable in accordance with its terms against the
lessor or lessee thereunder, as applicable, (iv) no Group Company, on the one
hand, nor, to the knowledge of the Company, any other party, on the other hand,
is in breach, default or an event of default under any such lease or sublease,
which breach, default or an event of default remains uncured, and no uncured
basis for termination of any such lease or sublease has occurred and no uncured
event has occurred which with or without the lapse of time or the giving of
notice or opportunity to cure would constitute a breach, default, event of
default or give rise to a right of termination, and no written termination of or
notice of default (with respect to any matter that remains uncured) has been
received by any Group Company with respect to any such lease or
sublease.  Schedule 3.16(c) sets
forth, the date of each lease or sublease of Leased Real Property, each
amendment thereto and the names of the parties to each such lease, as
amended.  Except as set forth in Schedule 3.16(c),
none of the rights of the Group Companies under the leases and subleases
underlying the Leased Real Property is subject to termination or modification as
a result of the Contemplated Transactions.  The Company has made
available to Parent REIT a true, correct and complete copy of each lease and
sublease underlying the Leased Real Property.  No purchase or other
option has been exercised under any lease or sublease underlying the Leased Real
Property, except options whose exercise has been evidenced by a written document
as described in Schedule 3.16(c), a
true and complete copy of which has been made available to Parent REIT prior to
the date hereof with the corresponding lease or sublease underlying the Leased
Real Property.  Except as set forth on Schedule
3.16(c),  there are not outstanding any options, rights of
first offer or rights of first refusal or any other rights in favor of any of
the Group Companies to acquire or sell any portion of the Leased Real Properties
(or rights to develop any portion of the Leased Real Properties).




(d)           The
Owned Real Properties and the Leased Real Properties are all of the real
properties owned or leased by the Group Companies.  Each of the Owned
Real Properties is suitable for its current use and its intended use by such
Group Company as of the date hereof and is in good operating condition, ordinary
wear and tear excepted.  All repairs or maintenance for any Owned Real
Properties necessary over the next twelve-month period following the date of
this Agreement in order to maintain such properties in such operating condition
are reflected in the Budget or are set forth in Schedule
3.16(d).  Since January 1, 2008, none of the Owned Real
Properties has suffered any physical event or condition which has resulted in a
loss of value (other than ordinary wear and tear and depreciation) which is not
subject to insurance (subject to deductibles) or which renders the property
unfit for its intended use.  None of the buildings or other
improvements on the Owned Real Properties has any latent or patent structural or
mechanical defect.




43


(e)           Each
Company Ground Lease is valid, binding and enforceable against the Group Company
that is a tenant thereunder and, to the knowledge of the Company, the other
parties thereto in accordance with its terms, and is in full force and
effect.  Except as listed in Schedule 3.16(e), (i)
the applicable Group Company has performed all obligations required to be
performed by it to date under each of the Company Ground Leases, (ii) no Group
Company, on the one hand, nor, to the knowledge of the Company, any other party,
on the other hand, is in breach, default or an event of default under any
Company Ground Lease which breach, default or event of default remains uncured,
(iii) no uncured basis for termination of any such Company Ground Lease has
occurred, and (iv) no uncured event has occurred which with or without the lapse
of time or the giving of notice or opportunity to cure would constitute a
breach, default, event of default or give rise to a right of termination, and no
written termination of or notice of default (with respect to any matter that
remains uncured) has been received by any Group Company, with respect to any
such Company Ground Lease.  Schedule 3.16(e) sets
forth, the date of each Company Ground Lease, each amendment thereto and the
names of the parties to each such lease, as amended.  None of the
rights of the Group Companies under the Company Ground Leases is subject to
termination or modification as a result of the entry into the Transaction
Documents or the consummation of the Contemplated Transactions.  The
Company has made available to Parent REIT prior to the date hereof a true,
correct and complete copy of each Company Ground Lease.  No purchase
or other option has been exercised under any of such Company Ground Leases,
except options whose exercise has been evidenced by a written document as
described in Schedule
3.16(e), a true and complete copy of which has been made available to
Parent REIT prior to the date hereof with the corresponding Company Ground
Lease.




(f)           Schedule 3.16(f)
contains a true, correct and complete list of (i) all leases, licenses and other
occupancy agreements demising space at the Owned Real Properties that were in
effect as of November 30, 2009 as to which any Group Company is a party as a
landlord (such leases, licenses and other occupancy agreements are, together
with all amendments, modifications, supplements, renewals, extensions and
guarantees related thereto, the “Company Leases”),
their respective terms, any renewal options, and the rent and other charges
payable thereunder, (ii) all of the guaranties under which a guarantor has
guaranteed the obligations of the tenant under any such Company Lease, (iii) all
consents to sublease and consents to assignment that in either case any Group
Company or, to the extent in a Group Company’s possession, any predecessor in
interest to a Group Company has heretofore executed and delivered in respect of
such Company Leases and for which the applicable subleases are in effect (the
items that are described in the foregoing clauses (i)-(iii) above being
collectively referred to herein as the “Existing Company Lease
Documents”).  The Company has made available to Parent REIT
prior to the date hereof true, correct and complete copies of all Existing
Company Lease Documents.  The Existing Company Lease Documents are in
full force and effect and are valid, binding on and enforceable against each
Group Company that is a party thereto and, to the knowledge of the Company, each
other party thereto, in accordance with their respective
terms.  Except as set forth on Schedule 3.16(f) or
in the Existing Company Lease Documents, (1) no tenant under a Company Lease has
a right of set-off or claim or counterclaim against the landlord arising out of
the Company Lease; (2) no tenant under a Company Lease has a right to relocate
the premises in the center in which such tenant occupies space; (3) no tenant
under a Company Lease has a right to lease any additional space; (4) no tenant
under a Company Lease has a right to be the exclusive seller or provider of
products or services in a center in which such tenant occupies space; (5) no
tenant under a Company Lease has any “co-tenancy right,” (e.g., a right to
terminate the lease, reduce the rent, reduce store hours or “go dark” based upon
the actions or inactions of another tenant); (6) no Company Leases provide for
free rent periods or other rent concessions applicable to any period of time
after the date hereof; (7) no tenant under a Company Lease is permitted to
handle, store or dispose of Hazardous Substances in violation of Environmental
Laws; (8) no tenant under any Company Lease has a right to cancel or terminate
such Company Lease prior to the end of the current term; (9) no Group Company
has received notice of any insolvency or bankruptcy proceeding involving any
tenant under any Company Lease; and (10) no Company Lease contains a “most
favored nation” provision or other similar provision which limits the amount of
rent, common area maintenance charges or other amounts payable by the tenant
thereunder by reference to the rent, common area maintenance charges or other
amounts payable by one or more tenants under other Company Leases.




44




(g)           No
Group Company has heretofore received from any of the counterparties under the
Existing Company Lease Documents to which such Group Company is a party a notice
to the effect that such Group Company is in default (with respect to any matter
that remains uncured) in any respect of the obligations of the lessor under the
applicable Company Lease (except for any such default that such Group Company
has heretofore cured or is disputing in good faith).  No Group
Company, on the one hand, nor, to the Company’s knowledge, any other party, on
the other hand, is in breach, default or an event of default under any Existing
Company Lease Documents, which breach, default or event of default remains
uncured that relates to Company Leases in excess of 5,000 square feet of net
rentable area or Company Leases that provide for more than $500,000 in annual
rental payments, in the aggregate, from a tenant or related tenants under such
lease and all other leases at one or more Owned Real Properties (the “Material Company
Leases”), in effect, and no uncured basis for termination of any such
Material Company Lease has occurred, and no uncured event has occurred which
with or without the lapse of time or the giving of notice or opportunity to cure
would constitute a breach, default, event of default or give rise to a right of
termination, and no written termination of or notice of default (with respect to
any matter that remains uncured) has been received by any Group Company, with
respect to any such Material Company Lease.  No Group Company has
heretofore received from any of the counterparties under the Existing Company
Lease Documents to which such Group Company is a party a notice from any tenant
of any intention to vacate prior to the end of the term of such Company
Lease.  No tenant under any of the Company Leases has asserted any
claim of which any Group Company has heretofore received notice which would
affect the collection of rent from such tenant.  No base rent due or
to become due under the Company Leases have been paid by the counterparty
thereunder more than one (1) month in advance.  No Group Company has
heretofore pledged or otherwise hypothecated the lessor’s interest under any of
the Company Leases which pledge or other hypothecation remains outstanding,
except to secure any existing mortgage loan.  No tenant under any of
the Company Leases has heretofore exercised its right to audit the lessor’s
books and records to confirm or challenge the lessor’s calculation of Overage
Rent or the lessor’s calculation of charges for electricity, heating,
ventilation and air-conditioning services, cleaning services, freight elevator
service or any other similar services, except for (i) any such audit that has
heretofore been settled or otherwise terminated and (ii) audits that are
currently being conducted by the tenants set forth on Schedule
3.16(g).  None of the rights of the Group Companies under the
Company Leases is subject to termination or modification as a result of the
transactions contemplated by this Agreement or by the consummation of the
Contemplated Transactions.  No purchase or other option has been
exercised under any of such Company Leases, except options whose exercise has
been evidenced by a written document as described in Schedule 3.16(g), a
true and complete copy of which has been made available to Parent REIT prior to
the date hereof with the corresponding Company Lease.  Other than the
rights granted to Parent REIT under this Agreement or any Permitted Liens, there
are not outstanding any options, rights of first offer or rights of first
refusal or any other rights to acquire or sell any portion of the Owned Real
Properties (or rights to develop any portion of the Owned Real
Properties).




45




(h)           The
rent roll for each of the Owned Real Properties as of November 30, 2009
(collectively, the “Rent Roll”) has been
made available to Parent REIT prior to the date hereof.  Except as
disclosed in Schedule
3.16(h), the Rent Roll lists all Company Leases as of the date
thereof.  The Rent Roll is true, correct and complete as of the date
thereof.




(i)           Schedule 3.16(i) sets
forth a true, correct and complete list of all brokerage agreements entered into
by each Group Company and entered into by any prior owner of the Owned Real
Properties, in each case relating to the Owned Real Properties and which are in
such Group Company’s possession and are binding on such Group Company and under
which any future commissions may become due and payable (the “Brokerage
Agreements”).  The Company has made available to Parent REIT
prior to the date hereof true, correct and complete copies of each of the
Brokerage Agreements.




(j)           Schedule 3.16(j) is a
true, correct and complete schedule of service, maintenance, construction and
supply contracts affecting the Owned Real Properties as of the date of this
Agreement (other than the Existing Company Lease Documents and the Brokerage
Agreements) (collectively, the “Service
Contracts”).  Except as may be permitted under Section 6.1(b), the
Service Contracts are the only service contracts which will affect the Owned
Real Properties on the Closing Date.  The Service Contracts are in
full force and effect as of the date hereof and have not been modified, amended,
supplemented or extended.  None of the Group Companies has received
from any of the counterparties under the Service Contracts a notice to the
effect that a Group Company is in default in any respect of its obligations
under the applicable Service Contract which default has not been cured or which
is being disputed by a Group Company in good faith.  The Company has
made available true and complete copies of all of the Service Contracts to
Parent REIT.




(k)           Schedule 3.16(k) is a
true, correct and complete list of the security deposits (whether cash or
letters of credit) held by or on behalf of the Group Companies as of the date
hereof under the Company Leases, and the Group Companies have held all such
security deposits in accordance with Law and the terms of the applicable Company
Leases.




(l)         
  The tenant arrearage schedules set forth on Schedule 3.16(l) are
true, correct and complete as of the date set forth on each such
schedule.




(m)         Schedule 3.16(m) is a
correct and complete list of all properties as to which any Group Company has a
right to purchase or lease and which is not now owned or leased by any Group
Company and the Company has made available to Parent REIT true and complete
copies of all of the agreements relating to such rights to purchase or
lease.  Schedule 3.16(m)
lists all properties owned by a Group Company which are undeveloped land, in the
process of development but not yet fully constructed and operational or are
properties being held for future development or rehabilitation and all
development, construction, purchase and similar agreements relating to such
project and the budgets therefor and the Company has made available to Parent
REIT of all of the agreements relating thereto.




46




(n)          Except
as listed in Schedule
3.16(n), there is no certificate, permit or license from any Governmental
Entity having jurisdiction over any Owned Real Property or any agreement,
easement or any other right which is necessary to permit the current use and
operation of the buildings and improvements on any of the Owned Real Properties
or which is necessary to permit the current use and operation of all driveways,
roads, and other means of ingress and egress to and from any of the Owned Real
Property or which govern the use and operation of the Owned Real Properties that
has not been obtained and is not in full force and effect, or any pending or
threatened modification or cancellation of any of the same.  Except as
listed in Schedule
3.16(n), no Group Company is in violation of any of the foregoing
agreements, certificates, permits and rights and no uncured breach, default,
event of default or right of termination or modification has occurred or event
(with the lapse of time or giving of notice) which would give rise to a breach,
default, event of default or right of termination or modification has
occurred.  No Group Company has received written notice from any
Governmental Entity of any violation of any Law affecting any portion of any of
the Owned Real Properties that has not been heretofore remedied.




(o)           There
are no pending or, to the knowledge of the Company, threatened condemnation,
expropriation, eminent domain or rezoning proceedings affecting all or any
portion of any Owned Real Property.  Except as set forth on Schedule 3.16(o),
each Group Company is in possession of all licenses or rights required by
applicable Law for use and occupancy as are necessary to conduct such Group
Company’s business thereon as presently conducted or currently intended by a
Group Company to be conducted.




(p)           None
of the Owned Real Properties are managed, as of the date hereof, by any Person
that is not a Group Company.  Schedule 3.16(p)
lists each property management agreement pursuant to which the Owned Real
Properties are managed as of the date hereof, including each amendment thereto,
true and complete copies of which have been made available to Parent REIT prior
to the date hereof.




(q)           Except
as set forth in Schedule 3.16(q),
valid policies of title insurance have been issued insuring any Group Company’s
fee simple title or leasehold estate to each of the Owned Real
Properties.  The Group Companies have made available to Parent REIT
prior to the date hereof true, correct and complete copies of those policies of
title insurance relating to the Owned Real Properties (the “Company Title Insurance
Policies”).  The Company Title Insurance Policies are in full
force and effect and no claim has been made under any such
policy.  Except for liens, assessments or other encumbrances which,
individually or in the aggregate, are immaterial or are set forth in Schedule 3.16(q), and
except for Permitted Liens, there are no liens for unpaid water and sewer
service charges, mechanics’, workmen’s, repairmen’s or materialmen’s liens,
brokers’ liens or assessments for street or other improvements or for any other
service or labor or any other encumbrances which could give rise to a Lien that
is not a Permitted Lien since the effective date of each Company Title Insurance
Policy.




(r)           No
zoning, building, land-use, fire, safety and signage or other applicable Laws,
including the Americans with Disabilities Act, or orders are being violated or
will be violated by the continued maintenance, operation or use of any buildings
or other improvements on any of the Owned Real Properties or related parking
areas.




47




(s)           The
Company has made available to Parent REIT prior to the date hereof all written
agreements in its possession pursuant to which any Group Company manages, acts
as leasing agent for or provides development services for any real property for
any third party (including any related guarantees) and any other contracts which
otherwise produce fee income to any of Group Company in excess of $100,000 per
year.




(t)           Except
as set forth in Schedule 3.16(t),
there are no options, rights of first refusal or offer, or other contractual
obligations to sell, dispose of or lease any of the Owned Real Properties or any
portion thereof or material interest therein other than leases to tenants in the
ordinary course.




(u)           Except
as set forth in Schedule 3.16(u), no
Group Company is subject to any obligation, whether pursuant to a written
agreement or otherwise, to make any improvements to any property not
constituting Owned Real Properties, whether the building of access roadways,
public plazas or otherwise.




(v)           Except
for those contracts or agreements set forth in Schedule 3.16(v) or
as contemplated by, or provided in, the Company Leases, Material Contracts,
Ground Leases, Governing Documents of the Group Companies or any Employee
Agreement, none of the Group Companies is a party to any contract or agreement
with any unaffiliated third party that provides for a right of such third party
to participate in the profits, sale proceeds or revenues of any Owned Real
Property (collectively, the “Participation
Agreements”).  Except as provided in Schedule 3.16(v), no
Group Company has any obligation to offer the right to participate in the
development, ownership or management of any property, shopping center or mall or
development or purchase of any property, shopping center or mall to any third
party (with the name of the third party with such participation rights, the
markets in which such participation rights apply, and the number of
participation rights of such party set forth in Schedule
3.16(v).




(w)           LVP
OP has good, valid and insurable fee title to the St. Augustine Land, free and
clear of any Liens (other than Permitted Liens).  The St. Augustine
Land is not subject to any right or option of any other Person to purchase or
lease an interest in such property.  No Person other than LVP OP has
any right to use, occupy or lease the St. Augustine Land.  There is no
pending or, to LVP OP’s knowledge, threatened condemnation, expropriation,
eminent domain or similar proceeding affecting all or any part of the St.
Augustine Land or LVP OP’s use or occupancy thereof or the conduct of its
operations thereon, and LVP OP has not received any written notice
thereof.  None of LVP OP or, to LVP OP’s knowledge, any other Person
is in violation of a condition or agreement contained in any easement,
restrictive covenant or any similar instrument or agreement affecting the St.
Augustine Land in any material respect.  To LVP OP’s knowledge, there
are no proposed reassessments of the St. Augustine Land by any taxing authority
and there are no threatened or pending special assessments or other actions or
proceedings that could give rise to a material increase in real property Taxes
or assessments against any of the St. Augustine Land.




48


Section
3.17    No Undisclosed
Liabilities




There are
no liabilities or obligations of any Group Company of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
other than (i) liabilities or obligations disclosed or provided for in the
Financial Statements; (ii) liabilities or obligations incurred in the ordinary
course of business consistent with past practice since the date of the Latest
Balance Sheet which are taken into account in connection with the calculation of
the Estimated Aggregate Consideration Value and/or the Final Aggregate
Consideration Value or incurred as a result of actions taken or not taken or
Contracts entered into, in each case, in compliance with Section 6.1(b); (iii)
liabilities or obligations set forth in the Company Schedules, including Schedule 3.17; (iv)
liabilities incurred by or on behalf of any Group Company in connection with
this Agreement or the Contemplated Transactions and (v) liabilities for which
any Person, other than the Group Companies, shall have liability following the
Closing pursuant to the terms of the Tax Matters Agreements.




Section
3.18    Transactions with
Affiliates




Except as
set forth on Schedule
3.18 and except for compensation and benefits received in the ordinary
course of business as an employee, no director, officer, employee, agent, or
Affiliate of any Group Company (including the Contributors, but excluding any
other Group Company), and no individual in any such foregoing Person’s immediate
family, is a party to or has any interest in: (a) any agreement, arrangement or
understanding with any Group Company, (b) any loan, arrangement, understanding
or other agreement for or relating to Funded Indebtedness or any other
indebtedness or (c) any property (real, personal or mixed), tangible, or
intangible, used or currently intended to be used in the business or operations
of any Group Company.




Section
3.19    Insurance




Schedule 3.19 sets
forth a true, correct and complete list of the insurance policies (including the
type, amount of coverage and premiums and expiration dates of such policies)
held by, or for the benefit of, the Group Companies.  Except as set
forth on Schedule
3.19, (a) the applicable Group Company has timely paid, or caused to be
timely paid, all premiums due under such policies and is not in default with
respect to any obligations under such policies in any material respect and (b)
since January 1, 2004, no Group Company has received any written notice of
cancellation, non-renewal or termination with respect to any such insurance
policy.  The Group Companies have not, made any claim against an
insurance policy as to which the insurer is denying coverage or defending the
claim under a reservation of rights.




Section
3.20    Investment Company Act
Status




Each
Group Company is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.




Section
3.21    No Other Representations and
Warranties Regarding the Group Companies




Except as
and to the extent expressly set forth in this Article 3, the
Company makes no representations or warranties, express or implied, with respect
to the Group Companies, or any of their businesses, assets or liabilities, to
Parent REIT, Parent OP and Parent Sub and hereby disclaim all liability and
responsibility for any other representation or warranty made, communicated, or
furnished to Parent REIT, Parent OP and Parent Sub.




49




ARTICLE
4


REPRESENTATIONS
AND WARRANTIES OF THE CONTRIBUTORS AND LVP REIT




Assuming,
in each case, the accuracy of the representations and warranties of the Company
in Article 3 and
the accuracy of the representations and warranties of the Parent Parties in
Article 5, each
Contributor and, solely with respect to Section 4.3(b), LVP
REIT, hereby, severally, and not jointly or jointly and severally, represents
and warrants to Parent OP as follows:




Section
4.1       Organization




Such
Contributor is duly organized, validly existing and in good standing (or the
equivalent thereof) under the laws of the jurisdiction of its organization and
has all requisite power and authority to carry on its businesses as presently
conducted, except where the failure to be in good standing (or equivalent
thereof) or to have such power or authority would not prevent or materially
impair or delay the ability of such Contributor to perform its respective
obligations hereunder.




Section
4.2       Authority




Such
Contributor has all necessary power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it will be a party and to
consummate the Contemplated Transactions.  The execution and delivery
of this Agreement and the other Transaction Documents to which it will be a
party and the consummation of the Contemplated Transactions by such Contributor
have been duly authorized by all necessary action on the part of  such
Contributor and no other proceeding (including, without limitation, by its
equity holders) on the part of such Contributor is necessary to authorize this
Agreement or the other Transaction Documents to which it will be a party or to
consummate the Contemplated Transactions.  This Agreement has been,
and the other Transaction Documents to which it will be a party will be when
executed, duly and validly executed and delivered by such Contributor and
constitutes, or will constitute when executed after the date hereof, a valid,
legal and binding agreement of such Contributor, enforceable against such
Contributor in accordance with its terms, except to the extent that
enforceability may be limited (a) by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors’
rights generally and (b) by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).




50


Section
4.3       Consents and Approvals; No
Violations




(a)           No
notice to, filing with, or authorization, consent or approval of any
Governmental Entity is necessary for the execution, delivery or performance of
this Agreement or the other Transaction Documents by such Contributor or the
consummation by such Contributor of the Contemplated
Transactions.  Neither the execution, delivery and performance of this
Agreement or the other Transaction Documents by such Contributor nor the
consummation by such Contributor of the Contemplated Transactions will
(i) conflict with or result in any breach of any provision of such
Contributor’s Governing Documents, (ii) result in a violation or breach of,
or cause acceleration, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation of any material agreement to which such Contributor is
a party, or (iii) violate any Law or Order applicable to such Contributor,
except in the case of clauses (ii) and (iii) above, for violations which
would not prevent or materially impair or delay the ability of such Contributor
to perform its respective obligations hereunder.




(b)           LVP
REIT’s board of directors have approved the entry into this
Agreement.  No vote of any holder of any class or series of LVP REIT
capital stock is necessary to approve the transactions contemplated
hereby.




Section
4.4       Title




Such
Contributor has good and valid title to the Contributed Interests set forth
opposite such Contributor’s name on Annex A and/or Annex B free and
clear of any preemptive rights, restrictions on transfer and Liens, in each case
other than Qualified Permitted Liens.  At the Closing, such
Contributor will have transferred and conveyed to Parent Sub and/or the Company,
as applicable, good and valid title to its Contributed Interests, free and clear
of any preemptive rights, restrictions on transfer and Liens, in each case other
than Qualified Permitted Liens.




Section
4.5       Accredited
Investor




Each
Contributor is an “accredited investor” as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act.  Each Contributor is acquiring
the Parent OP Common Units and New Company Common Units for investment purposes
only and not with a view to, or for, distribution, resale or fractionalization
thereof, in whole or in part, in each case under circumstances which would
require registration thereof under the Securities Act or any state securities
laws.




Section
4.6       Brokers




No
broker, finder, financial advisor or investment banker, other than the Persons
listed as “Financial Advisor” on Schedule 1.1(C), is
entitled to any brokerage, finder’s, financial advisor’s or investment banker’s
fee or commission in connection with the Contemplated Transactions for which any
Group Company, Parent REIT, Parent OP or Parent Sub may be responsible based
upon arrangements made by such Contributor.




Section
4.7       Acknowledgment




Such
Contributor hereby acknowledges and agrees that it has conducted and completed
its own investigation, analysis and evaluation of Parent REIT and Parent OP,
that it has made all such reviews and inspections of the financial condition,
business, results of operations, properties, assets and prospects of Parent REIT
and Parent OP, that it has had the opportunity to request information relevant
to the foregoing from Parent REIT and Parent OP, and that in making its decision
to enter into this Agreement and to consummate the Contemplated Transactions it
has relied solely on its own investigation, analysis and evaluation of Parent
REIT and Parent OP and is not relying in any way on any representations and
warranties, including any implied warranties, made by Parent REIT and Parent OP
or on behalf of Parent REIT and Parent OP by any other Person other than the
representations and warranties made expressly by Parent REIT and Parent OP in
Article 5 of
this Agreement.




51


Section
4.8       No Other Representations and
Warranties Regarding the Contributors




Except as
and to the extent expressly set forth in this Article 4, the
Contributors and LVP REIT make no representations or warranties, express or
implied, with respect to the Contributors, LVP REIT, the Contributed Interests,
the Group Companies or their respective business, assets or liabilities, to
Parent REIT, Parent OP and Parent Sub and hereby disclaim all liability and
responsibility for any other representation or warranty made, communicated, or
furnished to Parent REIT, Parent OP and Parent Sub.




ARTICLE
5


REPRESENTATIONS
AND WARRANTIES OF PARENT REIT, PARENT OP AND PARENT SUB




Assuming,
in each case, the accuracy of the representations and warranties of the Company
in Article 3 and
the accuracy of the representations and warranties of the Contributors and LVP
REIT in Article
4, Parent REIT, Parent OP and Parent Sub hereby jointly and severally
represent and warrant to the Company and the Contributors as
follows:




Section
5.1       Organization




Each of
Parent REIT, Parent OP and Parent Sub is duly organized, validly existing and in
good standing (or the equivalent thereof) under the laws of the jurisdiction of
its organization and has all requisite power and authority to carry on its
businesses as presently conducted, except where the failure to be in good
standing (or equivalent thereof) or to have such power or authority would not
have a Parent Material Adverse Effect.




Section
5.2       Authority




Each of
Parent REIT, Parent OP and Parent Sub has all necessary power and authority to
execute and deliver this Agreement and the other Transaction Documents and to
consummate the Contemplated Transactions.  The execution and delivery
of this Agreement and the other Transaction Documents and the consummation of
the Contemplated Transactions have been duly authorized by all necessary action
on the part of Parent REIT, Parent OP and Parent Sub and no other proceeding
(including, without limitation, by their respective equity holders) on the part
of Parent REIT, Parent OP or Parent Sub is necessary to authorize this Agreement
or the other Transaction Documents or to consummate the Contemplated
Transactions.  No vote of Parent REIT’s equity holders is required to
approve this Agreement or for Parent REIT, Parent OP or Parent Sub to consummate
the Contemplated Transactions.  This Agreement has been, and the other
Transaction Documents will be when executed, duly and validly executed and
delivered by each of Parent REIT, Parent OP and Parent Sub and constitutes, or
will constitute when executed after the date hereof, a valid, legal and binding
agreement of each of Parent REIT, Parent OP and Parent Sub, enforceable against
each of Parent REIT, Parent OP and Parent Sub in accordance with its terms,
except to the extent that enforceability may be limited (i) by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors’ rights generally and (ii) by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).




52


Section
5.3       Consents and Approvals; No
Violations




No notice
to, filing with, or authorization, consent or approval of any Governmental
Entity is necessary for the execution, delivery or performance of this Agreement
and the other Transaction Documents by Parent REIT, Parent OP and Parent Sub or
the consummation by Parent REIT, Parent OP and Parent Sub of the Contemplated
Transactions.  Neither the execution, delivery and performance of this
Agreement or the other Transaction Documents by Parent REIT, Parent OP or Parent
Sub nor the consummation by Parent REIT, Parent OP or Parent Sub of the
Contemplated Transactions will (a) conflict with or result in any breach of
any provision of Parent REIT’s, Parent OP’s or Parent Sub’s Governing Documents,
(b) result in a violation or breach of, or cause acceleration, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation of any
material agreement to which Parent REIT, Parent OP or Parent Sub is a party or
by which any of them or any of their respective properties or assets may be
bound, or (c) violate any Law or Order applicable to Parent REIT, Parent OP
or Parent Sub or any of their respective Subsidiaries or any of their respective
properties or assets, except in the case of clauses (b) and
(c) above, for
violations which would not have a Parent Material Adverse Effect.




Section
5.4       Capitalization




(a)           The
total number of shares of capital stock which Parent REIT has authority to issue
is 850,000,000 shares, consisting of 511,990,000 shares of Common Stock, par
value $.0001 per share (“Parent Common
Stock”), 10,000 shares of Class B Common Stock, par value $.0001 per
share (“Parent Class B
Common Stock”), 100,000,000 shares of Preferred Stock, par value $.0001
per share, (“Parent
Preferred Stock”), and 237,996,000 of Excess Common Stock, par value
$.0001 per share.  As of September 30, 2009, (i) 287,424,297 shares of
Parent Common Stock were issued and outstanding, (ii) 8,000 shares of Class B
Common Stock were issued and outstanding (iii) 796,948 shares of Parent
Preferred Stock were issued and outstanding and (iv) 4,123,116 shares of Parent
Common Stock were held in the treasury of the Parent.




(b)           (i)            As
of September 30, 2009, the issued and outstanding partnership interests of
Parent OP consisted of 57,959,705 limited partnership interests and 283,309,181
general partnership interests, all of which were validly issued and outstanding,
and not subject to or issued in violation of, any preemptive right, purchase
option, call option, right of first refusal, subscription or any other similar
right or Lien, and any capital contributions required to be made by the holders
thereof have been made other than as set forth in the Parent OP
Agreement.




53


(ii)           Each
Parent OP Common Unit may be converted into or exchanged for one share of Parent
Common Stock or, at Parent REIT’s election, an equivalent amount of cash, in
each case as set forth in the Parent OP Agreement.  Parent REIT is the
sole general partner of Parent OP.




(iii)           Each
Parent OP Common Unit included in the Unit Consideration will have been duly
authorized and validly issued, and will be free and clear of any preemptive
rights, restrictions on transfer (other than restrictions under applicable
federal, state and other securities Laws and the terms of the Parent OP
Agreement), or Liens (other than Liens created by the Contributors, the
Representative or the Escrow Agent, or pursuant to this Agreement or the Escrow
Agreement).




Section
5.5       SEC
Documents




(a)           Each
Parent SEC Report as of its respective date complied (and, when filed after the
date hereof, will comply) in all material respects with the Securities Exchange
Act of 1934, as amended, and the Securities Act and the rules and regulations of
the SEC promulgated thereunder applicable to such Parent SEC
Report.  Except to the extent that information contained in any of the
Parent SEC Reports filed and publicly available prior to the date of this
Agreement has been revised or superseded by a Parent SEC Report filed or
furnished prior to the date hereof, none of the Parent SEC Reports contains (or,
when filed after the date hereof, will contain) any untrue statement of a
material fact or omits (or, when filed after the date hereof, will omit) to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.




(b)           The
financial statements of Parent REIT and Parent OP included in the Parent SEC
Reports complied (and, when filed after the date hereof, will comply) in all
material respects with all applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared (and,
when filed after the date hereof, will be prepared) in accordance with GAAP
applied on a consistent basis during the periods presented and fairly presented
(and, when filed after the date hereof, will fairly present) the financial
position of Parent REIT and Parent OP as of the dates thereof and the results of
its operations and cash flows for the periods shown (subject, in the case of
unaudited financial statements, to the absence of footnotes and to year-end
adjustments which are immaterial in amount).




Section
5.6       Brokers




No
broker, finder, financial advisor or investment banker is entitled to any
brokerage, finder’s, financial advisor’s or investment banker’s fee or
commission in connection with the Contemplated Transactions for which any
Contributor or any Group Company or any of their respective Affiliates (other
than after the Closing, Parent REIT and its Subsidiaries) may be responsible
based upon arrangements made by and on behalf of Parent REIT, Parent OP or
Parent Sub or any of their respective Affiliates.




54




Section
5.7       ***15




Section
5.8       Tax
Matters




Parent OP
qualifies and intends to continue to qualify as a partnership for federal income
tax purposes. Parent OP would not be treated as an investment company (within
the meaning of Section 351(e) of the Code and the Treasury Regulations
Section 1.351-1(c)) if it were incorporated. Parent OP is not a publicly
traded partnership, within the meaning of Section 7704(b) of the Code and
the Treasury Regulations promulgated thereunder.  Parent REIT has been
organized and operated in conformity with the requirements for qualification as
a “real estate investment trust,” within the meaning of Section 856 of the
Code, for all taxable years since January 1, 1998.




Section
5.9       Certain
Activities




(a)           Except
as set forth in the Parent SEC Reports filed prior to the date hereof (without
giving effect to any amendment to any such Parent SEC Report filed on or after
the date hereof and excluding any disclosures that contain general cautionary,
predictive or forward-looking statements set forth in any section of a Parent
SEC Report entitled “risk factors” or constituting “forward-looking statements”
or any other sections of such filings), since September 30, 2009, there have not
been any events, developments or occurrences (nor have any facts become known)
that, individually or in the aggregate, have had or would reasonably be expected
to have a Parent Material Adverse Effect.




(b)           Parent
Sub was organized solely for the purpose of entering into this Agreement and
consummating the Contemplated Transactions and has not engaged in any activities
or business, and has incurred no liabilities or obligations whatsoever, in each
case, other than those incident to its organization and the execution of this
Agreement and the consummation of the Contemplated Transactions.




Section
5.10     New
Company




(a)           New
Company is duly organized, validly existing and in good standing (or the
equivalent thereof) under the laws of its jurisdiction of
organization.  New Company was organized solely for the purpose of
consummating the Contemplated Transactions and has not engaged in any activities
or business, and has incurred no liabilities or obligations and owns no assets
whatsoever, in each case, other than those incident to its organization and the
consummation of the Contemplated Transactions.




(b)           Parent
REIT has provided to the Representative complete and accurate copies of the
Governing Documents of New Company.





15Certain portions have
been omitted in connection with an application for confidential treatment
therefor.


55


(c)           Except
for the New Company Common Units to be issued in exchange for the Contributions,
there are (x) no equity securities of New Company, (y) no securities
of New Company convertible into or exchangeable for equity securities of New
Company, and (z) no agreements, arrangements, or other subscriptions,
options, warrants, conversion rights, stock appreciation rights, “phantom”
stock, stock units, calls, claims, rights of first refusal, rights (including
preemptive rights), commitments, arrangements or agreements to which New Company
is a party or by which it is bound in any case obligating New Company to issue,
deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered,
sold, purchased, redeemed or acquired, stock or other equity securities of New
Company, or obligating New Company to grant, extend or enter into any such
subscription, option, warrant, conversion right, stock appreciation right, call,
right, commitment, arrangement or agreement.




(d)           Upon
issuance, each New Company Common Unit may be converted into or exchanged for
one Parent OP Common Unit, which Parent OP Common Unit shall then be immediately
converted into an amount of cash determined in accordance with the Parent OP
Agreement, at Parent OP’s election, or one share of Parent Common Stock, in each
case as set forth in the New Company Agreement and the Parent OP
Agreement.  New Company Manager is a wholly owned subsidiary of Parent
OP andthe manager
of New Company.




(e)           Each
New Company Common Unit to be issued in accordance with the terms of this
Agreement and the New Company Agreement will have been duly authorized and
validly issued, and will be free and clear of any preemptive rights,
restrictions on transfer (other than restrictions under applicable federal,
state and other securities Laws and the New Company Agreement), and Liens (other
than Liens created by the Contributors, the Representative or the Escrow Agent,
or pursuant to this Agreement or the Escrow Agreement).




Section
5.11    Acknowledgement




Each of
Parent REIT, Parent OP and Parent Sub hereby acknowledges and agrees that it has
conducted and completed its own investigation, analysis and evaluation of the
Group Companies and the Contributed Interests, that it has made all such reviews
and inspections of the financial condition, business, results of operations,
properties, assets and prospects of the Group Companies as it has deemed
necessary or appropriate, that it has had the opportunity to request all
information it has deemed relevant to the foregoing from the Company, the
Contributors and LVP REIT and has received responses it deems adequate and
sufficient to all such requests for information, and that in making its decision
to enter into this Agreement and to consummate the transactions contemplated
hereby it has relied solely on its own investigation, analysis and evaluation of
the Group Companies and the Contributed Interests and is not relying in any way
on any representations and warranties, including any implied warranties, made by
or on behalf the Company or the Contributors other than the representations and
warranties made expressly by the Company in Article 3 and the
representations and warranties made expressly by the Contributors and LVP REIT
in Article
4.  In connection with the due diligence investigation of the
Group Companies and the Contributed Interests by Parent REIT, Parent OP and
Parent Sub and their respective Affiliates and representatives, Parent REIT,
Parent OP and Parent Sub and their respective Affiliates and representatives
have received and may continue to receive after the date hereof from the Company
and its Affiliates (including the Contributors and LVP REIT) and representatives
certain estimates, projections, forecasts and other forward-looking information,
as well as certain business plan information and non-binding term sheets and
letters of intent, regarding the Group Companies and their businesses and
operations and the Contributed Interests.  Parent REIT, Parent OP and
Parent Sub hereby acknowledge that there are uncertainties inherent in
attempting to make such estimates, projections, forecasts and other
forward-looking statements, as well as in such business plans and non-binding
term sheets and letters of intent, and that Parent REIT, Parent OP and Parent
Sub will have no claims against any of the Group Companies, or any of their
respective Affiliates and representatives, or any other Person, including the
Contributors and LVP REIT, with respect thereto.  Accordingly, Parent
REIT, Parent OP and Parent Sub hereby acknowledge and agree that, none of the
Group Companies, nor any of their respective Affiliates (including the
Contributors and LVP REIT) and representatives, nor any other Person, has made
or is making any express or implied representation or warranty with respect to
such estimates, projections, forecasts, forward-looking statements, business
plans or, except as expressly provided in this Agreement, non-binding term
sheets and letters of intent.




56


Section
5.12    No Other Representations and
Warranties Regarding Parent REIT, Parent OP and Parent Sub




Except as
and to the extent set forth in this Article 5, Parent
REIT, Parent OP and Parent Sub make no representations or warranties with
respect to Parent REIT, Parent OP and Parent Sub to the Company or the
Contributors and hereby disclaim all liability and responsibility for any other
representation or warranty made, communicated, or furnished to the Company or
the Contributors.




ARTICLE
6


COVENANTS




Section
6.1       Conduct of Business of the
Group Companies




(a)           Except
as contemplated by this Agreement or set forth on Schedule 6.1, from
and after the date hereof until the earlier of the Closing or the termination of
this Agreement in accordance with its terms, the Company shall, and shall cause
each other Group Company (whether or not a Subsidiary thereof) to, except as
consented to in writing by Parent REIT or Parent OP in their sole discretion,
conduct its business in the ordinary and regular course in substantially the
same manner heretofore conducted (including any conduct that is reasonably
related, complementary or incidental thereto).




(b)           Without
limiting the generality of the foregoing, except as contemplated by this
Agreement or set forth on Schedule 6.1, from
the date hereof through the earlier of the Closing and the termination of this
Agreement in accordance with its terms, the Company shall not, and shall cause
each other Group Company to not, except as consented to in writing by Parent
REIT or Parent OP in their sole discretion:




(i)           except
to the extent required to comply with its obligations under this Agreement or
the other Transaction Documents or with applicable Law, amend or otherwise
change any of its Governing Documents;




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(ii)          issue,
deliver, pledge, dispose of, grant, transfer, lease, license, guarantee,
encumber or sell, or authorize the issuance, delivery, pledge, disposition,
grant, transfer, lease, license, guarantee, encumbrance or sale of, any equity
interests or any options, warrants, or other rights of any kind to acquire
equity interests, in such Person;




(iii)        declare,
set aside or pay any dividends on, or make any other distributions in respect
of, any of their outstanding equity interests, except for any dividend or
distribution by a wholly-owned Subsidiary of such Group Company to such Group
Company or another wholly-owned Subsidiary thereof;




(iv)        reclassify,
combine, split, subdivide, redeem, purchase or otherwise acquire any equity
interests in such Person;




(v)         amend
any term of any outstanding equity security or equity interest;




(vi)        make
any expenditures, including capital expenditures, other than, with respect to
type, amount and timing, as set forth in the Budget;




(vii)        (A)
incur or assume any Funded Indebtedness, issue any debt securities or otherwise
incur or guarantee any indebtedness for borrowed money, in each case other than
(1) in a manner consistent in all material respects with the Budget and (2)
which may be prepaid without any fee, penalty or breakage fee at any time or (B)
enter into any capitalized lease obligation or Off Balance Sheet
Arrangement;




(viii)      guarantee
any indebtedness, debt securities or other obligations of another Person, enter
into any “keep well” or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the economic
effect of any of the foregoing;




(ix)         acquire,
enter into any option to acquire, or exercise an option or other right or
election or enter into any other commitment or agreement for the acquisition of
(A) any real property involving nonrefundable deposits or (B) any business or
other Person (other than a wholly-owned Group Company);




(x)          create
any new subsidiary or enter into any joint venture or partnership or other
similar agreement or arrangement;




(xi)         (A)
merge, consolidate or enter into any other business combination transaction with
any Person, (B) acquire (by merger, consolidation or acquisition of equity
interests or assets, or any other business combination) any corporation,
partnership or other entity (or division thereof), or (C) purchase any equity
interest in or all or substantially all of the assets of, any Person or any
division or business thereof, or any individual item of property;




(xii)        make
any loans, advances or capital contributions to, or investments in, any Person
(other than a Group Company), in each case in an amount in excess of $100,000
individually or $500,000 in the aggregate;




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(xiii)       sell,
lease, mortgage, agree to subject to Lien, transfer, or otherwise dispose of, to
any Person (other than a Group Company) any Owned Real Property or Leased Real
Property (whether by merger, consolidation or otherwise), in each case other
than pursuant to entry into space leases of any Owned Real Property in the
ordinary course of business consistent with past practice and in accordance with
the Leasing Plan;




(xiv)      (A)
cancel, terminate, or amend any Material Contract or (B) enter into any
agreement that would constitute a Material Contract if entered into prior to the
date hereof (it being understood that the Company shall not be deemed to have
breached this clause (xiv) if a Group Company enters into a Material Contract in
connection with taking an action permitted or required under any other provision
of this Agreement);




(xv)       (A)
increase the salary, monetary compensation, incentive compensation or benefits
payable or to become payable to any Employees, (B) grant any retention,
severance or termination pay to any Employees (except pursuant to the terms in
effect on the date of this Agreement of existing agreements, plans or policies),
(C) enter into any new Employment Agreements, or (D) establish, adopt, enter
into, terminate, amend or take any action to accelerate rights under any
Employee Benefits Plan, except in each case to the extent required by applicable
Laws or pursuant to a binding written agreement in effect on the date hereof
with respect to an Employee Benefit Plan which is listed on Schedule
3.10(a);




(xvi)       hire
any new employee other than to hire a replacement for an employee who has left,
promote any employee to be an officer or member of senior management or engage
any consultant or independent contractor for a period exceeding thirty (30)
days;




(xvii)      adopt
or enter into any collective bargaining agreement or other labor union contract
applicable to Employees;




(xviii)    discuss
the transactions set forth in this Agreement with any employee representative
body without consulting with the Parent REIT prior to any such
discussion;




(xix)       make
any change in accounting methods, principles or practices, except to the extent
required by GAAP or applicable Law;




(xx)        settle
or compromise any claim, litigation or other legal proceeding, other than (A) in
connection with this Agreement or the Contemplated Transactions, (B) those
wholly-covered by insurance or (C) in the ordinary course of business consistent
with past practice in an amount not involving more than $25,000 individually or
$150,000 in the aggregate;




(xxi)       commence
any litigation or any administrative proceeding against any Person, other than
in connection with this Agreement or the Contemplated Transactions or actions
brought in the ordinary course of business;




(xxii)      permit
any insurance policy naming any Group Company as a beneficiary or a loss payable
payee to be canceled or terminated without notice to Parent OP unless such Group
Company shall have obtained, prior to or simultaneous with such cancellation or
termination, an insurance policy with substantially similar terms and conditions
to the canceled or terminated policy;




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(xxiii)     initiate
or consent to any zoning reclassification of any the Owned Real Properties or
Leased Real Properties or any material change to any approved site plan, special
use permit, planned unit development approval or other land use entitlement
affecting any Owned Real Properties or material Leased Real Properties except to
the extent any of the foregoing would not materially adversely affect the value
of the affected Owned Real Properties or Leased Real Properties;




(xxiv)     make
or agree to make any new capital expenditures or development or construction
expenditures in excess of the amounts reflected in the Budget;




(xxv)      enter
into, amend, or supplement any Tax Protection Agreement or take any action that
would, or would reasonably be expected to, violate any Tax Protection Agreement
or otherwise give rise to any material liability of the Company or any Group
Company with respect thereto;




(xxvi)     take
any of the actions set forth on Schedule
6.1(b)(xxvi); or




(xxvii)    agree
in writing or otherwise commit to take any of the foregoing
actions.




Notwithstanding
the foregoing, the parties acknowledge and agree that any action expressly
permitted by any subsection of Section 6.1(b) shall
be deemed permitted by each subsection of Section
6.1(b).




(c)           Nothing
contained in this Agreement shall give Parent REIT, Parent OP and Parent Sub
directly or indirectly, rights to control or direct any Group Companies
operations prior to the Closing.  Prior to the Closing, each Group
Company shall, consistent with the terms and conditions of this Agreement,
exercise complete control and supervision over the operations of such Group
Company.




(d)           Notwithstanding
anything in this Section 6.1 to the
contrary, Parent REIT and Parent OP shall not unreasonably withhold, condition
or delay providing consent for any action intended to prevent, or any payment
intended to remedy, (i) a breach, default or event of default under any loan
agreement or similar document by any Group Company (other than in connection
with obtaining the Required Consents and the matters disclosed on Annex E and Schedule 8.1(b),
which shall be addressed in the manner set forth on Annex E and Schedule 8.1(b)),
(ii) a breach, default or event of default under any other Contract, (iii) a
violation of Law or (iv) a violation or loss of a Company Permit.  The
consent of Parent REIT or Parent OP shall not be required for the Group
Companies to make any emergency repairs; provided, that the
Company shall notify Parent REIT or Parent OP with respect to any such emergency
repairs as promptly as practicable following the taking of such
action.




(e)           The
Company shall cooperate and consult with Parent OP and Parent REIT in connection
with any action in lieu of condemnation described on Schedule
3.16(b).  Without limiting the foregoing, before taking any
such action in lieu of condemnation, the Company will provide Parent OP and
Parent REIT with advance notice at least three (3) Business Days prior to taking
any such action in lieu of condemnation and provide Parent OP and Parent REIT
with the opportunity to participate in any such action.




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Section
6.2       Pre-Closing Tax
Matters




During
the period from the date of this Agreement through the earlier of the Closing
and the termination of this Agreement in accordance with its terms, except as
consented to in writing by Parent REIT or Parent OP (which consent shall not be
unreasonably withheld, delayed or conditioned):




(a)           The
Company shall, and shall cause each other Group Company to, prepare and timely
file all material Tax Returns required to be filed by them on or before the
Closing Date (“Post-Signing
Returns”) in a manner consistent with past practice except as otherwise
required by applicable Laws;




(b)           The
Company shall, and shall cause each other Group Company to, fully and timely pay
(or cause to be paid) all material Taxes due and payable by the Company or
another Group Company, as applicable, in respect of such Post-Signing Returns
that are so filed;




(c)           The
Company shall furnish all material Post-Signing Returns (with respect to any
Group Company) to Parent REIT at least twenty (20) days before the due date for
such Tax Returns, and Parent REIT shall have the opportunity to discuss such Tax
Returns with the Company prior to the filing of such Tax Returns; provided
however, that this provision is not designed to imply that Parent REIT has an
approval right over the filing of such Tax Returns.




(d)           Each
party shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any Transaction Taxes
that become payable in connection with the Contemplated Transactions, and shall
cooperate in attempting to minimize the amount of such Transaction
Taxes;




(e)           The
Company shall not, and shall cause each other Group Company not to, make, change
or rescind any material Tax election or change a material method of Tax
accounting unless in each case such action is required by Law; if any action is
required by Law, the applicable Group Company shall promptly notify Parent
REIT;




(f)           The
Company shall not, and shall cause each other Group Company not to, amend any
material Tax Return, or settle or compromise any material federal, state, local
or foreign income Tax liability, audit, claim or assessment, or enter into any
material closing agreement related to Taxes, or knowingly surrender any right to
claim any material Tax refund unless either (i) such action is not material and
would not affect the Taxes of the applicable Group Company in a post-Closing
period or (ii) such action is required by law; solely in the case of clause
(ii), the applicable Group Company will promptly notify Parent
REIT;




(g)           The
Company shall, and shall cause each other Group Company to, promptly notify
Parent REIT of any suit, claim, action, investigation, proceeding or audit
brought against or with respect to the Company in respect of any Tax;
and




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(h)           No
Group Company shall enter into, amend or modify any Tax Protection Agreement, or
take any action that would, or could reasonably be expected to, violate any Tax
Protection Agreement or otherwise give rise to any liability of the Company or
any Subsidiary with respect thereto.




Section
6.3       Access to
Information




From and
after the date hereof until the earlier of the Closing or the termination of
this Agreement in accordance with its terms, upon reasonable notice, and subject
to restrictions contained in any confidentiality agreements to which the Group
Companies are subject, the Company shall, and shall cause the Group Companies
to, provide to Parent REIT, Parent OP and Parent Sub and their authorized
representatives, during normal business hours reasonable access to all books and
records (including computer files, retrieval programs and similar documentation,
which, for the avoidance of any doubt, includes all Tax Returns, Tax work
papers, and other information used to prepare Tax Returns), properties and
offices, and authorized representatives of the Group Companies (including
accountants, financial advisors and attorneys) in a manner so as to not
materially interfere with the normal business operations thereof and shall
furnish or cause to be furnished to Parent REIT, Parent OP and Parent Sub or
their authorized representatives such additional information concerning the
Group Companies as shall be reasonably requested.  The Company shall
provide Parent REIT, Parent OP and Parent Sub and their authorized
representatives with appropriate office and conference room space as may be
requested by Parent REIT, Parent OP and Parent Sub and their authorized
representatives in connection with such access.  All of such
information shall be treated as confidential information pursuant to the terms
of the Confidentiality Agreement, the provisions of which shall survive the
execution of this Agreement and are by this reference hereby incorporated
herein.  Without limiting the foregoing, Parent REIT, Parent OP and
Parent Sub and their authorized representatives shall have the right to conduct
appraisal and environmental and engineering inspections of each of the Owned
Real Properties and Leased Real Properties; provided, however, that none of
Parent REIT, Parent OP and Parent Sub or their authorized representatives shall
have the right to take and/or analyze any samples of any environmental media
(including soil, groundwater, surface water, air or sediment) or any building
material or to perform any invasive testing procedure on any building or real
property unless such invasive testing procedure is (a) required, or would be
required after the Closing, by applicable Law or pursuant to the terms of, or to
prevent any default under, any Contract to which any Group Company is a party or
(b) based on the findings of any inspections or assessments conducted pursuant
to this Section
6.3, the performance of such invasive testing is reasonably required as a
result of such investigations or assessments revealing a material issue and in
either case subject to the consent of the Company (such consent not to be
unreasonably withheld, conditioned or delayed).  The Company shall
instruct the employees, counsel, accountants and other representatives of the
Group Companies to cooperate with Parent REIT’s investigations of the Group
Companies.




62


Section
6.4       Efforts to
Consummate




(a)           Subject
to the terms and conditions herein provided, each of Parent REIT, Parent OP,
Parent Sub, the Company and the Contributors shall use reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable Law to
consummate and make effective as promptly as practicable the Contemplated
Transactions (including, without limitation, the satisfaction, but not waiver,
of the closing conditions set forth in Article 8 and the
entry into the Tax Matters Agreements, together with the Member Guarantees and
Capital Contribution Agreements that are exhibits thereto, and the New Company
Agreement).  Notwithstanding the foregoing or anything in this
Agreement to the contrary (including the preceding sentence of this Section 6.4(a) and
Section
9.1(f)), in exercising such reasonable efforts to obtain any consent,
waiver or other accommodation (including the Required Consents) from any Person
that is not a Governmental Entity, none of the Group Companies, the
Contributors, Parent REIT, Parent OP, Parent Sub, or any of their respective
Affiliates, shall be obligated, except as otherwise provided in Annex E or Section 6.4(c) or
Section 6.5, to
incur any liability, commence or threaten to commence any litigation, agree to
any amendment to this Agreement or any other Transaction Document, make any
payment (other than to attorneys, accountants and other advisors), offer or
grant any accommodation (financial or otherwise) or agree or commit to any of
the foregoing.




(b)           Subject
to the terms and conditions of this Agreement, each of the parties hereto shall
use its reasonable best efforts to (i) cooperate in all material respects with
each other in connection with obtaining any consent, waiver or other
accommodation (including the Required Consents) from any Person as may be
necessary or desirable to obtain any consent, waivers or approvals required to
consummate the Contemplated Transactions and (ii) keep the other party informed
in all material respects and on a reasonably timely basis of any material
communication received by such party or any of its Affiliates from, or given by
such party or any of its Affiliates to, any lender, servicer or agent in
connection with obtaining the Required Consents.  Without limiting the
foregoing, (A) Parent OP and Parent REIT shall be given no less than three (3)
Business Days to review and comment on all materials or documents relating to
this Transaction or any of the parties hereto that is to be provided to any
lender, servicer or agent in connection with obtaining a Required Consent and
any such materials shall be revised to reflect any reasonable comments of Parent
REIT and Parent OP with respect thereto and (B) the Group Companies and their
representatives shall not engage or participate in any meeting or discussion or
proposed discussion with any lender, servicer or agent for the purpose of
discussing the Contemplated Transactions or the Required Consents without the
participation of Parent REIT or Parent OP and their advisors and representatives
and all such meetings and discussions will be scheduled to take place at times
and locations that are reasonably convenient for Parent REIT and Parent
OP.




(c)           Subject
to the terms and conditions herein provided, in the event any claim, action,
suit, investigation or other proceeding by any Governmental Entity or other
Person is commenced which questions the validity or legality of the Contemplated
Transactions or seeks damages in connection therewith, each of the parties
hereto agrees to cooperate and use reasonable efforts to defend against such
claim, action, suit, investigation or other proceeding and, if an injunction or
other order is issued in any such action, suit or other proceeding, to use
reasonable efforts to have such injunction or other order lifted, and to
cooperate reasonably regarding any other impediment to the consummation of the
Contemplated Transactions.




(d)           Parent
REIT, Parent OP and Parent Sub shall not, and shall not permit any of their
respective controlled Affiliates to, without the prior written consent of the
Representative, enter into any merger, acquisition, joint venture or debt or
equity financing, that would reasonably be expected to materially impair, delay
or prevent consummation of the Financing or the Contemplated
Transactions.




63




Section
6.5       ***16




Section
6.6       Public
Announcements




Parent
REIT, Parent OP and Parent Sub, on the one hand, and the Company and the
Contributors, on the other hand, have agreed upon the form and substance of the
press releases to be issued to announce the execution of this Agreement, which
shall be issued promptly following the execution and delivery
hereof.  Thereafter, Parent REIT, Parent OP and Parent Sub, on the one
hand, and the Company and the Contributors, on the other hand shall not issue
any other press release or make any other public announcement with respect to
this Agreement or the Contemplated Transactions without the prior consent of the
other parties (which consent shall not be unreasonably withheld, delayed or
conditioned), except as may be required by Law or by any listing agreement with
a national securities exchange, in which case the party proposing to issue such
press release or make such public announcement shall use its commercially
reasonable efforts to consult in good faith with the other parties before making
any such public announcements by providing the other parties with a copy of the
proposed press release or public announcement reasonably in advance of such
release or announcement.




Section
6.7       Indemnification




(a)           Parent
REIT, Parent OP and Parent Sub agree that all rights to indemnification or
exculpation now existing in favor of any directors and officers of any Group
Company (collectively, the “Exculpated Parties”),
as provided in such Group Company’s Governing Documents and indemnification or
similar agreement disclosed in the Company Schedules with respect to any matters
occurring prior to the Closing, shall survive the Closing and shall continue in
full force and effect for a period of six (6) years from and after the
Closing.




(b)           Without
limiting the generality of the foregoing, Parent OP agrees that the
indemnification and liability limitation or exculpation provisions of the
Governing Documents of the Group Companies shall not be amended, repealed or
otherwise modified at or after the Closing in any manner that would adversely
affect the rights thereunder of any Exculpated Party, except to the extent such
modification is required by applicable Law.  In the event that any
Group Company or any of its successors or assigns (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving Person
of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in each
such case, Parent OP shall cause proper provision to be made so that the
successors or assigns of such Group Company shall succeed to the obligations set
forth in this Section 6.7.




(c)           The
directors and officers of each Group Company entitled to the indemnification,
liability limitation and exculpation set forth in this Section 6.7 are
intended to be third party beneficiaries of this Section
6.7.  This Section 6.7 shall
survive the Closing and shall be binding on all successors and assigns of Parent
REIT, Parent OP and Parent Sub.







16Certain portions have
been omitted in connection with an application for confidential treatment
therefor.


64


Section
6.8       Documents and
Information




(a)           If,
after the Closing, a Contributor shall determine that it, or one of its
Affiliates, has an original or a copy of the books, records (whether in paper or
electronic form) of the Group Companies, such Contributor shall promptly deliver
such original or copy of the books and records, and will not retain any copies
thereof except to the extent required by applicable Law.




(b)           After
the Closing, Parent OP and Parent Sub shall, until the seventh (7th)
anniversary of the Closing Date, retain all books, records and other documents
pertaining to the business of the Group Companies in existence on the Closing
Date and to make the same available for inspection and copying by the
Representative during normal business hours upon reasonable request and upon
reasonable notice and at the Representative’s expense, subject to entry into a
customary confidentiality agreement.  No such books, records or
documents shall be destroyed after the seventh (7th)
anniversary of the Closing Date by Parent REIT, Parent OP, Parent Sub or any of
their respective Subsidiaries, without first advising the Representative in
writing and giving the Representative a reasonable opportunity to obtain
possession thereof at Representative’s expense, subject to entry into a
customary confidentiality agreement.  Without limiting the foregoing,
Parent REIT, Parent OP and Parent Sub shall (and shall cause their Subsidiaries
to) retain all Tax Returns, schedules and work papers, records and other
documents in its possession (or in the possession of their Affiliates) relating
to Tax matters relevant to the business of the Group Companies for each taxable
period first ending after the Closing and for all prior taxable periods until
the later of:  (a) the expiration of the statute of limitations of the
taxable periods to which such Tax Returns and other documents relate; and (b)
six (6) years following the due date (with extension) for such Tax
Returns.




(c)           Within
five (5) days after the end of each calendar month prior to the Closing, the
Company will provide Parent OP with an updated true, correct and complete set of
tenant arrearage schedules for the Group Companies.




Section
6.9       ***17




Section
6.10    Employee Benefit
Matters




(a)           For
one year after the Closing Date, Parent REIT and Parent OP shall, or shall cause
their Subsidiaries to, provide each Retained Property Employee and Retained
Management Employee with a base salary or base wages and pension and health
benefits (other than retention, sale, stay, special bonuses or other change of
control payments or awards) that are, in the aggregate, either, at the option of
Parent REIT and Parent OP, (A) no less favorable to each Retained Property
Employee and Retained Management Employee than the base salary or base wages and
pension and health benefits provided to similarly situated employees of Parent
REIT and Parent OP, or (B) in the aggregate no less favorable to each Retained
Property Employee and Retained Management Employee than the base salary or base
wages and pension and health benefits provided to such Retained Property
Employees and Retained Management Employees immediately prior to the Closing, in
either case to be determined for each Retained Property Employee and Retained
Management Employee in the sole discretion of Parent REIT and Parent
OP.


17Certain portions have
been omitted in connection with an application for confidential treatment
therefor.


65




(b)           For
all purposes under the employee benefit plans of Parent REIT and Parent OP and
their Subsidiaries after the Closing Date, Parent REIT and Parent OP shall, and
shall cause their Subsidiaries to, credit service for eligibility and vesting
(but not benefit accrual) rendered by Retained Property Employees and Retained
Management Employees prior to the Closing Date for purposes of pension and
health benefits under employee benefit plans, programs, policies and
arrangements of Parent REIT and Parent OP and their Subsidiaries from and after
the Closing Date, to the same extent as such service was taken into account
under the corresponding plans of the Group Companies for such purposes (except
to the extent such credit would result in a duplication of accrual of
benefits).  Without limiting the foregoing, Parent OP shall use its
reasonable efforts to cause Retained Property Employees and Retained Management
Employees to be immediately eligible to participate, without waiting time and to
waive any pre-existing condition limitations otherwise applicable to Retained
Property Employees and Retained Management Employees and their eligible
dependents under any health or welfare plan of Parent REIT, Parent OP or their
Subsidiaries for any condition for which such Retained Property Employee and
Retained Management Employee would have been entitled to coverage under the
corresponding plans of the Group Companies in which such Retained Property
Employees and Retained Management Employees participated immediately prior to
the Closing.  Parent REIT and Parent OP shall, and shall use
reasonable efforts to cause, such current Retained Property Employees and
Retained Management Employees to be given credit under such plans for
co-payments made, and deductibles satisfied, prior to the Closing
Date.




(c)           Prior
to Closing, the Company shall, and shall cause each Group Company, to take such
actions as are necessary to ensure that no Group Company shall be the
administrator of the Lightstone Group, LLC 401(k) Plan or the sponsor of, or
participating employer in, any Employee Benefit Plan (including such plans
listed on Schedule
3.10(a)) from and after Closing.




(d)           No
provision of this Section 6.10 shall
create any third party beneficiary or other rights in any Employee (including
any dependent or beneficiary thereof).  Parent REIT and Parent OP and
their Subsidiaries, as applicable, shall have the right in their sole discretion
to amend, modify, terminate or adjust benefit levels under any and all employee
benefit plans and arrangements covering the Employees after the Closing Date,
subject to this Section
6.10.  No provision of this Section 6.10, or any
other provision of this Agreement, is intended to modify, amend or create any
employee benefit plan or arrangement of Parent REIT, Parent OP or any of the
Group Companies for purposes of ERISA or otherwise.




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(e)           (i)
Within thirty (30) days of the date hereof (or within forty five (45) days of
the date hereof with respect to 2009 compensation), the Group Companies shall
provide to Parent REIT and Parent OP a true and correct list of the following
information with respect to each Employee: their title and respective salaries,
wages, bonuses (and other material compensation and benefits to the extent not
otherwise made available to substantially all Employees) paid or payable during
2008 and 2009, date of hire, the date and amount of the last salary increase and
whether any such Employee is on short-term disability, long-term disability,
leave of absence or layoff. (ii) Within the later of five (5) days after
delivery of the information described in Section 6.10(e)(i)
and January 31, 2010, Parent REIT and Parent OP may, if practicable, provide the
Company with a list of positions of Property Employees at each property and
Management Employees it desires to retain and the number of persons required for
each position.  As soon as possible following delivery of the
information described in Section 6.10(e)(i),
but in no event later than five (5) Business Days thereafter, the Company will
permit persons designated by Parent REIT and Parent OP to interview any and all
(x) Management Employees so that Parent REIT and Parent OP can determine those
Management Employees to be hired by and transferred to the Group Companies (or
retained by Prime Manager if Prime Manager is a Group Company) at the Closing
(the “Retained
Management Employees”), and (y) Property Employees so that Parent REIT
and Parent OP can determine those Property Employees to be retained (the “Retained Property
Employees”); provided, that such
interview process shall be effected with the least amount of interference with
the operation of the business of the Group Companies and Prime Manager as
practicable, as reasonably determined by the parties acting in good
faith.  Parent REIT and Parent OP shall provide the Company with a
list of any designed Retained Management Employees (to whom offers of employment
will be made effective at the Closing if Prime Manager is not a Group Company)
and Retained Property Employees as soon as practicable but no later than 75 days
following the date hereof.  The Company shall, and shall cause each
Group Company (including Prime Manager if it is a Group Company), to terminate
the employment of all Employees other than the Retained Management Employees and
the Retained Property Employees prior to the Closing.  With respect to
each Employee terminated prior to the Closing, the Company shall, and shall
cause each Group Company, to use commercially reasonable efforts to obtain
releases from each terminated Employee, in a form approved by Parent REIT and
Parent OP, in which each Employee releases all claims against the Company and
the Group Companies with respect to such termination; provided that none of
the Group Companies or their Affiliates shall be required to incur any
liability, commence or threaten to commence any litigation, offer any cash or
other pecuniary consideration or grant any accommodation (financial or
otherwise) to any such Employee to secure such release other than as is required
pursuant to any Employee Agreement or Employee Benefit Plan.




(f)           With
respect to all Employees of the Group Companies or Prime Manager other than
Retained Management Employees and Retained Property Employees, Parent REIT and
Parent OP shall not be responsible for any notices required to be given or
otherwise to comply with WARN with respect to any plant closing or mass layoff
(or similar triggering event) caused by the Group Companies or Prime Manager
prior to the Closing, and Parent REIT and Parent OP shall have no responsibility
or liability under WARN with respect to such Employees except to the extent that
any notice requirement or other liabilities under WARN are triggered in respect
of such Employees as a result of the termination of employment following the
Closing of one or more Retained Management Employees or Retained Property
Employees.




Section
6.11   Notification




The
Company shall give notice to Parent REIT if, to the Company’s knowledge, any of
the Company’s representations, warranties or covenants herein are breached in a
manner that would give rise to a claim by the Parent Indemnitees pursuant to
Article 10
(subject to Section
10.4(b) and Section 12.15); provided, however, that, except
as otherwise provided herein, the delivery of any notice pursuant to this Section 6.11 shall
not limit or otherwise affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.




67


Section
6.12    Transactions in Parent
Common Stock




From the
date hereof until the earlier of termination of this Agreement in accordance
with its terms and the Closing, no Contributor shall knowingly, directly or
indirectly, (i) purchase or sell any shares of Parent Common Stock, (ii) engage
in any hedging, short-sale, derivative or other transaction based upon the
value, or intended to hedge the risk of ownership, of shares of Parent Common
Stock, provided
that this clause (ii) shall not apply until ten (10) days prior to the period of
time for the determination of the Parent Closing Price has begun, or (iii) enter
into any transaction with the intent to cause, or which would otherwise
reasonably be expected to result in, a decline in the trading price of the
Parent Common Stock.




Section
6.13    Exclusivity




(a)           During
the period commencing on the date hereof through the earlier to occur of the
Closing and the termination of this Agreement in accordance with its terms, the
Contributors and LVP REIT shall not, and shall cause the Group Companies and
each of their respective directors, officers and representatives not to,
directly or indirectly, (x) knowingly initiate, solicit, discuss, negotiate,
provide non-public information with respect to, or respond affirmatively to any
inquiries, proposals or offers (whether initiated by them or otherwise), from
any Person other than the Parent Parties and their Affiliates and
representatives (a “Third Party Bidder”),
with respect to any transaction, however structured, resulting in or relating to
the acquisition by such Third Party Bidder of all or substantially all of the
equity interests or assets of the Group Companies or any individual mall or
development project (a “Potential
Transaction”) or (y) enter into any contract, agreement or arrangement
with any Third Party Bidder to consummate a Potential Transaction; provided, that “Potential
Transaction” shall not include, and this Section 6.13(a) shall
not apply to, any inquiry, proposal or offer to acquire, whether by merger,
purchase of assets, equity interests or other securities, tender offer or
otherwise, all or substantially all of the capital stock or consolidated assets
of LVP REIT (a “Permitted
Transaction”), but LVP REIT may only enter into an agreement with respect
thereto to the extent that the entry into any such transaction would not require
or otherwise provide for the sale of the Company Interests owned by the
Contributors other than the LVP Parties or prevent or materially impair the
ability of the Contributors, the Company and the Group Companies to complete the
Contemplated Transactions.  The Contributors shall, and shall cause
the Group Companies to, immediately terminate any existing discussions with
respect to any Potential Transaction and request that all confidential
information relating to any of the Group Companies provided to any Third Party
Bidder in connection with a Potential Transaction be promptly returned or
destroyed.




(b)           LVP
REIT shall not provide any non-public information with respect to the Group
Companies (the “Group
Company Information”) to any Third Party Bidder in connection with the
pursuit of a Permitted Transaction before March 1, 2010.  On or after
March 1, 2010, LVP REIT may provide Group Company Information in connection with
the pursuit of a Permitted Transaction to a Person that executes a
confidentiality agreement with terms that are in the aggregate no less favorable
to LVP REIT (other than with respect to any standstill and non-solicitation
provisions) than those contained in the Confidentiality Agreement; provided that all
such Group Company Information (to the extent that such information has not been
previously provided or made available to Parent REIT) is concurrently made
available to Parent REIT.  LVP REIT shall not waive any of its rights
under any such confidentiality agreement with respect to Group Company
Information and shall take all reasonable steps to enforce all of its rights
with respect to Group Company Information under any such confidentiality
agreement to the extent it becomes aware of any breach thereof in respect of
Group Company Information.




68




(c)           Notwithstanding
the foregoing, nothing in this Section 6.13 shall
prohibit the Contributors, LVP REIT or the Group Companies, or any of their
respective directors, officers and representatives, from (i) discussing the
Contemplated Transactions with any equity holders of the Group Companies, the
Contributors, LVP REIT or any of their respective subsidiaries, or with any
lender (subject to Section 6.4(a)),
servicer (subjection to Section 6.4(a)),
landlord, employee, tenant or prospective tenant of the Group Companies, the
Contributors, LVP REIT or any of their respective subsidiaries, (ii) providing
non-public information to its tenants and others with whom the Group Companies
do business in the ordinary course of business, (iii) making any communications
designed to inform a Third Party Bidder that such Person is not permitted to
engage in any discussions regarding a Potential Transaction or (iv) taking any
other action to the extent expressly permitted by this Agreement.




Section
6.14    Use of PrimeRetail
Mark




From and
after the Closing Date, except as set forth on Schedule 6.14, the
Contributors shall not, and shall cause their Affiliates not to: (a) establish
or create any corporation, partnership, joint venture or other business entity
or enterprise that uses as, or incorporates as part of, its legal or trade name
any Prime Retail Mark or (b) seek any registration of any trademark, copyright,
domain name or analogous right, that incorporates, or is identical or
confusingly similar to, any Prime Retail Mark or (c) use any Prime Retail Mark
in connection with the operation of any outlets or shopping
malls.  Nothing in this Agreement shall be construed as granting to
any party any license to the Prime Retail Marks.




Section
6.15    Parent OP
Agreement




From and
after the date hereof, neither Parent REIT nor Parent OP shall amend the Parent
OP Agreement in a manner that would adversely and disproportionately affect the
rights of the Contributors with respect to the Parent OP Common Units to be
issued to the Contributors hereunder (assuming for this purpose that such Parent
OP Common Units have been issued to the Contributors as of the date hereof),
whether held by the New Company or received upon conversion or exchange of New
Company Common Units.




69


Section
6.16    ***18




ARTICLE
7


CERTAIN
AFFILIATE MATTERS




Section
7.1       Termination of Agreements;
Resignations of Affiliates




(a)           At
the Closing, and without any further action on the part of any party hereto and
without payment of any additional consideration, all rights and obligations of
any Group Company arising under or in connection with the agreements set
forth on Schedule
7.1 (the “Terminated
Agreements”) shall be terminated in full and without any further
liability of any Person thereunder at or after the Closing.  Prior to
the Closing, the Company shall, and shall cause each Group Company to, take all
action required to effect the foregoing in a manner reasonably satisfactory to
Parent REIT and Parent OP and shall deliver evidence of the termination of the
Terminated Agreements effective on the Closing Date as of no later than the
third (3) Business Day prior to the Closing in accordance with the preceding
sentence.




(b)           Prior
to Closing, the Parent Parties and the Company shall cooperate in good faith to
evaluate the ability of Prime Manager to transfer, without payment of any
additional consideration, all of the assets (other than Contracts to manage
properties owned by Persons other than the Group Companies), including all of
the books and records (including computer files, retrieval programs and similar
documentation), relating to any of the Group Companies, or their properties, of
Prime Manager to the Company and the ability of the Company to transfer Prime
Manager to an entity that is not a Group Company. If the parties hereto mutually
agree in good faith to such reorganization without payment of any additional
consideration, the parties shall enter into an amendment to this Agreement to
reflect such mutually-agreed restructuring, including by revising Schedule
7.1.




(c)           At
the Closing, and without any further action on the part of any party hereto and
without payment of any additional consideration, Lightstone Prime shall resign,
effective as of no later than immediately prior to the Closing, as the general
manager of the Company and as the general manager or general partner of any
other Group Company for which it acts as managing member.




(d)           At
the Closing, each of the Company, Mill Run, Ewell and Barceloneta shall, if
requested by Parent REIT, amend its Governing Documents in a manner reasonably
satisfactory to Parent REIT in order to (i) enable the acquirers of the
Contributed Interests pursuant to this Agreement and the LP Purchase Agreement
to automatically become substitute members or substitute limited partners, as
applicable, and (ii) replace the manager, managing member or general partner of
each Group Company with a Person designated by Parent REIT, in each case
immediately upon consummation of the Contemplated Transactions and without the
application of any waiting period.


18Certain portions have
been omitted in connection with an application for confidential treatment
therefor.


70


Section
7.2       Release




(a)           Effective
at and after the Closing, the Parent Parties agree that each Group Company, on
behalf of itself and its successors and assigns (the “Company Releasing
Parties”), releases, acquits and forever discharges each of the
Contributors, LVP REIT, each of their respective Affiliates which are not Group
Companies, each of their respective shareholders, members, partners, managers,
directors, officers and employees, in their capacities as such, each of the
Persons set forth on Schedule 7.2, and
each of their respective successors and assigns (collectively, the “Company Released
Parties”) from any and all claims, demands, damages, actions, causes of
action, rights, costs, losses, expenses, compensation or suits in equity, of
whatsoever kind or nature, in contract or in tort, that such Company Releasing
Party might have (i) because of anything done, omitted, suffered or allowed to
be done by such Company Released Parties prior to or at the Closing, or (ii) in
connection with or by reason of the Governing Documents of such Group Companies,
in each case whether heretofore or hereafter accruing, whether foreseen or
unforeseen or whether known or unknown to the parties, including without
limitation, any claim for indemnification, contribution or other relief (“Company Released
Matters”).  Notwithstanding the foregoing, the following shall
not constitute Company Released Matters: (A) in the case of any Company Released
Party that is a party to any Tax Protection Agreement with a Group Company, any
claims arising thereunder (except to the extent expressly set forth in the Tax
Matters Agreements), (B) any claims under the Tax Matters Agreements, (C) any
claim insofar as it is made to negate, limit or otherwise dispute any asserted
right to indemnification which a Company Released Party has asserted under
applicable Law, the Governing Documents of such Group Company or Section 6.7
hereof and (D) claims against any Contributor for Fraud.  Effective at and
after the Closing, each of the Parent Parties agrees that no Company Releasing
Party will commence, aid or participate in a manner adverse to any Company
Released Party in any legal action or other proceeding based in whole or in part
upon any Company Released Matters.  The Parent Parties acknowledge
that this release shall apply to all unknown or unanticipated results of any
action of any Company Released Party, as well as those known and
anticipated.  The Parent Parties have provided the release in this
Section 7.2(a)
voluntarily, with the intention of fully and finally extinguishing all Company
Released Matters.  Effective at and after the Closing, the Parent Parties
acknowledge and agree that no Company Releasing Party shall, directly or
indirectly, make any claim related to the Company Released Matters against any
person that has a right to seek indemnification, contribution or other relief
for such claim from any Company Released Party.  If a Company Releasing
Party makes such a claim and a Company Released Party notifies the Company
Releasing Party of such obligation, Parent OP shall cause the Company Releasing
Party to promptly, but no later than three (3) Business Days following such
notice, withdraw all such claims with prejudice and enter into a release thereof
in form and substance reasonably acceptable to the Company Released Party. The
release contained in this Section 7.2(a) shall
also be deemed to be a covenant not to sue. Any breach of this covenant by a
Company Releasing Party not to sue shall be deemed a breach of this Section
7.2(a)




71


(b)           Effective
at and after the Closing, each Contributor and LVP REIT, on behalf of itself and
its successors and assigns (the “Contributor Releasing
Parties”), releases, acquits and forever discharges each of the Group
Companies, each of the other Contributors, and each of their respective
Affiliates (other than the Parent Parties), shareholders, members, partners,
managers, directors, officers and employees, in their capacities as such, and
each of their respective successors and assigns (but excluding, in each case,
any of the foregoing of the Parent Parties) (collectively, the “Contributor Released
Parties”) from any and all claims, demands, damages, actions, causes of
action, rights, costs, losses, expenses, compensation or suits in equity, of
whatsoever kind or nature, in contract or in tort, that such Contributor
Releasing Party might have (i) because of anything done, omitted, suffered or
allowed to be done by such Contributor Released Parties prior to or at the
Closing, or (ii) in connection with or by reason of the Governing Documents of
such Group Companies, in each case whether heretofore or hereafter accruing,
whether foreseen or unforeseen or whether known or unknown to the parties,
including without limitation, any claim for indemnification, contribution or
other relief (“Contributor Released
Matters”).  Notwithstanding the foregoing, the following shall not
constitute Contributor Released Matters: (A) in the case of any Contributor
Released Party that is a party to any Tax Protection Agreement with a
Contributor Releasing Party, any claims arising thereunder (except to the extent
expressly set forth in the Tax Matters Agreements), (B) any claims against a
Parent Party under this Agreement or any other Transaction Document, including
the Tax Matters Agreements, (C) any claim but only insofar as it is made to
negate, limit or otherwise dispute any asserted right to indemnification which a
Contributor Released Party has asserted under applicable Law, the Governing
Documents of such Group Company and (D) claims against a party hereto for actual
and intentional fraud.  Effective at and after the Closing, each
Contributor Releasing Party further agrees never to commence, aid or participate
in a manner adverse to any Contributor Released Party in any legal action or
other proceeding based in whole or in part upon any Contributor Released
Matters.  Each Contributor and LVP REIT acknowledges that this release
shall apply to all unknown or unanticipated results of any action of any
Contributor Released Party, as well as those known and anticipated.  Each
Contributor and LVP REIT has provided the release in this Section 7.2(b)
voluntarily, with the intention of fully and finally extinguishing all
Contributor Released Matters.  Effective at and after the Closing,
each Contributor and LVP REIT acknowledges and agrees that such Contributor
Releasing Party shall not, directly or indirectly, make any claim related to the
Contributor Released Matters against any person that has a right to seek
indemnification, contribution or other relief for such claim from any
Contributor Released Party.  If a Contributor Releasing Party makes
such a claim and a Contributor Released Party notifies the Contributor Releasing
Party of such obligation, the Contributor Releasing Party shall promptly, but no
later than three (3) Business Days following such notice, withdraw all such
claims with prejudice and enter into a release thereof in form and substance
reasonably acceptable to the Contributor Released Party. The release contained
in this Section
7.2(b) shall also be deemed to be a covenant not to sue. Any breach of
this covenant by a Company Releasing Party not to sue shall be deemed a breach
of this Section
7.2(b).




(c)           California Civil Code
Section 1542 Waiver.  Each of the Parent Parties and each
Contributor Releasing Party acknowledges that it may discover facts or law
different from, or in addition to, the facts or law that it knows or believes to
be true with respect to the claims released in this Section 7.2 and
agrees, nonetheless, that the Release contained in this Section 7.2shall be
and remain effective in all respects notwithstanding such different or
additional facts or the discovery of them. Each of the Parent Parties and
each Contributor Releasing Party expressly acknowledges and agrees that all
rights under Section 1542 of the California Civil Code are expressly
waived.  That section provides:




72


A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.




ARTICLE
8


CONDITIONS
TO CONSUMMATION OF THE CONTRIBUTIONS




Section
8.1       Conditions to the
Obligations of the Contributors, Parent REIT, Parent OP and Parent
Sub




The
obligations of the Contributors, Parent REIT, Parent OP and Parent Sub to
consummate the Contemplated Transactions are subject to the satisfaction (or, if
permitted by applicable Law, waiver by the party for whose benefit such
condition exists) of the following conditions:




(a)           No
Order shall be in effect, and no Law shall have been enacted, which restrains,
enjoins, imposes conditions upon or makes illegal the Contemplated Transactions
in the United States (including Puerto Rico); and




(b)           The
Company shall have procured the written consents specified on Schedule 8.1(b) (the
“Required
Consents”) and Parent REIT shall have received evidence reasonably
satisfactory to Parent REIT of the receipt thereof.  All actions
necessary for all of the Fixed Rate Debt to remain outstanding following the
Closing in accordance with its original terms, as modified by the Required
Consents, without any breach, default or event of default (with or without
notice or lapse of time or both) with respect to any matter or circumstance of
which the parties are aware as of the Closing Date in accordance with the terms
of such Required Consents, and all conditions in the Required Consents, shall
have been taken or satisfied.  Parent OP shall have received payoff
letters reasonably satisfactory to Parent OP with respect to all of the debt
constituting Floating Rate Debt being repaid by Parent OP at
Closing.




Section
8.2       Other Conditions to the
Obligations of Parent REIT, Parent OP and Parent Sub




The
obligations of Parent REIT, Parent OP and Parent Sub to consummate the
Contemplated Transactions are subject to the satisfaction or, if permitted by
applicable Law, waiver by Parent REIT or Parent OP of the following further
conditions:




73


(a)           The
representations and warranties of the Company (i) set forth in Section 3.2, Section 3.3, Section 3.7(a), Section 3.14(b)
(with respect to any Group Companies that own, directly or indirectly, any
material interests in real property) and Section 3.14(p) (the
“Specified
Representations”) shall be true and correct in all respects on the
Closing Date as though made on the Closing Date (except for such representations
and warranties made as of a specified date, which shall have been true and
correct in all respects as of that specified date) other than in the case of
Section 3.2 for
de minimis exceptions,
and (ii) set forth in Article 3 (other than
the Specified Representations and the representations and warranties in Section 3.4(b) with
respect to the 2008 Unaudited Financial Statements), disregarding qualifications
therein as to “material,” “materiality” (or words of similar import) or “Company
Material Adverse Effect,” and excluding any Known Claims, to the extent included
in the calculation of the Known Claims Escrow Amount with respect thereto, shall
be true and correct in all respects on the Closing Date as though made on the
Closing Date (except for such representations and warranties made as of a
specified date, which, disregarding qualifications therein as to “materiality”
or “Company Material Adverse Effect,” shall have been true and correct in all
respects as of that specified date), unless, in the case of clause (ii) only,
the failure or failures of all such representations and warranties, disregarding
qualifications therein as to “materiality” or “Company Material Adverse Effect,”
to be so true and correct in all respects would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect;




(b)           The
Company shall have performed and complied in all material respects with all
covenants (other than the covenants set forth in Section 6.11 and
Section 6.13)
required to be performed or complied with by the Company under this Agreement
(including any obligation relating to the Group Companies) on or prior to the
Closing Date;




(c)           (i)
The representations and warranties of the Contributors and LVP REIT set forth in
Article 4 shall
be true and correct in all material respects on the Closing Date as though made
on the Closing Date (except for such representations and warranties made as of a
specified date, which shall have been true and correct in all material respects
as of that specified date), and (ii) the Contributors shall have performed and
complied in all material respects with all covenants required to be performed or
complied with by the Contributors under this Agreement (other than the covenants
set forth in Section
6.13) on or prior to the Closing Date;




(d)           Parent
REIT and Parent OP shall have received the Audited 2008 Financial Statements and
the auditor’s report thereon shall not contain any qualifications that are not
Permitted Qualifications.




(e)           At
the Closing, Parent OP shall have received:




(i)           a
certificate of a senior executive officer of the Company in his or her
representative capacity, and not individually, certifying the satisfaction of
the conditions set forth in Section 8.2(a) and
Section
8.2(b);




(ii)          the
Escrow Agreement, duly executed by the Representative and the Escrow
Agent;




(iii)    
    the GPT Sale Agreement, duly executed by GPT Outlet
Lender LLC;




(iv)        evidence
reasonably satisfactory to Parent REIT that transactions set forth in Section 7.1 shall
have been completed;




(v)      
  a duly executed recordable special warranty deed for the St.
Augustine Land, in a form reasonably acceptable to Parent REIT and Parent OP and
such documents of further assurance reasonably necessary and typical for
transactions similar to the sale of the St. Augustine Land in order to complete
the sale and transfer of the St. Augustine Land;




74


(vi)        the
New Company Agreement, duly executed by each Contributor;




(vii)       ***19; and




(viii)      ***20




Section
8.3       Other Conditions to the
Obligations of the Contributors




The
obligations of the Contributors to consummate the Contemplated Transactions are
subject to the satisfaction or, if permitted by applicable Law, waiver by the
Contributors of the following further conditions:




(a)           The
representations and warranties of Parent REIT, Parent OP and Parent Sub (i) set
forth in Section
5.1, Section
5.2, Section
5.9(a) and Section 5.10 shall be
true and correct in all respects on the Closing Date as though made on the
Closing Date (except for such representations and warranties made as of a
specified date, which shall have been true and correct in all respects as of
that specified date), (ii) set forth in Section 5.4 and Section 5.8,
(collectively with Section 5.1, Section 5.2, Section 5.9(a) and
Section 5.10
the “Parent Specified
Sections”) shall be true and correct in all material respects on the
Closing Date as though made on the Closing Date (except for such representations
and warranties made as of a specified date, which shall have been true and
correct in all material respects as of that specified date), and (iii) set forth
in Article 5
(other than the Parent Specified Sections), disregarding qualifications therein
as to “material,” “materiality” (or words of similar import) or “Parent Material
Adverse Effect,” shall be true and correct in all respects on the Closing Date
as though made on the Closing Date (except for such representations and
warranties made as of a specified date, which, disregarding qualifications
therein as to “materiality” or “Parent Material Adverse Effect,” shall have been
true and correct in all respects as of that specified date), unless, in the case
of clause (iii) only, the failure or failures of all such representations and
warranties, disregarding qualifications therein as to “materiality” or “Parent
Material Adverse Effect,” to be so true and correct in all respects would not,
individually or in the aggregate, reasonably be expected to have a Parent
Material Adverse Effect;




(b)           Each
of Parent REIT, Parent OP and Parent Sub shall have performed and complied in
all material respects with all covenants required to be performed or complied
with by them under this Agreement on or prior to the Closing Date;




(c)           ***21;




(d)           ***22;




(e)           ***23;







19Certain portions have
been omitted in connection with an application for confidential treatment
therefor.
 20Certain portions have
been omitted in connection with an application for confidential treatment
therefor.
 21Certain portions have
been omitted in connection with an application for confidential treatment
therefor.
 22Certain portions have
been omitted in connection with an application for confidential treatment
therefor.
 23Certain portions have
been omitted in connection with an application for confidential treatment
therefor.
  75




(f)           ***24;




(g)           At
the Closing, Parent OP shall have delivered to the Representative:




(i)           a
certificate of a senior executive officer of each of Parent REIT and Parent OP,
in each case in his or her representative capacity, and not individually,
certifying the satisfaction of the conditions set forth in Section 8.3(a) and
Section 8.3(b);
and




(ii)          the
Escrow Agreement, duly executed by Parent OP and the Escrow Agent;
and




(iii)         the
DL Tax Matters Agreement, duly executed by each of Parent REIT, Parent OP and
New Company, together with the Member Guarantees and Capital Contribution
Agreements that are exhibits thereto, duly executed by the Lender and the
applicable Parent Parties, respectively; and




(iv)         the
LVP Tax Matters Agreement, duly executed by each of Parent REIT and Parent OP
and New Company, together with the Member Guarantees and Capital Contribution
Agreements that are exhibits thereto, duly executed by the Lender and the
applicable Parent Parties, respectively.




Section
8.4       Frustration of Closing
Conditions




No party
hereto may rely on the failure of any condition set forth in this Article 8 to be
satisfied if such failure was caused by such party, including such party’s
failure, subject to Section 6.4(a), to
use reasonable efforts to consummate the Contemplated Transactions.




ARTICLE
9


TERMINATION;
AMENDMENT; WAIVER




Section
9.1       Termination




This
Agreement may be terminated at any time prior to the Closing:




(a)           by
mutual written consent of Parent REIT, Parent OP and the
Representative;




24Certain portions have
been omitted in connection with an application for confidential treatment
therefor.


76


(b)           by
Parent REIT or Parent OP, if none of Parent REIT, Parent OP or Parent Sub is in
material breach of its representations, warranties, covenants or obligations
under this Agreement, and if (i) the representations and warranties of the
Company in Article
3 become untrue or inaccurate such that Section 8.2(a)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(b)),
(ii) the representations and warranties of any Contributor in Article 4 become
untrue or inaccurate such that Section 8.2(c)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(b)),
(iii) there has been a breach on the part of the Company of its covenants
and agreements contained in this Agreement such that Section 8.2(b)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(b)),  or
(iv) there has been a breach on the part of any Contributor of its covenants and
agreements contained in this Agreement such that Section 8.2(c)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(b)),  and,
in each of clause
(i), clause
(ii), clause
(iii) and clause (iv) such
breach is not capable of being cured or has not been cured within thirty (30)
days after notice to the Company and the Representative;




(c)           by
the Representative, if none of the Company or any Contributor is in material
breach of its representations, warranties, covenants or obligations under this
Agreement, and if (i) the representations and warranties of Parent REIT, Parent
OP or Parent Sub herein become untrue or inaccurate such that Section 8.3(a)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(c))
or (ii) there has been a breach on the part of Parent REIT, Parent OP or
Parent Sub of its respective covenants and agreements contained in this
Agreement such that Section 8.3(b)
would not be satisfied (treating such time as if it were the Closing Date for
purposes of this Section 9.1(c)),
and, in both of clause
(i) and clause (ii), such
breach is not capable of being cured or has not been cured within thirty (30)
days after notice to Parent OP;




(d)           by
Parent REIT or Parent OP, if the Closing shall not have occurred by the
Termination Date, unless the failure to consummate the Closing is the result of
a breach by Parent REIT, Parent OP or Parent Sub of its respective obligations
or covenants under this Agreement.




(e)           by
the Representative, if the Closing shall not have occurred by the Termination
Date, unless the failure to consummate the Closing is the result of a breach by
the Company or any Contributor of its obligations or covenants under this
Agreement; or




(f)           by
Parent REIT, Parent OP or the Representative, if any Governmental Entity shall
have issued an Order permanently enjoining, restraining or otherwise prohibiting
the Contemplated Transactions and such Order shall have become final and
nonappealable; provided, that the
party hereto seeking to terminate this Agreement pursuant to this Section
9.1(f) shall, subject to Section 6.4(a), have
used reasonable efforts to remove such Order.




Section
9.2       Effect of
Termination




In the
event of any termination of this Agreement pursuant to Section 9.1, this
entire Agreement shall forthwith become void (and there shall be no liability or
obligation on the part of Parent REIT, Parent OP, Parent Sub, any Group Company,
LVP REIT, any Contributor or any of the Company Released Parties) with the
exception of (a) the provisions of this Section 9.2, the
third sentence of Section 6.3, Section 6.6, the last
sentence of Section
6.9 and Article
12, and (b) any liability of any party hereto for any material breach of
this Agreement resulting from an action or a knowing and intentional failure to
act which, at the time thereof, such party should reasonably have known would
constitute a breach of this Agreement, prior to such termination.




77


Section
9.3       Amendment




Prior to
the Closing, subject to applicable Law, this Agreement may be amended or
modified only by a written agreement executed and delivered by duly authorized
officers of Parent REIT, Parent OP, Parent Sub, the Company and the
Representative.  After the Closing subject to applicable Law, this
Agreement may be amended or modified only by written agreement executed and
delivered by duly authorized officers of Parent OP and the
Representative.  This Agreement may not be modified or amended except
as provided in the immediately preceding two sentences and any amendment
effected in a manner which does not comply with this Section 9.3 shall be
void.




Section
9.4       Extension;
Waiver




The
Contributors shall not (except at the direction of the Representative)
(a) extend the time for the performance of any of the obligations or other
acts of Parent REIT, Parent OP or Parent Sub contained herein, (b) waive
any inaccuracies in the representations and warranties of Parent REIT, Parent OP
or Parent Sub contained herein or in any document, certificate or writing
delivered by Parent REIT, Parent OP or Parent Sub pursuant hereto or
(c) waive compliance by Parent REIT, Parent OP or Parent Sub with any of
the agreements or conditions contained herein.  The Parent Parties may
(a) extend the time for the performance of any of the obligations or other
acts of the Company or the Contributors contained herein, (b) waive any
inaccuracies in the representations and warranties of the Company or the
Contributors contained herein or in any document or writing delivered by the
Company or the Contributors pursuant hereto or (c) waive compliance by the
Company or the Contributors with any of the agreements or conditions contained
herein.  Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in a written instrument signed on
behalf of such party.  The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of such rights.




ARTICLE
10


SURVIVAL;
INDEMNIFICATION




Section
10.1    Survival




Subject
to the provisions of this Article 10, (a)
the representations and warranties in this Agreement and in any certificate
delivered pursuant hereto shall survive until 5:00 p.m. New York City time on
the date that is the 18-month anniversary of the Closing Date; provided, that (i) to
the extent any claim for indemnification with respect to a breach of any
representation or warranty in this Agreement has been made in accordance with
Section 10.3
hereof prior to such time, then, solely to the extent of such claim, the
representations and warranties relevant thereto shall be deemed to survive until
the final resolution thereof and (ii) notwithstanding anything to the contrary
contained in this Agreement, the representations and warranties in (x) Section 4.2
(Authority), Section
4.4 (Title) and Section 5.2
(Authority) shall survive indefinitely and (y) Section 3.4(a)(i)
and, to the extent related to the 2008 Unaudited Financial Statements, Section 3.4(b) shall
not survive the Closing and no claims for indemnification may be made in respect
thereof (b) the covenants and agreements of the Parties in this Agreement to be
performed prior to the Closing shall not survive the Closing; provided, that the
expiration of such covenants and agreements shall not limit the right to any
Indemnified Party to seek or obtain indemnification with respect to any breach
thereof pursuant to this Article 10 and (c)
all covenants and agreements in this Agreement to be performed at or after the
Closing shall survive the Closing in accordance with their respective terms or,
if no term is specified, indefinitely.




78


Section
10.2     Indemnification




(a)           Subject
to the provisions of this Article 10 and the
Escrow Agreement, from and after the Closing, Parent REIT, Parent OP and Parent
OP’s Subsidiaries (including the Group Companies after the Closing) (each a
“Parent
Indemnitee”) shall be entitled, in accordance with the provisions of this
Article 10 and
the Escrow Agreement, to receive proceeds from the Escrow Account as
indemnification in respect of any damages, losses, liabilities, costs, expenses
or obligations of any kind (including, without limitation, reasonable attorneys’
fees and costs of investigation) (each a “Loss” and,
collectively, “Losses”) suffered or
paid, directly or indirectly, as a result of, in connection with, or arising out
of or relating to (i) any breach of any representation or warranty in Article 3 (other than
Section
3.4(a)(i) and, to the extent related to the 2008 Unaudited Financial
Statements, Section
3.4(b)) or in any certificate delivered by or on behalf of the Company
pursuant hereto (without regard to any Company Material Adverse Effect or
materiality qualifications contained in any Non-Excluded Representation and
without regard to any knowledge qualifications), (ii) any breach of any
covenant or agreement contained herein to be performed by the Company (including
any failure of a Group Company to take or refrain from taking any action
contemplated hereby) prior to the Closing (other than Section 6.11 and
Section 6.13),
(iii) the amount of any Severance, Employment and Shut-Down Costs incurred by
Parent REIT, Parent OP, Parent Sub or any of their Affiliates (including any
Group Company after the Closing) which are not paid prior to Closing or taken
into account in connection with the calculation of the Estimated Aggregate
Consideration Value and/or the Final Aggregate Consideration Value, (iv)(A) any
claims against a Group Company by any member or other equity holder of any Group
Company prior to the Closing arising from and relating to the Contemplated
Transactions or the management, operation or conduct of the Group Companies at
or prior to the Closing (collectively, “Minority Claims”) or
(B) in the event the transactions contemplated by the LP Purchase Agreement
shall not have been fully consummated in accordance with their terms at the
Closing (other than as a result of a breach of such Agreement by the Parent
Parties) (1) any out-of-pocket, costs or expenses (including reasonable
attorneys fees) incurred by the Parent Parties to enforce the LP Purchase
Agreement or to defend any claims made by the selling parties under the LP
Purchase Agreement and (2) any additional amounts paid by the Parent Parties in
excess of the purchase price specified in the LP Purchase Agreement (excluding,
for the avoidance of doubt, any amendments thereto after the Closing) for the
applicable securities not acquired at the Closing (including pursuant to any
judgment or settlement); provided that the additional costs or expenses incurred
by the Parent Parties to acquire such securities shall be subject to the consent
of the Representative (such consent not to be unreasonably withheld, conditioned
or delayed), and (v) the amount of any Pre-Signing Allowances and Commissions
incurred by Parent REIT, Parent OP, Parent Sub or any of their Affiliates
(including any Group Company after the Closing) which are not taken into account
in connection with the calculation of the Estimated Aggregate Consideration
Value and/or the Final Aggregate Consideration Value.




79




(b)           Subject
to the provisions of this Article 10, from and
after Closing, each Contributor and LVP REIT shall severally, and not jointly or
jointly and severally, indemnify, defend and hold harmless, the Parent
Indemnitees from and against any Losses suffered or paid, directly or
indirectly, as a result of, in connection with, or arising out of or related to
(i) any breach of any representation or warranty of such Contributor in
Article 4 or,
in the case of LVP REIT, Section 4.3(b), as of
the Closing Date, as though such representation and warranty was made on the
Closing Date, (ii) any breach of any covenant or agreement contained herein
to be performed by such Contributor or, in the case of LVP REIT, Section 6.13, prior
to the Closing and (iii) any breach of any covenant or agreement contained
herein to be performed by such Contributor or, in the case of LVP REIT, Section 6.16 or Section 7.2(b), at or
after the Closing.




(c)           Subject
to the provisions of this Article 10, from and
after Closing, each of Parent REIT, Parent OP and Parent Sub shall jointly and
severally indemnify, defend and hold harmless, the Contributors and each of
their respective Affiliates (other than the Group Companies), predecessors,
successors and assigns, and each of their respective officers, directors,
employees, members, partners, shareholders, managers, agents and representatives
(each a “Member
Indemnitee”) from and against any Losses suffered or paid, directly or
indirectly, as a result of, in connection with, or arising out of or related to
(i) any breach of any representation or warranty of Parent REIT, Parent OP
or Parent Sub in Article 5(without
regard to any Parent Material Adverse Effect or materiality qualifications
contained in any Non-Excluded Representation) or in any certificate delivered by
or on behalf of Parent REIT, Parent OP or Parent Sub pursuant hereto,
(ii) any breach of any covenant or agreement contained herein to be
performed by Parent REIT, Parent OP or Parent Sub prior to the Closing and (iii)
any breach of any covenant or agreement contained herein to be performed by
Parent REIT, Parent OP or Parent Sub at or after the Closing.




(d)           Subject
to the provisions of this Article 10, the
ability of any Parent Indemnitee to receive proceeds from the Escrow Account
pursuant to Section
10.2(a) or indemnification pursuant to Section 10.2(b)(i) or
Section
10.2(b)(ii) and the ability of any Member Indemnitee to receive
indemnification pursuant to Section 10.2(c)(i) or
Section
10.2(c)(ii) shall survive the Closing and shall terminate on the date
that is the eighteen (18) month anniversary of the Closing Date (the “Survival Period Termination
Date”), in each case except to the extent such Parent Indemnitee or
Member Indemnitee, as applicable, shall have made, prior to the Survival Period
Termination Date, a claim in accordance with the terms of this Article 10, in which
case such claim, if then unresolved, shall not be extinguished at the Survival
Period Termination Date and shall survive the Survival Period Termination Date
until finally resolved in accordance with the provisions of this Article 10 and,
if applicable, the Escrow Agreement; provided, that the
right of a Parent Indemnitee to receive indemnification pursuant to Section 10.2(b)(i) or
Section
10.2(b)(ii) with respect to a breach of the representations and
warranties in Section
4.2 (Authority) and Section 4.4 (Title)
shall survive indefinitely and the right of a Member Indemnitee to receive
indemnification pursuant to Section 10.2(c)(i)
with respect to a breach of the representations and warranties in Section 5.2
(Authority) shall survive indefinitely.  The right of a Parent
Indemnitee to receive indemnification pursuant to Section 10.2(b)(iii)
or a Member Indemnitee to receive indemnification pursuant to Section 10.2(c)(iii)
shall survive indefinitely.


80


Section
10.3    Indemnification
Procedures




(a)           If
a claim, action, suit or proceeding by a Person who is not a party hereto or an
Affiliate thereof (a “Third Party Claim”)
is made against any Person entitled to indemnification pursuant to Section 10.2 hereof
(an “Indemnified
Party”), and if such Indemnified Party intends to seek indemnity with
respect thereto under this Article 10, or if any
Indemnified Party otherwise determines that it wishes to seek indemnification
pursuant to Section
10.2 hereof, such Indemnified Party shall, in the case of a Member
Indemnitee, promptly notify Parent REIT and Parent OP and, in the case of a
Parent Indemnitee, promptly notify the Representative (such notified party, the
“Responsible
Party”) of such claims; provided, that the
failure to so notify shall not relieve the Responsible Party of its obligations
hereunder, except to the extent that the Responsible Party is actually
prejudiced thereby.  Such notice shall, to the extent reasonably
practicable, identify the basis under which indemnification is sought pursuant
to Section 10.2
and, if applicable, enclose true and correct copies of any written document
furnished to the Indemnified Party by the Person that instituted the Third Party
Claim.




(b)           Parent
REIT or Parent OP shall have thirty (30) days after receiving notice from any
Indemnified Party of any Third Party Claim which seeks solely cash damages (and
does not include any request for specific performance, or injunctive or other
equitable relief) (a “Parent Assumable
Claim”) to assume the conduct and control, through counsel reasonably
acceptable to the Representative at the expense of Parent REIT or Parent OP, of
the settlement or defense of such Third Party Claim, and the Indemnified Party
shall cooperate with the Responsible Party in connection
therewith.  Parent REIT or Parent OP shall permit the Indemnified
Party to participate in such settlement or defense through counsel chosen by
such Indemnified Party (the fees and expenses of such counsel shall be borne by
such Indemnified Party and shall not be indemnified hereunder as a
Loss).  So long as Parent REIT or Parent OP is reasonably contesting
(or causing any of its Subsidiaries to reasonably contest) any such Third Party
Claim in good faith, the Indemnified Party shall not pay or settle any such
Third Party Claim without the consent of Parent REIT or Parent OP (which consent
shall not be unreasonably withheld or delayed).  Notwithstanding the
foregoing, Parent REIT and Parent OP shall not, except with the consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed)
enter into any settlement that does not include as an unconditional term thereof
the giving by the Person(s) asserting such Third Party Claim to all Indemnified
Parties an unconditional release from all liability with respect to such claim
or consent to entry of any judgment.  If Parent REIT does not elect to
undertake the defense of such Third Party Claim, the Indemnified Party shall
have the right to contest the Third Party Claim without waiving its right to
indemnity therefor pursuant to this Agreement; provided, that the
Indemnified Party shall not settle any such Third Party Claim or consent to any
judgment without the prior written consent of Parent REIT or Parent OP (which
consent shall not be unreasonably withheld or delayed).




(c)           In
the event that Parent REIT or Parent OP receives notice from any Indemnified
Party of a Third Party Claim that is not a Parent Assumable Claim, Parent REIT
or Parent OP shall have the right to participate in the settlement or defense
thereof through counsel chosen by Parent REIT or Parent OP (the fees and
expenses of such counsel shall be borne by Parent REIT or Parent OP and shall
not be indemnified hereunder as a Loss) and the Indemnified Party shall not
settle any such Third Party Claim or consent to any judgment without the consent
of Parent REIT or Parent OP (not to be unreasonably withheld or
delayed).


81


(d)           The
Representative shall have thirty (30) days after receiving notice from any
Indemnified Party of any Third Party Claim which seeks solely cash damages (and
does not include any request for specific performance, or injunctive or other
equitable relief) and the maximum liability in respect of such Third Party Claim
and all other pending unresolved indemnity claims pursuant to Section 10.2(a) does
not exceed the value of the Escrow Cash and Escrow Units then held in the Escrow
Account (valued at the Parent Closing Price (a “Representative Assumable
Claim”) to assume the conduct and control, through counsel reasonably
acceptable to Parent REIT and Parent OP at the expense of the Representative
(not to be paid out of or reimbursed from the Escrow Account) of the settlement
or defense of such Third Party Claim, and the Indemnified Party shall cooperate
with the Representative in connection therewith.  The Representative
shall permit the Indemnified Party to participate in such settlement or defense
through counsel chosen by such Indemnified Party (the fees and expenses of such
counsel shall be borne by such Indemnified Party and shall not be indemnified
hereunder as a Loss).  So long as the Representative is reasonably
contesting (or causing any of its Subsidiaries to reasonably contest) any such
Third Party Claim in good faith, the Indemnified Party shall not pay or settle
any such Third Party Claim without the consent of the Representative (not to be
unreasonably withheld or delayed).  Notwithstanding the foregoing, the
Representative shall not, except with the consent of Parent REIT and Parent OP
enter into any settlement that does not include as an unconditional term thereof
the giving by the Person(s) asserting such Third Party Claim to all Indemnified
Parties an unconditional release from all liability with respect to such claim
or consent to entry of any judgment.  If the Representative does not
elect to undertake the defense of such Third Party Claim, the Parent Indemnitees
shall have the right to contest the Third Party Claim without waiving their
right to indemnity therefor pursuant to this Agreement.




(e)           In
the event the Representative receives notice from any Indemnified Party of a
Third Party Claim that is not a Representative Assumable Claim, the
Representative shall have the right to participate in the settlement or defense
thereof through counsel chosen by the Representative (the fees and expenses of
such counsel shall be borne by the Representative and shall not be payable out
of the Escrow Account) and Parent Indemnitee shall not settle any such Third
Party Claim or consent to any judgment without the consent of the Representative
(not to be unreasonably withheld or delayed).




(f)           Notwithstanding
anything in this Agreement or the Escrow Agreement to the contrary, no Parent
Indemnitee shall directly or indirectly settle, compromise or consent to any
judgment of any Third Party Claim for which such Parent Indemnitee may be
entitled to seek indemnification hereunder, regardless of whether it is a
Representative Assumable Claim or whether the Representative has received notice
thereof or elected to exercise or waive its rights to assume the conduct and
control of the settlement or defense thereof, without the prior written consent
of the Representative (not to be unreasonably withheld or delayed), and in the
event of any such settlement, compromise or consent to judgment without the
prior written consent of the Representative, the Parent Indemnitees and their
respective Affiliates shall have no further rights (and shall be deemed to have
irrevocably waived any such rights) to indemnification hereunder, whether from
the Escrow Account or otherwise.


82


(g)           Notwithstanding
anything in this Agreement or the Escrow Agreement to the contrary, the
Representative shall not directly or indirectly settle, compromise or consent to
any judgment of any Third Party Claim for which the Member Indemnitee may be
entitled to seek indemnification hereunder, regardless of whether the Parent
Indemnitees have received notice thereof or elected to exercise or waive their
rights to assume the conduct and control of the settlement or defense thereof,
without the prior written consent of the Parent REIT or Parent OP (not to be
unreasonably withheld or delayed), and in the event of any such settlement,
compromise or consent to judgment without the prior written consent of Parent
REIT or Parent OP, the Member Indemnitees and their respective Affiliates shall
have no further rights (and shall be deemed to have irrevocably waived any such
rights) to indemnification hereunder.




(h)           The
parties hereto shall reasonably cooperate in the defense or prosecution of any
Third Party Claim in respect of which indemnity may be sought hereunder and
shall furnish such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials and appeals, as may be
reasonably requested in connection therewith.




Section
10.4    Limitations on
Indemnification Obligations




The
rights to indemnification pursuant to the provisions of Section 10.2 are
subject to the following limitations:




(a)           the
amount of any and all Losses recoverable pursuant to Section 10.2(a),
Section 10.2(b)
and Section
10.2(c) shall be determined net of any amounts recovered by the Parent
Indemnitees or their Affiliates, or the Member Indemnitees or their Affiliates,
as applicable, under insurance policies or other collateral sources (such as
contractual indemnities of any Person which are contained outside of this
Agreement), including the Tax Matters Agreements (to the extent includable in
indemnifiable Losses), with respect to such Losses;




(b)           the
Parent Indemnitees shall not be entitled to recover in respect of any individual
claim pursuant to Section 10.2(a)(i),
Section
10.2(a)(ii), Section
10.2(a)(iv)(A), Section 10.2(b)(i) or
Section
10.2(b)(ii) unless the aggregate Losses relating to or arising out of
such claim (together with any related claims or other claims which arise from a
substantially similar course of conduct or facts) equal or exceed $***25; provided, that this
Section 10.4(b)
shall not apply to any claim for indemnification pursuant to (x) Section 10.2(a)(i) to
the extent such claim is based upon a breach of the representations and
warranties set forth in Section 3.2
(Capitalization of the Group Companies), Section 3.3
(Authority) or Section
3.15 (Brokers) or (y) Section 10.2(b)(i) to
the extent such claim is based upon a breach of a representation and warranty
set forth in Section
4.2 (Authority), Section 4.4 (Title)
or Section 4.6
(Brokers);




(c)           the
Member Indemnitees shall not be entitled to recover in respect of any individual
claim pursuant to Section 10.2(c)(i) or
Section
10.2(c)(ii) unless the aggregate Losses relating to or arising out of
such claim (together with any related claims or other claims which arise from a
substantially similar course of conduct or facts) equal or exceed an amount
equal to $***26; provided, that this
Section 10.4(c)
shall not apply to any claim for indemnification pursuant to (x) Section 10.2(c)(i) to
the extent such claim is based upon a breach of the representations and
warranties set forth in Section 5.2
(Authority), Section
5.6 (Brokers) or Section 5.10 (New
Company);





25


26


83





(d)           the
Parent Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(a)(i),
Section
10.2(a)(ii) or Section
10.2(a)(iv)(A) until the aggregate amount which the Parent Indemnitees
would recover under such sections (as limited by the provisions of Section 10.4(a) and
Section 10.4(b)
and Section
12.15) exceeds $***27 (the
“Threshold”),
in which case, the Parent Indemnitees shall only be entitled to recover Losses
in excess of the Threshold; provided, that the
Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(a)(i) to
the extent such claim is based upon a breach of the representations and
warranties set forth in Section 3.2
(Capitalization of the Group Companies) or Section 3.3
(Authority);




(e)           the
Member Indemnitees shall not be entitled to recover Losses pursuant to Section 10.2(c)(i) or
Section
10.2(c)(ii) until the aggregate amount which the Member Indemnitees would
recover under Section
10.2(c)(i) and Section 10.2(c)(ii)
(as limited by the provisions of Section 10.4(a) and
Section 10.4(d)
and Section
12.15) exceeds the Threshold, in which case, the Member Indemnitees shall
only be entitled to recover Losses in excess of the Threshold; provided, that the
Threshold shall not apply to any claim for indemnification pursuant to Section 10.2(c)(i) to
the extent such claim is based upon a breach of the representations and
warranties set forth in Section 5.2
(Authority), Section
5.6 (Brokers) or Section 5.10 (New
Company);




(f)           except
with respect to any claims resulting from the failure to complete the Financing
pursuant to the terms of this Agreement (including as a result of any waiver by
the Contributors of Section 8.3(c), the
aggregate liability of Parent REIT, Parent OP and Parent Sub pursuant to Section 10.2(c)(i)
and Section
10.2(c)(ii) shall not exceed the Aggregate Unit Value and the Member
Indemnitees, collectively, shall not be entitled to recover Losses pursuant to
Section
10.2(c)(i) and Section 10.2(c)(ii)
in excess of the Aggregate Unit Value;




(g)           the
aggregate liability of any Contributor or LVP REIT pursuant to Section 10.2(b)(i)
and Section
10.2(b)(ii) shall not exceed the aggregate consideration actually
received by such Person pursuant to Article 2 (valued, in
the case of Parent OP Common Units, at the Parent Closing Price) less the amount
of Escrow Cash and Escrow Units allocated to such Person and not distributed
thereto and the Parent Indemnitees, collectively, shall not be entitled to
recover Losses pursuant to Section 10.2(a),
Section
10.2(b)(i) and Section 10.2(b)(ii)
in excess of the Aggregate Consideration Value less the amount of Escrow Cash
and Escrow Units allocated to such Person;




(h)           (x)
the Escrow Units and Escrow Cash in the Escrow Account at any given time shall
be the sole source of recovery with respect to Losses indemnifiable pursuant to
Section
10.2(a), and in no event shall the Parent Indemnitees be entitled to
recover more than the amount of Escrow Cash and Escrow Units available in the
Escrow Account pursuant to Section 10.2(a) and
(y) in the event any facts, conditions, conduct or claims, or series of related
or substantially similar facts, conditions, conduct or claims, result in Losses
pursuant to which the Parent Indemnitees are entitled to indemnification
pursuant to Section
10.2(a) and Section 10.2(b), the
Parent Indemnitees shall only be entitled to recover for such Losses pursuant to
Section 10.2(a)
and shall have no rights to indemnification pursuant to Section 10.2(b) other
than in the case of a breach of Section 3.2
(Capitalization of the Group Companies) and Section 4.4 (Title),
in which case the Parent Indemnitees shall only be entitled to recover directly
from the applicable Contributor with respect to the dual claim (it being
understood that this shall not create a limit on claims relating to breaches of
provisions in Section
3.2 that are not also contained in Section 4.4);





27 Certain portions have been
omitted in connection with an application for confidential treatment
therefor.


84


(i)           Notwithstanding
anything contained herein to the contrary, after the Closing, on the date that
the Escrow Cash and the Escrow Units are reduced to zero, the Parent Indemnitees
shall have no further rights to indemnification under Section
10.2(a).  In any case where a Parent Indemnitee recovers, under
insurance policies or from other collateral sources, any amount in respect of a
matter for which such Parent Indemnitee was indemnified pursuant to Section 10.2(a) or
Section
10.2(b), such Parent Indemnitee shall promptly pay over to the
Representative (for further distribution to the Contributors) the amount so
recovered (after deducting therefrom the full amount of the expenses incurred by
such Parent Indemnitee in procuring such recovery), but not in excess of the
sum of (i) any
amount previously so paid to or on behalf of such Parent Indemnitee in respect
of such matter and (ii) any amount expended by the Representative in pursuing or
defending any claim arising out of such matter;




(j)           Following
the Closing, the Parent Indemnitees and the Member Indemnitees shall take
commercially reasonable steps to mitigate any Losses with respect to which
indemnification may be requested under this Article 10 and the
costs associated with such mitigation shall be included in the Losses with
respect to which indemnification may be requested under this Article 10;
and




(k)           In
no event shall a Parent Indemnitee be entitled to recover Losses pursuant to
Section
10.2(b)(i) in respect of a breach of the representations and warranties
in Article 3 hereof.




Section
10.5    The
Representative




The
parties hereto acknowledge and agree that the Representative may perform certain
administrative functions in connection with the consummation of the Contemplated
Transactions.  Accordingly, the parties hereto acknowledge and agree
that the Representative (in its capacity as Representative) shall have no
liability to, and shall not be liable for any Losses of, any Member Indemnitee
or Parent Indemnitee in connection with any obligations of the Representative
under this Agreement or the Escrow Agreement or otherwise in respect of this
Agreement or the Contemplated Transactions.


85


Section
10.6    Exclusive
Remedy




Notwithstanding
anything contained in this Agreement to the contrary, except for any claim by
the Parent Parties against a Contributor for the Fraud of such Contributor, from
and after Closing, indemnification pursuant to the provisions of this Article 10 shall be
the sole and exclusive remedy of any party hereto and each of its respective
Affiliates (including, in the case of the Parent Parties after the Closing, the
Group Companies) for any misrepresentation or any breach of any representation,
warranty, covenant or other provision or agreement contained in this Agreement,
in any certificate delivered pursuant hereto or otherwise (including, without
limitation, with respect to any matters arising under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended from
time to time, or any other environmental matters) and for any and all other
claims arising under, out of or related to this Agreement, the negotiation or
execution hereof, or the Contemplated Transactions, and no party hereto or any
of its respective Affiliates (including, in the case of the Parent Parties after
the Closing, the Group Companies) shall have any other entitlement, remedy or
recourse, at law or in equity, whether in contract, tort or otherwise, it being
agreed that all of such other remedies, entitlements and recourse (other than
with respect to any claim by the Parent Parties against a Contributor for the
Fraud of such Contributor) are expressly waived and released by the parties
hereto, on behalf of themselves and their respective Affiliates (including, in
the case of the Parent Parties after the Closing, the Group Companies), to the
fullest extent permitted by Law; provided, in each
case, that disputes as to financial matters referred to in Section 2.3(d)
shall be resolved solely in accordance with Section 2.3(d).




Section
10.7    Manner of Payment;
Escrow




(a)           The
Escrow Agent shall accept the deposit of the Escrow Units and Escrow Cash and
shall administer the Escrow Units and Escrow Cash and release Escrow Units and
Escrow Cash in accordance with the terms and subject to the conditions set forth
herein and in the Escrow Agreement.




(b)           Subject
to the terms and conditions of this Agreement and, if applicable, the Escrow
Agreement, (i) any indemnification of the Parent Indemnitees pursuant to Section 10.2(a)
shall, except as otherwise provided herein, be effected by the Escrow Agent’s
delivery to such Parent Indemnitees (subject to Section 10.7(e)) of
an amount of Escrow Cash and/or Escrow Units Escrow Units (rounded to the
nearest whole Escrow Unit and valued at the Parent Closing Price (with no
issuance of fractional Escrow Units) that are, together, equal in value to the
amount of such Parent Indemnitees’ indemnification pursuant to Section 10.2(a) with
the composition of Escrow Cash and Escrow Units being determined by the
Representative, within five (5) Business Days after the final determination
thereof, (ii) any indemnification of the Parent Indemnitees pursuant to Section 10.2(b) shall
be effected by wire transfer of immediately available funds from the applicable
Persons to an account designated in writing by the applicable Parent
Indemnitees, as the case may be, within five (5) Business Days after the final
determination thereof and (iii) any indemnification of the Member Indemnitees
pursuant to Section
10.2(c) shall be effected by wire transfer of immediately available funds
from the applicable Persons to an account designated in writing by the
applicable Member Indemnitees, as the case may be, within five (5) Business Days
after the final determination thereof.




(c)           Any
Escrow Units and Escrow Cash remaining in the Escrow Account as of the Survival
Period Termination Date (minus the maximum aggregate amount (valuing any Escrow
Units at their Parent Closing Price) which shall be retained in Escrow Units
and/or Escrow Cash in the proportion requested by the Representative, if any, of
claims asserted in accordance with this Article 10 by the
Parent Indemnitees against the Escrow Account pursuant to Section 10.2(a) that
are not fully resolved as of the Survival Period Termination Date) shall be
released to the Representative on the Survival Period Termination Date and the
Representative and Parent REIT or Parent OP shall deliver joint written
instructions instructing the Escrow Agent to deliver such Escrow Units from the
Escrow Account to the Representative for further distribution to the
Contributors.  To the extent that, as a result of resolution of
pending claims, the value of the Escrow Units and Escrow Cash held in the Escrow
Account (valued at the Parent Closing Price) exceeds, at any time following the
Survival Period Termination Date, the aggregate amount of claims then
outstanding by the Parent Indemnitees against the Escrow Account pursuant to
Section
10.2(a), such excess Escrow Units and/or Escrow Cash (at the
Representative’s election) shall be promptly released to the Representative for
further distribution to the Contributors.


86


(d)           During
the period in which the Escrow Units and Escrow Cash are retained in the Escrow
Account, the Escrow Units and Escrow Cash will be held for the benefit of the
applicable Contributors (and the applicable Contributors shall be entitled to
vote and to receive, and the Escrow Agent shall promptly deliver to the
Representative for further distribution to the Contributors, all cash dividends
and cash distributions on such Escrow Units and all interest on such Escrow
Cash, which dividends and interest shall be income of the applicable
Contributors for Tax purposes), except to the extent it has been finally
determined that any Parent Indemnitee is entitled to recover such Escrow Units
in respect of indemnification claims pursuant to this Article
10.  Any distributions on such Escrow Units made in the form of
Parent OP Common Units will be deemed to have been contributed by the Escrow
Agent, on behalf of each applicable Contributor, to New Company in exchange for
an equal number of New Company Common Units to be issued in the name of such
Contributor.




(e)           The
Representative and Parent OP shall deliver joint written instructions to the
Escrow Agent instructing the Escrow Agent to make all deliveries of Escrow Units
and Escrow Cash from the Escrow Account expressly provided for herein and the
Escrow Agreement.  In the event the Representative and Parent OP shall
have instructed the Escrow Agent to deliver any Escrow Units or Escrow Cash to a
Parent Indemnitee pursuant to the first sentence of Section 10.7(b) or
any Escrow Cash pursuant Section 2.3(e)(ii),
such Escrow Units and Escrow Cash shall be allocated by the Escrow Agent among
the Escrow Units and Escrow Cash of the Contributors in proportion to their
respective Applicable Percentage Interest as set forth on Annex D.




(f)           The
parties hereto agree that for Tax purposes: (i) the Contributors shall be
treated as the owner of the Escrow Units and Escrow Cash, (ii) the initial
amount distributed to the Contributors in consideration of the Contributions
shall include the Escrow Units and Escrow Cash, and (iii) the return to Parent
Indemnitees of Escrow Units and/or Escrow Cash upon settlement of claims in
accordance with Article 10 shall be
treated as a reduction to the amount distributed to the Contributors in
consideration of the Contributions.


87


ARTICLE
11


REPRESENTATIVE
OF THE CONTRIBUTORS





Section
11.1    Authorization of
Representative




(a)           Each
Contributor and LVP REIT, by its execution of this Agreement, hereby appoints,
authorizes and empowers Lightstone Prime, with full power of substitution and
resubstitution, to act as the representative (the “Representative”), for
the benefit of the Contributors and LVP REIT, and as the exclusive agent and
attorney-in-fact to act on behalf of each Contributor and LVP REIT, in
connection with and to facilitate the consummation of the Contemplated
Transactions, including, without limitation, pursuant to the Escrow Agreement,
which shall include the power and authority:




(i)           to
execute and deliver the Escrow Agreement (with such modifications or changes
therein as to which the Representative, in its sole discretion, shall have
consented) and to agree to such amendments or modifications thereto as the
Representative, in its sole discretion, determines to be desirable;




(ii)           to
execute and deliver such waivers and consents in connection with this Agreement
and the Escrow Agreement and the consummation of the Contemplated Transactions
as the Representative, in its sole discretion, may deem necessary or
desirable;




(iii)           to
collect and receive all moneys and other proceeds and property payable to the
Representative from the Escrow Account as described herein or otherwise payable
to the Representative pursuant to this Agreement, and, subject to any applicable
withholding retention laws, and net of any out-of-pocket expenses incurred by
the Representative, the Representative shall disburse, deliver and pay the same,
no later than three (3) Business Days from the date of receipt of such moneys,
proceeds and/or property by the Representative, to each of the Contributors,
subject to Section
10.7(e), in accordance with and to the extent of each such Contributor’s
respective contributions to the Escrow Account.




(iv)           as
the Representative, to enforce and protect the rights and interests of the
Contributors and LVP REIT and to enforce and protect the rights and interests of
the Representative arising out of or under or in any manner relating to this
Agreement and the Escrow Agreement, and each other agreement, document,
instrument or certificate referred to herein or therein or the transactions
provided for herein or therein (including, without limitation, in connection
with any and all claims asserted in accordance with the terms of this Article 10), and to
take any and all actions which the Representative believes are necessary or
appropriate under the Escrow Agreement and/or this Agreement for and on behalf
of the Contributors and LVP REIT, including, without limitation, asserting or
pursuing any claim, action, proceeding or investigation (a “Claim”) against
Parent REIT, Parent OP and/or Parent Sub, defending any Third Party Claims or
Claims by the Parent Indemnitees, consenting to, compromising or settling any
such Claims, conducting negotiations with Parent REIT, Parent OP, Parent Sub and
their respective representatives regarding such Claims, and, in connection
therewith, to (A) assert any claim or institute any action, proceeding or
investigation, (B) investigate, defend, contest or litigate any claim,
action, proceeding or investigation initiated by Parent REIT, Parent OP, Parent
Sub or any other Person, or by any federal, state or local Governmental Entity
against the Representative and/or any of the Contributors or LVP REIT or the
Escrow Units or Escrow Cash, and receive process on behalf of any or all
Contributors and LVP REIT in any such claim, action, proceeding or investigation
and compromise or settle on such terms as the Representative shall determine to
be appropriate, and give receipts, releases and discharges with respect to any
such claim, action, proceeding or investigation, (C) file any proofs of
debt, claims and petitions as the Representative may deem advisable or
necessary, (D) settle or compromise any claims asserted under the Escrow
Agreement and (E) file and prosecute appeals from any decision, judgment or
award rendered in any such action, proceeding or investigation, it being
understood that the Representative shall not have any obligation to take any
such actions, and shall not have any liability for any failure to take any such
actions;


88


(v)           to
refrain from enforcing any right of any Contributors, LVP REIT and/or the
Representative arising out of or under or in any manner relating to this
Agreement, the Escrow Agreement or any other agreement, instrument or document
in connection with the foregoing; provided, however, that no such
failure to act on the part of the Representative, except as otherwise provided
in this Agreement or in the Escrow Agreement, shall be deemed a waiver of any
such right or interest by the Representative or by such Contributors or LVP REIT
unless such waiver is in writing signed by the waiving Contributors, LVP REIT or
by the Representative (it being understood that no Contributor or LVP REIT shall
have any right to directly assert any claim against the Representative);
and




(vi)           to
make, execute, acknowledge and deliver all such other agreements, guarantees,
orders, receipts, endorsements, notices, requests, instructions, certificates,
unit powers, letters and other writings, and, in general, to do any and all
things and to take any and all action that the Representative, in its sole and
absolute discretion, may consider necessary or proper or convenient in
connection with or to carry out the Contemplated Transactions, the Escrow
Agreement, and all other agreements, documents or instruments referred to herein
or therein or executed in connection herewith and therewith.




(b)           The
Representative shall not be entitled to any fee, commission or other
compensation for the performance of its services hereunder.  In
connection with this Agreement, the Escrow Agreement and any instrument,
agreement or document relating hereto or thereto, and in exercising or failing
to exercise all or any of the powers conferred upon the Representative hereunder
(i) the Representative and the Parent Indemnitees shall incur no
responsibility whatsoever to any Contributor or LVP REIT by reason of any error
in judgment or other act or omission performed or omitted hereunder or in
connection with the Escrow Agreement or any such other agreement, instrument or
document by the Representative, excepting only (in the case of the
Representative only) responsibility for any act or failure to act by the
Representative which represents bad faith or willful misconduct and
(ii) the Representative shall be entitled to rely on the advice of counsel,
public accountants or other independent experts experienced in the matter at
issue, and any error in judgment or other act or omission of the Representative
pursuant to such advice shall in no event subject the Representative to
liability to any Contributor or LVP REIT, except where such reliance is in bad
faith or is a result of the Representative’s willful misconduct.  Each
Contributor and LVP REIT shall indemnify, pro rata based upon such Contributor’s
Applicable Percentage Interest (or in the case of LVP REIT, the combined
Applicable Percentage Interest of LVP OP and Pro-DFJV), the Representative
against all losses, damages, liabilities, claims, obligations, costs and
expenses, including, without limitation, reasonable attorneys’, accountants’ and
other experts’ fees and the amount of any judgment against them, of any nature
whatsoever (including, without limitation, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claims whatsoever), arising out of
or in connection with any claim, investigation, challenge, action or proceeding
or in connection with any appeal thereof, relating to the acts or omissions of
the Representative hereunder, or under the Escrow Agreement or otherwise in its
capacity as the Representative.  The foregoing indemnification shall
not apply in the event of any action or proceeding which finally adjudicates the
liability of the Representative hereunder for its willful
misconduct.  In the event of any indemnification under this clause
(b), upon written notice from the Representative to the Contributor or LVP REIT
as to the existence of a deficiency toward the payment of any such
indemnification amount, each Contributor and LVP REIT shall promptly deliver to
the Representative full payment of its, his or her ratable share of the amount
of such deficiency, in accordance with such Contributor’s Applicable Percentage
Interest (or in the case of LVP REIT, the combined Applicable Percentage
Interest of LVP OP and Pro-DFJV).


89


(c)           All
of the indemnities, immunities and powers granted to the Representative under
this Agreement shall survive the Closing and/or any termination of this
Agreement and/or the Escrow Agreement.




(d)           Parent
REIT, Parent OP and Parent Sub shall have the right to rely upon all actions
taken or omitted to be taken by the Representative pursuant to this Agreement
and the Escrow Agreement, all of which actions or omissions shall be legally
binding upon the Contributors.




(e)           The
grant of authority provided for herein (i) is coupled with an interest and
shall be irrevocable and survive the death, incompetency, bankruptcy or
liquidation of any Contributor or LVP REIT, and (ii) shall survive the
consummation of the Closing.




(f)           Upon
the written request of any Contributor or LVP REIT, the Representative shall
provide such Contributor or LVP REIT with an accounting of all monies received
and distributed by the Representative, in its capacity as the Representative,
and shall provide such Contributor or LVP REIT with such other reasonable
information regarding the Representative’s actions, in its capacity as the
Representative, as such Contributor or LVP REIT may reasonably
request.




ARTICLE
12


MISCELLANEOUS




Section
12.1    Entire Agreement;
Assignment




(a)           This
Agreement and the other Transaction Documents contain the entire agreement of
the parties hereto respecting the subject matter hereof and supersede all prior
agreements among the parties hereto respecting the same.  The parties
hereto have voluntarily agreed to define their rights, liabilities and
obligations respecting the subject matter hereof exclusively in contract
pursuant to the express terms and provisions of this Agreement and the other
Transaction Documents and the parties hereto expressly disclaim that they are
owed any duties or are entitled to any remedies not expressly set forth in this
Agreement or the other Transaction Documents.  Furthermore, the
parties hereto each hereby acknowledge that this Agreement embodies the
justifiable expectations of sophisticated parties derived from arm’s-length
negotiations; all parties to this Agreement specifically acknowledge that no
party has any special relationship with another party that would justify any
expectation beyond that of ordinary parties in an arm’s-length
transaction.  .  The sole and exclusive remedies for any
breach of the terms and provisions of this Agreement or the other Transaction
Documents (including any representations and warranties set forth herein or the
other Transaction Documents, made in connection herewith or the other
Transaction Documents or as an inducement to enter into this Agreement or the
other Transaction Documents) or any claim or cause of action otherwise arising
out of or related to the Contemplated Transactions shall be those remedies
available at law or in equity for breach of contract only (as such contractual
remedies have been further limited or excluded pursuant to the express terms of
this Agreement or the other Transaction Documents); and each party hereto hereby
agrees that no party hereto shall have any remedies or cause of action (whether
in contract or in tort) for any statements, communications, disclosures,
failures to disclose, representations or warranties not set forth in this
Agreement or the other Transaction Documents. Notwithstanding the foregoing,
claims by any Parent Party against any Contributor, to the extent arising from
the Fraud of such Contributor, shall not be prohibited by this Section
12.1(a).




90


(b)           This
Agreement may not be assigned by any party (whether by operation of law or
otherwise) without the prior written consent of Parent REIT, Parent OP, the
Company and the Representative.  Any attempted assignment of this
Agreement not in accordance with the terms of this Section 12.1 shall be
void; provided,
however, that,
so long as such assignment would not prevent or materially impair or delay the
Closing of the Contemplated Transactions, Parent REIT, Parent OP or Parent Sub
may assign this Agreement and any of their rights under this Agreement to one or
more Affiliates of Parent REIT, Parent OP or Parent Sub, provided that any such
assignment shall not relieve Parent REIT, Parent OP or Parent Sub of any of
their obligations hereunder.




Section
12.2    Notices




All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by cable, telegram, facsimile, scanned pages or
telex, or by registered or certified mail (postage prepaid, return receipt
requested) as follows:




To Parent REIT, Parent OP or
Parent Sub:




Simon
Property Group, Inc


225 West
Washington Street


Indianapolis,
Indiana 46204


Attention:    James
M. Barkley, Esq.


Facsimile:   317.685.7377




with a
copy (which copy shall not constitute notice) to:




Fried,
Frank, Harris, Shriver and Jacobson LLP


One New
York Plaza


New York,
New York 10004


Tel:
212.859.8980


Attention:    Peter
S. Golden, Esq.


John
E. Sorkin, Esq.


Facsimile:  
212.859.4000


91


To the Company (prior to the
Closing):




Prime
Outlets Acquisition Company LLC


217 East
Redwood Street, 20th Floor


Baltimore,
MD 21202


Attention:    Kelvin
Antill, Esq.


Facsimile:    410.234.0275




with a copy (which shall not
constitute notice) to:




Lightstone
Prime, LLC


c/o The
Lightstone Group


1985
Cedar Bridge Avenue


Lakewood,
NJ  08701


Attention:    Joseph
E. Teichman, Esq.


Facsimile:   732.612.1444





and, with a copy (which
shall not constitute notice) to:




Paul,
Weiss, Rifkind, Wharton & Garrison LLP


1285
Avenue of the Americas


New York,
New York  10019-6064


Attention:    Jeffrey
D. Marell, Esq.


Robert
B. Schumer, Esq.


Facsimile:    212.757.3990




To the
Representative:




Lightstone
Prime, LLC


c/o The
Lightstone Group


1985
Cedar Bridge Avenue


Lakewood,
NJ  08701


Attention:    Joseph
E. Teichman, Esq.


Facsimile:    732.612.1444




with a copy (which shall not
constitute notice) to:




Paul,
Weiss, Rifkind, Wharton & Garrison LLP


1285
Avenue of the Americas


New York,
New York  10019-6064


Attention:    Jeffrey
D. Marell, Esq.


Robert
B. Schumer, Esq.


Facsimile:    212.757.3990




or to
such other address as any party to whom notice is given may have previously
furnished to the others in writing in the manner set forth
above.


92


Section
12.3    Governing
Law




This
Agreement, and all claims or causes of action (whether in contract or tort) that
may be based upon, arise out of or relate to this Agreement, or the negotiation,
execution or performance of this Agreement (including any claim or cause of
action based upon, arising out of or related to any representation or warranty
made in or in connection with this Agreement or as an inducement to enter into
this Agreement), shall be governed by the internal laws of the State of Delaware
as applicable to agreements made and to be performed entirely within the State
of Delaware, without regard to conflict of law principles or rules.




Section
12.4    Fees and
Expenses




Except as
otherwise expressly set forth in this Agreement or Annex E, whether or
not the Closing is consummated, all fees and expenses incurred in connection
with this Agreement and the Contemplated Transactions, including, without
limitation, the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the party incurring such fees or
expenses.




Section
12.5    Construction;
Interpretation




The term
“this Agreement” means this Contribution Agreement together with all Schedules,
exhibits and annexes hereto, as the same may from time to time be amended,
modified, supplemented or restated in accordance with the terms
hereof.  The headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.  No party, nor its respective counsel, shall be
deemed the drafter of this Agreement for purposes of construing the provisions
hereof, and all provisions of this Agreement shall be construed according to
their fair meaning and not strictly for or against any party
hereto.  Unless otherwise indicated to the contrary herein by the
context or use thereof: (i) the words, “herein,” “hereto,” “hereof” and words of
similar import refer to this Agreement as a whole, including, without
limitation, the Schedules, exhibits and annexes, and not to any particular
section, subsection, paragraph, subparagraph or clause contained in this
Agreement; (ii) masculine gender shall also include the feminine and neutral
genders, and vice versa; and (iii) words importing the singular shall also
include the plural, and vice versa.




Section
12.6    Exhibits, Annexes and
Schedules




All
exhibits, annexes and Schedules, or documents expressly incorporated into this
Agreement, are hereby incorporated into this Agreement and are hereby made a
part hereof as if set out in full in this Agreement.  The
specification of any dollar amount in the representations and warranties
contained in this Agreement or the inclusion of any specific item in any
Schedule is not intended to imply that such amounts, or higher or lower amounts
or the items so included or other items, are or are not material, and no party
shall use the fact of the setting of such amounts or the inclusion of any such
item in any dispute or controversy as to whether any obligation, items or matter
not described herein or included in a Schedule is or is not material for
purposes of this Agreement.




93


Section
12.7    Parties in
Interest




This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns and, except as
expressly provided in Section 6.7, Section 7.2 and Article 10 and Article 12, nothing
in this Agreement, express or implied, is intend to or shall confer upon any
other Person (other than the Representative, in its capacity as set forth
herein) any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.




Section
12.8    Severability




If any
term or other provision of this Agreement is invalid, illegal or unenforceable,
all other provisions of this Agreement shall remain in full force and effect so
long as the economic or legal substance of the Contemplated Transactions is not
affected in any manner materially adverse to any Party.




Section
12.9    Counterparts; Facsimile
Signatures




This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page to
this Agreement by facsimile or scanned pages shall be effective as delivery of a
manually executed counterpart to this Agreement.




Section
12.10  Obligations Joint and
Several




The
obligations of Parent REIT, Parent OP and Parent Sub hereunder are jointly and
severally guaranteed by each other.




Section
12.11  Knowledge of the
Company




For all
purposes of this Agreement, the phrase “to the Company’s knowledge” and “known
by the Company” and any derivations thereof shall mean as of the applicable
date, the actual knowledge of the Company Knowledge Parties, none of whom shall
have any personal liability or obligations regarding such
knowledge.




Section
12.12  Waiver of Jury
Trial




Each
party hereto hereby waives, to the fullest extent permitted by law, any right to
trial by jury of any claim, demand, action, or cause of action (i) arising
under this Agreement or (ii) in any way connected with or related or
incidental to the dealings of the parties in respect of this Agreement or any of
the transactions related hereto, in each case, whether now existing or hereafter
arising, and whether in contract, tort, equity, or otherwise.  Each
party hereto hereby further agrees and consents that any such claim, demand,
action, or cause of action shall be decided by court trial without a jury and
that the parties hereto may file a copy of this Agreement with any court as
written evidence of the consent of the parties hereto to the waiver of their
right to trial by jury.


94


Section
12.13  Jurisdiction and
Venue




Each of
the parties hereto (i) submits to the exclusive jurisdiction of any state or
federal court sitting in Delaware, in any action or proceeding (whether in
contract or tort) arising out of or relating to this Agreement, or the
negotiation, execution or performance of this Agreement (including any claim or
cause of action based upon, arising out of or related to any representation or
warranty made in or in connection with this Agreement or as an inducement to
enter into this Agreement), (ii) agrees that all such claims in respect of such
action or proceeding shall be heard and determined in any such court and (iii)
agrees not to bring any such action or proceeding in any other
court.  Each of the parties hereto waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives any
bond, surety or other security that might be required of any other parties
hereto with respect thereto.  Each of the parties hereto agrees that
service of summons and complaint or any other process that might be served in
any action or proceeding may be made on such party by sending or delivering a
copy of the process to the party to be served at the address of the party and in
the manner provided for the giving of notices in Section
12.2.  Nothing in this Section 12.13,
however, shall affect the right of any party hereto to serve legal process in
any other manner permitted by Law.  Each party hereto agrees that a
final, non-appealable judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by Law.




Section
12.14  Waiver of
Conflicts




Recognizing
that Paul Weiss has acted as legal counsel to the Representative and its
Affiliates, and has acted as legal counsel to the Group Companies prior to the
Closing, and that Paul Weiss intends to act as legal counsel to the
Representative and its Affiliates after the Closing, each of Parent REIT, Parent
OP, Parent Sub and the Company hereby waives, on its own behalf and agrees to
cause its Affiliates to waive, any conflicts that may arise in connection with
Paul Weiss representing the Representative and its Affiliates (or any of the
other Contributors) after the Closing as such representation may relate to
Parent REIT, Parent OP, Parent Sub, any Group Company or the Contemplated
Transactions.




Section
12.15  Limitation on
Damages;
Remedies




(a)           Notwithstanding
anything to the contrary contained in this Agreement, the parties shall only be
entitled to recover such costs, damages, losses and expenses as would be
reasonably foreseeable by the parties hereto in connection with any proceeding
or claim pursuant to Article 10 or
otherwise seeking damages with respect to a breach of this Agreement; provided, that in no
event shall any party be liable (directly or indirectly, including through any
recovery from the Escrow Account) for any punitive damages or damages in excess
of the actual damages of any other party.


95


(b)           Notwithstanding
anything to the contrary in this Agreement, without limiting Section 7.2(a), no
past or present director, officer, member, partner, shareholder, Affiliate,
attorney or representative of any Group Company (other than a Group Company) or
any of their respective Affiliates (including the Representative, but excluding
any Group Company) shall have any liability (whether in contract or in tort),
except to the extent of the Escrow Account following the Closing, for any
obligations or liabilities of the Group Companies arising under, in connection
with or related to this Agreement or the other Transaction Documents or for any
claim based on, in respect of, or by reason of, the Contemplated Transactions,
including, without limitation, any alleged non-disclosure or misrepresentations
made by any such Persons. Each such foregoing Person is an intended third-party
beneficiary of this Section
12.16(b).  Notwithstanding the foregoing, claims by any Parent
Party against any Contributor, to the extent arising from the Fraud of such
Contributor, shall not be prohibited by this Section
12.15(b).




(c)           The
ability of any Parent Party to assert claims for Fraud against the Contributors
with respect to representations, warranties or covenants of the Group Companies
shall not be limited by the fact that the Contributors have not provided any
representations or warranties with respect thereto and the Contributors hereby
waive any such defense.




Section
12.16  Specific
Performance




Prior to
Closing, each of the parties hereto (and the Representative, on behalf of the
Contributors) shall be entitled to an injunction or injunctions, without the
necessity of posting bond, to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement, in addition to any
other remedy to which such party is entitled at law or in equity.  In
furtherance thereof, each of the parties hereto hereby waives (and agrees not to
assert) (i) any defense in any action for specific performance that a remedy at
law would be adequate, and (ii) any requirement under any Laws to post a bond or
other security as a prerequisite to obtaining equitable relief.




*     *     *     *     *


96


IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.




SIMON
      PROPERTY GROUP, INC.By:
                      /s/ David SimonName:
      David SimonTitle:
      Chief Executive Officer and
                        Chairman
      of the
Board





IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





SIMON
      PROPERTY GROUP, L.PBy
      Simon Property Group, Inc.its
      General PartnerBy:
                      /s/ David SimonName:
      David SimonTitle:
      Chief Executive Officer and
                        Chairman
      of the
Board








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





MARCO
      CAPITAL ACQUISITION,
                  LLCBy:
                /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and
                  Chief
      Financial Officer








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





PRIME
      OUTLETS ACQUISITION
                    COMPANY
      LLCBy:
                  /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized
Signatory








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





LIGHTSTONE
      VALUE PLUS REIT,
                        L.P.By:
                      /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized
Signatory








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





PRO-DFJV
      HOLDINGS LLCBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





LIGHTSTONE
      HOLDINGS, LLCBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





LIGHTSTONE
      PRIME, LLCBy:
                /s/ David LichtensteinName:
      David LichtensteinTitle:
      President





IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





BRM,
      LLCBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory





IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





LIGHTSTONE
      REAL PROPERTY
                        VENTURES
      LIMITED LIABILITY
                        COMPANYBy:
                      /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized
Signatory








IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





PR
      LIGHTSTONE MANAGER, LLCBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory





IN WITNESS WHEREOF, each of
the Parties has caused this Agreement to be duly executed on its behalf as of
the day and year first above written.





LIGHTSTONE
      VALUE PLUS REAL
                ESTATE
      INVESTMENT TRUST, INC.By:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory





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