EXECUTION
COPY





AMENDMENT NO. 3 TO THE
CONTRIBUTION AGREEMENT




THIS AMENDMENT NO. 3 TO THE
CONTRIBUTION AGREEMENT, made this 30th day of
August, 2010 (this “Amendment”), is made
by and among Simon Property Group, Inc., a Delaware corporation (“Parent REIT”), Simon
Property Group, L.P., a Delaware limited partnership (“Parent OP”), 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 Prime, LLC, a Delaware limited liability company (“Lightstone Prime”)
(solely in its capacity as the Representative), and Prime Outlets Acquisition
Company LLC, a Delaware limited liability company (the “Company”).  Except
as expressly set forth in this Amendment, all capitalized terms used herein
shall have the meanings ascribed to them in the Contribution
Agreement.




WITNESSETH:




WHEREAS, the parties hereto
and certain of their affiliates have entered into that certain Contribution
Agreement, dated as of December 8, 2009, Amendment No. 1 thereto dated as
of May 13, 2010, and Amendment No. 2 thereto dated as of June 28, 2010
(such Contribution Agreement, including Amendment No. 1 and Amendment No. 2
thereto, as further amended from time to time, the “Contribution
Agreement”);




WHEREAS, in accordance with
Section 7.1(b) of the Contribution Agreement, the Parent Parties and the
Company have agreed to amend the Contribution Agreement to provide that
(i) Prime Manager will transfer to the Company, without payment of any
additional consideration, the assets of Prime Manager (including specified
Contracts) relating to the operation of any of the Group Companies or their
properties, (ii) the Company will assume the liabilities of Prime Manager
under the specified Contracts assigned to the Company other than retained
liabilities (which will include any liabilities under such Contracts to Prime
Manager or any of the Contributors), and (iii) the Company shall distribute
pro rata to its members all of the ownership interests owned by the Company in
Prime Manager;




WHEREAS, in accordance with
Section 9.3 of the Contribution Agreement, which provides that, among other
things, the Contribution Agreement may be amended or modified by a written
agreement executed and delivered by duly authorized officers of Parent REIT,
Parent OP, Parent Sub, the Company and the Representative, the parties hereto
desire to enter into this Amendment to amend the Contribution Agreement;
and




WHEREAS, pursuant to
Section 11.1 of the Contribution Agreement, the Representative is
authorized to execute this Amendment on behalf of the Contributors, which
Amendment will thereupon be binding upon the Contributors.




NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:





1.          Definitions.




(a)        The
following definitions in Section 1.1 of the Contribution Agreement are
hereby amended and restated in their entirety to read as set forth
below:




“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, increased by
(vi) the amount of Paid Post-Signing Allowances and Commissions, decreased by
(vii) the Minority 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.




“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; provided, that in
each case, that Company Transaction Expenses shall not include any Unpaid
Post-Signing Allowances and Commissions.




“Contemplated
Transactions” means the Contributions and the other transactions
contemplated by this Agreement and the other Transaction Documents (but not
including any of the Entity Distributions or the Prime Manager
Transfer).




“Enterprise Value”
means two billion,one hundred sixty three
million dollars ($2,163,000,000) (equal to (i) two billion,one hundred forty eight
million dollars ($2,148,000,000) (the Enterprise Value in Amendment No. 2) plus
(ii) fifteen million dollars ($15,000,000)).




“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 and the actual Minority Cash
Amount and (b) shall estimate the amount of (i) the Net Working
Capital Adjustment, (ii) the Paid Post-Signing Allowances and Commissions,
(iii) the Closing Date Funded Indebtedness, and (iv) Company
Transaction Expenses.


2


“Excluded Liabilities”
means any Loss, as such term is defined in Section 10.2(a),
incurred by Parent OP or its Affiliates (including the Group Companies) after
the Closing as a result of (i) the conduct of business by Grand Prairie,
Livermore, Prime Development or any of their respective Subsidiaries prior to
Closing, including construction, development and leasing activities and any debt
obligations, guarantees of debt or completion of construction guarantees of
Grand Prairie, Livermore, Prime Development or any of their respective
Subsidiaries; (ii) the ownership by Grand Prairie, Livermore, Prime
Development or any of their respective Subsidiaries as of Closing of any real
property; and (iii) the items set forth on Schedule 1.1(G);
provided, that
“Excluded Liabilities” shall not include (i) any Loss incurred by Parent OP
or its Affiliates (including the Group Companies) to the extent arising as a
result of any of the Entity Distributions or the Prime Manager Transfer or from
any liabilities of Prime Manager which are assumed by the Company pursuant to
the Prime Manager Transfer or (ii) any Excluded Grand Prairie Guarantee
Liabilities.




“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, (x) “Funded Indebtedness” shall not include any
(i) obligations under operating leases, (ii) undrawn letters of
credit, (iii) LIBOR breakage fees and (iv) obligations of a Group
Company to any other Group Company and (y) solely for purposes of
calculating the Aggregate Consideration Value, “Funded Indebtedness” shall not
include any amount in respect of clause (f) above.




“Group Companies”
means, collectively, the Company, Ewell, Mill Run and each of their respective
Subsidiaries (but excluding Livermore, Prime Development, Grand Prairie, Prime
Manager and each of their respective Subsidiaries).




“Net Working Capital”
means, with respect to the Group Companies, 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
(a) 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 (b) Unpaid 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.


3


“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 and leasing commissions
and other similar payments payable to brokers or leasing agents (including third
party brokers and leasing agents and brokers and leasing agents employed by or
providing services to any Group Company or an Affiliate thereof) required to be
paid by any Group Company, 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).




“Property Employees”
means all current employees of Prime Manager (other than Management Employees)
who provide individual services at a property 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.




“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) the
termination of the Corporate Office Lease after September 30, 2010 (provided, that Parent
OP shall have  permitted the Representative at all times following the
Closing to control any negotiations with the landlord(s) thereunder in respect
of such termination and provided, further, that an
amount equal to one- (1-) month of rent thereunder shall be subtracted from the
amount of Severance, Employment and Shut-Down Costs) 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 employment
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(e)
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 (x) 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, (y) any costs or expenses included in the definition of Barceloneta
Severance, Employment and Shut-Down Costs (as defined in the Barceloneta
Contribution Agreement) which are also included in this definition of Severance,
Employment and Shut-Down Costs shall not be included in the calculation of
Barceloneta Severance, Employment and Shut-Down Costs and (z) any amounts
payable by a Group Company or Parent Party to any Retained Property
Employees that arise from and after the Closing Date shall not be
included in the calculation of Severance Employment and Shut-Down
Costs.


4


“Transaction
Documents” means this Agreement, Amendment No. 1, Amendment No. 2,
Amendment No. 3, the New Company Agreement, the LP Purchase Agreement, the Tax
Matters Agreements, the Escrow Agreement, the Prime Manager Assignment Agreement
and the Mill Run Letter Agreement.




(b)        Section 1.1
of the Contribution Agreement is hereby amended by adding the following defined
terms:




“Amendment No. 3”
means the Amendment No. 3 to this Agreement, dated as of August 30, 2010,
by and among the Parent Parties, Lightstone Prime and the Company.




“Corporate Office
Lease” means the lease set forth on Schedule 1.1(E).




“Paid Post-Signing Allowances
and Commissions” means (a) any out-of-pocket payments made by or on
behalf of any Group Company or Prime Manager prior to the Closing under any
lease or sublease executed on or after the date hereof by any Group Company (as
lessor or sublessor, as applicable) and any tenant thereof 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) an amount equal to the
brokerage and leasing commissions and other similar payments paid by or on
behalf of any Group Company or Prime Manager prior to the Closing to brokers or
leasing agents (including third party brokers and leasing agents and brokers and
leasing agents employed by or providing services to any Group Company, Prime
Manager or an Affiliate thereof), in each case with respect to any lease or
sublease 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 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).  Notwithstanding the foregoing, in no event shall
the amount of Paid Post-Signing Allowances and Commissions exceed
$682,103.


5


“Prime Manager Assigned
Assets” means the “Assets” and “Assigned Contracts”, each case as defined
in the Prime Manager Assignment Agreement.




“Prime Manager
Distribution” has the meaning set forth in Section 2.7.




“Prime Manager
Transfer” has the meaning set forth in Section 2.7.




“Prime Manager Assignment
Agreement” means the assignment and assumption agreement attached hereto
in Exhibit H.




“Unpaid Post-Signing
Allowances and Commissions” means (a) any unpaid out-of-pocket
payments under any lease or sublease 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 unpaid brokerage and
leasing commissions and other similar payments payable to brokers or leasing
agents (including third party brokers and leasing agents and brokers and leasing
agents employed by or providing services to any Group Company or an Affiliate
thereof) required to be paid by any Group Company, in each case with respect to
any lease or sublease 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 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).




(c)         Section 1.1
of the Contribution Agreement is hereby amended by deleting the defined terms
“Post-Signing Allowances and Commissions”, “Retained Management Employee” and
“Terminated Agreements”.




2.          Amendment to
Section 2.3(b).  The sentence added at the end of
Section 2.3(b) of the Contribution Agreement pursuant to Amendment No. 2 is
hereby amended and restated as follows:


6


“For
the avoidance of doubt, except for the Prime Manager Assigned Assets and except
as provided in the definition of “Paid Post-Signing Allowances and Commissions”,
each of (i) the assets, liabilities and financial condition, including
working capital and debt, of Livermore, Prime Development, Grand Prairie, St.
Augustine, the St. Augustine Land, Prime Manager and any Subsidiaries of
Livermore, Prime Development, Grand Prairie, St. Augustine and Prime Manager and
(ii) the assets and liabilities of any Group Company related to or arising
with respect to Livermore, Prime Development, Grand Prairie, St. Augustine, the
St. Augustine Land, Prime Manager, any Subsidiaries of Livermore, Prime
Development, Grand Prairie, St. Augustine, Prime Manager, the Grand Prairie
Guarantee, the Prime Manager Transfer or any of the Entity Distributions, shall
be excluded from the calculation of the Final Aggregate Consideration Value and
the Estimated Aggregate Consideration Value and any component thereof, including
the calculation of Net Working Capital, Net Working Capital Adjustment, and
Funded Indebtedness. For further clarity, the Final Aggregate Consideration
Value and the Estimated Aggregate Consideration Value and any component thereof,
including the calculation of Net Working Capital, Net Working Capital
Adjustment, and Funded Indebtedness, shall be calculated assuming that the
contracts to be terminated pursuant to the Prime Manager Assignment Agreement
shall not have been terminated but instead shall have been assigned to the
Company immediately prior to Closing.”




3.          
Amendment to
Section 2.3(d).




Section 2.3(d)(i) of
the Contribution Agreement shall be amended and restated in its entirety to read
as follows:




“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 the Paid Post-Signing
Allowances, (C) a proposed calculation of the amount of Closing Date Funded
Indebtedness, (D) a proposed calculation of the amount of Company
Transaction Expenses (including each of the components thereof), and (E) 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.””


7


Section 2.3(d)(ii) of
the Contribution Agreement shall be amended and restated in its entirety to read
as follows:





“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, Paid Post-Signing Allowances and Commissions, 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, Paid Post-Signing Allowances and
Commissions, 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.”


8


4.          Amendment to
Section 2.7.  Section 2.7 of the Contribution
Agreement is hereby amended and restated in its entirety to read as
follows:




“Section 2.7   Prime ManagerTransfer;
Distribution of Ownership Interests in Prime Manager, Livermore, Prime
Development and Grand Prairie




Upon the
terms and subject to the conditions set forth in this Agreement, immediately
prior to the Closing, (i) the Company and Prime Manager shall execute the
Prime Manager Assignment Agreement and consummate the assignment, assumption and
termination transactions contemplated thereby (collectively, the “Prime Manager
Transfer”) and (ii)(a) immediately following the Prime Manager Transfer,
the Company shall distribute pro rata to its members all of the ownership
interests owned by the Company in Prime Manager (the “Prime Manager
Distribution”), (b) the Company shall cause Prime Retail L.P. to
distribute to the Company all of the ownership interests owned by Prime Retail
L.P. in Livermore and the Company shall thereupon distribute pro rata to its
members all such ownership interests in Livermore (the “Livermore
Distribution”), (c) the Company shall distribute pro rata to its
members all of the ownership interests owned by the Company in Prime Development
(the “Prime
Development Distribution”) and (d) the Company shall cause Prime
Retail L.P. to distribute to the Company all of the ownership interests owned by
Prime Retail L.P. in Grand Prairie and the Company shall thereupon distribute
pro rata to its members all such ownership interests in Grand Prairie (the
“Grand Prairie
Distribution” and together with the Prime Manager Distribution, the
Livermore Distribution and the Prime Development Distribution, the “Entity
Distributions”), so that following the Closing, none of the Parent
Parties and their Affiliates (including the Group Companies) shall have any
direct or indirect ownership interest in Livermore, Prime Development, Grand
Prairie or Prime Manager.  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 Prime Manager
Transfer and the Entity Distributions 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 distribution of the ownership interests
as contemplated by this Section 2.7
shall be shared one-half by the Parent Parties and one-half by Lightstone Prime,
LVP OP and Pro-DFJV.”




5.          Amendment to
Section 3.21.  The paragraph added at the end of
Section 3.21 of the Contribution Agreement pursuant to Amendment No 2 is
hereby amended and restated to read as follows:




“Except
as set forth in Section 3.23,
notwithstanding anything to the contrary in this Agreement, the Company makes no
representations or warranties, express or implied, with respect to St.
Augustine, Livermore, Prime Development, Grand Prairie, Prime Manager, any of
their respective Subsidiaries, the St. Augustine Land, any of St. Augustine’s,
Livermore’s, Prime Development’s, Grand Prairie’s, Prime Manager’s or their
respective Subsidiaries’ respective businesses, assets or liabilities, the Prime
Manager Transfer or any of the Entity Distributions, to Parent REIT, Parent OP
or Parent Sub and hereby disclaims all liability and responsibility for any such
representation or warranty made, communicated, or furnished to Parent REIT,
Parent OP or Parent Sub.”




6.          Amendment to
Section 3.23.  Section 3.23 of
the Contribution Agreement is hereby amended and restated to read as
follows:




“The
Company hereby represents and warrants to Parent OP that the entry into
Amendment No. 2 and Amendment No. 3 does not and will not, except as set forth
in the Company Schedules, including Schedule 3.23,
and assuming the receipt of the Required Consents and repayment of the Floating
Rate Debt at Closing,  (i) 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,
(ii) conflict with or violate any Law or Order applicable to any Group
Company or any of their respective properties or assets or (iii) except as
expressly contemplated by this Agreement and the other Transaction Documents,
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; provided, that no
representation or warranty is being made in this Section 3.23
with respect to the Prime Manager Transfer, any of the Entity Distributions or
any antitrust or competition Laws (or any Orders or Contracts related thereto)
that may be applicable to the Contemplated Transactions, the Prime Manager
Transfer or any of the Entity Distributions.”


9


7.          Amendment to
Section 4.8.  The paragraph added at the end of
Section 4.8 of the Contribution Agreement pursuant to Amendment No 2 is
hereby amended and restated to read as follows:




“Except
as set forth in Section 4.10,
notwithstanding anything to the contrary in this Agreement, the Contributors
make no representations or warranties, express or implied, with respect to St.
Augustine, Livermore, Prime Development, Grand Prairie, Prime Manager, any of
their respective Subsidiaries, the St. Augustine Land, any of St. Augustine’s,
Livermore’s, Prime Development’s, Grand Prairie’s, Prime Manager’s or their
respective Subsidiaries’ respective businesses, assets or liabilities, the Prime
Manager Transfer or any of the Entity Distributions, to Parent REIT, Parent OP
or Parent Sub and hereby disclaim all liability and responsibility for any such
representation or warranty made, communicated, or furnished to Parent REIT,
Parent OP or Parent Sub.”




8.          Amendment to
Section 4.10.  Section 4.10 of the Contribution
Agreement is hereby amended and restated to read as follows:




“Each
Contributor hereby, severally, and not jointly or jointly and severally,
represents and warrants to Parent OP that the entry into Amendment No. 2 and
Amendment No. 3 does not and will not, except as set forth in Schedule 3.23,
(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 under this Agreement and provided, that no
representation or warranty is being made in this Section 4.10
with respect to the Prime Manager Transfer, any of the Entity Distributions or
any antitrust or competition Laws (or any Orders or Contracts related thereto)
that may be applicable to the Contemplated Transactions, the Prime Manager
Transfer or any of the Entity Distributions.”




9.          Amendment to
Section 5.11.  The paragraph added at the end of Section 5.11 of
the Contribution Agreement pursuant to Amendment No 2 is hereby amended and
restated to read as follows:


10


“Except
as set forth in Section 3.23 and
Section 4.10,
each of Parent REIT, Parent OP and Parent Sub hereby acknowledges and agrees
that, (i) neither the Company nor any of the Contributors makes any
representations or warranties, express or implied, with respect to St.
Augustine, Livermore, Prime Development, Grand Prairie, Prime Manager any of
their respective Subsidiaries, the St. Augustine Land, any of St. Augustine’s,
Livermore’s, Prime Development’s, Grand Prairie’s, Prime Manager’s or their
respective Subsidiaries’ respective businesses, assets or liabilities, the Prime
Manager Transfer or any of the Entity Distributions and (ii) no
representation, warranty or covenant of the Company or any Contributor in this
Agreement or any other Transaction Document shall be deemed breached as a result
of the execution, delivery and performance of Amendment No. 2 or Amendment No.
3, or the consummation of the Prime Manager Transfer or any of the Entity
Distributions or transactions related thereto.  In furtherance of the
foregoing, to the extent any representation, warranty or covenant (other than
Section 2.7) of
the Company (including in Section 3.4(a)
and Section 3.4(b))
or any Contributor in any Transaction Document may apply to or otherwise
include, by reference to a schedule or otherwise, any information or obligation
regarding St. Augustine, Livermore, Prime Development, Grand Prairie, Prime
Manager, any of their respective Subsidiaries, the St. Augustine Land, any of
St. Augustine’s, Livermore’s, Prime Development’s, Grand Prairie’s, Prime
Manager’s or their respective Subsidiaries’ respective businesses, assets or
liabilities, the Prime Manager Transfer or any of the Entity Distributions, such
representation, warranty or covenant shall be deemed modified to exclude any
application thereof to St. Augustine, Livermore, Prime Development, Grand
Prairie, Prime Manager, any of their respective Subsidiaries, the St. Augustine
Land, any of St. Augustine’s, Livermore’s, Prime Development’s, Grand Prairie’s,
Prime Manager’s or their respective Subsidiaries’ respective businesses, assets
or liabilities, the Prime Manager Transfer and the Entity Distributions, and
such representation, warranty or covenant, as so modified, shall not be deemed
breached to the extent such exclusion of St. Augustine, Livermore, Prime
Development, Grand Prairie, Prime Manager, any of their respective Subsidiaries,
the St. Augustine Land, any of St. Augustine’s, Livermore’s, Prime
Development’s, Grand Prairie’s, Prime Manager’s or their respective
Subsidiaries’ respective businesses, assets or liabilities, the Prime Manager
Transfer or any of the Entity Distributions would otherwise result in a breach
thereof.”




10.        Amendment to
Section 5.14.  Section 5.14 of the Contribution
Agreement is hereby amended and restated to read as follows:




“Parent
REIT, Parent OP and Parent Sub hereby jointly and severally represent and
warrant to the Company and the Contributors that the entry into Amendment No. 2
and Amendment No. 3 does not and will not (i) conflict with or result in
any breach of any provision of such Person’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 Person is a party, or (iii) violate any
Law or Order applicable to such Person, 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 Person to perform its respective
obligations under this Agreement and provided, that no
representation or warranty is being made with respect to any antitrust or
competition Laws (or any Orders or Contracts related thereto) that may be
applicable to the Contemplated Transactions.”


11


11.        Amendment to
Section 6.10(a).  Section 6.10(a) is hereby amended
and restated in its entirety as follows:




“(a)       
Parent OP or a Subsidiary of Parent REIT or Parent OP shall offer employment,
effective as of 9:00 a.m. on the Closing Date, to all of the Property Employees
set forth on Schedule 6.10(a).  Those Property Employees who
accept such offers are referred to herein as “Retained Property
Employees.”  For one year after the Closing Date, Parent REIT
and Parent OP shall, or shall cause their Subsidiaries to, provide each Retained
Property 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 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) no less favorable to each Retained Property Employee than the base
salary or base wages and pension and health benefits provided to such Retained
Property Employees immediately prior to the Closing, in either case to be
determined for each Retained Property Employee in the sole discretion of Parent
REIT and Parent OP.”




12.        Amendment to
Section 6.10(b).  All references in Section 6.10(b)
and Section 6.10(e) (as renumbered from Section 6.10(f) pursuant to
Section 9
hereof) to “Retained Property Employee and Retained Management Employee” shall
be amended to refer only to “Retained Property Employee.”




13.        Deletion of
Section 6.10(e).  Section 6.10(e) is hereby deleted
in its entirety, and Section 6.10(f) shall be renumbered
Section 6.10(e) and all references to Section 6.10(f) shall be amended
to refer to Section 6.10(e).




14.        New
Section 6.18.  The following new Section 6.18 is
hereby added to the Contribution Agreement:


12


“Section 6.18   Corporate
Office Lease




From and
after Closing, (a) the Parent Parties shall not (and shall cause their
Affiliates and the Group Companies not to), without the prior written consent of
the Representative, (i) after September 30, 2010, use or occupy any
portion of the premises demised under the Corporate Office Lease,
(ii) enter into any agreement or understanding (including any modification
to the Corporate Office Lease) with the landlord(s) under the Corporate Office
Lease, (iii) enter into any agreement or understanding with any Person
other than the Representative to permit any Person to use or occupy all or any
portion of the premises demised under the Corporate Office Lease, (b) the
Parent Parties shall (and shall cause their Affiliates and the Group Companies
to) use their reasonable best efforts to permit the Representative and its
designees to (i) after September 30, 2010, use and occupy, without
payment of any additional consideration, any and all of the premises demised
under the Corporate Office Lease and (ii) direct and control any and all
negotiations with the landlord(s) under the Corporate Office Lease; provided
that none of the Parent Parties, their Affiliates or the Group Companies shall
be obligated to pay any sums to, or incur any liability or obligation to, any
third party in connection with this Section 6.18(b)
and (c) upon termination or expiration of the obligations of the Parent
Parties and their Affiliates (including the Group Companies) to pay rent under
the Corporate Office Lease (including by reason of an assignment of all
obligations under the Corporate Office Lease to the Representative or one of its
designees), Parent OP shall distribute, or cause to be distributed, within ten
(10) Business Days after such termination or expiration, out of the proceeds of
additional borrowings pursuant to the Financing which have the benefit of the
Member Guarantees, to the Representative (for further distribution to the
Contributors), an amount equal to the excess, if any, of (x) any amount
included in the calculation of the Estimated Aggregate Consideration Value or
Final Aggregate Consideration Value, as the case may be, in respect of the
Corporate Office Lease (including pursuant to clause (i) of the definition
of Severance, Employment and Shut-Down Costs) over (y) the excess of
(A) the amount of rent actually paid by the Parent Parties and their
Affiliates (including the Group Companies) after Closing to the landlord(s)
under the Corporate Office Lease over (B) an amount equal to the rent for
the month of September, 2010 under the Corporate Office Lease; provided,
however, that if (x) any amount required to be distributed by the Parent
Parties to the Representative pursuant to this Section 6.18(c)
is less than $100,000 and (y) the Final Aggregate Consideration Value has
not been finally determined pursuant to Section 2.3(d) on the date such
amount is required to be distributed pursuant to this Section 6.18(c),
the Parent Parties shall have the right to delay making such required
distribution until the third (3rd)
Business Day after the Final Aggregate Consideration Value is finally determined
pursuant to Section 2.3(d).”




15.        Amendment to
Section 7.1.  Section 7.1 is hereby amended and
restated in its entirety as follows:




“Section 7.1        [Intentionally
Omitted.]”




16.        Amendment to
Section 8.2(e).  Clause (iv) of Section 8.2(e)
of the Contribution Agreement is hereby amended and restated to read as
follows:




“(iv)     [Intentionally
Omitted.]”




17.        Amendments to Company
Schedules.  The Company Schedules are hereby amended as
set forth in Exhibit A
hereto.




18.        Amendments to
Exhibits and Annexes.




(a)        Exhibit C
(Net Working Capital Line Items) of the Contribution Agreement is hereby amended
and restated in its entirety as set forth in Exhibit B
hereto.




(b)        Exhibit H
(Prime Manager Assignment Agreement) is hereby attached to the Contribution
Agreement, which Exhibit H is set forth in Exhibit C
hereto.


13


(c)        Annex D
(Applicable Percentage Interest) of the Contribution Agreement is hereby amended
and restated in its entirety as set forth in Exhibit D
hereto.




(d)        Annex G
(Escrow Unit Payment Percentage Interest) is hereby amended and restated in its
entirety as set forth in Exhibit E
hereto.




19.        No Other
Amendments.  Except as otherwise expressly amended or modified
hereby, all of the terms and conditions of the Contribution Agreement shall
continue in full force and effect.  Each reference to “hereof”,
“hereunder”, “herein” and “hereby” and each similar reference in the
Contribution Agreement shall refer to the Contribution Agreement as amended
hereby.




20.        Entire Agreement;
Assignment.




(a)        This
Amendment, the Contribution Agreement (including Amendment No. 1 and Amendment
No. 2 thereto), the Barceloneta Contribution 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 Amendment, the Contribution Agreement (including Amendment
No. 1 and Amendment No. 2 thereto), the Barceloneta Contribution 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 Amendment, the Contribution Agreement (including Amendment No. 1 and
Amendment No. 2 thereto), the Barceloneta Contribution Agreement or the other
Transaction Documents.  Furthermore, the parties hereto each hereby
acknowledges that this Amendment embodies the justifiable expectations of
sophisticated parties derived from arm’s-length negotiations; all parties to
this Amendment 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 Amendment,
the Contribution Agreement (including Amendment No. 1 and Amendment No. 2
thereto), the Barceloneta Contribution Agreement or the other Transaction
Documents (including any representations and warranties set forth herein, the
Contribution Agreement (including Amendment No. 1 and Amendment No. 2 thereto),
the Barceloneta Contribution Agreement or the other Transaction Documents, made
in connection herewith, the Contribution Agreement (including Amendment No. 1
and Amendment No. 2 thereto), the Barceloneta Contribution Agreement or the
other Transaction Documents or as an inducement to enter into this Amendment,
the Contribution Agreement (including Amendment No. 1 and Amendment No. 2
thereto), the Barceloneta Contribution 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 the Contribution
Agreement (including Amendment No. 1 and Amendment No. 2 thereto), the
Barceloneta Contribution 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 Amendment, the Contribution Agreement (including Amendment No. 1 and
Amendment No. 2 thereto), the Barceloneta Contribution 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 20.


14


(b)        This
Amendment 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
Amendment not in accordance with the terms of this Section 20 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 Amendment and any of their rights under this Amendment 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.




21.        Governing
Law.  This Amendment, and all claims or causes of action
(whether in contract or tort) that may be based upon, arise out of or relate to
this Amendment, or the negotiation, execution or performance of this Amendment
(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 Amendment or
as an inducement to enter into this Amendment), 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.




22.        Fees and
Expenses.  Except as otherwise expressly set forth in this
Amendment, the Contribution Agreement or Annex E thereof, whether or not
the Closing is consummated, all fees and expenses incurred in connection with
this Amendment, the Contribution 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.




23.        Construction;
Interpretation.  The term “this Amendment” means this Amendment
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 Amendment are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Amendment.  No party, nor its respective
counsel, shall be deemed the drafter of this Amendment for purposes of
construing the provisions hereof, and all provisions of this Amendment 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 Amendment 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
Amendment; (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.


15


24.        Exhibits, Annexes and
Schedules.  All exhibits, annexes and Schedules, or documents
expressly incorporated into this Amendment, are hereby incorporated into this
Amendment and are hereby made a part hereof as if set out in full in this
Amendment.  The specification of any dollar amount in this Amendment
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
Amendment.




25.        Severability.  If
any term or other provision of this Amendment is invalid, illegal or
unenforceable, all other provisions of this Amendment shall remain in full force
and effect so long as the economic or legal substance of the Contemplated
Transactions (as amended hereby) is not affected in any manner materially
adverse to any party.




26.        Counterparts. This
Amendment 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 Amendment by facsimile or scanned pages shall be effective as delivery of a
manually executed counterpart to this Amendment.




27.        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 Amendment or (ii) in any way
connected with or related or incidental to the dealings of the parties in
respect of this Amendment 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 Amendment with any court as written evidence of the consent of the
parties hereto to the waiver of their right to trial by jury.




28.        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 Amendment, or the negotiation, execution or performance of this Amendment
(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 Amendment or
as an inducement to enter into this Amendment), (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 of
the Contribution Agreement.  Nothing in this Section 28,
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.





[Remainder
of page intentionally left blank.]


16


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed on the date first written above.




SIMON
      PROPERTY GROUP, INC.By:
              /s/ Stephen E.
    SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief Financial
                OfficerSIMON
      PROPERTY GROUP, L.P.By:
              Simon
      Property Group, Inc. a Delaware corporationits
      General PartnerBy:
              /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief Financial
                OfficerMARCO
      CAPITAL ACQUISITION, LLCBy:
              /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief Financial
                OfficerPRIME
      OUTLETS ACQUISITION COMPANY LLCBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized SignatoryLIGHTSTONE
      PRIME, LLCSolely
      in its capacity as the RepresentativeBy:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory





Signature
Page to Amendment No. 3 to the Contribution Agreement


17


Exhibit
A


A-1


Exhibit
B


B-1


Exhibit C
Addendum


B-2


Exhibit
C




(See
attached)


C-1


ASSIGNMENT,
ASSUMPTION AND TERMINATION AGREEMENT




THIS
ASSIGNMENT, ASSUMPTION AND TERMINATION AGREEMENT, dated as of August 30,
2010 (this “Agreement”), by and
between Prime Retail Property Management, LLC, a Delaware limited liability
company (the “Assignor”), Prime
Outlets Acquisition Company LLC,a Delaware limited
liability company (the “Assignee”) and,
solely for the purpose of Section 3 hereof, the subsidiaries of the
Assignee set forth on the signature pages hereto.




RECITALS




WHEREAS,
The Assignor, the Assignee and certain other parties have entered into a
Contribution Agreement, dated at of December 8, 2009, as amended by
Amendment No. 1, dated as of May 13, 2010, and Amendment No. 2, dated as of
June 28, 2010, and Amendment No. 3, dated as of August 30, 2010 (as
further amended from time to time, the “Contribution
Agreement”).  This Agreement is being delivered in furtherance
of Section 2.7 of the Contribution Agreement.  Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Contribution Agreement; and




WHEREAS,
subject to the consummation of the transactions contemplated in the Contribution
Agreement, the Assignor desires to assign, transfer, and deliver to the Assignee
all of the Assets and the Assigned Contracts (each as defined below), and the
Assignee desires to accept such assignment, transfer and delivery from the
Assignor and agrees to assume the Assumed Liabilities (as defined
below).




NOW,
THEREFORE, in consideration of the mutual promises made herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and upon the terms and subject to the conditions set forth herein,
the parties hereto hereby agree as follows:




1.          Assignment and
Assumption.  The parties hereto hereby agree that, effective as
of immediately prior to the consummation of the transactions contemplated in the
Contribution Agreement, (a) the Assignor hereby assigns, transfers and
delivers to the Assignee, (i) all of the property and assets set forth in
Section A of Schedule 1 hereto (collectively, the “Assets”) and
(ii) all rights, benefits and interests of the Assignor under the Contracts
set forth in Section B of Schedule 1 hereto (the “Assigned Contracts”)
and (b) the Assignee hereby accepts the assignment, transfer and delivery
of the Assets and the Assigned Contracts and assumes and agrees to promptly and
fully pay when due, perform and discharge in accordance with their terms all
obligations, liabilities and commitments of the Assignor under the Assigned
Contracts, in each case whether arising prior to, on or after the Closing
(collectively, the “Assumed
Liabilities”).




2.          Retained
Liabilities.  Notwithstanding anything to the contrary
contained in this Agreement, Assignee shall not be deemed by virtue of the
execution and delivery of this Agreement or as a result of the consummation of
the transactions contemplated in the Contribution Agreement, to have assumed, or
to have agreed to pay, perform or discharge, any liability or obligation of the
Assignor other than the Assumed Liabilities (the “Retain
Liabilities”).  For the avoidance of any doubt, the Retained
Liabilities shall not include any liabilities under the Terminated Contracts
(defined below).


C-2


3.          Termination.  The
parties hereto hereby agree that, effective as of immediately prior to the
consummation of the transactions contemplated in the Contribution Agreement, the
Contracts set forth in Section C of Schedule 1 hereto (the “Terminated
Contracts”) shall be terminated in full, and none of Assignor, the Group
Companies, the Parent Parties, or any of their respective affiliates, as the
case may be, shall have any further rights or obligations under the Terminated
Contracts following the closing.  Each of the parties hereto expressly
waives any requirement of or right to any prior notice or payments that may be
contained in the Terminated Contracts.




4.          Closing.  The
closing of the transactions contemplated in Section 1 hereof (the “Closing”) shall take
place at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285
Avenue of the Americas, New York, New York 10019-6064 on the date of
and immediately prior to the closing of the transactions contemplated by the
Contribution Agreement.




5.          Further
Assurances.  The Assignor agrees to take such actions and
execute and deliver to the Assignee such further assignments or other transfer
documents as the Assignee may reasonably request to effectively assign, transfer
and convey, and to evidence such assignment, transfer and conveyance of, the
Assets and the Assigned Contracts to the Assignee, in each case, at the sole
cost and expense of the Assignee.  The Assignee agrees to take such
actions and execute and deliver to the Assignor such further assumptions or
other transfer documents as the Assignor may reasonably request to effectively
assume, and to evidence such assumption of, the Assumed Liabilities by the
Assignee, in each case, at the sole cost and expense of the
Assignor.




6.          No Representations or
Warranties.  Neither the Assignor nor the Assignee makes any
representation or warranty under this Agreement with respect to the Assets or
the Assigned Contracts.  Nothing contained in this Agreement shall
release the Assignee from any of its obligations under the Contribution
Agreement or in any way diminish or modify any of the representations,
warranties, indemnities, covenants, agreements or in general, any of the
obligations of such party set forth in the Contribution Agreement.




7.          Entire
Agreement(i)    . This Agreement contains the entire
agreement of the parties respecting the subject matter hereof and supersedes all
prior agreements among the parties respecting the same.  The parties
hereto have voluntarily agreed to define their rights, liabilities and
obligations respecting subject matter hereto exclusively in contract pursuant to
the express terms and provisions of this Agreement.This Agreement may not be
assigned by any party (whether by operation of law or otherwise) without the
prior written consent of the other parties.  Any attempted assignment
of this Agreement not in accordance with the terms of this Section 6 shall
be void.


C-3


8.          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 the
Assignor:




c/o The
Lightstone Group


1985
Cedar Bridge Avenue


Lakewood,
New Jersey 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


Attention:           Jeffrey
D. Marell, Esq.


Robert B. Schumer,
Esq.


Facsimile:          212.757.3990





To the
Assignee:





c/o 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





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.




9.          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.


C-4


10.        Fees and
ExpensesExcept as otherwise expressly set forth in the Contribution
Agreement, all fees and expenses incurred in connection with such transactions
and this Agreement, including, without limitation, the fees and disbursements of
counsel, financial advisors and accountants, shall be paid by the party
incurring such fees or expenses.




11.        Construction;
Interpretation.  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.  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 and exhibits, 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.




12.        Exhibits and
Schedules.  All exhibits are hereby incorporated into this
Agreement and are hereby made a part hereof as if set out in full in this
Agreement.  The inclusion of any specific item in any Schedule is
not intended to imply that such item, is or is not material, and no party shall
use the fact of the setting of such item in any dispute or controversy as to
whether any item not described herein or included in a Schedule is or is
not material for purposes of this Agreement.




13.        Parties in
Interest.  This Agreement shall be binding upon and inure
solely to the benefit of the parties and their respective successors and
permitted assigns and nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.




14.        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.




15.        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.




16.        Waiver of Jury
Trial.  Each party 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 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 may file a copy of this
Agreement with any court as written evidence of the consent of the parties to
the waiver of their right to trial by jury.


C-5


17.        Jurisdiction and
Venue.  Each of the parties (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 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
party with respect thereto.  Each party 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 7.  Nothing
in this Section 16,
however, shall affect the right of any party to serve legal process in any other
manner permitted by law.  Each party 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.




18.        Remedies.  Except
as otherwise expressly provided in this Agreement or the Contribution Agreement,
any and all remedies expressly conferred upon a party to this Agreement shall be
cumulative with, and not exclusive of, any other remedy contained in this
Agreement, at law or in equity, and the exercise by a party to this Agreement of
any one remedy shall not preclude the exercise by it of any other
remedy.




19.        Amendment and
Waiver.




(a)        No
failure or delay on the part of the parties in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy.


(b)        Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by the parties from the terms of any provision of this Agreement, shall be
effective (i) only if it is made or given in writing and signed by the
parties, and (ii) only in the specific instance and for the specific
purpose for which made or given.




20.        Further
Assurances.  Each of the parties shall execute such documents
and perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations or other actions by, or giving any notices
to, or making any filings with, any governmental authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement.




[Signature
page follows.]


C-6


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.




ASSIGNOR:PRIME RETAIL PROPERTY MANAGEMENT, LLCBy:Name:Title:ASSIGNEE:PRIME
      OUTLETS ACQUISITION COMPANY LLCBy:Name:Title:


C-7


Acknowledged
and Accepted:




§
            BIRCH RUN OUTLETS II,
      LLC




§
            CALHOUN OUTLETS,
      LLC




§
            CORAL ISLE FACTORY SHOPS
      LP




§
            FLORIDA KEYS FACTORY SHOPS
      LP




§
            GAFFNEY OUTLETS,
      LLC




§
            GROVE CITY FACTORY SHOPS
      LP




§
            GULF COAST FACTORY SHOPS
      LP




§
            GULFPORT FACTORY SHOPS
      LP




§
            HUNTLEY FACTORY SHOPS
      LP




§
            LEE OUTLETS,
      LLC




§
            OHIO FACTORY SHOPS
      PARTNERSHIP




§
            ORLANDO DESIGN CENTER,
      LLC




§
            ORLANDO OUTLET OWNER,
      LLC




§
            OUTLET VILLAGE OF HAGERSTOWN
      LP




§
            PRIME OUTLETS AT PISMO BEACH,
      LLC




§
            PRIME OUTLETS AT PLEASANT
      PRAIRIE, LLC




§
            PRIME OUTLETS AT PLEASANT
      PRAIRIE II, LLC




§
            PRIME OUTLETS AT SAN
      MARCOS II LP




§
            SAN MARCOS FACTORY STORES,
      LTD




§
            SECOND HORIZON GROUP
      LP




§
            THE PRIME OUTLETS AT LEBANON
      LP




§
            WILLIAMSBURG MAZEL,
      LLC




§
            WILLIAMSBURG OUTLETS,
      LLC




By:Name:Title:




C-8


Schedule 1


C-9


Exhibit
D




“Annex
D




Applicable Percentage
Interests – Base




Entity
                
                Percentage
                  InterestLightstone
      Prime LLC
                
                
                41.170
                %Pro-DFJV
      Holdings LLC
                
                
                14.755BRM,
      LLC
                
                
                16.448Lightstone
      Value Plus REIT LP
                
                
                26.144Lightstone
      Holdings
                
                
                1.483Total
      Percentage Interests
                
                
                100.000
                %”


D-1


Exhibit
D




“Annex
G




Escrow Unit Payment
Percentage Interest




Entity
                
                Percentage
                  InterestLightstone
      Prime LLC
                
                
                44.086
                %Pro-DFJV
      Holdings LLC
                
                
                13.472BRM,
      LLC
                
                
                17.035Lightstone
      Value Plus REIT LP
                
                
                23.871Lightstone
      Holdings
                
                
                1.536Total
      Percentage Interests
                
                
                100.000
                %”




E-1