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
              21Section 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
              26Section 2.5
              Special
      Distribution Amount; Escrow of Cash
              26Section 2.6
              Book
      Entry; No Fractional Units
              26Section 2.7
              Purchase
      and Sale of St. Augustine Interests and St. Augustine Land
              27ARTICLE
      3 REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP
      COMPANIES
              28Section 3.1
              Organization
      and Qualification; Subsidiaries
              28Section 3.2
              Capitalization
      of the Group Companies
              29Section 3.3
              Authority
              31Section 3.4
              Financial
      Statements; Indebtedness
              32Section 3.5
              Consents
      and Approvals; No Violations
              33Section 3.6
              Material
      Contracts
              34Section 3.7
              Absence
      of Changes
              35Section 3.8
              Litigation
              36Section 3.9
              Compliance
      with Applicable Law
              36Section 3.10
              Employee
      Benefit Plans
              37Section 3.11
              Environmental
      Matters
              38Section 3.12
              Intellectual
      Property
              39Section 3.13
              Labor
      Matters
              40Section 3.14
              Tax
      Matters
              41Section 3.15
              Brokers
              43Section 3.16
              Real
      and Personal Property
              43Section 3.17
              No
      Undisclosed Liabilities
              50Section 3.18
              Transactions
      with Affiliates
              50Section 3.19
              Insurance
              50Section 3.20
              Investment
      Company Act Status
              50Section 3.21
              No
      Other Representations and Warranties Regarding the Group
      Companies
              51ARTICLE
      4 REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS AND LVP
      REIT
              51Section 4.1
              Organization
              51Section 4.2
              Authority
              51Section 4.3
              Consents
      and Approvals; No Violations
              52Section 4.4
              Title
              52





(i)





Section 4.5
                Accredited
      Investor
                52Section 4.6
                Brokers
                52Section 4.7
                Acknowledgment
                53Section 4.8
                No
      Other Representations and Warranties Regarding the
      Contributors
                53ARTICLE
      5 REPRESENTATIONS AND WARRANTIES OF PARENT REIT, PARENT OP AND PARENT
      SUB
                53Section 5.1
                Organization
                53Section 5.2
                Authority
                54Section 5.3
                Consents
      and Approvals; No Violations
                54Section 5.4
                Capitalization
                54Section 5.5
                SEC
      Documents
                55Section 5.6
                Brokers
                55Section 5.7
                Financing
                56Section 5.8
                Tax
      Matters
                56Section 5.9
                Certain
      Activities
                56Section 5.10
                New
      Company
                57Section 5.11
                Acknowledgement
                58Section 5.12
                No
      Other Representations and Warranties Regarding Parent REIT, Parent OP and
      Parent Sub
                58ARTICLE
      6 COVENANTS
                59Section 6.1
                Conduct
      of Business of the Group Companies
                59Section 6.2
                Pre-Closing
      Tax Matters
                62Section 6.3
                Access
      to Information
                63Section 6.4
                Efforts
      to Consummate
                64Section 6.5
                Financing
                65Section 6.6
                Public
      Announcements
                67Section 6.7
                Indemnification
                67Section 6.8
                Documents
      and Information
                68Section 6.9
                Contact
      with Customers, Suppliers and Other Business Relations
                68Section 6.10
                Employee
      Benefit Matters
                69Section 6.11
                Notification
                71Section 6.12
                Transactions
      in Parent Common Stock
                71Section 6.13
                Exclusivity
                71Section 6.14
                Use
      of Prime Retail Mark
                72Section 6.15
                Parent
      OP Agreement
                72Section 6.16
                LVP
      REIT; LVP OP
                73ARTICLE
      7 CERTAIN AFFILIATE MATTERS
                73Section 7.1
                Termination
      of Agreements; Resignations of Affiliates
                73Section 7.2
                Release
                74ARTICLE
      8 CONDITIONS TO CONSUMMATION OF THE CONTRIBUTIONS
                76Section 8.1
                Conditions
      to the Obligations of the Contributors, Parent REIT, Parent OP and Parent
      Sub
                76


(ii)





Section 8.2
              Other
      Conditions to the Obligations of Parent REIT, Parent OP and Parent
      Sub
              76Section 8.3
              Other
      Conditions to the Obligations of the Contributors
              78Section 8.4
              Frustration
      of Closing Conditions
              79ARTICLE
      9 TERMINATION; AMENDMENT; WAIVER
              80Section 9.1
              Termination
              80Section 9.2
              Effect
      of Termination
              81Section 9.3
              Amendment
              81Section 9.4
              Extension;
      Waiver
              81ARTICLE
      10 SURVIVAL; INDEMNIFICATION
              82Section 10.1
              Survival
              82Section 10.2
              Indemnification
              82Section 10.3
              Indemnification
      Procedures
              84Section 10.4
              Limitations
      on Indemnification Obligations
              86Section 10.5
              The
      Representative
              88Section 10.6
              Exclusive
      Remedy
              89Section 10.7
              Manner
      of Payment; Escrow
              89ARTICLE
      11 REPRESENTATIVE OF THE CONTRIBUTORS
              91Section 11.1
              Authorization
      of Representative
              91ARTICLE
      12 MISCELLANEOUS
              94Section 12.1
              Entire
      Agreement; Assignment
              94Section 12.2
              Notices
              94Section 12.3
              Governing
      Law
              96Section 12.4
              Fees
      and Expenses
              96Section 12.5
              Construction;
      Interpretation
              96Section 12.6
              Exhibits,
      Annexes and Schedules
              97Section 12.7
              Parties
      in Interest
              97Section 12.8
              Severability
              97Section 12.9
              Counterparts;
      Facsimile Signatures
              97Section 12.10
              Obligations
      Joint and Several
              97Section 12.11
              Knowledge
      of the Company
              97Section 12.12
              Waiver
      of Jury Trial
              98Section 12.13
              Jurisdiction
      and Venue
              98Section 12.14
              Waiver
      of Conflicts
              98Section 12.15
              Limitation
      on Damages; Remedies
              99Section 12.16
              Specific
      Performance
              99


(iii)




EXHIBITS


A
            —
            Form
      of LP Purchase AgreementB
            —
            Form
      of Member GuaranteeC
            —
            Net
      Working Capital Line ItemsD
            —
            Net
      Operating Income Line ItemsE
            —
            New
      Company AgreementF
            —
            Form
      of DL Tax Matters AgreementG
            —
            Form
      of LVP Tax Matters Agreement





ANNEXES:


A
            —
            Other
      Group Companies Contributed InterestsB
            —
            Company
      Contributed InterestsC
            —
            Legal
      Description of St. Augustine LandD
            —
            Applicable
      Percentage InterestE
            —
            Certain
      ObligationsF
            —
            Company
      Knowledge Parties


(iv)


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
(“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 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




“Company Consent Fees”
means the fees (including deferred financing fees) payable by the Group
Companies at or (to the extent agreed by such Group Company prior to the
Closing) after the Closing to any lender, agent or servicer solely in order to
(x) obtain the Required Consents or (y) effect the repayment of the Floating
Rate Debt (to the extent being repaid by the Group Companies or the Parent
Parties at, or promptly following, Closing); provided, that
“Company Consent Fees” shall not include (i) any amount for repayment of Funded
Indebtedness, (ii) any amount that the Parent Parties are obligated to pay, or,
except as set forth on Annex E, the costs of
any actions the Parent Parties are required to take, in each case in accordance
with Annex E,
or (iii) any amounts funded into any escrow or any costs associated with the
establishment of additional collateral for a loan as to which the Group
Companies or Parent Parties have the benefit after the Closing.




“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).


4


“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.




“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).


5


“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.




“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.




“DL Tax Matters
Agreement” means a Tax Matters Agreement to be entered into at or before
the Closing in the form attached as Exhibit F hereto
among Parent REIT, Parent OP, New Company, the Company, Lightstone Holdings,
Lightstone Prime, BRM, LRPV and David Lichtenstein, with final schedules and
exhibits to be agreed upon in good faith by the parties
thereto.


6




“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.




“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.


7




“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.




“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).




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




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




“Floating Rate Debt”
has the meaning set forth in Section
3.4(g).




“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.


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.




“GPT Promissory Note”
means that certain Promissory Note, dated August 13, 2008, in the principal
amount of $122,000,000 issued by Prime Outlets at Grand Prairie Limited
Partnership, as maker, to GPT Outlet Lender LLC, as noteholder.




“GPT Sale Agreement”
means a promissory note purchase agreement to be entered into on the Closing
Date by an Affiliate of Parent OP and GPT Outlet Lender LLC in a form as Parent
OP and GPT Outlet Lender LLC shall reasonably agree in good faith which provides
for the purchase by an Affiliate of Parent OP of the GPT Promissory Note from
GPT Outlet Lender LLC for a purchase price of $1,000.




“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).


9




“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).




“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.


10




“LVP Tax Matters
Agreement” means a Tax Matters Agreement to be entered into at or before
the Closing in the form attached as Exhibit G hereto
among Parent REIT, Parent OP, New Company, the Company and LVP REIT, LVP OP,
Pro-DFJV and, solely for purposes of Section 14 thereof,
Lightstone Prime, Lightstone Holdings, BRM, LRPV and David Lichtenstein, with
final schedules and exhibits to be agreed upon in good faith by the parties
thereto.




“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.




“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.


11




“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.




“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.


12




“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.




“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.


14




“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.




“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.




“Parent Revolving Credit
Facility” has the meaning set forth in Section
5.7.




“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.


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.


16


“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).




“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.


17




“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).




“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.


18


“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.




“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.




“Tax Matters
Agreements” means the DL Parties Tax Matters Agreement and the LVP Tax
Matters Agreement.




“Tax Protection
Agreements” means any written agreement to which any Group Company, any
Contributor or any of their respective Affiliates is a party pursuant to which:
(a) any Group Company, any Contributor or any of their respective Affiliates is
liable for the payment, reimbursement or indemnification of the Taxes of any
other Person in the event of a taxable disposition of property previously
contributed by such Person in a transaction intended to qualify under Section
721(a) of the Code (a “Section 721
Contribution”) or (b) in connection with a Section 721 Contribution by
such Person, any Group Company, any Contributor or any of their respective
Affiliates has agreed to (i) maintain a minimum level of debt in aggregate or
maintain a particular debt obligation, (ii) allocate a certain amount of
indebtedness to such Person, or (iii) retain or not dispose of assets for a
period of time that has not since expired.




“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.


19




“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).




“Termination Date”
means September 30, 2010, provided, that (i) if
prior to the Termination Date unresolved Known Claims shall have been submitted
to the Claim Arbitrator in accordance with Section 2.3(f) and the Claim
Arbitrator shall not have determined the aggregate value of such unresolved
Known Claims in accordance with Section 2.3(f)(iii)
prior to September 30, 2010, the Termination Date shall be extended until the
fifth (5th) Business Day after the value of all unresolved Known Claims
submitted to the Claim Arbitrator prior to September 30, 2010 shall have been
determined by the Claim Arbitrator in accordance with Section 2.3(f)(iii)
and (ii) if Parent has not obtained the funds under the Financing prior to
September 30, 2010, Parent may, in its sole discretion, upon written notice to
the Representative prior to September 30, 2010, elect to change the Termination
Date to November 30, 2010.




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




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




“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.




“2008 Adjusted NOI”
means the net operating income of the Group Companies (including the St.
Augustine Land) for the year ended December 31, 2008, as calculated in
accordance with Exhibit D. For
illustrative purposes, Exhibit D includes a
hypothetical calculation of 2008 Adjusted NOI based upon information in the 2008
Unaudited Financial Statements.




“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).


20




“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”).




Section
2.2     Closing of the
Contributions




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 Consideration
Value




(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.


21




(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).




(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.”


22


(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.




(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));


23




(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.




(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


24


(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.




(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).


25




(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.




Section
2.5     Special Distribution
Amount; Escrow
of Cash




(a)           On
the Closing Date, immediately following the Closing, Parent OP shall distribute
to the Contributors, out of the proceeds of the Financing, an aggregate amount
equal to (a) the Special Distribution Amount minus (b) an amount
in cash equal to the Escrow Cash, and such distribution shall be effected pro
rata among the Contributors in accordance with each such Contributor’s
Applicable Percentage Interest.




(b)           In
connection with the distribution described in the preceding sentence, Parent OP
shall deposit into the Escrow Account, on behalf of the Contributors and out of
the proceeds of the Financing, an amount equal to the Escrow Cash, pursuant to
the Escrow Agreement.




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.


26




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.


27






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.




28




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.




(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.


29


(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.


30




(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.


31




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.


32




(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)           Schedule 3.4(g) sets
forth a true and complete list of all Funded Indebtedness which has a floating
interest rate (the “Floating 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 Floating 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 Floating Rate Debt.  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 Floating Rate Debt, and no 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 Floating Rate Debt.




(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.


33




(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 pufrchase 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;


34




(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;




(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 Schedule 3.6(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).


35




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.




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).


36




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.




(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).


37


(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.




(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.


38




(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.




(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.


39




(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.




(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.


40




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.


41




(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.




(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.


42




(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.




(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.


43




(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.


44




(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.


45




(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).


46




(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.


47




(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.


48




(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.




(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.


49




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.


50




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.




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).


51




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.


52




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.




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.




53




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).




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.


54




(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.




(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.


55




Section
5.7     Financing




Parent OP
has delivered to the Company the latest draft of a revolving credit agreement
(the “Parent Revolving
Credit Facility”) pursuant to which JPMorgan Chase Bank, N.A., or an
Affiliate thereof, as lead arranger (or any lender to the Alternative Financing,
the “Lender”)
and the other lenders party thereto will provide $550,000,000 (it being
understood that a lesser amount may be required to satisfy the Parent Parties’
obligations under this Agreement) in debt financing to Parent OP that has the
benefit of the Member Guarantees (or an Alternative Financing, the “Financing”) that may
be used for consummation of the Contemplated Transactions.  As of the
date hereof, no event has occurred which, with or without notice, lapse of time,
or both, would reasonably be expected to constitute a default of Parent OP or
any other party thereto under the Parent Revolving Credit
Facility.  As of the date hereof, there are not expected to be any
conditions precedent or other contingencies related to the funding of the full
amount of the Financing, other than as set forth in or contemplated by the
Parent Revolving Credit Facility.  The aggregate proceeds contemplated
by the Parent Revolving Credit Facility will be sufficient to provide funds in
an amount necessary to satisfy all of Parent OP’s and Parent Sub’s obligations
under this Agreement and the Contemplated Transactions, including payment of the
Special Distribution Amount.




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.


56


(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.




(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).




57




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.




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.




58




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;




(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);


59




(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;




(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;


60




(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;




(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.


61




(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.




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;


62




(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




(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.


63




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.


64




(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.




Section
6.5     Financing




(a)           Without
limiting Section
6.4, each of Parent OP and Parent Sub shall (and shall cause their
Affiliates to) take, or cause to be taken, all actions and do, or cause to be
done, all things necessary, proper or advisable to arrange and consummate the
Financing on the terms and conditions described in the Parent Revolving Credit
Facility (without, for the avoidance of doubt, any requirement to bring any
legal action against the Lender) , including (x) satisfying on a timely basis
all terms, covenants and conditions set forth in the Parent Revolving Credit
Facility, (y) entering into definitive agreements with respect thereto on terms
and conditions substantially similar to the terms and conditions contemplated by
the Parent Revolving Credit Facility and (z) consummating the Financing at or
prior to Closing.  Parent OP will furnish correct and complete copies
of all such definitive agreements to the Representative promptly upon their
execution.




(b)           Without
limiting the foregoing, Parent OP and Parent Sub shall keep the Company and the
Representative informed on a reasonably current basis with respect to all
material activity concerning the status of their efforts to arrange and
consummate the Financing and shall give the Company and the Representative
prompt notice of any material adverse change with respect
thereto.  Parent OP and Parent Sub agree to provide written notice to
the Company and the Representative promptly, and in any event within two (2)
Business Days, if at any time any financing source that is to be a party to the
Parent Revolving Credit Facility notifies Parent OP or Parent Sub in writing
that such source no longer intends to provide financing to Parent OP or Parent
Sub on substantially the terms set forth therein, or Parent OP or Parent Sub
believes in good faith that it will be unable to obtain the Financing on
substantially the terms described in the Parent Revolving Credit
Facility.  None of Parent OP or Parent Sub shall amend or alter, or
agree to amend or alter, the Parent Revolving Credit Facility in any manner that
would be materially adverse to the Contributors or reasonably likely to prevent
or materially impair or delay the consummation of the Contemplated Transactions,
without the prior written consent of the Representative.


65




(c)           If
any portion of the Financing becomes unavailable on terms and conditions
substantially similar to the terms and conditions contemplated in the Parent
Revolving Credit Facility or the Parent Revolving Credit Facility shall be
modified in a manner materially adverse to Parent OP, Parent Sub or the
Contributors, Parent OP and Parent Sub shall (and shall cause their Affiliates
to) obtain and as promptly as reasonably practicable provide the Company and the
Representative with a copy of, a new credit facility (the “New Facility”) from
alternative sources on terms and conditions substantially similar to the terms
(including with respect to interest rate and fees) and conditions contemplated
in the Parent Revolving Credit Facility or any other financing of the type
permitted by Section 3.F of the Tax Matters Agreements as refinancing of the
Financing (“Alternate
Financing”); provided, that such
New Facility and such Alternate Financing must (i) provide for aggregate debt
financing to Parent OP that has the benefit of the Member Guarantees in an
amount equal to $550,000,000 (it being understood that a lesser amount may be
required to satisfy the Parent Parties’ obligations under this Agreement), (ii)
be available to fund the Special Distribution Amount and other amounts required
to be funded from the Financing, and (iii) otherwise satisfy the requirements
for the Financing under this Agreement.  To the extent applicable,
Parent OP and Parent Sub shall (and shall cause their Affiliates to) take, or
cause to be taken, all actions and do, or cause to be done, all things
necessary, proper or advisable to arrange promptly and consummate the Alternate
Financing on the terms and conditions described in any New Facility, including
(x) satisfying on a timely basis all terms, covenants and conditions set forth
in the New Facility (without, for the avoidance of doubt, any requirement to
bring any legal action against the Lender); (y) entering into definitive
agreements with respect thereto on terms and conditions substantially similar to
the terms and conditions contemplated by the New Facility; and (z) consummating
the Alternate Financing at or prior to the Closing.  In the event
Alternate Financing is obtained and a New Facility is entered into, references
in this Agreement to the applicable Parent Revolving Credit Facility shall be
deemed to include the New Facility, as applicable.  Notwithstanding
anything to the contrary in this Agreement, Parent REIT, Parent OP and Parent
Sub acknowledge and agree that obtaining the Financing, or any Alternate
Financing, is not a condition to their respective obligations to consummate the
Contemplated Transactions at Closing; provided, that the
Parent Parties shall not be deemed to have breached Section 6.5(a) if
they obtain Alternate Financing in accordance with Section
6.5(c).




(d)           The
Company agrees to use, and to cause the Group Companies to use, reasonable
efforts to provide all cooperation reasonably requested by Parent OP in
connection with the Financing (including, as applicable, any Alternate
Financing), including without limitation:  (i) providing and causing
their advisors to provide all available information reasonably deemed reasonably
necessary by Parent OP or the Lenders to complete syndication of the Financing,
including, but not limited to available financial information that is
customarily provided in such financings and is deemed necessary by Parent OP or
the Lenders for the consummation of such Financing; (ii) assisting in the
preparation and updating of the information memoranda and other materials to be
used in connection with the Financing and any related syndication efforts,
including, as applicable, participating in due diligence and drafting sessions;
(iii) cooperating in procuring any requisite rating for the Financing from an
accredited rating agency; (iv) making the officers and advisors of the Group
Companies available from time to time to attend and make presentations regarding
their respective businesses; and (v) assisting in the preparation of definitive
agreements and other certificates and documents, as may be reasonably requested
in connection with the foregoing, provided, however, that with
respect to all matters described in this Section 6.5(d) no
Group Company shall be required to execute any document or make any statements,
certifications, or analysis for the benefit of Parent REIT, Parent OP or Parent
Sub or any other Person other than documents, statements, certifications and
analyses to become effective immediately after the Closing.


66




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.


67




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     Contact with Customers,
Suppliers and Other Business Relations




Parent
REIT and Parent OP (and their employees, agents, representatives and Affiliates)
shall be permitted to discuss the Contemplated Transactions with any tenant or
supplier of any Group Company and other third parties with whom any of the Group
Companies may do business; provided, that Parent
OP shall provide the Representative, on at least a bi-weekly basis, and more
frequently if reasonably requested by the Representative, with reports (which
may be oral) of any material issues raised by any such tenants with respect to
the Group Companies, suppliers or third parties.  The Company
acknowledges that representatives of Parent REIT and Parent OP shall be spending
significant time at the premises of the Group Companies and shall be introducing
and engaging in discussions with Employees of the Group Companies with respect
to various matters, including the Contemplated Transactions, job status and the
business of the Group Companies.  In the event the Closing does not
occur, for a period of three (3) years following the termination of this
Agreement, the Parent Parties shall not use the information obtained as a result
of the discussions and contacts described in this Section 6.9 to
compete with or in a manner reasonably expected to harm the Group
Companies.


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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.




(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.


69




(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.




70


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.




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.




71


(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.




(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.




72


Section
6.16     LVP REIT; LVP
OP




If, as of
the Closing, a claim has been asserted against LVP REIT, LVP OP or a Group
Company for any breach of a Tax Protection Agreement, then until the earlier of
(a) the date such claim has been finally settled or resolved pursuant to a
non-appealable final judgment of a court of competent jurisdiction (whether
before, at or after the Closing Date) and (b) the date on which LVP REIT
commences its liquidation in accordance with its charter and
by-laws,  LVP REIT will not make any distributions to its shareholders
other than (i) in the ordinary course consistent with past practice, (ii) to the
extent required to avoid the imposition of Tax under Section 857(b) of the Code,
and  (iii) to avoid the imposition of Tax under Section 4981 of the
Code.




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.




73


(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.




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)




74


(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).




75


(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:




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:




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(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;




77


(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;




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




(vii)       the
DL Tax Matters Agreement, duly executed by each of Lightstone Holdings,
Lightstone Prime, BRM, LRPV, David Lichtenstein and the Company;
and




(viii)      the
LVP Tax Matters Agreement, duly executed by each of LVP REIT, LVP OP, Pro-DFJV,
the Company and, solely for purposes of Section 14 thereof, Lightstone Prime,
Lightstone Holdings, BRM, LRPV and David Lichtenstein.




Section
8.3       Other Conditions to the
Obligations of theContributors




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;




78


(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)           All
of the conditions precedent to the consummation of the Financing shall have been
satisfied or waived and those Persons providing such Financing shall have either
funded or are prepared to fund, in each case in accordance with the terms of the
Parent Revolving Credit Facility and this Agreement and with the benefit of the
Member Guarantees;




(d)           After
any reduction required pursuant to Section 2.3(a), the
Enterprise Value shall be equal to at least $2,283,000,000;




(e)           The
adjustment to Enterprise Value pursuant to Section 2.3(a), after
taking into account any NOI Waiver, shall not exceed $42,000,000;




(f)           the
Known Claims Escrow Amount shall not exceed $25,000,000, after taking into
account any reduction thereof by Parent REIT pursuant to Section
2.3(f)(iii);




(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 Article8 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.




79




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;




(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.




80


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.




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.




81




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.




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.




82


(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.




83


(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.




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).




84


(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).




(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).




85


(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.




(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;




86


(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 $50,000; 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 $50,000; 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);




(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 $5,000,000 (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;




87


(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);




(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.




88


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.




89


(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.




(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.




90




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;




91


(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).




92


(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.




93




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).




(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


94


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




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


95


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.




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.




96


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.




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.




97


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.




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.




98


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.




(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.




*     *     *     *     *


99


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 andChief 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 REALESTATE
      INVESTMENT TRUST, INC.By:
              /s/ Joseph E. TeichmanName:
      Joseph E. TeichmanTitle:
      Authorized Signatory





EXHIBIT
A


EXHIBIT
A




FORM OF INTEREST PURCHASE
AGREEMENT




INTEREST
PURCHASEAGREEMENT,
dated as of [l]
[l], 2009 (this
“Agreement”),
by and among Marco Capital Acquisition, LLC, a Delaware limited liability
company (the “Purchaser”), Simon
Property Group, L.P., a Delaware limited partnership (“Parent OP”), the
individuals and entities set forth on Schedule 1 hereto
(each a “Seller” and,
collectively, the “Sellers”), Ewell
Holdings, LLC, a Delaware limited liability company (“Ewell”) and Mill Run
L.L.C., a New Jersey limited liability company (“Mill Run,” each of
Ewell and Mill Run are referred to herein, individually as a “Company,” and
together, as the “Companies”).




RECITALS




WHEREAS,
the Sellers are owners of the membership interests in the Companies set forth on
Schedule 1
hereto (the “Interests”);




WHEREAS,
the Purchaser desires to purchase from each of the Sellers, and each of the
Sellers desire to sell and transfer to the Purchaser, such Seller’s right, title
and interest in and to all of the Interests owned by such Seller upon the terms
and subject to the conditions set forth herein;




WHEREAS,
a majority of the membership interests in the Companies will be transferred to
the Purchaser, or an Affiliate of the Purchaser, pursuant to the transactions
contemplated in a Contribution Agreement, dated as of December 8, 2009 (as it
may be amended from time to time, the “Contribution
Agreement”); and




WHEREAS,
as a result of the consummation of the sale of the Interests to the Purchaser
pursuant to the terms of this Agreement (the “Minority Purchase”)
and the consummation of the transactions contemplated by the Contribution
Agreement, the Purchaser and its Affiliates will own one hundred percent (100%)
of the outstanding membership interests in each of the Companies.




NOW
THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, the parties hereto agree as follows:




ARTICLE
I


DEFINITIONS




1.1       Certain
Definitions




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





“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.




“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.




“Contract” means any
agreement, contract, arrangement, understanding, obligation or commitment to
which a party is bound or to which its assets or properties are subject, whether
oral or written, and any amendments and supplements thereto.




“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.




“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.




“Lien” means any
mortgage, pledge, security interest, encumbrance, lien or charge.




“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.




“Permitted Lien” means
any (a) restrictions on transfer arising under the Governing Documents of the
Companies and (b) any restrictions on transfer arising under applicable federal,
state and other securities Laws.




ARTICLE
II


PURCHASE
AND SALE




2.1         Closing.




The
closing (the “Closing”) of the
Minority Purchase 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 concurrently with the closing
of the transactions contemplated by the Contribution Agreement (such date, the
“Closing
Date”); provided, that the
Purchaser or the Companies shall provide written notice of such closing to the
Sellers at least three (3) Business Days prior thereto.




2


2.2         Purchase and Sale of
Interests.




Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing,
(a) each Seller shall assign, transfer and deliver to the Purchaser all right,
title and interest of such Seller in and to the Interests set forth opposite its
name on Schedule
1 hereto and (b) the Purchaser shall purchase, acquire and accept from
each Seller all right, title and interest of such Seller in and to such
Interests set forth opposite such Seller’s name on Schedule 1 hereto, in
each case free and clear of any Liens (other than Permitted
Liens).  Each Seller irrevocably authorizes the Companies to, and the
Companies shall, effect the foregoing transfer on the record books of Ewell
and/or Mill Run, as applicable, on the Closing Date without any further action
or authorization from such Seller and without any requirement for such Seller to
be present or represented at the Closing and such transfer shall be deemed to
occur automatically and concurrently with the closing of the transactions
contemplated by the Contribution Agreement.




2.3         Purchase
Price.




Subject
to the terms and conditions of this Agreement, at the Closing, the Purchaser
shall deliver, or cause to be delivered, to each Seller the amount set forth
opposite such Seller’s name on Schedule 1 hereto
(the “Purchase
Price”), by wire transfer of immediately available funds to the account
specified by the applicable Seller at least two (2) Business Days prior to the
Closing or, if not specified, such Purchase Price shall be payable by certified
check.




ARTICLE
III


REPRESENTATIONS
AND WARRANTIES OF THE SELLERS




Assuming,
in each case, the accuracy of the representations and warranties of the
Purchaser and Parent OP in Article IV, each
Seller hereby, individually and not jointly or joint and severally, represents
and warrants as of the date hereof and as of the Closing:




3.1         Organization and
Qualification.




Such
Seller, if not an individual, 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 power and authority to carry
on its businesses as presently conducted, except to the extent the failure to be
in good standing (or the equivalent thereof) or to have such power and authority
would not materially and adversely impact the ability of such Seller to comply
with its obligations under this Agreement and consummate the transaction
contemplated hereby.  For the avoidance of doubt, the ability of a
Seller to comply with and perform under Section 2.2 in all respects shall be
deemed “material”.




3.2         Authorization.




Such
Seller (and, if such Seller is a married individual, such Seller’s spouse) has
the requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.  The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary action (including any vote or
approval of equity holders) on the part of such Seller and, if such Seller is a
married individual, such Seller’s spouse. This Agreement has been duly executed
and delivered by such Seller (and, if Seller is a married individual, such
Seller’s spouse) and constitutes the valid, legal and binding agreement of such
Seller (and, if Seller is a married individual, such Seller’s spouse),
enforceable against such Seller (and, if Seller is a married individual, such
Seller’s spouse) 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).




3


3.3         Ownership ofthe
Interests.




Such
Seller is the sole record and beneficial owner of, and has good and valid title
to, the Interests set forth opposite such Seller’s name on Schedule 1 hereto,
free and clear of any Liens (other than Permitted Liens). Upon delivery of such
Seller’s Interests to the Purchaser on the Closing Date and upon payment
therefor on the Closing Date in accordance with this Agreement, the Purchaser
will acquire such Seller’s Interests free and clear of any Liens (other than
Permitted Liens).  Such Seller does not hold the Interests set forth
opposite such Seller’s name on Schedule 1 in
certificated form.




3.4         No
Violation.




The
execution, delivery and performance by such Seller of this Agreement, the
consummation of the transactions contemplated hereby by such Seller, compliance
with the terms and provisions of this Agreement by such Seller and the
performance by such Seller of its obligations under this Agreement do not (a)
conflict with, violate or result in a breach or default under any provision of
the Governing Documents of such Seller, if applicable, (b) conflict with or
violate any applicable Law in any respect that would adversely impact the
ability of such Seller to consummate the transactions contemplated hereby, (c)
result in a violation or breach by such Seller of, conflict with, result in a
termination of, contravene or constitute a default (or give rise to any right of
termination, cancellation, payment or acceleration) under any of the terms,
conditions or provisions of any Contract to which such Seller is a party (other
than the Governing Documents of the Companies) or (d) result in the creation of
any Lien (other than a Permitted Lien) upon any of such Seller’s Interests
(other than any Liens for the benefit of the Purchaser), except, in each case,
to the extent the occurrence of any of the foregoing would not materially and
adversely impact the ability of such Seller to consummate the transactions
contemplated hereby.




3.5         No
Brokers.




Such
Seller has not employed or incurred, directly or indirectly, any liability to
any broker, finder, financial advisor or investment banker for any brokerage,
finder’s, financial advisor’s or investment banker’s fee or commission in
connection with the transactions contemplated by this Agreement, in each case
for which the Companies, Purchaser or Parent OP may be responsible.




4


3.6         Investment
Decision.




Such
Seller has had the right to ask questions of and receive answers from each
Company in which it holds Interests set forth opposite its name on Schedule 1 and to
obtain such information concerning each such Company (including its business and
prospects) and the terms and conditions of the transactions contemplated by the
Contribution Agreement, if any, as it deems relevant to making a decision to
sell such Interests.




3.7         Form W-9




Such
Seller has delivered (or will deliver prior to the Closing) to Purchaser a
completed and duly executed IRS Form W-9 or, if such Seller is not a U.S.
person, the appropriate IRS Form W-8 and the information contained therein is
complete and accurate (except to the extent such Seller provides a revised Form
W-8 or Form W-9 to Purchaser at or prior to the Closing).




3.8         Acknowledgement.




Such
Seller acknowledges and understands that Purchaser, Parent OP and the Companies
are not making any representations or warranties with respect to the Purchaser,
Parent OP, the Companies or the transactions contemplated hereby except as
expressly set forth in this Agreement.




ARTICLE
IV


REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER AND PARENT OP




Assuming,
in each case, the accuracy of the representations and warranties of the Sellers
in Article III,
each of the Purchaser and Parent OP hereby represents and warrants as of the
date hereof and as of the Closing:




4.1         Organization and
Qualification.




Each of
the Purchaser and Parent OP 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 power and authority to carry
on it businesses as presently conducted, except to the extent the failure to be
in good standing (or the equivalent thereof) or to have such power and authority
would not materially and adversely impact the ability of Purchaser and Parent OP
to comply with its obligations under this Agreement and to consummate the
transactions contemplated hereby.




4.2         Authorization.




Each of
the Purchaser and Parent OP has the requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby.  The execution and delivery of this Agreement and consummation
of the transactions contemplated hereby have been duly authorized by all
necessary action (including any vote or approval) on the part of Purchaser and
Parent OP.  This Agreement has been duly executed and delivered by
Purchaser and Parent OP and constitutes the valid, legal and binding agreement
of the Purchaser and Parent OP enforceable against the Purchaser and Parent OP,
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).




5


4.3         No Violations.




The
execution, delivery and performance by the Purchaser and Parent OP of this
Agreement, the consummation of the transactions contemplated hereby, compliance
with the terms and provisions of this Agreement and the performance by the
Purchaser and Parent OP of its obligations under this Agreement do not
(a) conflict with, violate or result in a breach or default under any
provision of the Governing Documents of the Purchaser or Parent OP, (b) 
conflict with or violate any applicable Law in any material respect, (c) result
in a violation or breach by the Purchaser or Parent OP of, conflict with, result
in a termination of, contravene or constitute or will constitute a default (or
give rise to any right of termination, cancellation, payment or acceleration)
under any of the terms, conditions or provisions of any contract or other
instrument or obligation to which the Purchaser or Parent OP is a party, or by
which the Purchaser or Parent OP or any of their properties or assets may be
bound or (d) result in the creation of any Lien upon any of the Purchaser’s
or Parent OP’s properties or assets (other than any Liens for the benefit of the
Purchaser or Parent OP), except, in each case, to the extent the occurrence of
any of the foregoing would not materially and adversely impact the ability of
Purchaser and Parent OP to consummate the transactions contemplated
hereby.




4.4         Acknowledgement.




The
Purchaser and Parent OP acknowledge and understand that the Sellers are not
making any representations or warranties with respect to the Companies, the
Interests or the transactions contemplated hereby except as expressly set forth
in this Agreement.




ARTICLE
V


APPROVALS;
COVENANTS; CONDITIONS TO CLOSING




5.1         Approvals.




Each
Company hereby approves and consents to the transactions
contemplated.




5.2         Covenants of the
Sellers.




Each
Seller hereby covenants and agrees that from the date of this Agreement until
Closing such Seller will not, directly or indirectly, (a) sell, assign,
exchange, convey, transfer, pledge, encumber, hypothecate, grant a security
interest in or otherwise dispose or attempt to dispose of (“Transfer”) such
Seller’s Interests or any interest therein, or any voting rights with respect
thereto, (b) enter into any contract, option or other arrangement or
understanding with respect thereto that would be binding on the Companies,
Purchaser, Parent OP or the Interests following the Closing (including any
voting trust or agreement and the granting of any proxy), (c) create or
contractually permit to exist any Lien (other than a Permitted Lien) on such
Seller’s Interests or (d) agree to do any of the foregoing or engage in any
discussions or negotiations with any Person, other than Purchaser and Parent OP
and other than any advisors to or family members of such Seller, with respect to
any of the foregoing.  Each Seller authorizes the applicable Company
to take any action necessary to effect the transactions contemplated by this
Agreement at the Closing, including, without limitation, effecting the transfer
of the Interests on the books and records of such Company.




6


5.3         Conditions to
Closing.




The
obligations of the Purchaser and the Sellers to consummate the Minority Purchase
are subject to the concurrent consummation of the transactions contemplated by
the Contribution Agreement.




ARTICLE
VI


MUTUAL
RELEASE




6.1         Release by the
Companies.




Effective
upon the consummation of the Minority Purchase pursuant hereto, each Company, on
behalf of itself and its successors and assigns, releases, acquits and forever
discharges each Seller transferring Interests in such Company (an “Applicable Seller”)
pursuant hereto 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 might have
(a) because of anything done, omitted, suffered or allowed to be done by such
Seller, in its capacity as an equity holder of such Company, prior to the
Closing, or (b) in connection with or by reason of the Governing Documents of
such Company, 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
(“Seller Released
Matters”).  Notwithstanding the foregoing, the following shall
not constitute Seller Released Matters: (i) any claims against a Seller under
this Agreement; or (ii) claims against a Seller for the actual and intentional
fraud of such Seller.  Effective upon the consummation of the Minority
Purchase pursuant hereto, each Company further agrees never to commence, aid or
participate in a manner adverse to any Applicable Seller in any legal action or
other proceeding based in whole or in part upon any Seller Released Matters
relating to such Applicable Seller.  The Companies acknowledge that
this release shall apply to all unknown or unanticipated results of any action
of any Applicable Seller, as well as those known and anticipated.  The
Companies have provided the release in this Article VI voluntarily, with the
intention of fully and finally extinguishing all Seller Released
Matters.  Effective upon the consummation of the Minority Purchase
pursuant hereto, the Companies acknowledge and agree that they shall not make
any claim related to the Seller Released Matters against any Person that has a
right to seek indemnification, contribution or other relief for such claim from
any Applicable Seller.  The release contained in this Article VI shall
also be deemed to be a covenant not to sue.  Any breach of this
covenant by a Company not to sue shall be deemed a breach of this Article
VI.




7


6.2         Release by the
Sellers.




Effective
upon the consummation of the Minority Purchase pursuant hereto, each Seller, on
behalf of itself and its successors and assigns, releases, acquits and forever
discharges each Company, each of its current and former members, Parent OP,
Purchaser and each of their respective Affiliates (including subsidiaries and
controlling Persons) and each of their respective directors, officers, employees
and agents in their capacities as such, 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 Seller might have
(a) because of anything done, omitted, suffered or allowed to be done by such
Company Released Parties prior to the Closing, or (b) in connection with or by
reason of the Governing Documents of such Company or the transactions
contemplated by this Agreement or by the Contribution Agreement, in each case
whether heretofore or hereafter accruing, whether foreseen or unforeseen or
whether known or unknown to the parties, including, without limitation, any
matters that may be the subject of a claim for indemnification, contribution or
other relief from such Company pursuant to the Governing Documents of such
Company (“Company
Released Matters”).  Notwithstanding the foregoing, the
following shall not constitute Company Released Matters: (i) any claims against
a Company Released Party under this Agreement; or (ii) any claims against a
Company Released Party for the actual and intentional fraud of such Company
Released Party.  Effective upon the consummation of the Minority
Purchase pursuant hereto, each Seller further agrees never to 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 relating to such Seller.  Each Seller acknowledges 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.  Each
Seller has provided the release in this Article VI voluntarily, with the
intention of fully and finally extinguishing all Company Released
Matters.  Effective upon the consummation of the Minority Purchase
pursuant hereto, each Seller acknowledges and agrees, individually and not
jointly, that such Seller shall not make any claim related to the Seller
Released Matters against any Person that has a right to seek indemnification,
contribution or other relief for such claim from any Company Released
Party.  The release contained in this Article VI shall also be deemed
to be a covenant not to sue.  Any breach of this covenant by a Seller
not to sue shall be deemed a breach of this Article VI by such
Seller.




ARTICLE
VII


TERMINATION;
SURVIVAL




7.1         Termination.




If the
Contribution Agreement is terminated in accordance with its terms, this
Agreement shall be deemed terminated concurrently therewith and thereafter shall
be of no further force or effect.




8


7.2         Survival of Representations
and Warranties; Covenants.




The
representations and warranties of the parties in this Agreement shall survive
the Closing.  The covenants and agreements in this Agreement to be
performed prior to the Closing shall not survive the Closing and 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.




7.3         Additional Documents and
Acts.




At any
time after the Closing, the parties shall execute and deliver such additional
documents, certificates and instruments and use their reasonable best efforts to
perform such additional acts, as may be reasonably requested, necessary or
appropriate to carry out any of the provisions of this Agreement and to
consummate all of the transactions contemplated hereby.  After the
Closing, upon the reasonable request of any party or parties hereto, the other
parties hereto, as the case may be, agree to promptly execute and deliver such
further instruments of assignment, transfer, conveyance, endorsement, direction
or authorization and other documents as may be requested to effectuate the
purposes of this Agreement and the transactions contemplated hereby.  If requested by
Purchaser, each Seller shall (after the Closing) provide the Purchaser with a
receipt acknowledging receipt of the applicable Purchase Price, in form and
substance reasonably satisfactory to Purchaser and such Seller (it being
understood that this shall not serve as a condition to Closing and the Closing
shall occur without regard to the delivery of such receipts).




ARTICLE
VIII


MISCELLANEOUS




8.1         Entire Agreement;
Assignment.




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.  Furthermore, the parties 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.




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; provided that
the Purchaser may assign this Agreement and any of its rights under this
Agreement to one or more Affiliates of the Purchaser, provided that any such
assignment shall not relieve the Purchaser of its obligations
hereunder.  Any attempted assignment of this Agreement not in
accordance with the terms of this Section 8.1 shall be void.




9


8.2         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:




If to the
Purchaser or Parent OP:




Simon
Property Group, Inc


225 West
Washington Street


Indianapolis,
Indiana 46204


Attention:
James M. Barkley, Esq.


Facsimile:
317.685.7377




with a
copy to:




Fried,
Frank, Harris, Shriver & Jacobson LLP


One New
York Plaza


New York,
NY 10004


Tel:
212.859.8980


Attention: 
Peter S. Golden


John Sorkin


Facsimile: 
212.859.4000




If to any
Seller, to Seller at the address set forth on Schedule 1 hereto.




with a
copy (which copy 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 copy 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


Robert
B. Schumer


Facsimile:   212.757.3990




10


8.3          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.




8.4          Fees and
Expenses.




Except as
otherwise expressly set forth in the Contribution Agreement (solely as between
Parent OP and Purchaser on the one hand, and the Companies, on the other hand),
whether or not the transactions contemplated hereby are consummated, 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.




8.5          Construction;
Interpretation.




The term
“this Agreement” means this Interest Purchase Agreement together with all
Schedules and exhibits 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.  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.




8.6          Exhibits and
Schedules.




All
exhibits 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 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.




8.7          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, except that (i) the parties described in Article VI
are express third party beneficiaries of the covenants and agreements described
in Article VI and (ii) the Representative (as defined in the Contribution
Agreement) is an express third-party beneficiary of this Agreement.




11


8.8          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 transactions contemplated hereby
are not affected in any manner materially adverse to any party.




8.9          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.




8.10         Limitation on
Damages.




Notwithstanding
anything to the contrary set forth herein, no party shall be liable for any
consequential damages, including, without limitation, loss of revenue, income or
profits, loss in value of assets or securities, diminution in value, punitive,
special or indirect damages, relating to any breach of this
Agreement.




8.11        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.




12


8.12        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
8.2.  Nothing in this Section 8.12, 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.




8.13        Remedies.




Except as
otherwise expressly provided in this 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.




8.14        Specific
Performance.




Prior to
Closing, each of the parties 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.  This right shall include (a) the right of any Seller to, at
its election, prior to Closing, cause Purchaser to cause the transactions
contemplated hereby to be consummated on the terms and subject to the conditions
set forth in this Agreement and (b) the right of the Purchaser to, at its
election, prior to Closing, cause any Seller to cause the transactions
contemplated hereby to be consummated on the terms and subject to the conditions
set forth in this Agreement.  In furtherance thereof, each party
hereby waives (and agrees not to assert) (i) any defenses 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.




(Signature
pages follow)


13


IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.




MARCO
      CAPITAL ACQUISITION, LLCBy:Name:Title:SIMON
      PROPERTY GROUP, L.P.By:Name:Title:EWELL
      HOLDINGS, LLCBy:Name:Title:MILL
      RUN L.L.C.By:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.




RABAMG
      AND ASSOCIATES, L.L.C.By:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.




BEECHDALE
      RPH LLCBy:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.





LISA
      K, LLCBy:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.




HARRY
      KLEINMANBy:Signature
      of SpouseBy:Name:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.





HAROLD
      RUBINBy:Signature
      of SpouseBy:Name:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.





WPRCO,
      LLCBy:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.





BINYOMIN
      GREENBAUMBy:Signature
      of SpouseBy:Name:





[Signature
Page to the Interest Purchase Agreement]





IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly
executed and delivered in its name and on its behalf, all as of the day and year
first above written.





CEDAR
      ASSET MANAGEMENT, LLCBy:Name:Title:





[Signature
Page to the Interest Purchase Agreement]





SCHEDULE
1





EXHIBIT
B




FORM OF GUARANTY OF
COLLECTION




THIS
GUARANTY OF COLLECTION is made as of ____, 20__ (this “Agreement”) by [_______],
a  [______] (the “Guarantor”), to and for the benefit of JPMorgan
Chase Bank, N.A., as Administrative Agent (the “Agent”), each of the Lenders (as
such term is defined in the Credit Agreement (as defined below)), and any of
their respective successors and assigns with respect to the obligations of Simon
Property Group, L.P., a Delaware limited partnership (the “Borrower”), in
respect of the Loans (as hereinafter defined), and is acknowledged by the Agent,
as representative acting on behalf of the Lenders.




RECITALS:




WHEREAS,
the Guarantor indirectly owns a limited partnership interest in the
Borrower;




WHEREAS,
pursuant to the Credit Agreement dated December __, 2009, by
and among the Borrower, the Lenders party thereto and the Agent (the “Credit
Agreement”) and the other Loan Documents (as defined in the Credit Agreement),
the Lenders have agreed to provide to Borrower a revolving credit facility in an
aggregate amount of  Three Billion and No 100/Dollars ($3,000,000,000)
(the “Loans”);




WHEREAS,
the Lenders are prepared to make certain Loans to the Borrower for the purpose
described in Section 15.28 of the Credit Agreement (the “Section 15.28 Loan”)
which shall be accompanied by the delivery of one or more Guarantees as defined
and described in said Section 15.28; and




WHEREAS,
the Guarantor will directly benefit from the Section 15.28 Loan being made to
the Borrower;




NOW,
THEREFORE, as an inducement to the Lenders to make the Section 15.28 Loan to the
Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as
follows:




1.        Guaranty .  Subject
to the terms and conditions set forth in this Agreement, the Guarantor hereby
irrevocably, unconditionally, absolutely and directly agrees to pay to the Agent
(for the benefit of the Lenders) the principal amount of the Section 15.28 Loan
(which, for the avoidance of doubt, shall include any Loans to Borrower in
respect of amounts to be distributed or deposited pursuant to Sections
2.3(e)(i), 2.5, and 2.6(b) of the Contribution Agreement dated as of the date
hereof, by and among Borrower, Simon Property Group, Inc., a Delaware
corporation, Marco Capital Acquisition LLC, a Delaware limited liability
company, Prime Outlets Acquisition Company LLC, a Delaware limited liability
company, Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
corporation, Guarantor, and other Contributors party thereto (the “Contribution
Agreement”)), together with interest thereon, in each case to the extent
provided for in the Loan Documents, (the “Guaranteed Obligations”); provided,
however, that the Guarantor shall have no obligation to make a payment hereunder
with respect to any other costs, fees, expenses, penalties, charges or similar
items payable by the Borrower and any other person or entity (a “Person”) that
has guaranteed any payment under the Loan Documents other than the Guarantor
(collectively, the “Borrower Parties”) in respect of the Section 15.28 Loan or
under the Credit Agreement.











2.        Guaranty of Collection and
Not of Payment .  Notwithstanding
any other provision of this Agreement, this Agreement is a guaranty of
collection and not of payment, and the Guarantor shall not be obligated to make
any payment hereunder until each of the following is true: (a) Borrower shall
have failed to make a payment due to the Lenders in respect of such Guaranteed
Obligations and the Section 15.28 Loan shall have been accelerated, (b) the
Lenders shall have exhausted all Lender Remedies (as defined below), and (c) the
Lenders shall have failed to collect the full amount of the Guaranteed
Obligations.  The term “Lender Remedies” shall mean all rights and
remedies at law and in equity that the Agent or the Lenders may have against any
Borrower Party, any collateral deposited in the Letter of Credit Collateral
Account (as such term is defined in the Credit Agreement) (the “LC Collateral”)
or any other Person that has provided credit support in respect of the
applicable Guaranteed Obligations, to collect, or obtain payment of, the
Guaranteed Obligations, including, without limitation, foreclosure or similar
proceedings, litigation and collection on all applicable insurance policies, and
termination of all commitments to advance additional funds to the Borrower under
the Loan Documents.  For the avoidance of doubt, Lender Remedies shall
not have been exhausted with respect to any LC Collateral unless and until the
value thereof has been included in Section 3(a)(y)(ii).




3.        Cap .  Notwithstanding
any other term or condition of this Agreement it is agreed that Guarantor’s
maximum liability under this Agreement shall not exceed the sum of (a) the
difference between (x) the sum of $[_________]1 plus any amounts to be
received by the Guarantor pursuant to Sections 2.3(e)(i) and 2.6(b) of the
Contribution Agreement, minus (y) the sum of (i) any payments of principal made
by or on behalf of Borrower or any other Borrower Party to the Lenders (or any
one of them) in respect of the Section 15.28 Loan following an Event of Default
under the Credit Agreement, plus (ii) any amount of cash proceeds collected or
otherwise realized (including by way of set off) by or on behalf of any Lender,
pursuant to, or in connection with, the Section 15.28 Loan, including, but not
limited to, any cash proceeds collected or realized from the exercise of any
Lender Remedies (but excluding any cash payments of principal (to the extent
such payment is already included in clause (i) above), premium or interest (it
being understood that the paid premium or interest shall not be deemed to be
unpaid for purposes of clause (b) below) received from the Borrower and any
amount received as a reimbursement of expenses, indemnification payment or
fees), plus (iii) the amount of principal or accrued and unpaid interest or
accrued and unpaid premium otherwise owing by the Borrower Parties which is
affirmatively discharged, forgiven or otherwise compromised by the Agent or the
Lenders, plus (b) any unpaid premium on, or unpaid interest accruing under the
Loan Documents on, the amount described in clause (a)(x) above.  For
purposes of this Agreement, the Section 15.28 Loan will be deemed to be
outstanding and not repaid until all other Loans under the Credit Agreement have
been repaid and not reborrowed.





1
              The figure in brackets will equal
      the Guarantor’s proportionate share of the Special Distribution Amount (as
      defined in the Contribution
Agreement).









4.        Notice .  As
a condition to the enforcement of this Agreement, the Guarantor shall have
received written notice of any failure by Borrower to pay any Guaranteed
Obligations to the Lenders.  Except for the notice required under the
preceding sentence, the Guarantor hereby waives notice of acceptance of this
Agreement, demand of payment, presentment of this or any instrument, notice of
dishonor, protest and notice of protest, or other action taken in reliance
hereon and all other demands and notices of any description in connection with
this Agreement.  Subject to the last sentence of Section 2, the
Guarantor further waives and forgoes all defenses which may be available by
virtue of any valuation, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets, and all suretyship
defenses generally.




5.        Absolute
Obligation . Subject
to the provisions of Sections 1, 2, 3 and 4, the obligations of the Guarantor
hereunder shall be absolute and unconditional and shall not be subject to any
reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any setoff, counterclaim, deduction,
diminution, abatement, suspension, reduction, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations.  Without limiting the generality of the
foregoing, subject to the provisions of Sections 1, 2, 3 and 4, the obligations
of the Guarantor hereunder shall not be released, discharged, impaired or
otherwise affected by any circumstance or condition whatsoever (whether or not
the Borrower, any other Borrower Party, the Guarantor, the Agent or any Lender
has knowledge thereof) which may or might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor as a matter of law or equity (other than the indefeasible payment in
full of all of the Guaranteed Obligations), including, without
limitation:




(a)         any
amendment, modification, addition, deletion or supplement to or other change to
any of the terms of the Loan Documents, or any assignment or transfer of any
thereof, or any furnishing, acceptance, surrender, substitution, modification or
release of any security for, or guaranty of, the Guaranteed
Obligations;




(b)         any
failure, omission or delay on the part of the Borrower or any other Borrower
Party to comply with any term of any of the Loan Documents;




(c)         any
waiver of the payment, performance or observance of any of the obligations,
conditions, covenants or agreements contained in the Loan Documents or any of
them or any delay on the part of the Agent or the Lenders to enforce, assert or
exercise any right, power or remedy conferred on the Agent or the Lenders in the
Loan Documents;




(d)         any
extension of the time for payment of the principal of or premium (if any) or
interest on any of the Guaranteed Obligations, or of the time for performance of
any other obligations, covenants or agreements under or arising out of the Loan
Documents or any of them, or the extension or the renewal thereof;











(e)         to
the extent permitted by applicable law, any voluntary or involuntary bankruptcy,
insolvency, reorganization, moratorium, arrangement, adjustment, readjustment,
composition, assignment for the benefit of creditors, receivership,
conservatorship, custodianship, liquidation, marshaling of assets and
liabilities or similar proceedings with respect to the Borrower, any other
Borrower Party or the Guarantor or any other Person or any of their respective
properties or creditors, or any action taken by any trustee or receiver or by
any court in any such proceeding (including, without limitation, any automatic
stay incident to any such proceeding);




(f)          any
limitation, invalidity, irregularity or unenforceability, in whole or in part,
limiting the liability or obligation of the Borrower or any other Borrower Party
or any security therefor or guarantee thereof or the Agent’s or the Lenders’
recourse to any such security or limiting the Agent’s or the Lenders’ right to a
deficiency judgment against the Borrower, any other Borrower Party, the
Guarantor or any other Person; and




(g)         any
other act, omission, occurrence, circumstance, happening or event whatsoever,
whether similar or dissimilar to the foregoing, whether foreseen or unforeseen,
and any other circumstance which might otherwise constitute a legal or equitable
defense, release or discharge (including the release or discharge of the
liabilities of a guarantor or surety or which might otherwise limit recourse
against the Borrower, any other Borrower Party, the Guarantor or any other
Person, whether or not the Borrower, any other Borrower Party, the Guarantor,
the Agent or any Lender shall have notice or knowledge of the
foregoing).




6.        Subrogation .  To
the extent that the Guarantor shall have made any payments under this Agreement,
the Guarantor shall be subrogated to, and shall acquire, all rights of the
Lenders against the Borrower Parties and the LC Collateral with respect to such
payments, including without limitation, (a) all rights of subrogation,
reimbursement, exoneration, contribution or indemnification, and (b) all rights
to participate in any claim or remedy of any Lender or any trustee on behalf of
any Lender against any Borrower Party or the LC Collateral, in each case,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Borrower Parties, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim, remedy or right; provided, however, that the Guarantor shall not
exercise any right of subrogation, contribution, indemnity or reimbursement or
any other rights it may have now or hereafter have, and any and all rights of
recourse to any Borrower Party or any of its assets with respect to any payment
it makes under this Agreement until (x) all of the Obligations (as defined in
the Credit Agreement) (other than contingent indemnification obligations not yet
asserted by the Person entitled thereto) shall have been indefeasibly paid,
performed or discharged in full in cash, and (y) no Person has any further right
to obtain any loans, advances or other extensions of credit under any of the
Loan Documents.  If any amount is paid to the Guarantor in violation
of the foregoing limitation, then such amount shall be held in trust for the
benefit of the Lenders and shall forthwith be paid to the Agent (for the benefit
of the Lenders) to reduce the amount of the Guaranteed Obligations, whether
matured or unmatured.  Notwithstanding any other provision of this
Agreement or applicable law, the Guarantor shall not have, with respect to any
payments made by the Guarantor under this Agreement, any right of subrogation,
contribution, indemnity, reimbursement or other right whatsoever, whether by
contract at law, in equity or otherwise, against, and shall have no recourse
whatsoever to, any Borrower Party other than the Borrower and its Subsidiaries;
provided, that, (x) nothing in this sentence shall provide the Guarantor with
greater rights or recourse with respect to the Borrower or its Subsidiaries than
the Guarantor would otherwise have under applicable law, and (y) all such rights
and recourse shall subject in all respects to the other provisions of this
Section 6.  For the avoidance of doubt, this Agreement shall not limit
the ability of the Guarantor or its subsidiaries to ask for, sue, demand,
receive and retain payments and other consideration from the Borrower or any
other Borrower Party in respect of obligations of such Persons to the Guarantor
and/or its subsidiaries which do not arise under this Agreement.











7.        Continuity of Guaranteed
Obligations; Bankruptcy or Insolvency .  If
all or any part of any payment applied to any Guaranteed Obligation is or must
be recovered, rescinded or returned to the Borrower, the Guarantor or any other
Person (other than the Lenders) for any reason whatsoever (including, without
limitation, bankruptcy or insolvency of any party), such Guaranteed Obligation
shall be deemed to have continued in existence and this Agreement shall continue
in effect as to such Guaranteed Obligation, all as though such payment had not
been made. For the avoidance of doubt, the bankruptcy, insolvency, or
dissolution of, or the commencement of any case or proceeding under any
bankruptcy, insolvency, or similar law in respect of, the Borrower or any other
Borrower Party shall not require the Guarantor to make any payment under this
Agreement until all of the conditions in Section 2 and Section 4 have been
satisfied (including, without limitation, the exhaustion of all Lender
Remedies).




8.        No Waiver .  No
delay or omission on the part of the Agent or any Lender in exercising any
rights hereunder shall operate as a waiver of such rights or any other rights,
and no waiver of any right on any one occasion shall result in a waiver of such
right on any future occasion or of any other rights; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.




9.        Representations and
Warranties .  The
Guarantor represents and warrants that [(a) it is a [________] duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) the execution, delivery and performance by the Guarantor of
this Agreement, and the consummation of the transactions contemplated hereby,
are within its powers and have been duly authorized by all necessary
action]2; (c) this
Agreement has been duly executed and delivered by the Guarantor, and constitutes
the Guarantor’s legal, valid and binding obligation enforceable in accordance
with its terms; (d) the making and performance of this Agreement does not and
will not violate the provisions of any applicable law, regulation or order
applicable to or binding on the Guarantor, and does not and will not result in
the breach of, or constitute a default or require any consent under, any
material agreement, instrument, or document to which the Guarantor is a party or
by which the Guarantor or any of its property may be bound or affected; (e) all
consents, approvals, licenses and authorizations of, and filings and
registrations with, any governmental authority or regulatory body or other third
party for the execution, delivery and performance of this Guarantee by the
Guarantor have been obtained or made and are in full force and effect; and (f)
by virtue of the Guarantor’s relationship with the Borrower, the execution,
delivery and performance of this Agreement is for the direct benefit of the
Guarantor and the Guarantor has received adequate consideration for this
Agreement.







2
              Delete representations (a) and
      (b) if the guarantor is an
individual.









10.      Enforcement
Expenses .  The
Guarantor hereby agrees to pay all out-of-pocket costs and expenses of the Agent
and each Lender in connection with the enforcement of this Agreement (including,
without limitation, the reasonable fees and disbursements of counsel employed by
the Agent or any of the Lenders); provided that no payment shall be due and
owing under this Section 10 during the pendancy of any good faith dispute
between the Guarantor and the Agent or the Lenders regarding the enforcement of
this Agreement against the Guarantor and such payment shall be due only if (A)
Guarantor agrees to make such payment or (B) a court of competent jurisdiction
has determined pursuant to a final non-appealable order that this Agreement may
be enforced against the Guarantor.




11.      Fraudulent
Conveyance .  Notwithstanding
any provision of this Agreement to the contrary, it is intended that this
Agreement, the Guarantor’s guarantee of the Guaranteed Obligations hereunder and
any liens and security interests securing the Guarantor’s obligations under this
Agreement, not constitute a Fraudulent Conveyance (as defined
below).  Consequently, Guarantor agrees that if this Agreement, the
Guarantor’s guarantee of the Guaranteed Obligations hereunder or any liens or
security interests securing the Guarantor’s obligations under this Agreement,
would, but for the application of this sentence, constitute a Fraudulent
Conveyance, this Agreement, such guarantee and each such lien and security
interest shall be valid and enforceable only to the maximum extent that would
not cause this Agreement, such guarantee or such lien or security interest to
constitute a Fraudulent Conveyance, and this Agreement shall automatically be
deemed to have been amended accordingly at all relevant times.  For
purposes of this Section 11, the term “Fraudulent Conveyance” means a fraudulent
conveyance under Section 548 of the Bankruptcy Code (as defined in the Credit
Agreement) or a fraudulent conveyance or fraudulent transfer under the
provisions of any applicable fraudulent conveyance or fraudulent transfer law or
similar law of any state, nation or other governmental unit, as in effect from
time to time.




12.      Exculpation of
Lenders .  The
Guarantor acknowledges and agrees, on behalf of itself and each of its
Affiliates, that none of J.P. Morgan Chase Bank, N.A., J.P. Morgan Securities
Inc., Bank of America, N.A., Bank of America Securities LLC or any of the other
Lenders from time-to-time under the Credit Agreement, or any of their respective
Affiliates, successors or assigns, or any officer, director, partner, trustee,
equity holder, agent, employee, attorney, attorney-in-fact, advisor or
controlling Person of any of the foregoing (collectively, the “Lender Parties”)
shall have any duty (including any fiduciary duty or any other express or
implied duty), liability, obligation or responsibility whatsoever to the
Guarantor or any of its Affiliates arising from, in connection with or relating
to (i) the Loans and other extensions of credit contemplated by the Credit
Agreement and the other Loan Documents (the “Debt Financing”), or (ii) any of
the transactions contemplated by this Agreement, the Credit Agreement or any of
the other Loan Documents or any agreement, instrument certificate or instrument
referred to in the Loan Documents, including, without limitation, any actual or
alleged breach, misrepresentation or failure to perform any of their respective
duties or obligations (including, but not limited to, any failure to fund or
otherwise extend credit) under any Loan Document or any agreement, certificate
or instrument related thereto (clauses (i) and (ii), collectively, the
“Financing Matters”).  No Lender Party shall be liable to the
Guarantor or any of its Affiliates for any action taken or not taken by such
Lender Party in connection with any of the Financing Matters; provided, that,
for the avoidance of doubt, the foregoing sentence shall not, in and of itself,
operate as a waiver of defenses by the Guarantor to enforcement of this
Agreement. The Guarantor hereby waives, releases and forever discharges each of
the Lender Parties from any and all actions, causes of action, suits, debts,
losses, costs, controversies, damages, liabilities, judgments, claims and
demands whatsoever, in law or equity or otherwise, whether known or unknown
(collectively, “Claims”) directly or indirectly arising out of or relating to
any of the Financing Matters, that the Guarantor or any of its Affiliates ever
had, now has or hereafter can, shall or may have against any of the Lender
Parties, except to the extent arising as a result of (x) a demand for payment
hereunder prior to the conditions in Section 2 and Section 4 being satisfied or
(y) any act of gross negligence or willful misconduct committed by such Person
at any time following the date hereof as determined by a court of competent
jurisdiction pursuant to a final non-appealable order.  Furthermore,
the Guarantor covenants not to sue any Lender Party in connection with or
assert, and agrees to cause his Affiliates not to sue any Lender Party in
connection with or assert, any Claims which they or any other party now or may
hereafter have in connection with any Financing Matter, except to the extent
arising as a result of (x) a demand for payment hereunder prior to the
conditions in Section 2 and Section 4 being satisfied or (y) any act of gross
negligence or willful misconduct committed by such Person at any time following
the date hereof as determined by a court of competent jurisdiction pursuant to a
final non-appealable order. Each of the Lender Parties shall be an intended
third party beneficiary of this Section 12 and may enforce the terms of this
Section 12 as if such Lender Party were a direct party to this Agreement, and
this Section 12 may not be amended, supplemented, waived or otherwise modified
without the prior written consent of each of JPMorgan Chase Bank, N.A. and Bank
of America, N.A.











13.      Miscellaneous.




(a)         This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely in
New York.




(b)         The
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or federal
court of the United States of America sitting in New York City and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and the
Agent hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding shall be heard and determined exclusively in
any such New York State court or, to the extent permitted by law, in such
federal court.  The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party (other than the
Guarantor) may otherwise have to bring any action or proceeding relating to this
Agreement in the courts of any jurisdiction.  The Guarantor
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any New York State or federal court.  The Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.











(c)         This
Agreement shall inure to the benefit of and be binding upon the Guarantor and
its successors
and assigns and the Agent, the Lenders and their respective successors and
assigns.




(d)         This
Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties related
thereto.




(e)         Each
reference herein to the Guarantor shall be deemed to include the successors and
assigns of the Guarantor, all of whom shall be bound by the provisions of this
Agreement; provided, however, that the Guarantor shall not, without obtaining
the prior written consent of the Lenders (which consent may be withheld or
conditioned in the Lenders’ sole discretion), assign or transfer this Agreement
or the Guarantor’s obligations and liabilities under this Agreement, in whole or
in part, to any other Person (and any attempted assignment or transfer by
Guarantor without such prior written consent shall be null and void). Upon the
written request of the Lenders, the Guarantor shall assign this Agreement to any
Person who acquires all or substantially all of the assets of Guarantor;
provided, that the Lenders shall have no duty or obligation to make such
request. Each reference herein to the Lenders shall be deemed to include the
successors and assigns of the Lenders under the Credit Agreement; it being
understood that this Agreement shall not be for the benefit of, or be assigned
to, any refinancing or refunding source with respect to the Guaranteed
Obligations (it being acknowledged that an amendment, restatement, waiver or
other modification of the terms of the Credit Agreement or other Loan Documents
shall not constitute a refinancing or refunding for purposes of this provision)
without the prior written consent of the Guarantor, provided, that in no event
shall the foregoing prevent or restrict any Lender from making an assignment,
selling a participation in, pledging or granting a security interest in or
otherwise transferring all or any portion of its interests in the Loans (and its
corresponding interest in the guarantee provided for hereunder) under the
applicable provisions of Section 15.1 of the Credit Agreement (as in effect on
the date hereof, except to the extent the Guarantor consents to any subsequent
amendment or other modification to such provisions) or impair any Lender’s
rights under this Agreement as a result of any such assignment, participation,
pledge, security interest or transfer made in accordance with such
provisions.




(f)          This
Agreement is for the benefit only of the Agent and the Lenders, shall be
enforceable by them alone, is not intended to confer upon any third party any
rights or remedies hereunder, and shall not be construed as for the benefit of
any third party; provided, however, that (i) the Agent shall be permitted, in
its sole discretion, to pay or to direct the Guarantor to pay any and all
amounts payable pursuant to this Agreement to any Lender or any third party, and
(ii) each of the Lender Parties may enforce the provisions of Section 12 of this
Agreement.











(g)         EACH
PARTY HERETO, FOR ITSELF AND ITS AFFILIATES, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR
THEIR RESPECTIVE AFFILIATES PURSUANT TO THIS AGREEMENT IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF AND THEREOF. THE PARTIES AGREE
THAT ANY SUCH ACTION OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT
A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.




14.           Miscellaneous.




(a)         This
Agreement may not be modified or amended except by an instrument or instruments
in writing signed by each of the parties hereto and, with respect to any
amendment or modification of Section 11, each of JPMorgan Chase Bank, N.A. and
Bank of America, N.A.




(b)         All
notices and other communications hereunder will be in writing and given by
certified or registered mail, return receipt requested, nationally recognized
overnight delivery service, such as Federal Express or facsimile (or like
transmission) with confirmation of transmission by the transmitting equipment or
personal delivery against receipt to the party to whim it is given, in each
case, at such party’s address or facsimile number set forth below or such other
address or facsimile number as such party may hereafter specify by notice to the
other parties hereto given in accordance herewith. Any such notice or other
communication shall be deemed to have been given as of the date so personally
delivered or transmitted by facsimile or like transmission (with confirmation of
receipt), on the next business day when sent by overnight delivery services or
five days after the date so mailed if by certified or registered
mail:




If to the
Guarantor:


[____________]





with a
copy to:


[____________]





If to the
Agent:




JPMorgan
Chase Bank, N.A., as Agent


277 Park
Avenue


New York,
NY 10172


Attn:  Marc
Costantino


Telecopy:  212-622-8167









(c)           If
any term or provision of this Agreement, or the application thereof to any
Person or circumstance, shall to any extent be held invalid or unenforceable in
any jurisdiction, then (i) as to such jurisdiction, the remainder of this
Agreement, or the application of such term or provision to Persons or
circumstances other than those as to which such term or provision is held
invalid or unenforceable in such jurisdiction, shall not be affected thereby,
(ii) the court making such determination shall have the power to reduce the
scope, duration, area or applicability of such provision, to delete specific
words or phrases, or to replace any invalid or unenforceable provision with a
provision that is valid and enforceable and comes closest to expressing the
intention of the invalid or unenforceable provision, and (iii) each remaining
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by applicable law. Any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.




(d)           This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and will become effective when one or
more counterparts have been signed by a party and delivered to the other
parties.  Copies of executed counterparts transmitted by telecopy,
telefax or other electronic transmission service shall be considered original
executed counterparts for purposes of this Section 14(d), provided that receipt
of copies of such counterparts is confirmed.




[The next
page is the signature page]












IN
WITNESS WHEREOF, the Guarantor has executed this Agreement as of the date first
above written.




[GUARANTOR]By:Name:Title:





ACCEPTED
      AND AGREED TO:JPMORGAN
      CHASE BANK, N.A., as AgentBy:Name:Title:











EXHIBIT
C





NET WORKING CAPITAL LINE
ITEMS





C-1





EXHIBIT
D





NET OPERATING INCOME LINE
ITEMS











EXHIBIT
E





FORM OF LIMITED LIABILITY
COMPANY OPERATING AGREEMENT




THIS
LIMITED LIABILITY COMPANY OPERATING AGREEMENT of Marco LP Units, LLC, a Delaware
limited liability company (the “Company”), is made,
entered into and effective as of [l] [l], 2009 (this “Agreement”), by and
among LP Units Manager, LLC, a Delaware limited liability company (the “Manager”) and wholly
owned subsidiary of Simon Property Group, L.P. (“Parent OP”) and the
Persons whose names appear on the signature pages of this Agreement as members
of the Company (each, a “Member”, and,
collectively, the “Members”).




WHEREAS,
the Company was formed as a limited liability company pursuant to the Delaware
Limited Liability Company Act (6 Del. C. § 18-101 et seq.), as amended
(the “Act”) by
the filing of the Certificate of Formation of the Company (the “Certificate”) with
the Secretary of State of the State of Delaware on December 4, 2009;
and




WHEREAS,
the Company was formed under the laws of the State of Delaware in connection
with the closing of the transactions contemplated by the Contribution Agreement
for the sole purpose of holding, owning, managing and disposing of the Parent OP
Units issued pursuant to the terms of the Contribution Agreement which are being
contributed to the Company, subject to the terms and conditions of this
Agreement;




WHEREAS,
the parties hereto desire to provide for the respective rights, obligations and
interests of the Members and the Manager to each other and to the Company and
the terms and conditions on which the Company will conduct business in this
Agreement; and




WHEREAS,
this Agreement shall apply to and govern the management and operation of the
Company from the date hereof and shall bind each and every present and future
Manager and Member of the Company.




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




ARTICLE
1


DEFINITIONS AND RULES OF
CONSTRUCTION




1.1.          Certain
Definitions.  Unless otherwise indicated, capitalized terms
used in this Agreement and not otherwise defined herein shall have the
respective meanings ascribed thereto in Annex A hereto, which
is hereby incorporated into this Agreement as if set forth in full herein,
notwithstanding any contrary or inconsistent definition contained in the
Act.




1.2.          Other
Terms.  Other terms may be defined elsewhere in the text of
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.





E-1





1.3.          Construction;
Interpretation.  The term “this Agreement” means this Limited
Liability Company Operating Agreement together with all Schedules and exhibits
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.  Unless otherwise
indicated to the contrary herein by the context or use thereof: (a) 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, (b) masculine gender shall also include the
feminine and neutral genders, and vice versa, (c) words importing the singular
shall also include the plural, and vice versa and (d) the word “contributed”
includes anything that is contributed directly by a Person or anything that is
contributed on behalf of, or for the benefit of, such person or is otherwise
deemed to have been contributed by such Person pursuant to the Contribution
Agreement or any other agreement.




ARTICLE
2


ORGANIZATION OF THE
COMPANY




2.1.          Formation.  The
Members hereby acknowledge the formation of the Company as a limited liability
company pursuant to the Act by virtue of the filing of the Certificate with the
Secretary of State of the State of Delaware.




2.2.          Term.  The
Company commenced on the date of the filing of the Certificate with the
Secretary of State of the State of Delaware.  The Company shall
continue until dissolved pursuant to the provisions hereof.




2.3.          Name.  The
business of the Company shall be conducted under the name “Marco LP Units, LLC”;
provided, that such
name shall be subject to change, from time to time, by the Members holding a
majority of the outstanding Company Units and with the written consent of the
Manager, which consent shall not be unreasonably withheld or
delayed.




2.4.          Principal Place of
Business.  The principal place of business of the Company shall
be at 225 West Washington Street, Indianapolis, Indiana 46204 or such other
place as the Manager shall determine.  The Company may maintain such
other office or offices for the transaction of business at such other locations
as the Manager may deem advisable.




2.5.          Registered Office and
Registered Agent.  The street address of the initial registered
office of the Company shall be Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801 and the Company’s registered agent at such address
shall be The Corporation Trust Company.  The Manager may hereafter
change the registered agent and registered office and, if necessary, the Company
shall amend the Certificate in accordance with the applicable requirements of
the Act to reflect such change.




2.6.          Purpose.  The
sole purpose of the Company is to hold the Parent OP Units in accordance with
the terms and conditions of this Agreement and to otherwise comply with its
obligations under this Agreement; provided, that the Company shall not, and the
Manager shall cause the Company not to, without the consent of the Members
holding a majority of the outstanding Company Units, sell, transfer, dispose of,
hypothecate, convey, exchange or encumber, directly or indirectly, the Parent OP
Units other than pursuant to Article 6 or Article 10
hereof.





E-2





2.7.        Single Purpose
Limitations.  Notwithstanding any provision hereof or of any
other document governing the formation, management or operation of the Company
to the contrary, except to the extent expressly permitted hereunder, the Company
shall not, and the Manager shall not cause or permit the Company to, in each
case without the consent of the Members holding a majority of the outstanding
Company Units:




(a)         incur
or assume any Liability;




(b)         pledge
any of its assets for the benefit of any other Person;




(c)         consolidate
or merge with or into any other Person, convert into any other type of Person or
convey or transfer any of its properties or assets;




(d)         to
the fullest extent permitted by Law, be dissolved, liquidated or terminated;
or




(e)         agree
or otherwise commit to take any of the foregoing actions.




2.8.        Limitations on the Company’s
Activities.  This Section 2.8 is being
adopted in order to comply with certain provisions required in order to qualify
the Company as a “special purpose” entity.




(a)         The
Manager shall cause the Company to do or cause to be done all things necessary
to preserve and keep in full force and effect its existence, rights (charter and
statutory) and franchises, and the Manager also shall cause the Company
to:




(i)           at
all times hold itself out to the public as a legal entity separate from the
Manager, the Members and any other Person;




(ii)          file
its own tax returns, if any, as may be required under applicable Law, and pay
any taxes so required to be paid under applicable Law;




(iii)         not
commingle its assets with assets of any other Person;




(iv)        conduct
its business in its own name and strictly comply with all organizational
formalities to maintain its separate existence;




(v)         maintain
an arm’s length relationship with any Affiliate upon terms that are commercially
reasonable and that are no less favorable to the Company than could be obtained
in a comparable arm’s length transaction with an unrelated Person;




(vi)        not
hold out its credit or assets as being available to satisfy the obligations of
others, or Guarantee or otherwise obligate itself with respect to the Debts of
any other Person;





E-3





(vii)       except
as contemplated hereby, not make any loans or advances to any other Person;
provided that it may invest its funds in interest bearing accounts held by any
bank that is not its Affiliate;




(viii)      observe
all limited liability company formalities;




(ix)         correct
any known misunderstanding regarding its separate identity; and




(x)          maintain
adequate capital in light of its contemplated business purpose, transactions and
liabilities, if any.




(b)         The
failure of the Company, or the Manager on behalf of the Company, to comply with
any of the foregoing covenants or any other covenants contained in this
Agreement shall not affect the status of the Company as a separate legal entity
or the limited liability of the Members.




(c)         Unless
approved in writing by the Members holding a majority of the Company Units, the
Manager also shall not cause or permit the Company to:




(i)           Guarantee
any obligation of any Person, including, without limitation, any Affiliate of
the Company;




(ii)  
       except to the extent expressly
permitted hereunder, enter into any transaction with any Affiliate of the
Company;




(iii)         engage
in any business unrelated to the purpose stated in Section
2.6;




(iv)        have
any assets other than the Parent OP Units and those related to the purpose
stated in Section
2.6;




(v)         except
to the extent expressly permitted hereunder, incur, create or assume any
Debt;




(vi)        make
or permit to remain outstanding any loan or advance to, or own or acquire any
stock or securities of, any Person other than the Parent OP Units and
Securities, if any, issuable in respect thereof;




(vii)       except
to the extent expressly permitted hereunder, execute or enter into any contract
or agreement, whether oral or written (other this Agreement);




(viii)      hire
any employee or adopt, enter into or agree to comply with any other agreement
regarding the employment of any Person;




(ix)         commence,
settle or compromise any Action;





E-4





(x)          issue
any units or other securities of the Company other than pursuant to Section
5.1(d);




(xi)         enter
into any joint venture or partnership or other similar agreement or
arrangement;




(xii)        form,
acquire or hold any Subsidiary; or




(xiii)       except
to the extent expressly permitted hereunder, agree or otherwise commit to take
any of the foregoing actions.




ARTICLE
3


MEMBERS




3.1.        Names.  The
name and business or residence address of each Member of the Company are as set
forth on Schedule
I hereto, which shall be amended or otherwise modified by the Manager to
the extent required.




3.2.        Action.  Any
action permitted or required by applicable Law or this Agreement to be taken at
a meeting of the Members may be taken without a meeting if a consent in writing,
setting forth the action to be taken, is signed by the Members necessary to
approve any action at a meeting if one were called.  Such consent
shall have the same force and effect as a vote at a meeting and may be stated as
such in any document or instrument filed with the Secretary of State of
Delaware, and the execution of such consent shall constitute attendance or
presence in person at a meeting of the Members.




3.3.        Limited Power and Duties of
the Members.  The Members shall have no power to participate in
the management of the Company except as expressly authorized by this Agreement
or as expressly required by the Act.  Unless expressly and duly
authorized in writing to do so by the Manager, no Member, in its capacity as
such, shall have any power or authority to bind or act on behalf of the Company
in any way, to pledge the Company’s credit or to render the Company liable for
any purpose.




ARTICLE
4


MANAGEMENT AND OPERATIONS OF
THE COMPANY.




4.1.        Management of the Company’s
Affairs.




(a)         The
management of the Company shall be vested exclusively in LP Units Manager, LLC,
which is hereby appointed as the Manager effective as of the date
hereof.  Subject to the terms and conditions of this Agreement, the
Manager shall have full and exclusive power and discretion to, and shall, manage
the business and affairs of the Company only in accordance with this
Agreement.  The Manager shall not resign, may not assign or delegate
its responsibilities to any other Person, and shall serve as such until such
time, if any, as the Manager is otherwise removed and replaced or the Company is
dissolved in accordance with the terms of this Agreement.  The Manager
shall devote such time to the affairs of the Company as is reasonably necessary
to manage the Company as set forth in this Agreement.  Nothing in this
Section 4.1
eliminates, limits or otherwise modifies any of the express terms of this
Agreement or any liability, obligation or covenant of any Person
hereunder.





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(b)         The
Manager shall have no authority to take or authorize the taking of any action in
contravention of any express term of this Agreement.




(c)         No
Member or Members shall have any power or authority to remove the Manager for
any reason.




(d)         No
Person dealing with the Company or the Manager shall be required to determine,
and any such Person may conclusively assume and rely upon, the authority of the
Manager to execute any instrument or make any undertaking on behalf of the
Company.  No Person dealing with the Company or the Manager shall be
required to determine any facts or circumstances bearing upon the existence of
such authority.  Without limitation of the foregoing, any Person
dealing with the Company or the Manager is entitled to rely upon a certificate
signed by the Manager as to:




(i)           the
identity of the Members;




(ii)          the
existence or non-existence of any fact or facts that constitute a condition
precedent to acts by the Manager or are in any other manner germane to the
affairs of the Company;




(iii)         the
identity of Persons who are authorized to execute and deliver any instrument or
document of or on behalf of the Company; or




(iv)        any
act or failure to act by the Company or any other matter whatsoever involving
the Company or the Members.




4.2.        Payment of
Expenses.  The Manager shall, on behalf of the Company, pay for
any and all costs, fees and expenses incurred or payable by the Company,
including, without limitation, (i) any administrative expenses, including,
without limitation, fees of accountants, auditors and attorneys, incurred by the
Company and (ii) any franchise or similar taxes payable to the Secretary of
State of the State of Delaware in order to maintain the good standing of the
Company in the State of Delaware.




4.3.        Entry into Tax Matters
Agreements.  Notwithstanding any other provision of this
Agreement to the contrary, the Company is authorized to enter into the DL Tax
Matters Agreement and the LVP Tax Matters Agreement and to perform all of the
Company’s obligations, and to exercise all of the Company’s rights, pursuant to
the DL Tax Matters Agreement and the LVP Tax Matters Agreement.





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ARTICLE
5


COMPANY UNITS; CAPITAL
CONTRIBUTIONS




5.1.        Capital
Structure.




(a)         The
Company is authorized to issue equity interests in the Company designated as
“Company Units,” which shall constitute limited liability company interests
under the Act (the “Company
Units”).  As of the date hereof, the Company has no outstanding
Company Units.  Pursuant to the terms of the Contribution Agreement,
at the Closing the Company shall issue Company Units and Schedule I hereto
shall be revised to reflect such issuance.  The Company Units will
have the powers, preferences, rights, qualifications, limitations and
restrictions as set forth herein.  Each Company Unit is intended to
represent the same rights, powers, and obligations of the Parent OP Unit that
will be deemed to be contributed by a Member to the Company (which will be set
forth on Schedule
I hereto), with the intention that the capital structure will represent,
to the maximum extent possible, the same right to receive allocations of income,
gain, loss, deduction and credit (for purposes of determining both Capital
Accounts and for U.S. federal income tax purposes) and distributions that a
Member would possess if the Member directly owned the Parent OP Units to be
contributed to the Company.




(b)         The
name of each Member and the number of Company Units held by each such Member as
well as the Parent OP Units to be held by the Company for the benefit of such
Member will be set forth on Schedule I hereto, as
such schedule may be amended from time to time to reflect, among other things
the admission of new Members, additional issuances of Company Units to the
Members and transfers of Company Units.




(c)         The
Company Units will not be certificated and will be represented solely by
book-entry.  The Manager shall maintain a list of the holders of
Company Units and the Parent OP Units to be contributed by such Member in the
same manner as the Parent OP maintains a list of the holders of Parent OP
Units.  The Manager shall maintain this list in a manner that shall
separately track and identify the Company Units of a Member as corresponding to
the Parent OP Units to be contributed by such Member.




(d)         In
the event of any change in the outstanding number of Parent OP Units by reason
of any share dividend, split, reverse split, recapitalization, merger,
consolidation or combination by the Parent OP, the number of Company Units to be
held by each Member shall be proportionately adjusted such that, to the extent
possible, one Company Unit remains the equivalent of one Parent OP Unit without
dilution or accretion.




5.2.        Capital
Contributions.




(a)         Except
as otherwise expressly provided in this Agreement or the Act, no Manager or
Member shall be obligated to make any contribution of capital to the Company or
have any liability for the debts and obligations of the Company.  This
Section 5.2 is
in furtherance of, and not in limitation of, Section 18-303(a) of the
Act.





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5.3.        Capital
Accounts.




(a)         A
separate account (each a “Capital Account”)
shall be established and maintained for each Member, in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv), which shall be increased by (i) the amount
of any cash contributed to the Company by such Member (ii) the fair market value
of any property contributed to the Company by such Member (as determined by in
good faith by the Manager) and (iii) the amount of any income, gain or credit
allocated to such Member pursuant to Article 7, and
decreased by (i) the amount of any loss or deduction allocated to such Member
pursuant to Article
7, (ii) the amount of any cash distributed to such Member and (iii) the
fair market value of any asset distributed in kind to such Member (as determined
by in good faith by the Manager) including any Parent REIT
Shares.  The Manager’s determination of such Capital Accounts shall be
binding upon all parties.  The Manager shall have authority to choose
from all available tax accounting methodologies.




(b)         The
Capital Accounts of the Members as of the date of this Agreement are set forth
in Schedule I
hereto which will be amended upon the Closing to reflect the contribution of the
Parent OP Units pursuant to the Contribution Agreement.




(c)         Withdrawal of
Contributions.  No Member shall be entitled to withdraw any
cash or property or other sums from its Capital Account or to receive any
distributions from the Company except as expressly provided in this
Agreement.  Except as set forth in Article 6, no Member
shall have the right to demand to receive any cash or assets for its Company
Units or the Parent OP Units contributed by such Member.




(d)         No
Interest.  No member shall be entitled to interest on any cash
or property or other sums from its Capital Account and no such interest shall be
accrued.




5.4.        Voting
Rights.




(a)         Except
as otherwise expressly provided in this Agreement or the Act, the Company Units
shall not have any voting rights.




(b)         With
respect to any matter put to a vote of holders of Parent OP Units or as to which
the consent of the holders of Parent OP Units is sought, the Manager shall vote
or provide its consent with respect to all of the Parent OP Units held by the
Company in accordance with the vote or consent of a majority of the Parent OP
Units not held by the Parent OP General Partner or by the Company voting or
providing consent with respect to such matter; provided; however, that any
amendments to the Parent OP Agreement requiring the consent of each holder of
Parent OP Units shall not be consented to by the Manager unless the Member
holding the Company Units consents with respect to the Parent OP Units it would
have the right to receive from the Company upon the exercise of the Conversion
Right, as defined in Section 6.1(a)
below.





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ARTICLE
6


CONVERSION OF COMPANY
UNITS




6.1.        Conversion at the Option of
the Members.




(a)         Each
of the Members is hereby granted the right (the “Conversion Right”) to
exchange all or any portion of such Member’s Company Units for the Parent OP
Units that such Member contributed to the Company at any time or from time to
time, on the terms and subject to the conditions and restrictions contained in
this Section
6.1.  The Conversion Right may be exercised by a Member (a
“Converting
Member”) by delivery to the Manager of both (i) a notice in the form of
Annex B hereto
(a “Company Unit
Exercise Notice”), which notice shall specify the whole number of such
Member’s Company Units that are to be exchanged by such Converting Member (the
“Converted
Units” and (ii) a signed Notice of Conversion in the form attached to the
Parent OP Agreement (a copy of which is attached to Annex B for the
convenience of the Converting Member) pursuant to which the Converting Member
elects to convert the Parent OP Units received in respect of the Converted Units
into cash or Parent REIT Shares, as selected by Parent REIT pursuant to Article XI of the
Parent OP Agreement.  Once delivered, the Company Unit Exercise Notice
and such Notice of Conversion shall be irrevocable.




(b)         Promptly
after receipt of a Company Unit Exercise Notice, the Manager shall effect, on
behalf of the Converting Member, the conversion of each Parent OP Unit that such
Member contributed to the Company and has elected to convert pursuant toSection 6.1(a) such
that each Converting Member shall receive all or a portion of the Parent OP
Units (and any securities issued by Parent OP in respect of such Parent OP
Units) such Member contributed to the Company.  Upon receipt of the
Parent OP Units pursuant to the preceding sentence of thisSection 6.1(b), each
Converting Member shall be obligated pursuant to the Notice of Conversion
described in Section
6.1(a)(ii)to immediately exercise its rights pursuant to Article XI of the
Parent OP Agreement to convert all of its Parent OP Units into Parent REIT
Shares or cash (as selected by Parent REIT pursuant to Article XI of the
Parent OP Agreement).




(c)         The
closing of the exchange of the Converted Units and the conversion of the
underlying Parent OP Units, which such Member contributed to the Company, shall
be held at a location and on a date agreed to by the Manager and the Converting
Members, which date shall be no later than the date specified for closing by
such Converting Member in the Company Unit Exercise Notice.




(d)         At
the closing of the exchange of the Converted Units and the conversion of the
underlying Parent OP Units, the transfer of Parent OP Units, which such Member
contributed to the Company, to the Converting Member shall be accompanied by
proper instruments of transfer and assignment and by the delivery of
representations and warranties of (A) the Converting Member with respect to its
due authority to sell all of the right, title and interest in and to such
Converted Units to the Company and with respect to the ownership by such
Converting Member of such Converted Units, free and clear of all Liens, and (B)
the Company with respect to its due authority to acquire such Converted
Units.





E-9





6.2.        Redemption at the Option of
the Company.




(a)         At
any time, or from time to time, following the date hereof, the Company shall
have the right (the “Redemption Right”) to
redeem all, but not less than all, of the outstanding Company Units held by the
Members in exchange for the Parent OP Units held by the Company which were
contributed by such Members (and any securities issued by Parent OP with respect
to such Parent OP Units) on the terms and subject to the conditions and
restrictions contained in this Section
6.2.  The Redemption Right may be exercised by the Company upon
delivery by the Manager to the Members of a notice in the form of Annex C hereto (a
“Redemption
Notice”), which notice shall state that all of such Member’s Company
Units are to be redeemed by the Company in exchange for such Parent OP Units
(the “Redeemed
Units”).




(b)         Promptly
after mailing a Redemption Notice, the Manager shall effect the exchange of the
Redeemed Units held by the applicable Member for the Parent OP Units held by the
Company which were contributed by such Member (and any securities issued by
Parent OP with respect to such Parent OP Units) (the “Redemption
Consideration”).




(c)         The
closing of the redemption of the Redeemed Units shall be held at a location and
on a date selected by the Manager, which date (the “Redemption Settlement
Date”) shall between ten (10) and thirty (30) days after the date of the
Redemption Notice.




(d)         At
the closing of the redemption of the Redeemed Units, payment of the Redemption
Consideration shall be accompanied by proper instruments of transfer and
assignment and by the delivery of representations and warranties of (A) each of
the Members with respect to its due authority to sell all of the right, title
and interest in and to such Member’s Redeemed Units to the Company and with
respect to the ownership by such Member of such Redeemed Units, free and clear
of all Liens, and (B) the Company with respect to its due authority to acquire
such Redeemed Units for the Redemption Consideration.




ARTICLE
7


DISTRIBUTIONS AND
ALLOCATIONS




7.1.        Allocations of Profits and
Losses.  Each Member shall be allocated each item of income,
gain, loss, deduction or credit allocated by Parent OP with respect to the
Parent OP Units that such Member contributed to the Company, as if such Member
continued to directly own such Parent OP Units.  The Manager shall
allocate any item of income, gain, loss, deduction or credit of the Company not
attributable to the Parent OP Units pro rata in accordance with the number of
Parent OP Units contributed by each Member.




7.2.        Distributions
Generally.  Except as set forth in Article 6 and Section 7.3,
distributions from the Company to the Members shall be made at such times as the
Manager shall determine.





E-10





7.3.        Required
Distributions.  Subject to Section 7.4, except
as set forth in Article 6, (i) all
cash dividends and other cash distributions received by the Company with respect
to the Parent OP Units contributed by a Member; (ii) all dividends and
distributions of securities issued by any Person other than Parent OP received
by the Company with respect to the Parent OP Units contributed by a Member; and
(iii) all dividends and distributions of securities issued by the Parent OP that
are not Parent OP Units (as such term is defined in the Contribution Agreement),
in each case, shall be promptly, and in any event within two Business Days of
receipt of such dividend or distribution, distributed to the Member that
contributed such Parent OP Units as if such Member continued to directly own
such Parent OP Units.  For the avoidance of doubt, any Parent OP Units
shall be received by the Company in compliance with Section
5.1(d).




7.4.        Withholding.   Each
Member hereby authorizes the Company to withhold or pay on behalf of or with
respect to such Member any amount of federal, state, local or foreign taxes that
the Manager determines the Company is required to withhold or pay with respect
to any amount distributable or allocable to such Member pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Company pursuant to Code Sections 1441, 1442, 1445, or
1446.  Any amount paid by the Company on behalf of or with respect to
a Member will be deemed to have been actually distributed to such Member and
paid by such Member to the applicable taxing authority. Nothing in this Section 7.4 shall
create any obligation on the Manager to advance funds to the Company or to
borrow funds from third parties in order to make payments on account of any
liability of the Company under a withholding tax act; provided, however, the
Manager may borrow funds for such purpose notwithstanding the limitations
imposed on the Manger by Section
3.8.  If the Manager borrows funds from third parties in order
to make payments to a taxing authority under this Section 7.4, the
Member on whose behalf such taxes are paid will be required to reimburse the
Manager for any and all interest payments made on such amount, which shall be
repaid through withholding of subsequent distributions to such
Member.




7.5.        Tax Matters
Member.  The Company hereby designates the Manager as the tax
matters partner of the Company as provided in the Treasury Regulations pursuant
to Section 6231 of the Code (the “Tax Matters
Member”).  The Manager shall pay all expenses incurred by it in
connection with service as Tax Matters Member.  The Manager shall have
all rights permitted to be granted to a tax matters partner.  Each
Member shall, if necessary, execute any power of attorney to the Manager in its
capacity as Tax Matters Member to fulfill its obligations with respect to tax
matters on behalf of the Company.  The Manager shall at all times keep
the Members reasonably informed of the commencement and progress of any audit or
other proceeding with respect to Taxes and shall permit any Member, at its own
expense, to participate in such proceeding.




ARTICLE
8


ACCOUNTING AND
TAXATION




8.1.        Fiscal
Year.  The Company shall keep appropriate books and records and
the fiscal year of the Company shall commence on January 1 and end on December
31.




8.2.        Maintenance of Books and
Records.  At all times during the continuance of the Company,
the Manager shall keep or cause to be kept, at the principal place of business
of the Company referred to in Section 2.4, full and
complete books of account.  The books of account shall be maintained
in a manner that provides sufficient assurance that:





E-11





(a)         transactions
of the Company are executed in accordance with the general or specific
authorization of the Manager consistent with the provisions of this Agreement;
and




(b)         transactions
of the Company are recorded in such form and manner as will permit preparation
of federal, state and local income and franchise tax returns and information
returns in accordance with this Agreement and as required by Law, permit
preparation of the Company’s financial statements in accordance with GAAP and as
otherwise set forth herein and the provisions of the reports required to be
provided hereunder, and maintain accountability for the Company’s
assets.




8.3.        Form
W-9.  Each Member shall deliver to the Company at or prior to
the Closing, a completed and executed Form W-8 or IRS Form W-9, as applicable,
with respect to such Member. Notwithstanding anything to the contrary herein, in
the event a Member has not executed and delivered to the Company the required
IRS Form W-8 or IRS Form W-9, as applicable, Parent OP, pursuant to the
Contribution Agreement, and the Company shall withhold taxes in any amount
necessary to comply with applicable Law.




8.4.        Partnership
Status.  The Members intend that the Company shall be treated
as a partnership for U.S. federal income, state and local income tax purposes to
the extent such treatment is available, and agree to take such actions as may be
necessary to receive and maintain such treatment and refrain from taking any
actions inconsistent thereof.




8.5.        Records
Retention.  The Manager shall, upon reasonable advance notice
and during normal business hours, make available to the Members for review and
copying, at the Manager’s expense, all books and records of the Company and
shall retain such books and records of a period of 3 years following the
dissolution of the Company pursuant to Article 10 of this
Agreement.




ARTICLE
9


TRANSFER OF COMPANY
UNITS/ADMISSION OF NEW MEMBERS




9.1.        Transfers.  No
Member may directly or indirectly, Transfer all or any portion of its Company
Units or any of its rights or interests under this Agreement to any Person
without the consent of the Manager, which consent may be withheld or granted
subject to such conditions as may be determined by the Manager in its sole
discretion.





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(a)         Notwithstanding
the foregoing, but subject to the provisions of Section 9.2 hereof,
any Member may at any time, without the consent of the Manager, (i) Transfer all
or a portion of its Company Units to an Affiliate of such Member, or (ii) other
than LVP OP and Pro-DFJV, Pledge some or all of its Company Units to any
Institutional Lender.  Any Transfer to an Affiliate pursuant to clause
(i) and any Transfer to a pledgee of Company Units pursuant to clause (ii) may
be made without the consent of the Manager but, except as provided in subsequent
provisions of this Section 9.1, such
transferee or such pledgee shall hold the Company Units so transferred to it
(and shall be admitted to the Company as a Member) subject to all the
restrictions set forth in this Section
9.1.  It is a condition to any Transfer otherwise permitted
under any provision of this Section 9.1 that the
transferee assumes by operation of law or express agreement all of the
obligations of the transferor Member under this Agreement with respect to such
transferred Company Units, as the case may be, arising after the effective date
of the Transfer and no such Transfer (other than pursuant to a statutory merger
or consolidation wherein all obligations and liabilities of the transferor
Member are assumed by a successor corporation by operation of law) shall relieve
the transferor Member of its obligations under this Agreement prior to the
effective date of such Transfer.  Upon any such Transfer or Pledge
permitted under this Section 9.1, the
transferee or, upon foreclosure on the Company Units, as the case may be, each
Institutional Lender which is the pledgee shall be admitted as a Member and
shall succeed to all of the rights of the transferor Member under this Agreement
in the place and stead of such transferor Member.  Any transferee,
whether or not admitted as a Member, shall take subject to the obligations of
the transferor hereunder.  No transferee pursuant to a Transfer which
is not expressly permitted under this Section 9.1 or is not
consented to by the Manager, whether by a voluntary Transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the right to
receive such portion of the distributions and allocations of profits and losses
made by the Company as are allocable to the Company Units, as the case may be,
so transferred.




9.2.        Restrictions on
Transfer.  In addition to any other restrictions on Transfer
herein contained, in no event may any Transfer or assignment of a Company Unit
by any Member be made (i) to any Person which lacks the legal right, power or
capacity to own a Company Unit; (ii) in violation of applicable Law; (iii) if
such Transfer would immediately or with the passage of time cause the Parent OP
General Partner to fail to comply with the REIT Requirements (as defined in the
Parent OP Agreement), such determination to be made assuming that the Parent OP
General Partner does comply with the REIT Requirements immediately prior to the
proposed Transfer; (iv) if such Transfer would cause the Company to become, with
respect to any employee benefit plan subject to Title I of ERISA, a
“party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified
person” (as defined in Section 4975(e) of the Code); (v) if such Transfer would,
in the opinion of counsel to the Company, cause any portion of the underlying
assets of the Company to constitute assets of any employee benefit plan pursuant
to Department of Labor Regulations Section 2510.3-101; (vi) if such Transfer
would result in a deemed distribution to any Member attributable to a failure to
meet the requirements of Regulations Section l.752-2(d)(l), unless such Member
consents thereto, (vii) if such Transfer would cause any lender to the Company
to hold in excess of ten (10) percent of the Company Units that would, pursuant
to the regulations under Section 752 of the Code or any successor provision,
cause a loan by such a lender to constitute “Partner Nonrecourse Debt”, (viii)
if such Transfer, other than to an Affiliate, is of Company Units the value of
which would have been less than $20,000 when issued, (ix) if such Transfer
would, in the opinion of counsel to the Company, cause the Company to cease to
be classified as a partnership for U.S. federal income tax purposes or (x) if
such Transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning of
Section 7704(b) of the Code.  Notwithstanding anything to the contrary
in this Agreement, the issuance, sale, transfer or other disposition (whether by
merger, consolidation or otherwise) of equity securities of LVP REIT or LVP OP
shall not be a “Transfer” for purposes of this Agreement and shall not be
subject to any restrictions hereunder.




9.3.        Effect of Transfer Not in
Accordance with Agreement.  Any Transfer of any direct or
indirect interest in the Company in violation of this Article 9 shall be
null and void ab initio, and of no force and effect.





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ARTICLE
10


DISSOLUTION AND WINDING-UP
OF THE COMPANY




10.1.      Dissolution.  A
dissolution of the Company shall take place upon the first to occur of the
following:




(a)         the
determination of the Manager to dissolve the Company at any time after there are
no outstanding Company Units;




(b)         the
entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act;
or




(c)         without
limitation of clause (a) above, a Dissolution Event or an Insolvency Event
occurs with respect to the Manager or a Person that Controls
Manager.




10.2.      Winding-Up
Procedures.  If a dissolution of the Company pursuant to Section 10.1
occurs, subject to the Company’s compliance with its obligation under the other
terms and conditions of this Agreement, the Manager shall proceed as promptly as
practicable to wind up the affairs of the Company in an orderly and businesslike
manner.  A final accounting shall be made by the
Manager.  As part of the winding up of the affairs of the Company, the
following steps will be taken:




(a)         The
assets of the Company, other than the Parent OP Units and any Required
Distributions, shall be sold except to the extent that some or all of the assets
of the Company are retained by the Company for distribution to the Members as
hereinafter provided.




(b)         The
Company shall comply with Section 18-804(b) of the Act.




(c)         Distributions
of the assets of the Company after a dissolution of the Company shall be
conducted as follows:




(i)           first,
to creditors and Members who are creditors, to the extent otherwise permitted by
Law, in satisfaction of liabilities of the Company (whether by payment or the
making of reasonable provision for payment thereof) other than liabilities for
which reasonable provision for payment has been made and liabilities for
distributions to the Members under Section 18-601 of the Act;




(ii)          next,
to the Members in satisfaction of liabilities (if any) for distributions under
Section 18-601 of the Act; and




(iii)         finally,
to the Members in proportion to their respective Percentage Interests, provided
that, to the maximum extent possible, the Company shall distribute to each
Member the Parent OP Units contributed to the Company by such
Member.





E-14





ARTICLE
11


WITHDRAWAL




11.1.      Withdrawal.  No
Member shall have the right to withdraw from the Company except with the consent
of the Manager and upon such terms and conditions as may be specifically agreed
upon between the Manager and the withdrawing Member.




ARTICLE
12


LIABILITY;
EXCULPATION




12.1.      Liability of
Manager.




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




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




(c)         The
Manager shall not be liable to the Company or any Member for any loss, damage or
claim (or any expenses or costs associated therewith) incurred by reason of any
act or omission performed or omitted to be performed by the Manager other than
as a result of the Manager’s gross negligence or willful
misconduct.




(d)         The
Manager’s obligations to the Company and to the Members are limited to the
express obligations described in this Agreement.




(e)         The
Members acknowledge and agree that the relationship of the Manager to the
Company and the Members is, to the maximum extent permissible under the Act,
contractual in nature and not fiduciary.  Accordingly, pursuant to
Section 18-1101 of the Act, the Members agree that to the maximum extent
permissible under the Act, the Manager shall not have any fiduciary or any other
similar duties or obligations to any Member or any other Person by virtue of the
Manager’s actions in its capacity as such (or, if complete elimination of such
duties and obligations is deemed to be not permissible under the Act, then such
duties and obligations shall be reduced to the maximum extent
permissible).




(f)          The
provisions of this Section 12.1 are for
the benefit of the Manager.  This Section 12.1 may be
amended, modified or repealed in the manner set forth in Section 14.6 of this
Agreement, but any amendment, modification or repeal of this Section 12.1 or any
provision hereof (including as a result of any amendment, modification or repeal
of the Act) shall (unless the Manager shall expressly have consented to such
amendment, modification or repeal) be prospective only and shall (unless the
Manager shall expressly have consented to such amendment, modification or
repeal) not in any way affect the limitations on liability under this Section 12.1 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may be asserted.





E-15





(g)         The
limitations and exculpation afforded by each provision of this Section 12.1 are
cumulative and not exclusive. Nothing in this Section 12.1 is
intended, or shall be deemed, to permit conduct that would otherwise conduct
that, even disregarding the terms hereof otherwise would be actionable by the
Company or the Members.




12.2.      Liability of the
Members.  Except as otherwise required in the Act, the debts,
obligations, and liabilities of the Company, whether arising in contract, tort
or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Members shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member or
participating in the management of the Company.  The failure of the
Company to observe any formalities or requirements relating to the exercise of
its powers or management of its business or affairs under the Act or this
Agreement shall not be grounds for imposing personal liability on the Members
for liabilities of the Company.




ARTICLE
13


COVENANTS




13.1.      No Individual
Authority.  Accept as otherwise expressly provided in this
Agreement, no Member shall have any authority to act for, or undertake or assume
any obligations or responsibility on behalf of the Company.




13.2.      Separateness.  The
Company shall take all necessary actions to hold itself as an entity separate
and distinct from any other person or entity (including Affiliates), including,
without limitation, by: maintaining books, records and bank accounts separate
and distinct from the books, records and bank accounts of any other person or
entity; not commingling any of its assets or liability with the assets or
liabilities of any other person or entity; paying its own liabilities and
expenses only out of its own funds; not guaranteeing the indebtedness of any
other person or entity; holding its assets in it own name; not pledging its
assets for the benefit of any other person or entity; using its own letterhead
and checks; causing its representatives, employees or agents to hold themselves
out to third parties as representatives, employees or agents of the Company; not
assuming the obligations of its Affiliates; and not holding out its credit as
being available to satisfy the obligations of any other person or
entity.




13.3.      Indemnification.  Each
Member agrees to indemnify and hold harmless the other Members against all
claims, demands, losses, damages, liabilities, lawsuits and other proceedings,
judgments, awards, costs and expenses (including reasonable attorneys’ fees,
disbursements and court costs) to the extent the same arise directly or
indirectly from any material inaccuracy in or material breach of any covenant,
representation or warranty, as applicable, of such Member made pursuant to this
Agreement.





E-16





13.4.      Specific
Performance.  Each of the Members and the Manager 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
Member and the Manager 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 Law to post a bond or other security as a prerequisite
to obtaining equitable relief.




ARTICLE
14


MISCELLANEOUS




14.1.      Investment
Representations.




(a)         Each
Member acknowledges that it (i) has been given full and complete access to the
Company and the Manager in connection with this Agreement and the transactions
contemplated hereby, (ii) has had the opportunity to review all documents
relevant to its decision to enter into this Agreement, and (iii) has had the
opportunity to ask questions of the Company and the Manager concerning its
investment in the Company and the transactions contemplated hereby.




(b)         Each
Member acknowledges that it understands that the Company Units to be acquired by
it hereunder will not be registered under the Securities Act in reliance upon
the exemption afforded by Section 4(2) thereof for transactions by an issuer not
involving any public offering, and will not be registered or qualified under any
applicable state securities laws.  Each Member represents that (i) it
is acquiring such Company Units for investment only and without any view toward
distribution thereof, and it will not sell or otherwise dispose of such Company
Units except in accordance with the terms hereof and in compliance with the
registration requirements or exemption provisions of any applicable state
securities laws, (ii) its economic circumstances are such that it is able to
bear all risks of the investment in the Company Units for an indefinite period
of time including the risk of a complete loss of its investment in the Company
Units and (iii) it has knowledge and experience in financial and business
matters sufficient to evaluate the risks of investment in the Company
Units.  Each Member further acknowledges and represents that it has
made its own independent investigation of the Company and the business conducted
and proposed to be conducted by the Company, and that any information relating
thereto furnished to the Member was supplied by or on behalf of the
Company.




14.2.      Entire
Agreement.  This Agreement, together with the Annexes and
Schedules hereto (and any other agreements expressly contemplated hereby or
thereby), constitutes the entire agreement and understanding, and supersedes all
other prior agreements and understandings, both written and oral, between Member
or its Affiliates or any of them and the Company with respect to the subject
matter hereof.




14.3.      Governing Law;
Jurisdiction.  THIS AGREEMENT IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.  In
the event of a direct conflict between the provisions of this Agreement and any
mandatory, non-waivable provision of the Act, such provision of the Act shall
control to the extent necessary to eliminate such direct
conflict.  Nothing in this Agreement shall require any unlawful action
or inaction by any Person.





E-17





14.4.      Third Party
Beneficiaries.  Subject to Section 12.1, (i)
this Agreement is for the benefit solely of, and shall inure solely to the
benefit of, the Members, the Manager and the Company and (ii) this Agreement is
not enforceable by any Person (including any creditor of the Company or of the
Members) other than the Members, the Manager and the Company.




14.5.      Expenses.  Except
as may otherwise be expressly provided herein, the Manager and the Members shall
pay their own expenses (including legal, accounting investment banker, broker or
finders fees) incident to the negotiation and execution of this Agreement and
the performance of its obligations hereunder.




14.6.      Waivers and
Amendments.  This Agreement may only be amended or modified
(including by merger, consolidation or otherwise), and the terms hereof may only
be waived, upon the prior written approval of the Manager and the Members
holding a majority of the outstanding Company Units; provided that, (a) to
the extent any such amendment (or series of amendments) disproportionately
affects in any materially adverse manner the rights of any Member relative to
the rights of any other Member (taking into account the rights and obligations
of such Member prior to giving effect to such amendment), then such amendment
shall not be effective against such Member without the prior written consent of
such Member and (b) prior to the issuance of Company Units, no amendment,
modification or waiver shall be made without the prior written approval of the
Manager and the Representative (as defined in the Contribution
Agreement).  Except where a specific period for action or inaction is
provided herein, no failure on the part of the Manager or a Member to exercise,
and no delay on the part of the Manager or a Member in exercising, any right,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
waiver on the part of the Manager or a Member of any such right, power or
privilege, or any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.




14.7.      Notices.  All
notices, requests, demands, and other communications required or permitted to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be given by certified or registered mail, postage
prepaid, or, delivered by hand or by nationally recognized air courier service,
directed to the address of such Person set forth below:




if to the
Company or the Manager, to:




Marco LP Units, LLC


225 West Washington Street


Indianapolis, Indiana 46204


Attention:
              James
      M. Barkley


Facsimile:
              317.685.7377





E-18




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


John
      E. Sorkin


Facsimile:
            212.859.4000




if to any
Member, to such Member at the address set forth on Schedule I
hereto:




with a
copy (which copy 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


Robert
      B. Schumer


Facsimile:
            212.757.3990




Any such
notice shall become effective when received (or receipt is refused) by the
addressee, provided that any notice or communication that is received (or
refused) other than during regular business hours of the recipient shall be
deemed to have been given at the opening of business on the next business day of
the recipient.  From time to time, any Person may designate a new
address for purposes of notice hereunder by notice to such effect to the other
Persons identified above.




14.8.      Counterparts; Facsimile
Signatures.




(a)         This
Agreement may be executed in any number of counterparts, each of which shall be
an original and all of which shall together constitute one and the same
instrument.  It shall not be necessary for any counterpart to bear the
signature of all parties hereto.




(b)         This
Agreement and any amendments hereto, to the extent signed and delivered by
facsimile or other electronic means, shall be treated in all manner and respects
as an original agreement and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in
person.  No signatory to this Agreement shall raise the use of a
facsimile machine or other electronic means to deliver a signature or the fact
that any signature or agreement was transmitted or communicated through the use
of a facsimile machine or other electronic means as a defense to the formation
or enforceability of a contract and each such Person forever waives any such
defense.




14.9.      Successors and
Assigns.  Except as otherwise specifically provided in this
Agreement, this Agreement shall be binding upon and inure to the benefit of
Members and the Company and their respective Successors and
Assignees.





E-19





14.10.    Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall be ineffective, but such ineffectiveness shall be limited as
follows: (i) if such provision is prohibited or unenforceable in such
jurisdiction only as to a particular Person or Persons and/or under any
particular circumstance or circumstances, such provision shall be ineffective,
but only in such jurisdiction and only with respect to such particular Person or
Persons and/or under such particular circumstance or circumstances, as the case
may be; (ii) without limitation of clause (i), such provision shall in any event
be ineffective only as to such jurisdiction and only to the extent of such
prohibition or unenforceability, and such prohibition or unenforceability in
such jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction; and (iii) without limitation of clauses (i) or (ii),
such ineffectiveness shall not invalidate any of the remaining provisions of
this Agreement.  Without limitation of the preceding sentence, it is
the intent of the parties to this Agreement that in the event that in any court
proceeding, such court determines that any provision of this Agreement is
prohibited or unenforceable in any jurisdiction (because of the duration or
scope (geographic or otherwise) of such provision, or for any other reason) such
court shall have the power to, and shall, (x) modify such provision (including
without limitation, to the extent applicable, by limiting the duration or scope
of such provision and/or the Persons against whom, and/or the circumstances
under which, such provision shall be effective in such jurisdiction) for
purposes of such proceeding to the minimum extent necessary so that such
provision, as so modified, may then be enforced in such proceeding and (y)
enforce such provision, as so modified pursuant to clause (x), in such
proceeding.  Nothing in this Section 14.10 is
intended to, or shall, limit (1) the ability of any party to this Agreement to
appeal any court ruling or the effect of any favorable ruling on appeal or (2)
the intended effect of Section
14.4.




14.11.    Submission to Jurisdiction;
Waivers.  Each of the Company, the Manager and each of the
Members hereby irrevocably and unconditionally:




(a)         (i)
agrees that any suit, action or proceeding against it or any of its Affiliates
arising out of or relating to or in connection with this Agreement shall be
instituted solely in the Chancery Court of the State of Delaware; provided that
if (and only after) such courts determine that they lack subject matter
jurisdiction over any such legal action, suit or proceeding, such legal action,
suit or proceeding shall be brought in the Federal courts of the United States
located in the State of Delaware, (ii) consents and submits, for itself and its
property, to the jurisdiction of such courts for the purpose of any such suit,
action or proceeding instituted against it, and (iii) agrees that a final
judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law;




(b)         agrees
that service of all writs, process and summonses in any suit, action or
proceeding pursuant to Section 14.11(a) may
be effected by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at its address for notices pursuant to Section 14.7 (with
copies to such other Persons as specified therein), such service to become
effective thirty (30) days after such mailing, provided that nothing contained
in this Section
14.11(b) shall affect the right of any party to serve process in any
other manner permitted by Law;





E-20





(c)         (i)
waives any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
brought in any court specified in Section 14.11(a),
(ii) waives any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum, and (iii) agrees not to
plead or claim either of the foregoing; and




(d)         WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.




14.12.    Termination of
Agreement.  If the Contribution Agreement is terminated in
accordance with its terms, this Agreement shall be deemed terminated and of no
further force or effect without any liability to any Member or the
Manager.




[Signature Pages
Follow]





E-21




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




MANAGER:LP
      UNITS MANAGER, LLCBy:Name:Title:





E-22




IN
WITNESS WHEREOF, the undersigned has executed this Agreement as of the date
first above written, and by such execution, the undersigned acknowledges that it
has fully reviewed this Agreement.




MEMBERS:LIGHTSTONE
      VALUE PLUS REIT, L.P.By:Name:Title:PRO-DFJV
      HOLDINGS LLCBy:Name:Title:LIGHTSTONE
      HOLDINGS, LLCBy:Name:Title:LIGHTSTONE
      PRIME, LLCBy:Name:Title:





E-23





BRM,
      LLCBy:Name:Title:LIGHTSTONE
      REAL PROPERTY
                VENTURES
      LIMITED LIABILITY
                COMPANYBy:Name:Title:PR
      LIGHTSTONE MANAGER, LLCBy:Name:Title:





E-24





ANNEX
A




Certain
Definitions




As used
in the Agreement, the following terms have the following meanings (terms defined
in the singular to include the plural and vice versa and references in this
Annex A to
sections constitute references to sections of the Agreement unless otherwise
expressly indicated):




“Accountants” shall
mean the independent certified public accountants of the Company.




“Act” shall have the
meaning set forth in the recitals.




“Action” means any
claim, action, suit, proceeding, arbitration, mediation, audit, inquiry, or
other investigation by or before any Governmental Authority.




“Affiliate” shall
mean, with respect to any specified Person, (i) any other Person directly or
indirectly controlling or controlled by or under common control with such
specified Person, (ii) any Person owning or controlling ten percent (10%) or
more of the outstanding voting securities, voting equity interests, or
beneficial interests of the Person specified, (iii) any officer, director,
general partner, managing member, trustee, employee or promoter of the Person
specified or any Immediate Family Member of such officer, director, general
partner, managing member, trustee, employee or promoter, (iv) any corporation,
partnership, limited liability company or trust for which any Person referred to
in clause (ii) or (iii) acts in that capacity, or (v) any Person who is an
officer, director, general partner, managing member, trustee or holder of ten
percent (10%) or more of the outstanding voting securities, voting equity
interests or beneficial interests of any Person described in clauses (i) through
(iv).




“Agreement” shall have
the meaning set forth in the preamble.




“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.




“Capital Account”
shall have the meaning set forth in Section
5.3(a).




“Certificate” shall
have the meaning set forth in the recitals.




“Closing” shall mean
the closing of the transactions contemplated by the Contribution
Agreement.




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




“Company Units” shall
have the meaning set forth in Section
5.1.




“Company” shall have
the meaning set forth in the preamble.




“Company Unit Exercise
Notice” shall have the meaning set forth in Section
6.1(a).





E-A-1





“ContributionAgreement” shall
mean that certain Contribution Agreement, dated as of December 8, 2009, by and
among Parent REIT, Parent OP, Marco Capital Acquisition, LLC, a Delaware limited
liability company and a wholly owned subsidiary of Parent OP, Lightstone Value
Plus REIT, L.P., a Delaware limited partnership, Pro-DFJV Holdings LLC, a
Delaware limited liability company, Lightstone Holdings, LLC, a Delaware limited
liability company, Lightstone Prime, LLC, a Delaware limited liability company,
BRM, LLC, a New Jersey limited liability company, Barceloneta Holding Company, a
New Jersey limited liability company, Prime Outlets Acquisition Company LLC, a
Delaware limited liability company, and Lightstone Value Plus Real Estate
Investment Trust, Inc., a Maryland corporation.




“control” (including
the phrases “controlled by” and “under common control with”) when used with
respect to any specified Person shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or interests, by
contract or otherwise.




“Conversion Right”
shall have the meaning set forth in Section
6.1(a).




“Converted Units”
shall have the meaning set forth in Section
6.1(a).




“Converting Member”
shall have the meaning set forth in Section
6.1(a).




“Debt” of any Person
shall mean (i) all indebtedness of such Person for borrowed money, (ii) all
obligations of such Person for the deferred purchase price of property or
services (excluding trade payables arising in the ordinary course of business),
(iii) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (v) all obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP, recorded as capital
leases, or (vi) all indebtedness or obligations of others of the kinds referred
to in clauses (i) through (v) above in respect of which such Person has entered
into or issued any Guarantee.




“Dissolution Event”
shall mean, with respect to any specified Person, (i) in the case of a specified
Person that is a partnership or limited partnership or a limited liability
company, the dissolution and commencement of winding up of such partnership,
limited partnership or limited liability company, and (ii) in the case of a
specified Person that is a corporation, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter and the expiration of 90 days after the date of notice to the
corporation of revocation without a reinstatement of its charter.  For
the avoidance of doubt, it is understood and agreed that a statutory conversion
of a Person into another form of Person does not constitute a “Dissolution
Event.”




“DL Tax Matters
Agreement” shall have the meaning ascribed to such term in the
Contribution Agreement.




“GAAP” shall mean
United States generally accepted accounting principles as in effect from time to
time.





E-A-2





“Governmental
Authority” shall mean any United States or non-United States national,
federal, state, local, municipal or provincial or international government or
any political subdivision of any governmental, regulatory or administrative
authority, agency or commission, or judicial or arbitral body.




“Guarantee” shall
mean, with respect to any particular indebtedness or other obligation, (i) any
direct or indirect guarantee thereof by a Person other than the obligor with
respect to such indebtedness or other obligation or any transaction or
arrangement intended to have the effect of directly or indirectly guaranteeing
such indebtedness or other obligation, including without limitation any
agreement by a Person other than the obligor with respect to such indebtedness
or other obligation (A) to pay or purchase such indebtedness or other obligation
or to advance or supply funds for the payment or purchase of such indebtedness
or other obligation, (B) to purchase, sell or lease (as lessee or lessor)
property of, to purchase or sell services from or to, to supply funds to or in
any other manner invest in, the obligor with respect to such indebtedness or
other obligation (including any agreement to pay for property or services of the
obligor irrespective of whether such property is received or such services are
rendered), primarily for the purpose of enabling the obligor to make payment of
such indebtedness or other obligation or to assure the holder or other obligee
of such indebtedness or other obligation against loss, or (C) otherwise to
assure the obligee of such indebtedness or other obligation against loss with
respect thereto, or (ii) any grant (or agreement in favor of the obligee of such
indebtedness or other obligation to grant such obligee, under any circumstances)
by a Person other than the obligor with respect to such indebtedness or other
obligation of a security interest in, or other lien on, any property or other
interest of such Person, whether or not such other Person has not assumed or
become liable for the payment of such indebtedness or other
obligation.




“Immediate Family
Member” shall mean, with respect to any individual, his or her spouse,
parents, parents-in-law, grandparents, descendants, nephews, nieces, brothers,
sisters, brothers-in-law, sisters-in-law, children (whether natural or adopted),
children-in-law, stepchildren, grandchildren and
grandchildren-in-law.




“Insolvency Event”
shall mean, with respect to any specified Person, the occurrence of any of the
following events:




(1)           the
specified Person makes an assignment for the benefit of creditors;




(2)           the
specified Person files a voluntary petition for relief in any Insolvency
Proceeding;




(3)           the
specified Person is adjudged bankrupt or insolvent or there is entered against
the specified Person an order for relief in any Insolvency
Proceeding;




(4)           the
specified Person files a petition or answer seeking for the specified Person any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or
regulation;




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





E-A-3





(6)           the
specified Person files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the specified
Person in any proceeding described in clauses (1) through (5);




(7)           the
specified Person becomes unable to pay its obligations as they become due, or
the sum of such specified Person's debts is greater than all of such Person’s
property, at a fair valuation; or




(8)           within
90 days of any proceeding against the specified Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any Law if the proceeding has not been dismissed, or within 90 days
after the appointment of a trustee, receiver or liquidator for the specified
Person or all or any substantial part of the specified Person’s properties
without the specified Person’s agreement or acquiescence, which appointment is
not vacated or stayed, or if the appointment is stayed, for 90 days after the
expiration of the stay if the appointment is not vacated.




“Insolvency
Proceeding” shall mean any proceeding under Title 11 of the United States
Code (11 U.S.C. §§101, et seq.) or any proceeding under the statues, laws or
regulations of any jurisdiction involving any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar
relief.




“Institutional Lender”
shall mean a commercial bank or trust company, a savings and loan association or
an insurance company.




“Law” means any
statute, law, ordinance, code, regulation, rule, or other requirement of any
Governmental Authority.




“Lien” shall mean any
liens, security interests, mortgages, deeds of trust, charges, claims,
encumbrances, restrictions, pledges, options, rights of first offer or first
refusal and any other rights or interests of others of any kind or nature,
actual or contingent, or other similar encumbrances of any nature
whatsoever.




“Liabilities” shall
mean any Debt, liability, obligation of any kind or nature (whether accrued or
fixed, absolute or contingent or matured or unmatured), loss, damage, cost or
expense, including reasonable attorneys’ fees and expenses and disbursements,
including those arising under any Law, Action or Order and those arising under
any contract.




“Lightstone REIT”
shall mean Lightstone Value Plus REIT, L.P.




“LVP OP” shall
mean Lightstone Value Plus REIT, L.P., a Delaware limited
partnership.




“LVP OP Tax Matters
Agreement” shall have the meaning ascribed to such term in the
Contribution Agreement.




“Manager” shall have
the meaning set forth in the preamble.





E-A-4





“Member” shall have
the meaning set forth in the preamble.  For the avoidance of any
doubt, the Manager shall not be deemed a “Member” for any purpose under this
Agreement.




“Order” means any
decision, judgment, order, writ, injunction, decree, award or determination of
any Governmental Authority.




“Parent OP” means
Simon Property Group, L.P., a Delaware limited partnership.




“Parent OP Agreement”
means the Eighth Amended and Restated Limited Partnership Agreement of the
Parent OP, as amended, modified, supplemented or restated from time to
time.




“Parent OP General
Partner” means Simon Property Group, Inc., a Delaware
corporation.




“Parent OP Units”
shall mean (i) the interests in the Parent OP contributed to the Company
pursuant to the Contribution Agreement which entitle the Company to allocations
and distributions from Parent OP, and the rights of management, consent,
approval, or participation, if any, as provided in the Parent OP Agreement and
(ii) any interests in Parent OP issued in respect of a dividend or distribution
on (i).




“Parent REIT” means
Simon Property Group, Inc., a Delaware corporation.




“Parent REIT Shares”
means the shares of Common Stock, par value $0.0001 per share, of the Parent
REIT.




“Percentage Interest”
means, in the case of any Member, such Member’s portion of all outstanding
Company Units, expressed as a percentage, and adjusted from time to time in
accordance with this Agreement.




“Person” shall mean
any individual, corporation, partnership (general or limited), limited liability
company, limited liability partnership, firm, joint venture, association,
joint-stock company, trust, estate, unincorporated organization, governmental or
regulatory body or other entity.




“Pledge” shall mean
granting of a Lien on any Company Unit.




“Pro-DFJV” shall mean
Pro-DFJV Holdings LLC, a Delaware limited liability company.




“Redeemed Units” shall
have the meaning set forth in Section
6.2(a).




“Redemption
Consideration” shall have the meaning set forth in Section
6.2(b).




“Redemption Notice”
shall have the meaning set forth in Section
6.2(a).




“Redemption Right”
shall have the meaning set forth in Section
6.2(a).




“Redemption Settlement
Date” shall have the meaning set forth in Section
6.2(c).




“Required
Distribution” shall mean any such securities, dividends or distributions
described in subsection (i), (ii) or (iii) of Section
7.3.





E-A-5





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




“Subsidiary” shall
mean, with respect to any specified Person, each of (i) any other Person not
less than a majority of the overall economic equity in which is owned, directly
or indirectly through one of more intermediaries, by such specified Person, and
(ii) without limitation of clause (i), any other Person who or which, directly
or indirectly through one or more intermediaries, is Controlled by such
specified Person (it being understood with respect to each of clauses (i) and
(ii) that a pledge for collateral security purposes of an equity interest in a
Person shall not be deemed to affect the ownership of such equity interest by
the pledgor or the Control of such Person so long as such pledgor continues to
be entitled, in all material respects, to all the voting power and all the
income with respect to such equity interest).




“Successor” shall
mean, with respect to a Member, any future Member which is a direct or indirect
transferee of the Company Units of such Member.




“Tax Matters Member”
shall have the meaning set forth in Section
7.5




“Transfer” means any
direct or indirect sale, assignment, alienation, gift, exchange, conveyance,
transfer, pledge, encumbrance, hypothecation, granting of a security interest or
other disposition or attempted disposition whatsoever, whether voluntary or
involuntary of a Member’s Company Units.




“Treasury Regulations”
shall mean the regulations promulgated by the United States Department of the
Treasury pursuant to and in respect of provisions of the Internal revenue Code
of 1986, as amended, and all references to sections of the Treasury Regulations
shall include any corresponding provision or provisions of succeeding,
substitute, proposed or final Treasury Regulations.




“$” shall
mean lawful currency of the United States of America.





E-A-6





ANNEX
B




Company
Unit Exercise Notice




_________,
20___




Marco LP
Units, LLC


225 West
Washington Street


Indianapolis,
Indiana 46204


Attn:
            James
      M. Barkley




Re:
            Marco
      LP Units, LLC Conversion Notice




Reference
is hereby made to that certain Limited Liability Company Operating Agreement of
Marco LP Units, LLC (the “Company”), dated as
of December [l],
2009 (the “Agreement”).  All
capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the Agreement.




This
letter constitutes a “Company Unit Exercise Notice” pursuant to Section 6.1(a) of the
Agreement.  The undersigned Member hereby elects to exchange ______ of
its Company Units for the same number of Parent OP Units (and any securities
issued by Parent OP in respect of such Parent OP Units to the extent previously
retained by the Company) that such Member contributed to the Company, pursuant
to the Contribution Agreement (the “Conversion”).  The
Member acknowledges that upon the Conversion, the Member shall be obligated to
immediately exercise its right, pursuant to Article XI of the Parent OP
Agreement, to convert Parent OP Units into Parent REIT Shares or cash, at the
Parent REIT’s election.  The effective date of the Conversion shall be
the date hereof, and once delivered this Company Unit Exercise Notice shall be
irrevocable.




Sincerely,[MEMBER]By:Name:Title:





Acknowledged
      and Agreed:MARCO
      LP UNITS, LLCBy:Name:Title:





E-B-1





EXHIBIT F
– FORM OF EXERCISE OF NOTICE


FORM OF
EXERCISE NOTICE




[Limited
Partner], as of [date of exercise], hereby irrevocably (except as set forth in
the Agreement referred to below) elects, pursuant to the rights granted to it in
Section 11.1 of the Agreement of Limited Partnership of Simon Property
Group, L.P. (the “Agreement”) to convert of its Partnership units (as such term
is defined in the Agreement) into shares of common stock of Simon Property
Group, Inc. or cash, as selected by Simon Property
Group, Inc.




Limited
      Partner:By:(Printed
      Name)





E-B-2





ANNEX
C




Redemption
Notice




_________,
20__




[MEMBER]Attn:




Re:
            Marco
      LP Units, LLC Redemption Notice




Reference
is hereby made to that certain Limited Liability Company Operating Agreement of
Marco LP Units, LLC (the “Company”), dated as
of December [l],
2009 (the “Agreement”).  All
capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the Agreement.




This
letter constitutes a “Redemption Notice” pursuant to Section 6.2(a) of the
Agreement.  The Company hereby elects to redeem all of your Company
Units in exchange for the Parent OP Units held by the Company, which you
contributed to the Company (and any securities issued by Parent OP in respect of
such Parent OP Units, to the extent previously retained by the Company),
pursuant to the Contribution Agreement (the “Redemption”).  The
Company acknowledges that upon the Redemption, the Manager shall effect the
exchange of the Company Units for Parent OP Units, pursuant to Section 6.2 of the
Agreement.




Sincerely,LP
      UNITS MANAGER, LLCBy:Name:Title:





Acknowledged
      and Agreed:[MEMBER]By:Name:Title:





E-C-1





SCHEDULE
I




Members




Name and Address
                            Common
                              Units
                            Parent OP Units
                            Property With
                              Respect to
                              Which the
                              Parent Units
                              Have Been
                              Issued
                            Capital
                              Account
                              Balance as of
                              [l], 2010





E-S-1





EXHIBIT
F





FORM OF TAX MATTERS
AGREEMENT











TMA
for LVP Parties




EXHIBIT
G




FORM OF TAX MATTERS
AGREEMENT




This TAX
MATTERS AGREEMENT (the “Agreement”), dated as of __________________, 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
LP Units, LLC, a Delaware limited liability company (“New Company”), Prime
Outlets Acquisition Company LLC, a Delaware limited liability company (the
“Company”), Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
corporation (“LVP REIT”), Lightstone Value Plus REIT, L.P., a Delaware limited
partnership (“LVP OP”), and Pro-DFJV Holdings LLC, a Delaware limited liability
company (“Pro-DFJV”), and solely for purposes of Section
14, Lightstone Prime, LLC, a Delaware limited liability company
(“Lightstone”), Lightstone Holdings, LLC, a Delaware limited liability company
(“Holdings”), BRM, LLC, a New Jersey limited liability company (“BRM”),
Lightstone Real Property Ventures Limited Liability Company, a New Jersey
limited liability company (“LRPV”), and David Lichtenstein, an individual with
an address at1985
Cedar Bridge Avenue, Lakewood, New Jersey (“Lichtenstein”).




WHEREAS,
pursuant to the Contribution Agreement, dated as of the date hereof by and among
Parent REIT, Parent OP, Marco Capital Acquisition, LLC, a Delaware limited
liability company, Holdings, Lightstone, BRM, and LRPV, the Company, LVP REIT,
LVP OP, and Pro-DFJV (the “Contribution Agreement”), Holdings, Lightstone, BRM,
LRPV, LVP, and Pro-DFJV have agreed to contribute all of the outstanding
membership interests in the Company, and membership interests in each of Ewell
Holdings, LLC, a Delaware limited liability company, Mill Run, L.L.C., a New
Jersey limited liability company, and PR Barceloneta LLC, a New Jersey limited
liability company, to Parent OP (the “Contributions”);




WHEREAS,
it is intended that the Contributions will be treated as tax-free contributions
of property to Parent OP under Section 721(a) of the Internal Revenue Code of
1986, as amended (the “Code”); and




WHEREAS,
the Parties desire to set forth their rights and responsibilities with respect
to certain tax matters arising in connection with the
Contributions.




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 hereby agree as
follows:




1.  
          Definitions.  All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Contribution Agreement.




“Adjusted Spreadsheet”
shall have the meaning set forth in Section
7.




“Allocable Share”
shall mean, with respect to a given LVP Party, such Person’s economic interest
in New Company, expressed as a percentage, as set forth on Schedule
D.




“Applicable
Spreadsheet” shall mean the Preliminary Spreadsheet, the Adjusted
Spreadsheet or the Final Spreadsheet, as applicable.





G-1





“BRM” shall have the
meaning set forth in the recitals.




“Built-In Gain” shall
mean gain allocable under Section 704(c) of the Code pursuant to Treasury
Regulations Section 1.704-1(b)(4)(i) to the LVP Parties (or their Indirect
Owners) with respect to the Properties, taking into account any special inside
basis of the LVP Parties (or their Indirect Owners) under Section 743(b) of the
Code with respect to the Properties.  Such Built-In Gain shall be the
amount determined on the Applicable Spreadsheet and thereafter shall be adjusted
from time to time pursuant to the principles set forth in the Code and the
Regulations thereunder.  Built-In Gain shall be reduced by any
Built-In Gain that is recognized for federal income tax purposes prior to or
during the Protected Period.




“Capital Account”
shall have the meaning set forth in the OP Agreement.




“Capital Contribution
Agreements” shall have the meaning set forth in Section
4(d).




“Capital Contribution
Obligations” shall have the meaning set forth in Section
4(d).




“CMBS Debt” shall mean
the indebtedness of the Company and its Subsidiaries set forth on Schedule C (the
“Original CMBS Debt”) and any indebtedness incurred in replacement thereof in
whole or in part that (i) is secured only by one or more of the Properties and
(ii) qualifies as both a “nonrecourse liability” for purposes of Treasury
Regulations Section 1.752-1(a)(2) and “qualified nonrecourse financing” for
purposes of Section 465(b)(6) of the Code.




“Code” shall have the
meaning set forth in the recitals.




“Company” shall have
the meaning set forth in the recitals.




“Contribution
Agreement” shall have the meaning set forth in the recitals.




“Contributions” shall
have the meaning set forth in the recitals.




“Dispute Firm” shall
have the meaning set forth in Section
6(c).




“Distributable Amount”
means (a) the sum of the Special Distribution Amount plus (b) the amount
described in Section 2.6(b) of the Contribution Agreement plus (c) the amount
described in Section 2.3(e)(i) of the Contribution Agreement.




“Final Spreadsheet”
shall have the meaning set forth in Section
7.




“General Partner”
shall mean the general partner of Parent OP.




“Guaranties” shall
mean the guaranties of collection by the LVP Parties in respect of the Section
15.28 Loan executed as of the Closing Date, which are substantially in the form
attached as Exhibit
B.





G-2





“Holdings” shall have
the meaning set forth in the recitals.




“Indirect Owner”
means, in the case of a LVP Party that is an entity that is classified as a
partnership or disregarded entity for federal income tax purposes, any Person
owning an equity interest in such LVP Party and, in the case of any Indirect
Owner that itself is an entity that is classified as a partnership or
disregarded entity for federal income tax purposes, any Person owning an equity
interest in such entity.




“Lichtenstein” shall
have the meaning set forth in the recitals.




"Lichtenstein Parties"
shall mean Lightstone Holdings, BRM, Lichtenstein, and LRPV.




“LVP Guaranty Failure”
shall have the meaning set fort in Section 4(e).




“Lightstone” shall
have the meaning set forth in the recitals.




“LVP REIT” shall have
the meaning set forth in the recitals.




“LVP Parties” shall
mean LVP and Pro-DFJV.




“New Company” shall
have the meaning set forth in the recitals.




“New Company
Agreement” shall mean the limited liability company operating agreement
of New Company, dated as of the date hereof.




“Non-Parent TPA
Obligations” shall have the meaning set forth in Section
14.




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




“Original CMBS Debt”
shall have the meaning set forth the in the definition of CMBS
Debt.




“Parent OP” shall have
the meaning set forth in the recitals.




“Parent OP Debt” shall
mean debt that is (i) indebtedness for U.S. federal tax purposes, (ii) either
(x) indebtedness of Parent OP or (y) indebtedness of an entity that is
disregarded as an entity separate from Parent OP for U.S. federal income tax
purposes for which Parent OP has provided a full recourse guaranty of payment in
respect of the entire principal amount, and (iii) not required to be registered
at any time with the Securities and Exchange Commission pursuant to the
Securities Act of 1933.




“Parent REIT” shall
have the meaning set forth in the recitals.




“Permitted Transfer”
shall have the meaning set forth in Section
2(b).




“Preliminary
Spreadsheet” shall have the meaning set forth in Section
7.





G-3





“Pro-DFJV” shall have
the meaning set forth in the recitals.




“Properties” shall
mean the properties transferred directly or indirectly by LVP and Pro-DFJV
pursuant to the Contributions, or any entity in which Parent OP or any of its
Subsidiaries subsequently holds a direct or indirect interest as “substituted
basis property” as defined in Section 7701(a)(42) of the Code with respect
to any of the Properties.




“Property” shall mean
any one of the Properties.




“Protected Period”
shall mean the period of time beginning on the Closing Date and ending on the
date set forth on Schedule B in respect
of each Property.




“Refinancing” shall
mean debt that is (i) allocable under the rules of Treasury Regulations Section
1.163-8T to payments discharging the Section 15.28 Loan or an earlier
Refinancing and (ii) that is owed by Parent OP (or an entity that is disregarded
as an entity separate from Parent OP for U.S. federal income tax purposes) to a
Person that is not related to any partner of Parent OP for purposes of Treasury
Regulations Section 1.752-4(b).




“Refinancing Guaranty”
shall have the meaning set forth in Section
4(b).




“Representative” shall
mean Lightstone, acting as agent on behalf of each LVP Party, in its capacity as
representative of the LVP Parties.




“Restricted Transfer”
means any transaction or series of transactions involving the sale, conveyance,
exchange, or other transfer of more than 50% of Parent OP’s gross assets,
whether in a single transaction or a series of transactions, other than
a  transaction entailing a transfer (i) to a Subsidiary of Parent OP,
(ii) to a Person other than a Subsidiary of Parent OP for consideration having a
fair market value approximately equal to that of the transferred assets, or
(iii) in a transaction pursuant to which the full amount of the LVP Parties’
Built-In Gain is recognized, resulting in Parent OP making payment in full to
the LVP Parties to the extent required hereunder.




“Section 15.28 Loan”
shall mean the loan to Parent OP to be made in connection with the Closing
pursuant to Section 15.28 of the Credit Agreement dated December 8, 2009 by and
among Parent OP, the lenders party thereto, and JP Morgan Chase Bank, N.A., as
administrative agent or any Alternate Financing.




“Section 752 Gain”
shall mean without duplication (x) gain recognized under Section 731(a)(1) of
the Code because of a deemed distribution under Section 752(b) of the Code or
(y) gain recognized under Section 465(e) of the Code, in either case as a result
of a reduction of the amount of liabilities allocable to the LVP Parties for
purposes of Section 752 of the Code (including liabilities allocable to the LVP
Parties with respect to their interests in New Company).




“Taking” shall have
the meaning set forth in Section
2(b).




“Taxable Disposition”
shall have the meaning set forth in Section
2(c).





G-4





“Taxable OP Unit
Disposition” shall have the meaning set forth in Section
2(c).




“Taxable Property
Disposition” shall have the meaning set forth in Section
2(a).




“TPAs” shall have the
meaning set forth in Section
14.




“Treasury Regulations”
shall mean the income tax regulations promulgated under the Code, as such
regulations may be amended from time to time.




2.           Restrictions on Dispositions
of the Properties.




(a)         Subject
to Section 2(b), at all times during the Protected Period, neither Parent OP nor
any entity in which Parent OP holds a direct or indirect interest will
consummate a sale, transfer, exchange, or other disposition of any Property (but
excluding any Permitted Transfer), or engage in any other transaction, that
would result in the recognition of all or any portion of the Built-In Gain by a
LVP Party or its Indirect Owner(s) (a “Taxable Property
Disposition”).




(b)         Section
2(a) shall not apply to (i) the condemnation or other taking of any Property by
a governmental entity or authority in an eminent domain proceeding or otherwise
(such event, a “Taking”), or (ii) a transfer of any of the Properties in an
involuntary bankruptcy against Parent OP or any entity in which Parent OP holds
a direct or indirect interest in any of the Properties (each, a “Permitted
Transfer”); provided, however, that in the event that a Taking occurs with
respect to a Property, Parent OP and Parent REIT shall use their commercially
reasonable efforts to avoid recognition of gain with respect to such Taking by
acquiring appropriate replacement property and making any required elections in
accordance with Section 1033(a)(2) of the Code and the Regulations promulgated
thereunder; provided, however, nothing herein shall be deemed to require that
Parent OP, Parent REIT or the General Partner take any action to avoid or
prevent a Permitted Transfer.




(c)         At
all times that the LVP Parties hold direct or indirect interests in Parent OP,
and so long as Parent OP or an Affiliate of Parent OP is the Manager, Manager
shall not cause New Company to (and New Company shall not) consummate a sale,
transfer, exchange, or other disposition of any Parent OP Common Units, or
engage in any other transaction that would result in the recognition of all or
any portion of the Built-In Gain by a LVP Party or its Indirect Owner(s) (a
“Taxable OP Unit Disposition”, and together with a Taxable Property Disposition,
a “Taxable Disposition”).




(d)         For
the avoidance of doubt, a Taxable Disposition shall not include a sale,
transfer, exchange, or other disposition of any New Company Units or Parent OP
Common Units (including following a pledge of New Company Units or Parent OP
Common Units) by a LVP Party (or an Indirect Owner) or any Affiliate
thereof.




3.           Obligation to Maintain and
Allocate Certain Debt.




(a)         Parent
OP shall maintain the Section 15.28 Loan or the Refinancing with an outstanding
principal balance of no less than the Distributable Amount until the fourth
anniversary of the Closing Date, and shall not discharge the Section 15.28 Loan
(other than through a Refinancing) or the Refinancing prior to such
anniversary.





G-5





(b)         Parent
OP, directly or indirectly, shall maintain the CMBS Debt at all times through
the scheduled maturity dates listed on Schedule C, in the
principal amounts set forth on Schedule C, as
adjusted for regularly scheduled principal payments.




(c)         At
all times up to and including the scheduled maturity of the Original CMBS Debt,
Parent OP shall allocate “excess nonrecourse liabilities” (as described in
Treasury Regulations Section 1.752-3(a)(3)) in respect of each Property subject
to the CMBS Debt to each LVP Party (through its interest in New Company) up to
the amount of such Person’s Allocable Share of the Built-In Gain with respect to
each such Property, after taking into allocations described in Treasury
Regulations Sections 1.752-3(a)(1) and 1.752-3(a)(2).




(d)         The
CMBS Debt shall be allocated among the Properties in accordance with Treasury
Regulations Section 1.752-3(b).  The allocation of the CMBS Debt among
the Properties as of the Closing Date shall be set forth on Schedule
F.




(e)         All
tax returns filed by Parent OP shall report the outstanding principal amount of
the Section 15.28 Loan and any Refinancing as a recourse liability allocable
solely to the LVP Parties (through their interests in New Company) to the extent
of the Guaranties or Refinancing Guaranties for purposes of Section 752 of the
Code, except as required by a change in law or a determination under Section
1313 of the Code with respect to a LVP Party after the date hereof.




(f)         For
federal, state and local tax purposes, the Section 15.28 Loan and any
Refinancing with respect to which the LVP Parties provide Refinancing Guaranties
shall be Parent OP Debt that satisfies the requirements for treatment as a
“nonrecourse liability” for purposes of Treasury Regulations Section
1.752-1(a)(2), and would not constitute “partner nonrecourse debt” or a “partner
nonrecourse liability” within the meaning of Treasury Regulations Section
1.704-2(b)(4) in the absence of any Guaranty or Refinancing Guaranty. For
avoidance of doubt, any “significant modification” (within the meaning of
Treasury Regulations Section 1.1001-3(e)) of the Section 15.28 Loan or a
Refinancing occurring as a result of actions by Parent OP or any of its
Affiliates shall itself be treated as the incurrence of new indebtedness for
purposes of this Agreement and must satisfy the requirements set forth in the
previous sentence.




4.           Guaranties; Capital
Contribution Obligations.




(a)         At
all times up to and including the maturity of the Section 15.28 Loan, Parent OP
shall permit each LVP Party to maintain a Guaranty in an amount at least equal
to such Person’s Allocable Share of the Distributable Amount, as determined from
time to time.




(b)         Each
LVP Party shall be given the opportunity to provide a guaranty of collection
with respect to any Refinancing that is substantially identical to the Guaranty
in all respects including the amount of the guaranty (the “Refinancing
Guaranty”) contemporaneously with the consummation of each such Refinancing, and
shall be permitted to maintain such Refinancing Guaranty at all times up to and
including the maturity of each Refinancing in an amount at least equal to such
LVP Party’s Allocable Share of Distributable Amount; provided, that Parent OP
shall have no obligation to offer the LVP Parties the opportunity to provide
Refinancing Guaranties with respect to any Refinancing consummated after the
fourth anniversary of the Closing Date; provided further, at any time after the
fourth anniversary of the Closing Date, Parent OP shall be permitted to repay or
satisfy, in whole or in part, modify or otherwise take any actions with respect
to the 15.28 Loan or any Refinancing without limitation.





G-6





(c)         Parent
REIT shall not be an obligor with respect to the Section 15.28 Loan or any
Refinancing with respect to which the LVP Parties provide Refinancing
Guaranties.




(d)         At
all times that the LVP Parties hold direct or indirect interests in Parent OP
(other than through the ownership of stock of Parent REIT), Parent OP shall
offer the LVP Parties the opportunity to enter into capital contribution
agreements substantially in the form of Exhibit A (the
“Capital Contribution Agreements”), pursuant to which the LVP Parties shall have
capital contribution obligations in respect of indebtedness of Parent OP that
would qualify as “nonrecourse liabilities” for purposes of Treasury Regulations
Section 1.752-1(a)(2) in the absence of such agreements (the “Capital
Contribution Obligations”).  The LVP Parties shall designate the
initial amounts of the Capital Contribution Obligations on the Closing Date on
Schedule E, and
such amounts shall be increased from time to time pursuant to the terms of the
Capital Contribution Agreements.1  Parent OP shall maintain sufficient
amounts of indebtedness described in the first sentence of this paragraph in
order to support the Capital Contribution Obligations, taking into account any
other similar obligations of other direct or indirect owners of Parent OP, at
all times that the LVP Parties hold direct or indirect interests in Parent
OP.




(e)         If
a LVP Party declines to execute a Refinancing Guaranty that Parent OP tenders to
such LVP Party (a “LVP Guaranty Failure”), the loan to which such guaranty
opportunity relates, and any refinancing of such loan, shall no longer be
subject to the provisions of this Section 4 and, accordingly, Parent OP shall
not be required at any point in the future to offer such LVP Party an
opportunity to guaranty such Refinancing or any loan that refinances such
Refinancing.




5.           Section 704(c)
Method.  Parent OP and any other entity in which Parent OP has
a direct or indirect interest shall use, to the extent permitted under the Code,
the “traditional method” (without “curative allocations”) under Treasury
Regulations Section 1.704-3(b) for purposes of making allocations under Code
Section 704(c) with respect to each Property to take into account the
book-tax disparities as of the Closing Date and with respect to any revaluation
of such Property pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(2)(iv)(g), and 1.704-3(a)(6).




1
              Capital Contribution Agreements
      to provide that the amount of the Capital Contribution Obligations will be
      increased as of (i) the fourth anniversary of the Closing, or, if later,
      the expiration of the Refinancing Guaranties and (ii) the repayment of the
      CMBS Debt.





G-7





6.           Indemnification.




(a)




(i)           In
the event that Parent OP or New Company breaches its obligations under Section 2, Parent OP
and Parent REIT shall indemnify and hold harmless each LVP Party from and
against, and Parent OP and Parent REIT shall  be jointly and severally
liable to each LVP Party for (x) the amount of Taxes deemed incurred by such LVP
Party with respect to such LVP Party’s Allocable Share of the Built-In Gain that
is recognized as a result of such Taxable Disposition and (y) a “gross-up”
amount so that, after the hypothetical payment by such LVP Party of all Taxes on
amounts received pursuant to this Section 6(a)(i), such LVP Party would retain
from such payments hereunder an amount equal to its total deemed income tax
liability incurred as a result of the Taxable Disposition and recognition of
Built-In Gain.




(ii)          In
the event that Parent OP breaches its obligations under Section 3 or Section 4, Parent OP
and Parent REIT shall indemnify and hold harmless each LVP Party from and
against, and Parent OP and Parent REIT shall be jointly and severally liable to
each LVP Party for (x) the amount of Taxes deemed incurred by such LVP Party
with respect to the Section 752 Gain or other gain recognized by such LVP Party
as a result of such breach and (y) a “gross-up” amount so that, after the
hypothetical payment by such LVP Party of all Taxes on amounts received pursuant
to this Section 6(a)(ii), such LVP Party would retain from such payments
hereunder an amount equal to its total deemed income tax liability incurred as a
result of such breach and its recognition of Section 752 Gain or other
gain.




(iii)         In
the event that Parent OP breaches its obligations under Section 5, Parent OP
and the REIT shall indemnify and hold harmless each LVP Party from and against,
and Parent OP and the REIT shall be jointly and severally liable to each LVP
Party for (x) the amount of Taxes deemed incurred by such LVP Party as a result
of, or in connection with, such breach (taking into account all Taxes imposed
with respect to items allocated to the LVP Party as a result of allocations not
permitted by Section
5) and (y) a “gross-up” amount so that, after the hypothetical payment by
such LVP Party of all Taxes on amounts received pursuant to this Section
6(a)(iii), such LVP Party would retain from such payments hereunder an amount
equal to its total deemed income tax liability incurred as a result of such
breach.




(b)         Notwithstanding
anything herein to the contrary, it is the understanding and the intention of
the parties hereto that Parent OP and Parent REIT shall have no liability under
this Agreement as a result of (i) any actions or failure to take actions prior
to the Closing, (ii) any change in Law or interpretation thereof after the date
hereof, (iii) the structure and effectuation of the transactions contemplated by
this Agreement, the Contribution Agreement or any other Transaction Document or
(iv) any action taken by LVP OP or LVP REIT or any LVP Party (or Indirect Owner)
or any Affiliate of any of the foregoing (regardless of when such action is
taken).





G-8





(c)         For
purposes of determining the amount of the deemed income Taxes incurred by each
LVP Party and the amount of the indemnity under Section 6(a), (i) all
income arising from a transaction or event that is taxable at ordinary income
rates (including, without limitation, “recapture” under Code Sections 1245 or
1250 and net short-term capital gain) under the applicable provisions of the
Code and allocable to a given LVP Party shall be treated as subject to federal,
state and local income tax at the then applicable effective tax rate imposed on
the income of corporations doing business in New Jersey, determined using the
maximum federal rate of tax on ordinary income and the maximum state and local
rates of tax on income then in effect in New Jersey and (ii) the benefits of the
deductibility of state and local income taxes shall be taken into
account.




7.           Determination of Built-In
Gain.  Prior to Closing, the LVP Parties shall provide to
Parent OP, on Schedule
A, a spreadsheet (the “Preliminary Spreadsheet”) showing their good faith
estimate of the amount of Built-In Gain with respect to the Properties as of the
Closing Dating.  Promptly following the determination of the Actual
Adjustment, the LVP Parties and Parent OP shall jointly prepare a spreadsheet
showing the amount of the Built-In Gain with respect to the Properties as of the
Closing Date, prepared on a basis consistent with the Preliminary Spreadsheet
and updated to reflect the Actual Adjustment (the “Adjusted Spreadsheet”).
Promptly following the disbursement of all amounts from the Escrow Account, the
LVP Parties and Parent OP shall jointly prepare a spreadsheet showing the amount
of the Built-In Gain with respect to the Properties as of the Closing Date,
prepared on a basis consistent with the Adjusted Spreadsheet and updated to
reflect the settlement of the Escrow (the “Final Spreadsheet”).




8.           Cooperation Regarding
Post-Closing Tax Matters.  The LVP Parties agree to, and agree
to cause their Affiliates to, cooperate and to provide such information and
assistance as may be reasonably requested by Parent OP in connection with any
tax reporting or compliance obligations of Parent OP or its Affiliates or any
obligations of Parent OP under this Agreement.  Such cooperation shall
include the provision of information required for Parent OP to properly prepare
and file any U.S. federal or state tax returns or reports relating to the
transactions contemplated in the Contribution Agreement or the Properties and
any information reasonably relevant to the determination of any potential
liability of Parent OP under Section
6.




9.           Reporting.




(a)         For
Federal, state and local income tax purposes, the Contributions and the
distribution of the Distributable Amount shall be reported by all parties hereto
as follows:




(i)           The
Contributions shall be treated as nontaxable contributions in exchange for
Parent OP Common Units under Section 721(a) of the Code.




(ii)          The
distribution of the Distributable Amount from the proceeds of the Section 15.28
Loan shall be treated as a nontaxable distribution to a partner pursuant to
Section 731 of the Code and Treasury Regulations Section 1.707-5(b), without
separate disclosure pursuant to Section 6662(d)(2)(B)(ii) or any other provision
of the Code or Treasury Regulations or similar provisions of state and local
law, except as required by a change in law after the date hereof; provided that, upon a
reasonable request from Parent OP or its accountant, the LVP Parties shall
provide (at Parent OP’s expense) to Parent OP, at the LVP Parties’ election,
either (i) a letter from a nationally recognized accounting firm or law firm
with expertise in U.S. federal income taxation of partnerships addressed to
Parent OP or its accountant or (ii) an opinion letter from such a firm, which
shall provide that Parent OP or its accountant is entitled to rely on it, in
each case providing the required level of comfort to Parent OP or its accountant
in order to sign the return or returns.





G-9





(iii)         Pursuant
to Notice 89-35, 1989-1 C.B. 675, for purposes of applying the interest-tracing
rules of Treasury Regulations Section 1.163-8T, the Company shall treat the
distribution of the Distributable Amount as being made from the proceeds of the
Section 15.28 Loan.




10.         No Limitations After
Expiration of Term of the Agreement; Sole and Exclusive Remedy; No
Representations or Warranties; Limitation on Rights.




(a)         After
the expiration of the Protected Period with respect to any Property, (i) the
restriction set forth in Section 2 with respect to such Property shall be of no
force and effect, (ii) neither Parent OP nor the General Partner shall be under
any restriction or limitation as to the actions it can take with respect to such
Property, whether by reason of fiduciary duty or otherwise, regardless of the
tax consequences that such action (or any failure to act) might have for the LVP
Parties, and (iii) the Parent OP and the General Partner shall have no duty to
consider the tax consequences to LVP Parties of any action (or failure to act)
with respect to such Property.




(b)         The
sole and exclusive remedy of LVP Parties against Parent OP and the General
Partner and any affiliates thereof with respect to any breach or alleged or
prospective breach of the covenants set forth in Sections 2, 3 or 4 shall be to
receive the payment from the Parent OP provided in Section 6 hereof, it being
intended by the parties that in no event shall any LVP Party have any right to
specific performance or equitable relief with respect to any obligation of
Parent OP under this Agreement or with respect to the breach of Section 2 any
right to money damages of any nature, consequential or otherwise, for any breach
under this Agreement, except for the specific payment provided for in Section
6(a) hereof.




(c)         Each
of the LVP Parties acknowledges and agrees that none of the Parent OP, General
Partner, any Affiliate of Parent OP or Parent REIT, or any employee or officer
of any of the foregoing has made or hereby makes any representation or warranty
to any LVP Party regarding the federal income tax treatment of Parent OP (other
than to the extent set forth in the Contribution Agreement) or the federal
income tax consequences of any of the transactions contemplated by the
Contribution Agreement, including whether or not the transfer of the Properties
to Parent OP as contemplated under the Contribution Agreement will be effective
to avoid the recognition by any taxpayer of all or any portion of the gain that
otherwise would be required to be recognized for federal income tax purposes
upon a fully taxable disposition of the Properties, and in that event the LVP
Parties shall bear the cost of all income taxes associated therewith. Each LVP
Party further acknowledges and agrees that the transactions contemplated by the
Contribution Agreement shall be treated as having occurred outside of this
Agreement and, accordingly, are not intended to be, and shall not be, covered by
this Agreement.





G-10





11.         Provision of Information to
the LVP Parties.




(a)         At
the time Parent OP and any entity in which Parent OP holds a direct or indirect
interest enters into an agreement to consummate a Taxable Disposition that, if
consummated, would result in the recognition by the LVP Parties of all or any
portion of their Built-In Gain, and in any case not less than thirty (30) days
prior to consummating such Taxable Disposition, Parent OP shall notify
Representative in writing of such proposed Taxable Disposition and all details
of the Taxable Disposition that are relevant to the calculation of the
indemnities set forth herein including, but not limited to (i) the Property, or
portion thereof disposed of, (ii) the amount and nature of the consideration to
be received, and (iii) the expected amount of gain (including Built-In Gain)
allocable to the LVP Parties (or their Indirect Owners, if applicable) as a
result of such Taxable Disposition.  The failure to provide any such
written notice shall not affect the amount, if any, of Parent OP’s
indemnification obligation.




(b)         At
the time Parent OP and any entity in which Parent OP holds a direct or indirect
interest enters into an agreement to consummate a transaction that, if
consummated, would result in the recognition by the LVP Parties of Section 752
Gain, and in any case not less than thirty (30) days prior to consummating such
transaction, Parent OP shall notify Representative in writing of such proposed
transaction and all details that are relevant to the calculation of the
indemnities set forth herein including, but not limited to the expected amount
of Section 752 Gain allocable to the LVP Parties (or their Indirect Owners, if
applicable) as a result of such transaction.  The failure to provide
any such written notice shall not affect the amount, if any, of Parent OP’s
indemnification obligation.




(c)         Following
a request by a LVP Party, Parent OP shall deliver to such LVP Party (or the
direct or indirect owner of such LVP Party, if applicable) a good-faith estimate
of such Person’s Capital Account and allocation of  Partnership
liabilities pursuant to each of  Treasury Regulations Sections
1.752-2(a), 1.752-3(a)(1), (2), and (3).  Parent OP shall have no
liability (and its indemnification obligation under this Agreement shall not be
affected) if it fails to provide any such good faith estimate or if such
estimate is not accurate.




12.         Contests.




(a)         Nothing
in this Agreement shall be construed to prevent the General Partner from
contesting in good faith, as the tax matters partner of Parent OP in accordance
with the OP Agreement, any claim that, if successful, would result in an
indemnity payment pursuant to Section 6.




(b)         The
LVP Parties shall provide written notice to Parent OP promptly after learning of
any audit or other proceeding involving a LVP Party for which Parent OP could
have an indemnification obligation under Section 6 (a “Proceeding”).  Failure
to provide prompt written notice of a Proceeding shall preclude any indemnity
hereunder to the extent Parent OP is materially prejudiced thereby.




(i)           Upon
receipt of notice of a Proceeding, Parent OP shall either (i) assume the conduct
and control of the settlement or defense of such Proceeding, and the LVP Parties
shall cooperate with Parent OP in connection therewith (including, for example,
signing a power of attorney with respect to such Proceeding) or (ii) advise the
LVP Parties that it does not wish to control such Proceeding, in which case
Parent OP shall bear all costs and expenses of a nationally recognized law firm
retained to represent the LVP Parties in such Proceeding, which counsel shall be
reasonably acceptable to Parent OP. In either event, the party not controlling
the Proceeding shall be given the right to participate in such Proceeding, at
its own expense. So long as Parent OP is reasonably contesting any Proceeding,
the LVP Parties (or their Indirect Owners) shall not pay or settle any such
Proceeding without the consent of Parent OP, which consent may be withheld in
Parent OP’s sole discretion.





G-11





(ii)          Subject
to Section
12(b)(iii), (a) a final determination under Section 1313 of the Code of
the claim underlying the Proceeding shall be binding on Parent OP and the LVP
Parties and (b) if the LVP Parties are found liable for the Taxes that were the
subject of the Proceeding, and it is determined that such Taxes were caused by
Parent OP’s breach of this Agreement, Parent OP shall promptly pay the LVP
Parties the amount payable pursuant to Section 6 of this
Agreement.




(iii)         Notwithstanding
the foregoing, if either Parent OP or the LVP Parties disputes the finding with
respect to causation, Parent OP shall select a nationally recognized accounting
firm or law firm experienced in tax protection matters and reasonably acceptable
to Representative (the “Dispute Firm”) to review the indemnification claim and
the applicable provisions of this Agreement.  The Dispute Firm shall
have fifteen (15) business days (or such additional time as the Dispute Firm
determines is reasonably necessary) to review such materials and deliver to
Parent OP and Representative its determination of whether any amount is due
under this Agreement.  The determination of the Dispute Firm shall be
final and binding on the parties to this Agreement, and Parent OP shall promptly
pay over to the LVP Parties such amounts determined by the Dispute Firm to be
due under this Agreement and the LVP Parties shall have no further recourse
against Parent OP for the indemnification claim with respect to which such
amounts have been paid.  Parent OP shall bear all costs and expenses
of the Dispute Firm; provided, the LVP
Parties shall bear such costs if Parent OP is found to have no liability
pursuant to this Agreement.




(c)         Subject
to paragraphs (a) and (b) above, the LVP Parties shall have the right to
participate in any audit, claim for refund, or administrative or judicial
proceeding involving any asserted Tax liability, refund, or adjustment to the
taxable income of any party hereto that could result in disallowance of the tax
treatment set forth in Section 9 at its own
expense.




13.         Transfer of Parent OP’s
Assets.  For so long as the LVP Parties hold direct or indirect
interests in Parent OP, neither Parent OP nor its Affiliates shall consummate a
Restricted Transfer unless the transferee assumes the liabilities and
obligations of Parent OP under this Agreement; provided, that Parent OP shall
not be released from such liabilities and obligations as a result of such
assumption.





G-12





14.         Assumption of Existing Tax
Protection Agreements.  Parent OP and Parent REIT shall
indemnify and hold harmless LVP OP, LVP REIT, each LVP Party, each Lichtenstein
Party, or any of their Affiliates from and against, and Parent OP and Parent
REIT shall be jointly and severally liable for all liabilities and obligations
arising under the Tax Protection Agreements set forth on Schedule G (such
Agreements, the “TPAs”)  solely
as a result of Parent OP, Parent REIT or any of their Affiliates (including the
Company) taking an action or failing to take an action after the Closing that
triggers an indemnification obligation under a TPA (such liabilities and
obligations, the “Parent TPA
Obligations”).  For the avoidance of doubt, the Parent TPA
Obligations shall not include any liabilities or obligations under the TPAs with
respect to (a) the structure of the contributions and debt arrangements that are
the subject of the TPAs, (b) any transactions occurring prior to the Closing,
(c) the structure and effectuation of the transactions contemplated by the
Contribution Agreement or any other Transaction Document, (d) any actions taken
by any Member of the New Company, LVP OP or LVP REIT (regardless of when such
action is taken), or (e) a change in Law or interpretation thereof after the
date hereof.  The LVP OP and LVP REIT shall indemnify and hold
harmless Parent OP from and against and LVP OP and LVP REIT shall be jointly and
severally liable for any liability arising under the TPAs that is not a Parent
TPA Obligation (“Non-Parent TPA
Obligations”).  The Non-Parent TPA Obligations shall not be
subject to any limitations, including without limitation, the limitations on
indemnification described in Article 10 of the Contribution
Agreement.




15.         Termination.  This
Agreement shall terminate and shall become void, and there shall be no liability
on the part of any party hereto, in the event that the Contribution Agreement
shall terminate pursuant to its terms prior to the Closing.




16.         Miscellaneous
Provisions.




(a)         Assignment.  No
party shall assign this Agreement or its rights hereunder to any Person without
the prior written consent of the other party, which consent such other party may
grant or withhold in its sole discretion, and any such assignment undertaken
without such consent shall be null and void.




(b)         Integration,
Waiver.  This Agreement (including the Exhibits hereto)
embodies and constitutes the entire understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, representations and statements, whether oral or
written.  Neither this Agreement nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an instrument
signed by the party against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument. No waiver by a party hereto of any failure or refusal
by any other party to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply.




(c)         Governing
Law.  This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws.




(d)         Captions Not Binding:
Exhibits.  The captions in this Agreement are inserted for
reference only and in no way define, describe or limit the scope or intent of
this Agreement or of any of the provisions hereof.  All Exhibits
attached hereto shall be incorporated by reference as if set out herein in
full.




(e)         Binding Effect; No
Third-Party Beneficiaries.  This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  No Person, other than the parties
hereto, shall have any rights against Parent OP as a result of this
Agreement.  The parties hereto further acknowledge that there are no
intended third-party beneficiaries to this Agreement.





G-13





(f)          Severability.  If
any term or provision of this Agreement or the application thereof to any
persons or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
Persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by
law.




(g)         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


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


Alan
      S. Kaden


Facsimile:
              212.859.4000





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





G-14





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


Jeffrey
      B. Samuels


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


Jeffrey
      B. Samuels


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.




(h)         Counterparts.  This
Agreement may be executed in counterparts, each of which shall be an original
and all of which counterparts taken together shall constitute one and the same
agreement. The signature page of any counterpart may be detached therefrom
without impairing the legal effect of the signature(s) thereon provided such
signature page is attached to any other counterpart identical thereto except
having additional signature pages executed by other parties to this Agreement
attached thereto.




(i)           Construction.  The
parties acknowledge that each party and its counsel have reviewed and revised
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendment or Exhibit
hereto.




[Remainder
of Page Intentionally Left Blank]





G-15





IN
WITNESS WHEREOF, EACH PARTY HERETO HAS CAUSED THIS Agreement to be duly executed
on its behalf on the date first above written.




Simon
      Property Group, Inc.By:Name:Title:Simon
      Property Group, L.P.By:
                Simon
      Property Group, Inc., its generalpartnerBy:Name:Title:Prime
      Outlets Acquisition Company LLCBy:Name:Title:Marco
      LP Units, LLCBy:Name:Title:Lightstone
      Prime, LLCBy:Name:Title:Lightstone
      Holdings, LLCBy:Name:Title:




[Signature
page to LVP Tax Matters Agreement]










Pro-DFJV
      Holdings LLCBy:Name:Title:BRM,
      LLCBy:Name:Title:Lightstone
      Value Plus Real Estate InvestmentTrust,
      Inc.By:Name:Title:Lightstone
      Value Plus REIT, L.P.By:Name:Title:David
      Lichtenstein




[Signature
page to LVP Tax Matters Agreement]











SCHEDULE
A




ESTIMATE
OF BUILT-IN GAIN




PropertyCalhounNaplesFlorida
      CityGaffneyGrove
      CityGulf
      CoastGulfportHuntleyLebanonJeffersonvilleOhioPismo
      BeachPleasant
      PrairiePleasant
      Prairie IIQueenstownSan
      MarcosSan
      Marcos IIBirch
      RunHagerstownWilliamsburgMill
      Run DesignerMill
      Run OrlandoMazelBarcelonetaSt.
      Augustine
              
              N/ATOTAL




G-Schedules/Exhibits











SCHEDULE
B




PROTECTED
PERIODS




Property
              
              End of Protected PeriodEllenton
              
              Eighth
      anniversary of the ClosingSan
      Marcos
              
              Eighth
      anniversary of the ClosingOrlando
              
              Eighth
      anniversary of the ClosingGrove
      City
              
              Eighth
      anniversary of the ClosingJeffersonville
              
              Eighth
      anniversary of the ClosingBarceloneta
              
              Eighth
      anniversary of the ClosingPleasant
      Prairie I
              
              Sixth
      anniversary of the ClosingWilliamsburg
              
              Sixth
      anniversary of the ClosingPleasant
      Prairie II
              
              Sixth
      anniversary of the ClosingWilliamsburg
      Mazel
              
              Sixth
      anniversary of the ClosingQueenstown
              
              Sixth
      anniversary of the ClosingLee
              
              Sixth
      anniversary of the ClosingHagerstown
              
              Sixth
      anniversary of the ClosingCalhoun
              
              June
      26, 2013Naples
              
              June
      26, 2013Florida
      City
              
              June
      26, 2013Gaffney
              
              June
      26, 2013Gulfport
              
              June
      26, 2013Huntley
              
              June
      26, 2013Lebanon
              
              June
      26, 2013Pismo
      Beach
              
              June
      26, 2013Birch
      Run
              
              June
      26, 2013St.
      Augustine
              
              N/A




G-Schedules/Exhibits











SCHEDULE
C




CMBS
DEBT




Lender
                
                Loan
                
                Property
                
                Amount
                  Outstanding2
                
                MaturityWachovia
                
                Megadeal
                
                Ellentown
                  Florida
      City
                  Grove
      City
                  Gulfport
                  Huntley
                  Jeffersonville
                  Lebanon
                  Naples
                  San
      Marcos
                  Pleasant
      Prairie I
                
                $[619.2
      million]
                
                January
      11, 2016Citigroup
                
                2nd
      Horizon
                
                Pismo
      Beach
                  Queenstown
                
                $[100.0
      million]
                
                November
      6, 2016CIBC
                
                Bridge
      Portfolio
                
                Calhoun
                  Gaffney
                  Lee
                
                $[113.7
      million]
                
                September
      1, 2016Wachovia
                
                Triple
      Outlet World Loans
                
                Birch
      Run
                  Hagerstown
                  Williamsburg
                
                $[312.7
      million]
                
                April
      11, 2016CIBC
                
                Pleasant
      Prairie II
                
                Pleasant
      Prairie II
                
                $[38.1
      million]
                
                December
      1, 2016Wachovia
                
                St.
      Augustine
                
                St.
      Augustine
                
                $[26.6
      million]
                
                April
      11, 2016





2




G-Schedules/Exhibits











SCHEDULE
D




ALLOCABLE
SHARES




LVP Party
                      
                      Allocable SharesLightstone
      Value Plus REIT, L.P.
                      
                      [_
                      ]%Pro-DFJV
      Holdings, LLC
                      
                      [_
                      ]%




G-Schedules/Exhibits











SCHEDULE
E




CAPITAL
CONTRIBUTION OBLIGATIONS




LVP Party
              
              Amount of Capital Contribution Obligation
                as of the Closing DateLightstone
      Value Plus REIT, L.P.Pro-DFJV
      Holdings, LLC




G-Schedules/Exhibits











SCHEDULE
F




INITIAL ALLOCATION OF CMBS
DEBT




Property
              
              Initial Debt AllocationEllentonSan
      MarcosOrlandoGrove
      CityJeffersonvilleBarcelonetaPleasant
      Prairie IWilliamsburgPleasant
      Prairie IIWilliamsburg
      MazelQueenstownLeeHagerstownCalhounNaplesFlorida
      CityGaffneyGulfportHuntleyLebanonPismo
      BeachBirch
      RunSt.
      Augustine




G-Schedules/Exhibits











SCHEDULE
G




TAX
PROTECTION AGREEMENTS




1.
            Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and Central Jersey Holdings II
      LLC.




2.
            Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and JT Prime
  LLC.




3.
            Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and Trac Central Jersey
    LLC.




4.
            Tax
      Protection Agreement, dated June 26, 2008, by and among Lightstone
      Value Plus REIT, L.P., the Company, and AR Prime Holdings,
      LLC.




5.
            Series
      C Optional Tax Indemnification, attached as Exhibit H to Fourth Amended
      and Restated Agreement of Limited Partnership of Prime Retail,
      L.P.




6.
            Tax
      Protection Agreement, dated June 26, 2008, by and between Lightstone
      Value Plus REIT, L.P. and Arbor National CJ,
  LLC.




7.
              Tax Protection
      Agreement, dated June 26, 2008, by and between Lightstone Value Plus
      REIT, L.P. and Arbor Mill Run JRM
  LLC.




G-Schedules/Exhibits











EXHIBIT
A




FORM OF
CAPITAL CONTRIBUTION AGREEMENT




G-Schedules/Exhibits











EXHIBIT
B




FORM OF
GUARANTY OF COLLECTION




G-Schedules/Exhibits











Annex A




Owner
              
              Percentage Owned in the
                Other Group CompaniesLightstone
      Holdings
              
              84.015%
      interest in EwellPro-DFJV
              
              14.26%
      interest in Mill RunBRM
              
              55.199%
      interest in Mill RunLVP
      OP
              
              22.54%
      interest in Mill RunLRPV
              
              99%
      interest in BarcelonetaPR
      Manager
              
              1%
      interest in Barceloneta











Annex B




Owner
                  
                  Percentage Owned in the CompanyLightstone
      Prime
                  
                  
                  60
                  %LVP
      OP
                  
                  
                  25
                  %Pro-DFJV
                  
                  
                  15
                  %











Annex C




Description of the St.
Augustine Land


All that
certain lot, piece or parcel of land, with the buildings and improvements
thereon erected, situate, lying and being in the City of St. Augustine, County
of St. Johns, State of Florida.


A part of
Section 6, Township 7 South, Range 29 East, St. Johns County, Florida, more
particularly described as follows:


For a
point of reference, commence at the Northeast corner of said Section 6; thence
South 02 degrees 02 minutes 27 seconds East along the East line of said Section
6, a distance of 921.41 feet; thence departing said Section line, North 33
degrees 23 minutes 45 seconds West, a distance of 377.94 feet; thence South 56
degrees 36 minutes 15 seconds West, a distance of 994.41 feet; thence South 33
degrees 23 minutes 45 seconds East, a distance of 286.50 feet to the POINT OF
BEGINNING;


Thence
continue South 33 degrees 23 minutes 45 seconds East, a distance of 807.37 feet;
thence South 22 degrees 44 minutes 16 seconds East, a distance of 218.65 feet;
thence South 33 degrees 23 minutes 45 seconds East, a distance of 83.75 feet to
a point on the Northwesterly right of way line of Outlet Centre Drive (a 90 foot
private right of way); thence South 56 degrees 36 minutes 15 seconds West along
said Northwesterly right of way line, a distance of 307.90 feet to a point on
the Northeasterly limited access right of way line of Interstate 95, State Road
No. 9 (a varying right of way as now established) and a point on a curve concave
Southwesterly having a radius of 5879.58 feet; thence departing said
Northwesterly right of way line, Northwesterly along said limited access right
of way line and along the arc of said curve, an arc distance of 950.01 feet,
said arc being subtended by a chord bearing of North 33 degrees 51 minutes 59
seconds West and a chord distance of 948.98 feet to the point of tangency of
said curve; thence North 38 degrees 29 minutes 40 seconds West continuing along
said limited access right of way line, a distance of 157.68 feet; thence
departing said limited access right of way line, North 56 degrees 36 minutes 15
seconds East, a distance of 370.14 feet to the POINT OF BEGINNING.


TOGETHER
WITH:


Development
Agreement between St. Augustine Associates, Inc., a Florida corporation, as
Trustee under Land Trust Agreement for St. Augustine Centre Land Trust dated
June 15, 1998 and FOM St. Augustine Limited Partnership recorded July 13, 1998
in Official Records Book 1333, page 416; First Amendment recorded in Official
Records Book 2495, page 1207, public records of St. Johns County,
Florida.


Declaration
of Reciprocal Easements, Rights and Maintenance Covenants for the St. Augustine
Centre DRI/PUD, by St. Augustine Associates, Inc., a Florida corporation, as
Trustee under Land Trust Agreement for St. Augustine Centre Land Trust dated
June 15, 1998 recorded July 13, 1998 in Official Records Book 1333, page 347,
public records of St. Johns County, Florida, and First Amendment recorded in
Official Records Book 1333, page 384, public records of St. Johns County,
Florida.











St.
Augustine Centre Road and Utilities Improvements Construction Agreement between
St. Augustine Associates, Inc.. a Florida corporation, as Trustee under
Land Trust Agreement for St. Augustine Centre Land Trust dated June 15, 1998 and
FOM St. Augustine Limited Partnership recorded July 13, 1998 in Official Records
Book 1333, page 434, public records of St. Johns County,
Florida.


Declaration
of Drainage Easement by St. Augustine Associates. Inc., a Florida corporation,
as Trustee under Land Trust Agreement for St. Augustine Centre Land Trust dated
June 15, 1998, recorded July 13. 1998 in Official Records Book 1333, page 388,
public records of St. Johns County, Florida.


Declaration
of Restrictive Covenants and Easement Agreement made by FOM St. Augustine
Limited Partnership dated September 23, 1999.


NOTE:
 Being Parcel No. 087330-0000 of the City of St. Augustine. County of St.
Johns.


NOTE:
 Parcel No. shown for informational purposes only.











Annex D




Contributors
                  
                  Applicable Percentage InterestLightstone Holdings
                  
                  
                  1.140
                  %Pro-DFJV
                  
                  
                  13.750
                  %BRM
                  
                  
                  15.274
                  %LVP
      OP
                  
                  
                  22.576
                  %LRPV
                  
                  
                  8.231
                  %PR
      Manager
                  
                  
                  0.083
                  %Lightstone
      Prime
                  
                  
                  38.946
                  %TOTAL
                  
                  
                  100
                  %











Annex E











Annex F




Company
Knowledge Parties




1.
            Peyton
      H. Owen, Jr.




2.
            Donna
      Brandin




3.
            Joseph
      Teichman




4.
            Robert
      A. Brvenik