LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.


     

    FORM
      OF 2009 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

     

    Adopted
      by Board of Directors: , 2008

     

    Approved
      by Stockholders: , 2009

     

      
        

      

    

    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF CONTENTS

     

    Page


    


    
      	
              1.

            	 	 	
              Purpose
                of the Plan.

            	 	 	
              1

            	 
	
              2.

            	 	 	
              Definitions.

            	 	 	
              1

            	 
	
              3.

            	 	 	
              Effective
                Date/Expiration of Plan.

            	 	 	
              3

            	 
	
              4.

            	 	 	
              Administration.

            	 	 	
              3

            	 
	
              5.

            	 	 	
              Shares;
                Adjustment Upon Certain Events.

            	 	 	
              4

            	 
	
              6.

            	 	 	
              Awards
                and Terms of Options.

            	 	 	
              6

            	 
	
              7.

            	 	 	
              Effect
                of Termination of Service.

            	 	 	
              9

            	 
	
              8.

            	 	 	
              Nontransferability
                of Options.

            	 	 	
              10

            	 
	
              9.

            	 	 	
              Rights
                as a Stockholder.

            	 	 	
              10

            	 
	
              10.

            	 	 	
              Determinations.

            	 	 	
              10

            	 
	
              11.

            	 	 	
              Termination,
                Amendment and Modification.

            	 	 	
              10

            	 
	
              12.

            	 	 	
              Non-Exclusivity.

            	 	 	
              11

            	 
	
              13.

            	 	 	
              Use
                of Proceeds.

            	 	 	
              11

            	 
	
              14.

            	 	 	
              General
                Provisions.

            	 	 	
              11

            	 
	
              15.

            	 	 	
              Uncertificated
                Shares; Payment of Expenses; and Section 16(b) of the Act.

            	 	 	
              12

            	 
	
              16.

            	 	 	
              Listing
                of Shares and Related Matters.

            	 	 	
              13

            	 
	
              17.

            	 	 	
              Governing
                Law.

            	 	 	
              13

            	 


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

     

    FORM
      OF 2009 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

     

    Adopted
      by Board of Directors: , 2008


     

    Approved
      by Stockholders: , 2009

     

    
      	
              1.
                

            	
              Purpose
                of the Plan.

            


    

     

    The
      purpose of this Lightstone Value Plus Real Estate Investment Trust II, Inc.
      2009
      Non-Employee Director Stock Option Plan is to enhance the Company’s
      profitability and value for the benefit of stockholders, to enable the Company
      to attract, retain and motivate Non-Employee Directors who are important to
      the
      success of the Company and to create and strengthen a mutuality of interest
      between the Non-Employee Directors and the stockholders of the Company by
      granting such directors options to purchase Common Stock of the
      Company.

     

    
      	
              2.
                

            	
              Definitions.

            


    

     

    (a)
       “Acquisition
      Event”
      means a
      merger or consolidation in which the Company is not the surviving entity, or
      any
      transaction that results in the acquisition of all or substantially all of
      the
      Company’s outstanding Common Stock by a single person or entity or by a group of
      persons and/or entities in concert, or the sale or transfer of all or
      substantially all of the Company’s assets.

     

    (b)
       “Act”
      means
      the Securities Exchange Act of 1934, as amended and the rules and regulations
      promulgated thereunder.

     

    (c)
       “Board”
      means
      the Board of Directors of the Company.

     

    (d)
       “Cause”
      has the
      meaning set forth in Section 7(b).

     

    (e)
       “Change
      of Control”
      has the
      meaning set forth in Section 6(d).

     

    (f)
       “Code”
      means
      the Internal Revenue Code of 1986, as amended.

     

    (g)
       “Common
      Stock”
      means
      the voting common stock of the Company, par value $.01, any common stock into
      which the common stock may be converted and any common stock resulting from
      any
      reclassification of the common stock.

     

    (h)
       “Company”
      means
Lightstone
      Value Plus Real Estate Investment Trust II, Inc., a
      Maryland corporation.

     

    (i)
       “Company
      Voting Securities”
      has the
      meaning set forth in Section 6(d)(i).

     

    (j)
       “Corporate
      Transaction”
      has the
      meaning set forth in Section 6(d)(i).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (k)
       “Disability”
      means a
      permanent and total disability, as determined by the Board in its sole
      discretion, provided that in no event shall any disability that is not permanent
      and total disability within the meaning of Section 22(e)(3) of the Code be
      treated as a Disability. A Disability shall be deemed to occur at the time
      of
      the determination by the Board of the Disability.

     

    (l)
       “Effective
      Date”
      has the
      meaning set forth in Section 3.

     

    (m)
       “Fair
      Market Value” 
      means,
      for purposes of this Plan, unless otherwise required by any applicable provision
      of the Code or any regulations issued thereunder, as of any date, (a) if the
      Common Stock is not readily tradeable on an established securities market as
      determined under Section 409A of the Code, a value determined by the Board
      by
      the reasonable application of a reasonable valuation method in accordance with
      Section 409A of the Code or (b) if the Common Stock is readily tradeable on
      an
      established securities market as determined under Section 409A of the Code,
      a
      value based on the closing price reported for the Common Stock on the applicable
      date in accordance with Section 409A of the Code. For purposes of the grant
      of
      any Option, the applicable date shall be the date for which the last sales
      price
      is available at the time of grant.

     

    (n)
       “FINRA”
      means
      the
      Financial Industry Regulatory Authority, Inc.

     

    (o)
       “Incumbent
      Board”
      has the
      meaning set forth in Section 6(d)(ii).

     

    (p)
       “Non-Employee
      Directors”
      means
      directors of the Company who are not officers or employees of the Company or
      its
      subsidiaries.

     

    (q)
       “Option”
      means
      the right to purchase the number of Shares granted in the Option agreement
      at a
      prescribed purchase price on the terms specified in the Plan and the Option
      agreement. No Option awarded under this Plan is intended to be an “incentive
      stock option” within the meaning of Section 422 of the Code.

     

    (r)
       “Participant”
      means a
      Non-Employee Director who is granted an Option under the Plan, which Option
      has
      not expired or been cancelled.

     

    (s)
       “Person”
      means an
      individual, entity or group within the meaning of Section l3d-3 or 14d-1 of
      the
      Act.

     

    (t)
       “Plan”
      means
      this Lightstone Value Plus Real Estate Investment Trust II, Inc. 2009
      Non-Employee Director Stock Option Plan, as amended from time to
      time.

     

    (u)
       “Purchase
      Price”
      means
      the purchase price per Share.

     

    (v)
       “Securities
      Act”
      means
      the Securities Act of 1933, as amended.

     

    (w)
       “Section
      409A of the Code”
      means
      the nonqualified deferred compensation rules under Section 409A of the Code
      and
      any applicable Treasury regulation or other official guidance promulgated
      thereunder.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (x)
       “Share”
      means a
      share of Common Stock.

     

    (y)
       “Termination
      of Service”
      means
      termination of the relationship with the Company so that an individual is no
      longer a director of the Company.

     

    
      	
              3.
                

            	
              Effective
                Date/Expiration of Plan.

            


    

     

    The
      Plan
      shall become effective , 2009 (the “Effective
      Date”).
      No
      Option shall be granted under the Plan on or after the tenth anniversary of
      the
      Effective Date, but Options previously granted may extend beyond that
      date.

     

    
      	
              4.
                

            	
              Administration.

            


    

     

    (a)
       Duties
      of the Board.
      The
      Plan shall be administered by the Board. The Board shall have full authority
      to
      interpret the Plan and to decide any questions and settle all controversies
      and
      disputes that may arise in connection with the Plan; to establish, amend, and
      rescind rules for carrying out the Plan, to administer the Plan, subject to
      its
      provisions; to prescribe the form or forms of instruments evidencing Options
      and
      any other instruments required under the Plan (which need not be uniform) and
      to
      change such forms from time to time; and to make all other determinations and
      to
      take all such steps in connection with the Plan and the Options as the Board,
      in
      its sole discretion, deems necessary or desirable; provided,
      that
      all such determinations shall be in accordance with the express provisions,
      if
      any, contained in the Plan or Option agreement. The Board shall not be bound
      to
      any standards of uniformity or similarity of action, interpretation or conduct
      in the discharge of its duties hereunder, regardless of the apparent similarity
      of the matters coming before it. The determination, action or conclusion of
      the
      Board in connection with the foregoing shall be final, conclusive and binding
      on
      all parties. 

     

    (b)
       Advisors.
      The
      Board may designate the Secretary of the Company, other officers or employees
      of
      the Company or competent professional advisors to assist the Board in the
      administration of the Plan, and may grant authority to such persons (other
      than
      professional advisors) to grant an Option or to execute Option agreements or
      other documents on behalf of the Board, provided that no Participant may grant
      an Option or execute any Option agreement granting Options to such Participant.
      The Board may employ such legal counsel, consultants and agents as it may deem
      desirable for the administration of the Plan, and may rely upon any opinion
      received from any such counsel or consultant and any computation received from
      any such consultant or agent. Expenses incurred by the Board in the engagement
      of such counsel, consultant or agent shall be paid by the Company.

     

    (c)
       Indemnification.
      To the
      maximum extent permitted by law, no officer, member or former officer or member
      of the Board shall be liable for any action or determination made in good faith
      with respect to the Plan or any Option granted under it. To the maximum extent
      permitted by applicable law or the Certificate of Incorporation or By-Laws
      of
      the Company, as may be amended from time to time, and to the extent not covered
      by insurance, each officer, member or former officer or member of the Board
      shall be indemnified and held harmless by the Company against any cost or
      expense (including reasonable fees of counsel reasonably acceptable to the
      Company) or liability (including any sum paid in settlement of a claim with
      the
      approval of the Company), and advanced amounts necessary to pay the foregoing
      at
      the earliest time and to the fullest extent permitted, arising out of any act
      or
      omission to act in connection with the Plan, except to the extent arising out
      of
      such officer’s, member’s or former officer’s or member’s own fraud or bad faith.
      Such indemnification shall be in addition to any rights of indemnification
      the
      officers, members or former officers or members may have as directors under
      applicable law or under the Certificate of Incorporation or By-Laws of the
      Company or otherwise.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              5.
                

            	
              Shares;
                Adjustment Upon Certain
                Events.

            


    

     

    (a)
       Shares
      to be Delivered; Fractional Shares.
      Shares
      to be issued under the Plan shall be made available, at the discretion of the
      Board, either from authorized but unissued Shares or from issued Shares
      reacquired by the Company and held in treasury. No fractional Shares will be
      issued or transferred upon the exercise of any Option. In lieu thereof, the
      Company shall pay a cash adjustment equal to the same fraction of the Fair
      Market Value of one Share on the date of exercise.

     

    (b)
       Number
      of Shares.
      Subject
      to adjustment as provided in this Section 5, the maximum aggregate number of
      Shares authorized for issuance under the Plan shall be 75,000 Shares. If an
      Option is for any reason canceled, or expires or terminates unexercised, the
      Shares covered by such Option shall again be available for the grant of Options,
      within the limits provided by the preceding sentence. In addition, if Common
      Stock has been exchanged by a Participant as full or partial payment to the
      Company of the Purchase Price or if the number of shares of Common Stock
      otherwise deliverable has been reduced for full or partial payment to the
      Company of the Purchase Price, the number of shares of Common Stock exchanged
      or
      reduced shall again be available under the Plan.

     

    (c)
       Adjustments;
      Recapitalization, etc.
      The
      existence of the Plan and the Options granted hereunder shall not affect in
      any
      way the right or power of the Board or the stockholders of the Company to make
      or authorize any adjustment, recapitalization, reorganization or other change
      in
      the Company’s capital structure or its business, any merger or consolidation of
      the Company, any issue of bonds, debentures, preferred or prior preference
      stocks ahead of or affecting Common Stock, the dissolution or liquidation of
      the
      Company or any sale or transfer of all or part of its assets or business or
      any
      other corporate act or proceeding. If and whenever the Company takes any such
      action, however, the following provisions, to the extent applicable, shall
      govern:

     

    (i) If
      and
      whenever the Company shall effect a stock split, stock dividend, subdivision,
      recapitalization or combination of Shares or other changes in the Company’s
      Common Stock, (x) the Purchase Price (as defined herein) per Share and the
      number and class of Shares and/or other securities with respect to which
      outstanding Options thereafter may be exercised, and (y) the total number and
      class of Shares and/or other securities that may be issued under this Plan,
      shall be proportionately adjusted by the Board. The Board may also make such
      other adjustments as it deems necessary to take into consideration any other
      event (including, without limitation, accounting changes) if the Board
      determines that such adjustment is appropriate to avoid distortion in the
      operation of the Plan.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (ii) Subject
      to Section 5(c)(iii), if the Company merges or consolidates with one or more
      corporations, then from and after the effective date of such merger or
      consolidation, upon exercise of an Option theretofore granted, the Participant
      shall be entitled to purchase under such Option, in lieu of the number of Shares
      as to which such Option shall then be exercisable but on the same terms and
      conditions of exercise set forth in such Option, the number and class of Shares
      and/or other securities or property (including cash) to which the Participant
      would have been entitled pursuant to the terms of the agreement of merger or
      consolidation if, immediately prior to such merger or consolidation, the
      Participant had been the holder of record of the total number of Shares
      receivable upon exercise of such Option (whether or not then exercisable).
      In
      connection with any event described in this paragraph, the Board may provide,
      in
      its sole discretion, for the cancellation of any outstanding Options and payment
      in cash or other property in exchange therefor.

     

    (iii) In
      the
      event of an Acquisition Event, the Board may, in its discretion, and without
      any
      liability to any Participant, terminate all outstanding Options as of the
      consummation of the Acquisition Event by delivering notice of termination to
      each Participant at least 20 days prior to the date of consummation of the
      Acquisition Event; provided that, during the period from the date on which
      such
      notice of termination is delivered to the consummation of the Acquisition Event,
      each Participant shall have the right to exercise in full all of the Options
      that are then outstanding (without regard to limitations on exercise otherwise
      contained in the outstanding Option agreements or the Plan) but any such
      exercise shall be contingent upon and subject to the occurrence of the
      Acquisition Event, provided that if the Acquisition Event does not take place
      within a specified period after giving such notice for any reason whatsoever,
      the notice and exercise pursuant thereto shall be null and void. If the
      Acquisition Event does take place after giving such notice, any Option not
      exercised prior to the date of the consummation of such Acquisition Event shall
      be forfeited simultaneous with the consummation of the Acquisition Event. If
      an
      Acquisition Event occurs and the Board does not terminate the outstanding
      Options pursuant to the foregoing provisions, then the provisions of Section
      5(c)(ii) shall apply.

     

    (iv) If,
      as a
      result of any adjustment made pursuant to the preceding paragraphs of this
      Section 5, any Participant shall become entitled upon exercise of an Option
      to
      receive any securities other than Common Stock, then the number and class of
      securities so receivable thereafter shall be subject to adjustment from time
      to
      time in a manner and on terms as nearly equivalent as practicable to the
      provisions with respect to the Common Stock set forth in this Section 5, as
      determined by the Board in its discretion.

     

    (v) Except
      as
      hereinbefore expressly provided, the issuance by the Company of shares of stock
      of any class, or securities convertible into shares of stock of any class,
      for
      cash, property, labor or services, upon direct sale, upon the exercise of rights
      or warrants to subscribe therefor, or upon conversion of shares or other
      securities, and in any case whether or not for fair value, shall not affect,
      and
      no adjustment by reason thereof shall be made with respect to the number and
      class of Shares and/or other securities or property subject to Options
      theretofore granted of the Purchase Price per Share.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (d)
       Unless
      determined otherwise by the Board, any adjustment made to outstanding Options
      under this Section 5 shall be made in such a manner that is (i) for Options
      that
      are not subject to Section 409A of the Code, consistent with the requirements
      of
      Section 409A of the Code in order for any such Options to remain exempt from
      the
      requirements of Section 409A of the Code, or (ii) for Options that are subject
      to Section 409A of the Code, in accordance with the requirements of Section
      409A
      of the Code.

     

    
      	
              6.
                

            	
              Awards
                and Terms of Options.

            


    

     

    (a)
       Grant.
      Options
      shall not be issued hereunder unless and until either (i) the Company offers
      options to the general public on the same terms or (ii) the rules of the North
      American Securities Administrators Association permit real estate investment
      trusts to grant compensatory stock options to independent directors without
      offering such options to the general public. 

     

    (b)
       Purchase
      Price.
      The
      Purchase Price per Share of Common Stock subject to an Option granted hereunder
      shall be determined by the Board at the time of grant; provided, that the
      Purchase Price per Share shall not be less than 100% of the Fair Market Value
      of
      the Share of Common Stock at the time of grant.

     

    (c)
       Exercisability.
      Except
      as
      otherwise provided herein or in the applicable Option agreement, any Option
      granted to a Participant shall vest and become exercisable on the second
      anniversary of the date of grant, subject to the Participant’s continued service
      as a Non-Employee Director through such date. No Option shall be exercisable
      after the expiration of ten (10) years from the date of grant.

     

    (d)
       Acceleration
      of Exercisability on Change of Control. All
      Options granted and not previously exercisable shall become exercisable
      immediately upon a Change of Control (as defined herein). For this purpose,
      a
“Change of Control” shall be deemed to have occurred upon:

     

    (i) an
      acquisition by any Person of beneficial ownership (within the meaning of Rule
      13d-3 promulgated under the Act) of 33% or more of either (A) the then
      outstanding Shares or (B) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Company
      Voting Securities”);
      excluding, however, the following: (w) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a conversion
      privilege unless the security being so converted was itself acquired directly
      from the Company, (x) any acquisition by the Company, (y) any acquisition by
      an
      employee benefit plan (or related trust) sponsored or maintained by the Company
      or (z) any acquisition by any entity pursuant to a reorganization, merger,
      consolidation or similar corporate transaction (in each case, a “Corporate
      Transaction”),
      if,
      pursuant to such Corporate Transaction, the conditions described in clauses
      (A),
      (B) and (C) of paragraph (iii) of this Section are satisfied; or 

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (ii) a
      change
      in the composition of the Board such that the individuals who, as of the
      Effective Date hereof, constitute the Board (the Board as of the Effective
      Date
      hereof shall be hereinafter referred to as the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Board; provided that
      for
      purposes of this subsection any individual who becomes a member of the Board
      subsequent to the Effective Date hereof whose election, or nomination for
      election by the Company’s stockholders, was approved by a vote of at least a
      majority of those individuals who are members of the Board and who are also
      members of the Incumbent Board (or deemed to be such pursuant to this proviso)
      shall be considered as though such individual were a member of the Incumbent
      Board; but, provided further, that any such individual whose initial assumption
      of office occurs as a result of either an actual or threatened election contest
      (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
      the
      Act) or other actual or threatened solicitation of proxies or consents by or
      on
      behalf of a Person other than the Board shall not be so considered as a member
      of the Incumbent Board; or 

     

    (iii) the
      approval by the stockholders of the Company of a Corporate Transaction or,
      if
      consummation of such Corporate Transaction is subject, at the time of such
      approval by stockholders, to the consent of any government or governmental
      agency, the obtaining of such consent (either explicitly or implicitly by
      consummation); excluding, however, such a Corporate Transaction pursuant to
      which (A) all or substantially all of the individuals and entities who are
      the
      beneficial owners, respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such Corporate Transaction will beneficially
      own, directly or indirectly, more than 60% of, respectively, the outstanding
      shares of common stock of the entity resulting from such Corporate Transaction
      and the combined voting power of the outstanding voting securities of such
      entity entitled to vote generally in the election of directors, in substantially
      the same proportions as their ownership, immediately prior to such Corporate
      Transaction, of the outstanding Shares and Company Voting Securities, as the
      case may be, (B) no Person (other than the Company, any employee benefit plan
      (or related trust) of the Company or the entity resulting from such Corporate
      Transaction and any Person beneficially owning, immediately prior to such
      Corporate Transaction, directly or indirectly, 33% or more of the outstanding
      Shares or Company Voting Securities, as the case may be) will beneficially
      own,
      directly or indirectly, 33% or more of, respectively, the outstanding shares
      of
      Common Stock of the entity resulting from such Corporate Transaction or the
      combined voting power of the then outstanding securities of such entity entitled
      to vote generally in the election of directors and (C) individuals who were
      members of the Incumbent Board will constitute at least a majority of the
      members of the board of directors of the corporation resulting from such
      Corporate Transaction; notwithstanding the foregoing, no Change of Control
      will
      occur if two-thirds (2/3)
      of the
      Incumbent Board approves the Corporate Transaction; or 

     

    (iv) the
      approval of the stockholders of the Company of (A) a complete liquidation or
      dissolution of the Company or (B) the sale or other disposition of all or
      substantially all of the assets of the Company; excluding; however, such a
      sale
      or other disposition to an entity with respect to which, following such sale
      or
      other disposition, (x) more than 60% of, respectively, the then outstanding
      shares of common stock of such entity and the combined voting power of the
      then
      outstanding voting securities of such entity entitled to vote generally in
      the
      election of directors will be then beneficially owned, directly or indirectly,
      by all or substantially all of the individuals and entities who were the
      beneficial owners respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such sale or other disposition in substantially
      the same proportion as their ownership, immediately prior to such sale or other
      disposition, of the outstanding Shares and Company Voting Securities, as the
      case may be, (y) no Person (other than the Company and any employee benefit
      plan
      (or related trust) of the Company or such entity and any Person beneficially
      owning, immediately prior to such sale or other disposition, directly or
      indirectly, 33% or more of the outstanding Shares or Company Voting Securities,
      as the case may be) will beneficially own, directly or indirectly, 33% or more
      of, respectively, the then outstanding shares of common stock of such entity
      and
      the combined voting power of the then outstanding voting securities of such
      entity entitled to vote generally in the election of directors and (z)
      individuals who were members of the Incumbent Board will constitute at least
      a
      majority of the members of the board of directors of such entity. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (e)
       Exercise
      of Options.

     

    (i) A
      Participant may elect to exercise an Option by giving written notice to the
      Board of such election and of the number of Shares such Participant has elected
      to purchase pursuant to the Option, accompanied by payment in full of the
      aggregate Purchase Price for the number of Shares for which the Option is being
      exercised.

     

    (ii) Shares
      purchased pursuant to the exercise of an Option shall be paid for at the time
      of
      exercise as follows:

     

    (A) in
      cash
      or by check, bank draft or money order payable to the order of the Company;
      

     

    (B) if
      so
      permitted by the Board: (x) through the delivery of unencumbered Shares
      (including Shares being acquired pursuant to the Option then being exercised),
      provided such Shares (or such Option) have been owned by the Participant for
      such period as may be required by applicable accounting standards to avoid
      a
      charge to earnings or (y) through a combination of Shares and cash as provided
      above, provided, that, if the Shares delivered upon exercise of the Option
      is an
      original issue of authorized Shares, at least so much of the Purchase Price
      as
      represents the par value of such Shares shall be paid in cash or by a
      combination of cash and Shares; 

     

    (C)
      to
      the extent permitted by applicable law, if the Common Stock is traded on a
      national securities exchange, the Nasdaq Stock Market or quoted on a national
      quotation system sponsored by FINRA, through the delivery of irrevocable
      instructions to a broker to deliver promptly to the Company an amount equal
      to
      the aggregate Purchase Price; or 

     

    (D) on
      such
      other terms and conditions as may be acceptable to the Committee and in
      accordance with applicable law. The Company will not issue Shares in
      certificated form. The Company's transfer agent maintains a stock ledger that
      contains the name and address of each stockholder and the number of Shares
      that
      the stockholder holds. The Company shall provide the Participant, pursuant
      to
      the Company's Articles of Amendment and Restatement, with a notice containing
      information about the Shares purchased, in lieu of issuance of a Share
      certificate.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (iii) REIT
      Status.
      Notwithstanding anything herein to the contrary, no Option granted under this
      Plan may be exercised if such exercise would jeopardize the Company’s status as
      a “real estate investment trust” as defined under the Code. 

     

    
      	
              7.
                

            	
              Effect
                of Termination of Service.

            


    

     

    (a)
       Death,
      Disability, or Retirement. Except
      as
      otherwise provided in the Participant’s Option agreement or in this Plan, upon a
      Termination of Service, all outstanding Options then exercisable and not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable by the Participant to the extent not theretofore exercised for
      the
      following time periods (subject to Section 6(c)):

     

    (i) in
      the
      event of the Participant’s death, such Options shall remain exercisable (by the
      Participant’s estate or by the person given authority to exercise such Options
      by the Participant’s will or by operation of law) for a period of one (1) year
      from the date of the Participant’s death; and 

     

    (ii) in
      the
      event the Participant retires at or after age 65 (or, with the consent of the
      Board, before age 65), or, if the Participant’s services terminate due to
      Disability, such Options shall remain exercisable for one (1) year from the
      date
      of the Participant’s Termination of Service.

     

    (b)
       Cause.
      Upon
      the Termination of Service of a Participant for Cause (as defined herein) or
      if
      it is discovered after a Termination of Service that such Participant had
      engaged in conduct that would have justified a Termination of Service for Cause,
      all outstanding Options (whether vested or unvested) shall immediately be
      canceled, provided that upon any such termination the Board may, in its
      discretion, require the Participant to promptly pay to the Company (and the
      Company shall have the right to recover) any gain the Participant realized
      as a
      result of the exercise of any Option that occurred within one (1) year prior
      to
      such Termination of Service or the discovery of conduct that would have
      justified a Termination of Service for Cause. Termination of Service shall
      be
      deemed to be for “Cause” for purposes of this Section 7(b) if the Participant
      shall have committed fraud or any felony in connection with the Participant’s
      duties as a director of the Company or willful misconduct or any act of
      disloyalty, dishonesty, fraud or breach of trust, confidentiality or fiduciary
      duties as to the Company or the commission of any other act which causes or
      may
      reasonably be expected to cause economic or reputational injury to the Company
      or any other act or failure to act that constitutes “cause” for removal of a
      director under applicable Maryland law.

     

    (c)
       Other
      Termination.
      In the
      event of a Termination of Service for any reason other than as provided in
      Sections 7(a) and 7(b), all outstanding Options then exercisable and not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable (to the extent exercisable by such Participant immediately before
      such termination) for a period of three (3) months after such termination,
      but
      not beyond the original stated term of the Option.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
              8.
                

            	
              Nontransferability
                of Options.

            


    

     

    No
      Option
      shall be transferable by the Participant otherwise than by will or under
      applicable laws of descent and distribution, and during the lifetime of the
      holder may be exercised only by the holder or his or her guardian or legal
      representative. In addition, no Option shall be assigned, negotiated, pledged
      or
      hypothecated in any way (whether by operation of law or otherwise), and no
      Option shall be subject to execution, attachment or similar process. Upon any
      attempt to transfer, assign, negotiate, pledge or hypothecate any Option, or
      in
      the event of any levy upon any Option by reason of any execution, attachment
      or
      similar process contrary to the provisions hereof, such Option shall immediately
      be cancelled. Notwithstanding the foregoing, the Board may determine at the
      time
      of grant or thereafter, that an Option that is otherwise non transferable is
      transferable in whole or in part and in such circumstances, and under such
      conditions, as specified by the Board.

     

    
      	
              9.
                

            	
              Rights
                as a Stockholder.

            


    

     

    A
      holder
      of an Option shall have no rights as a stockholder with respect to any Shares
      covered by such holder’s Option until such holder shall have become the holder
      of record of such Shares, and no adjustments shall be made for dividends in
      cash
      or other property or distributions or other rights in respect to any such
      Shares, except as otherwise specifically provided for in this Plan.

     

    
      	
              10.
                

            	
              Determinations.

            


    

     

    Each
      determination, interpretation or other action made or taken pursuant to the
      provisions of this Plan by the Board shall be final, conclusive and binding
      for
      all purposes and upon all persons, including, without limitation, the holders
      of
      any Options and Non-Employee Directors and their respective heirs, executors,
      administrators, personal representatives and other successors in
      interest.

     

    
      	
              11.
                

            	
              Termination,
                Amendment and
                Modification.

            


    

     

    Notwithstanding
      any other provision of this Plan, the Board may at any time, and from time
      to
      time, amend, in whole or in part, any or all of the provisions of this Plan,
      or
      suspend or terminate it entirely, retroactively or otherwise; provided, however,
      that, unless otherwise required by law or specifically provided herein, the
      rights of a Participant with respect to Options granted prior to such amendment,
      suspension or termination, may not be impaired without the consent of such
      Participant; provided further, that no amendment may be made without stockholder
      approval if stockholder approval is required under applicable law.

     

    The
      Board
      may amend the terms of any Option theretofore granted, prospectively or
      retroactively, but, subject to Section 5 above or as otherwise specifically
      provided herein, no such amendment or other action by the Board shall impair
      the
      rights of any holder without the holder’s consent.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Notwithstanding
      any provision of the Plan to the contrary, in the event that the Board
      determines that any Option may be subject to Section 409A of the Code, the
      Board may adopt such amendment to the Plan and the applicable Option agreement
      or adopt other policies and procedures (including amendments, policies and
      procedures with retroactive effect), or take any other actions that the Board
      determines are necessary or appropriate, without the consent of the Participant,
      to (1) exempt the Option from Section 409A of the Code and/or preserve
      the intended tax treatment of the benefits provided with respect to the Option
      or (2) comply with the requirements of Section 409A of the Code.


     

    
      	
              12.
                

            	
              Non-Exclusivity.

            


    

     

    The
      adoption of the Plan by the Board shall not be construed as creating any
      limitations on the power of the Board to adopt such other incentive arrangements
      as it may deem desirable, including, without limitation, the granting or
      issuance of Options, Shares and/or other incentives otherwise than under the
      Plan, and such arrangements may be either generally applicable or limited in
      application.

     

    
      	
              13.
                

            	
              Use
                of Proceeds.

            


    

     

    The
      proceeds of the sale of Shares subject to Options under the Plan are to be
      added
      to the general funds of the Company and used for its general corporate purposes
      as the Board shall determine.

     

    
      	
              14.
                

            	
              General
                Provisions.

            


    

     

    (a)
       Right
      to Terminate Services.
      Neither
      the adoption of the Plan nor the grant of Options shall impose any obligations
      on the Company to retain any Participant as a director nor shall it impose
      any
      obligation on the part of any Participant to remain a director.

     

    (b)
       Purchase
      for Investment. If
      the
      Board determines that the law so requires, the holder of an Option granted
      hereunder shall, upon any exercise or conversion thereof, execute and deliver
      to
      the Company a written statement, in form satisfactory to the Company,
      representing and warranting that such Participant is purchasing or accepting
      the
      Shares then acquired for such Participant’s own account and not with a view to
      the resale or distribution thereof, that any subsequent offer for sale or sale
      of any such Shares shall be made either pursuant to (i) a registration statement
      in appropriate form under the Securities Act, which registration statement
      shall
      have become effective and shall be current with respect to the Shares being
      offered and sold, or (ii) a specific exemption from the registration
      requirements of the Securities Act, and that in claiming such exemption the
      holder will, prior to any offer for sale or sale of such Shares, obtain a
      favorable written opinion, satisfactory in form and substance to the Company,
      from counsel approved by the Company as to the availability of such
      exception.

     

    (c)
       Trusts,
      etc. Nothing
      contained in the Plan and no action taken pursuant to the Plan (including,
      without limitation, the grant of any Option thereunder) shall create or be
      construed to create a trust of any kind, or a fiduciary relationship, between
      the Company and any Participant or the executor, administrator or other personal
      representative or designated beneficiary of such Participant, or any other
      persons. Any reserves that may be established by the Company in connection
      with
      the Plan shall continue to be part of the general funds of the Company, and
      no
      individual or entity other than the Company shall have any interest in such
      funds until paid to a Participant. If and to the extent that any Participant
      or
      such Participant’s executor, administrator, or other personal representative, as
      the case may be, acquires a right to receive any payment from the Company
      pursuant to the Plan, such right shall be no greater than the right of an
      unsecured general creditor of the Company.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (d)
       Notices.
      Each
      Participant shall be responsible for furnishing the Board with the current
      and
      proper address for the mailing to such Participant of notices and the delivery
      to such Participant of agreements, Shares and payments. Any notices required
      or
      permitted to be given shall be deemed given if directed to the person to whom
      addressed at such address and mailed by regular United States mail, first class
      and prepaid. If any item mailed to such address is returned as undeliverable
      to
      the addressee, mailing will be suspended until the Participant furnishes the
      proper address.

     

    (e)
       Severability
      of Provisions.
      If any
      provisions of the Plan shall be held invalid or unenforceable, such invalidity
      or unenforceability shall not affect any other provisions of the Plan, and
      the
      Plan shall be construed and enforced as if such provisions had not been
      included.

     

    (f)
       Payment
      to Minors, Etc. Any
      benefit payable to or for the benefit of a minor, an incompetent person or
      other
      person incapable of receipting therefor shall be deemed paid when paid to such
      person’s guardian or to the party providing or reasonably appearing to provide
      for the care of such person, and such payment shall fully discharge the Board,
      the Company and their employees, agents and representatives with respect
      thereto.

     

    (g)
       Readings
      and Captions.
      The
      headings and captions herein are provided for reference and convenience only.
      They shall not be considered part of the Plan and shall not be employed in
      the
      construction of the Plan.

     

    (h)
       Other
      Benefits.
      No
      award under this Plan shall be deemed compensation for purposes of computing
      benefits under any retirement plan of the Company or its subsidiaries nor affect
      any benefits under any other benefit plan now or subsequently in effect under
      which the availability or amount of benefits is related to the level of
      compensation. 

     

    (i)
       Section
      409A of the Code.
      Options
      granted under the Plan are intended to be exempt from Section 409A of the Code.
      Notwithstanding the foregoing, in no event whatsoever shall the Company be
      liable for any additional tax, interest or penalty that may be imposed on a
      Participant by Section 409A of the Code or any damages for failing to comply
      with Section 409A of the Code.

     

    
      	
              15.
                

            	
              Uncertificated
                Shares; Payment of Expenses; and Section 16(b) of the
                Act.

            


    

     

    (a)
       Uncertificated
      Shares.
      Upon
      any exercise of an Option and payment of the Purchase Price as provided in
      such
      Option, Shares as to which such Option has been exercised shall be issued by
      the
      Company in the name of the person or persons exercising such Option along with
      a
      notice to the Participant containing information about the Shares purchased,
      in
      lieu of issuance of a Share certificate, and the Company's transfer agent
      maintains a stock ledger that contains the name and address of each stockholder
      and the number of Shares that the stockholder holds. The Company will not issue
      Shares in certificated form.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)
       Payment
      of Expenses.
      The
      Company shall pay all issue or transfer taxes with respect to the issuance
      or
      transfer of Shares, as well as all fees and expenses necessarily incurred by
      the
      Company in connection with such issuance or transfer and with the administration
      of the Plan.

     

    (c)
       Section
      16(b) of the Act.
      All
      elections and transactions under the Plan by persons subject to Section 16
      of
      the Act involving Shares are intended to comply with any applicable condition
      under Rule 16b-3, provided,
      however, noncompliance with the requirements of Rule 16b-3 shall not affect
      the
      validity of an Option granted under this Plan.
      To the
      extent any provision of the Plan or action by the Board fails to so comply,
      it
      shall be deemed null and void. The Board may establish and adopt written
      administrative guidelines, designed to facilitate compliance with Section 16(b)
      of the Act, as it may deem necessary or proper for the administration and
      operation of the Plan and the transaction of business thereunder.

     

    
      	
              16.
                

            	
              Listing
                of Shares and Related
                Matters.

            


    

     

    If
      at any
      time the Board shall determine in its sole discretion that the listing,
      registration or qualification of the Shares covered by the Plan upon any
      national securities exchange or under any state or federal law, or the consent
      or approval of any governmental regulatory body, is necessary or desirable
      as a
      condition of, or in connection with, the award or sale of Shares under the
      Plan,
      no Shares will be delivered unless and until such listing, registration,
      qualification, consent or approval shall have been effected or obtained, or
      otherwise provided for, free of any conditions not acceptable to the
      Board.

     

    
      	
              17.
                

            	
              Governing
                Law.

            


    

     

    This
      Plan
      shall be governed and construed in accordance with the laws of the State of
      Maryland (regardless of the law that might otherwise govern under applicable
      principles of conflict of laws). 

     

    
      
         

      

      
        13