Document:

Unassociated Document

    FORM
      OF
      MANAGEMENT AGREEMENT

     

      This
      management agreement (this “Management
      Agreement”)
      is
      made and entered into as of the day of , 2008, by and among LIGHTSTONE VALUE
      PLUS REAL ESTATE INVESTMENT TRUST II, INC., a Maryland corporation (the
“Company”),
      LIGHTSTONE VALUE PLUS REIT II LP, a Delaware limited partnership (the
“OP”,
      and
      together with the Company, the “Owner”),
      and
BEACON
      PROPERTY MANAGEMENT,
      LLC, a
      Delaware limited liability company (the “Manager”).

     

    WHEREAS,
      the OP was organized to acquire, own, operate, lease and manage real estate
      properties on behalf of the Company; and

     

    WHEREAS,
      the Company intends to continue to raise money from the sale of its common
      stock
      to be used, net of payment of certain offering costs and expenses, for
      investment in the acquisition or rehabilitation of income-producing real estate
      to be acquired and held by the Company or by the OP on behalf of the Company;
      and

     

    WHEREAS,
      Owner wishes to retain Manager to manage and coordinate the leasing of certain
      real estate properties acquired by Owner, and the Manager wishes to be so
      retained, all under the terms and conditions set forth in this Management
      Agreement. 

     

    NOW,
      THEREFORE, in consideration of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto, intending to be legally bound hereby, do hereby agree as
      follows:

     

    ARTICLE
      I.

     

    DEFINITIONS

     

    Except
      as
      otherwise specified or as the context may otherwise require, the following
      terms
      have the respective meanings set forth below for all purposes of this Management
      Agreement, and the definitions of such terms are equally applicable both to
      the
      singular and plural forms thereof

     

    “Account”
has
      the
      meaning set forth in Section
      2.3(i)
      hereof.

     

    “Affiliate”
means
      a
      person who is (i) in the case of an individual, any relative of such person,
      (ii) any officer, director, trustee, partner, manager, employee or holder of
      ten
      percent (10%) or more of any class of the voting securities of or equity
      interest in such person; (iii) any corporation, partnership, limited liability
      company, trust or other entity controlling, controlled by or under common
      control with such person; or (iv) any officer, director, trustee, partner,
      manager, employee or holder of ten percent (10%) or more of the outstanding
      voting securities of any corporation, partnership, limited liability company,
      trust or other entity controlling, controlled by or under common control with
      such person. For purposes of this definition, the term “controls,” “is
      controlled by,” or “is under common control with” shall mean the possession,
      direct or indirect, of the power to direct or cause the direction of the
      management and policies of an entity, whether through the ownership of voting
      rights, by contract or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Director”
means
      a
      member of the board of directors of the Company.

     

    “Funds
      From Operations”
shall
      mean net income (computed in accordance with GAAP), excluding gains or losses
      from debt restructuring and sales of Properties, plus depreciation of real
      property and amortization, and after adjustments for unconsolidated partnerships
      and joint ventures.

     

    “GAAP”
shall
      mean United States generally accepted accounting principals, consistently
      applied.

     

    “Gross
      Revenues”
means
      all amounts actually collected as rents or other charges for the use and
      occupancy of the Properties, but shall exclude interest and other investment
      income of Owner and proceeds received by Owner for a sale, exchange,
      condemnation, eminent domain taking, casualty or other disposition of assets
      of
      Owner.

     

    “Improvements”
means
      buildings, structures, equipment from time to time located on the Properties
      and
      all parking and common areas located on the Properties.

     

    “Independent
      Director”
shall
      have the meaning set forth in the charter of the Company as in effect from
      time
      to time.

     

    “Management
      Fees”
has
      the
      meaning set forth in Section
      4.1
      hereof.

     

    “Properties”
means
      all real estate properties owned by Owner and all tracts as yet unspecified
      but
      to be acquired by Owner containing income-producing Improvements or on which
      Owner will rehabilitate income-producing Improvements. For the purposes of
      this
      Management Agreement, the term “Properties” shall only refer to residential
      properties and not lodging, retail, industrial or office properties.

     

    “Share”
shall
      mean a share of the common stock, par value $0.01, of the Company.

     

    ARTICLE
      II

    

    APPOINTMENT
      OF MANAGER; SERVICES TO BE PERFORMED

     

    2.1  Appointment
      of Manager.
      Owner
      hereby engages and retains Manager as the sole and exclusive manager and agent
      of the Properties, and Manager hereby accepts such appointment, all on the
      terms
      and conditions hereinafter set forth, it being understood that this Management
      Agreement shall cause Manager to be, at law, Owner’s agent upon the terms
      contained herein.

     

    2.2  General
      Duties.
      Manager
      shall devote its best efforts to performing its duties hereunder to manage,
      operate, maintain and lease the Properties in a diligent, careful and vigilant
      manner. The services of Manager are to be of scope and quality not less than
      those generally performed by professional property managers of other similar
      properties in the area. Manager shall make available to Owner the full benefit
      of the judgment, experience and advice of the members of Manager’s organization
      and staff with respect to the policies to be pursued by Owner relating to the
      operation and leasing of the Properties.

     

    
      
        
        

      

      
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    2.3  Specific
      Duties.
      Manager’s duties include the following:

     

    
      	(a)  	
              Lease
                Obligations.
                Manager shall perform all duties of the landlord under all leases
                insofar
                as such duties relate to operation, maintenance, and day-to-day
                management. Manager shall also provide or cause to be provided, at
                Owner’s
                expense, all services normally provided to tenants of like premises,
                including, where applicable and without limitation, gas, electricity
                or
                other utilities required to be furnished to tenants under leases,
                normal
                repairs and maintenance, and cleaning, and janitorial service. Manager
                shall arrange for and supervise the performance of all installations
                and
                improvements in space leased to any tenant which are either expressly
                required under the terms of the lease of such space or which are
                customarily provided to tenants.

            

    

     

    
      	(b)  	
              Maintenance.
                Manager shall cause the Properties to be maintained in the same manner
                as
                similar properties in the area. Manager’s duties and supervision in this
                respect shall include, without limitation, cleaning of the interior
                and
                the exterior of the Improvements and the public common areas on the
                Properties and the making and supervision of repair, alterations,
                and
                decoration of the Improvements, subject to and in strict compliance
                with
                this Management Agreement and any applicable leases. Construction
                and
                rehabilitation activities undertaken by the Manager, if any, will
                be
                limited to activities related to the management, operation, maintenance,
                and leasing of the Property (e.g., repairs, renovations, and leasehold
                improvements).

            

    

     

    
      	(c)  	
              Leasing
                Functions.
                Manager shall coordinate the leasing of the Properties and shall
                negotiate
                and use its best efforts to secure executed leases from qualified
                tenants,
                and to execute same on behalf of Owner, if requested, for available
                space
                in the Properties, such leases to be in form and on terms approved
                by
                Owner and Manager, and to bring about complete leasing of the Properties.
                Manager shall be responsible for the hiring of all leasing agents,
                as
                necessary for the leasing of the Properties, and to otherwise oversee
                and
                manage the leasing process on behalf of the
                Owner.

            

    

     

    
      	(d)  	
              Notice
                of Violations.
                Manager shall forward to Owner promptly upon receipt all notices
                of
                violation or other notices from any governmental authority, and board
                of
                fire underwriters or any insurance company, and shall make such
                recommendations regarding compliance with such notice as shall be
                appropriate.

            

    

     

    
      	(e)  	
              Personnel.
                Any personnel hired by Manager to maintain, operate and lease the
                Property
                shall be the employees or independent contractors of Manager and
                not of
                the Owner. Manager shall use due care in the selection and supervision of
                such employees or independent contractors. Manager shall be responsible
                for the preparation of and shall timely file all payroll tax reports
                and
                timely make payments of all withholding and other payroll taxes with
                respect to each employee.

            

    

     

    
      	(f)  	
              Utilities
                and Supplies.
                Manager shall enter into or renew contracts for electricity, gas,
                steam,
                landscaping, fuel, oil, maintenance and other services as are customarily
                furnished or rendered in connection with the operation of similar
                rental
                property in the area.

            

    

     

    
      
        
        

      

      
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      	(g)  	
              Expenses.
                Manager shall analyze all bills received for services, work and supplies
                in connection with the maintaining and operating the Properties,
                pay all
                such bills, and, if requested by Owner, pay, when due, utility and
                water
                charges, sewer rent and assessments, any applicable taxes, including,
                without limitation, any real estate taxes, and any other amount payable
                in
                respect to the Properties. All bills shall be paid by Manager within
                the
                time required to obtain discounts, if any. Owner may from time to
                time
                request that Manager forward certain bills to Owner promptly after
                receipt, and Manager shall comply with any such request. It is understood
                that the payment of real property taxes and assessment and insurance
                premiums will be paid out of the Account (as hereinafter defined)
                by
                Manager. All expenses shall be billed at net cost (i.e., less all
                rebates,
                commissions, discounts and allowances, however
                designed).

            

    

     

    
      	(h)  	
              Monies
                Collected.
                Manager shall collect all rent and other monies from tenants and
                any sums
                otherwise due Owner with respect to the Properties in the ordinary
                course
                of business. In collecting such monies, Manager shall inform tenants
                of
                the Properties that all remittances are to be in the form of a check
                or
                money order. Owner authorizes Manager to request, demand, collect
                and
                receipt for all such rent and other monies and to institute legal
                proceedings in the name of Owner for the collection thereof and for
                the
                dispossession of any tenant in default under its lease.
                

            

    

     

    
      	(i)  	
              Banking
                Accommodations.
                Manager shall establish and maintain a separate checking account
                (the
                “Account”)
                for funds relating to the Properties. All monies deposited from time
                to
                time in the Account shall be deemed to be trust funds and shall be
                and
                remain the property of Owner and shall be withdrawn and disbursed
                by
                Manager for the account of Owner only as expressly permitted by this
                Management Agreement for the purposes of performing the obligations
                of
                Manager hereunder. No monies collected by Manager on Owner’s behalf shall
                be commingled with funds of Manager. The Account shall be maintained,
                and
                monies shall be deposited therein and withdrawn therefrom, in accordance
                with the following:

            

    

     

    (i)  All
      sums
      received from rents and other income from the Properties shall be promptly
      deposited by Manager in the Account. Manager shall have the right to designate
      two or more persons who shall be authorized to draw against the Account, but
      only for purposes authorized by this Management Agreement.

     

    (ii)  All
      sums
      due to Manager hereunder, whether for compensation, reimbursement for
      expenditures, or otherwise, as herein provided, shall be a charge against the
      operating revenues of the Properties and shall be paid and/or withdrawn by
      Manager from the Account prior to the making of any other disbursements
      therefrom.

     

    (iii)  
      By the
      30th day of the first month following each calendar quarter, Manager shall
      forward to Owner net operating proceeds from the preceding quarter, retaining
      at
      all times, however a reserve of $5,000, in addition to any amounts otherwise
      provided in the budget.

     

    
      
        
        

      

      
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      	(j)  	
              Tenant
                Complaints.
                Manager shall maintain business-like relations with the tenants of
                the
                Properties.

            

    

     

    
      	(k)  	
              Ownership
                Agreements.
                Manager has received copies of the Agreement of Limited Partnership
                of the
                OP and the constitutive documents of the Company (collectively, the
                “Ownership
                Agreements”)
                and is familiar with the terms thereof. Manager shall use reasonable
                care
                to avoid any act or omission which, in the performance of its duties
                hereunder, shall in any way conflict with the terms of the Ownership
                Agreements.

            

    

     

    
      	(l)  	
              Signs.
                Manager shall place and remove, or cause to be placed and removed,
                such
                signs upon the Properties as Manager deems appropriate, subject,
                however,
                to the terms and conditions of the leases and to any applicable ordinances
                and regulations.

            

    

     

    2.4  Approval
      of Leases, Contracts, Etc.
      In
      fulfilling its duties to the Owner, Manager may and hereby is authorized to
      enter into any leases, contracts or agreements on behalf of the Owner in the
      ordinary course of the management, operation, maintenance and leasing of the
      Property.

     

    2.5  Accounting,
      Records and Reports.

     

    
      	(a)  	
              Records.
                Managers shall maintain all office records and books of account and
                shall
                record therein, and keep copies of, each invoice received from services,
                work and supplies ordered in connection with the maintenance and
                operation
                of the Properties. Such records shall be maintained on a double entry
                basis. Owner and persons designated by Owner shall at all reasonable
                time
                have access to and the right to audit and make independent examinations
                of
                such records, books and accounts and all vouchers, files and all
                other
                material pertaining to the Properties and this Management Agreement,
                all
                of which Manager agrees to keep safe, available and separate from
                any
                records not pertaining to the Properties, at a place recommended
                by
                Manager and approved by Owner.

            

    

     

    
      	(b)  	
              Quarterly
                Reports.
                On or before the 30th day of the first month following each calendar
                quarter for which such report or statement is prepared and during
                the term
                of this Management Agreement, Manager shall prepare and submit to
                Owner
                the following reports and
                statements:

            

    

     

    
      	(i)  	
              Rental
                collection record;

            

    

     

    
      	(ii)  	
              Quarterly
                operating statement;

            

    

     

    
      	(iii)  	
              Copy
                of cash disbursements ledger entries for such period, if
                requested;

            

    

     

    
      	(iv)  	
              Copy
                of cash receipts ledger entries for such period, if
                requested;

            

    

     

    
      	(v)  	
              The
                original copies of all contracts entered into by Manager on behalf
                of
                Owner during such period, if requested;
                and

            

    

     

    
      
        
        

      

      
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      	(vi)  	
              Copy
                of ledger entries for such period relating to security deposits maintained
                by Manager, if requested.

            

    

     

    
      	(c)  	
              Budgets
                and Leasing Plans.
                Not later than November 15 of each calendar year, Manager shall prepare
                and submit to Owner for its approval an operating budget and a marketing
                and leasing plan on the Properties for the calendar year immediately
                following such submission. The budget and leasing plan shall be in
                the
                form of the budget and plan approved by Owner prior to the date thereof.
                As often as reasonably necessary during the period covered by any
                such
                budget, Manager may submit to Owner for its approval an updated budget
                or
                plan incorporating such changes as shall be necessary to reflect
                cost
                over-runs and the like during such period. If Owner does not disapprove
                any such budget within 30 days after receipt thereof by Owner, such
                budget
                shall be deemed approved. If Owner shall disapprove any such budget
                or
                plan, it shall so notify Manager within said 30-day period and explain
                the
                reasons therefor. Manager will not incur any costs other than those
                estimated in any budget except for:

            

    

     

    
      	(i)  	
              maintenance
                or repair costs under $5,000; 

            

    

     

    
      	(ii)  	
              costs
                incurred in emergency situations in which action is immediately necessary
                for the preservation or safety of the Property, or for the safety
                of
                occupant or other person (or to avoid the suspension of any necessary
                service of the Property);

            

    

     

    
      	(iii)  	
              expenditures
                for real estate taxes and assessment;
                and

            

    

     

    
      	(iv)  	
              maintenance
                supplies calling for an aggregate purchase price less than
                $25,000.

            

    

     

    
      	(d)  	
              Returns
                Required by Law.
                Manager shall execute and file when due all forms, reports, and returns
                required by law relating to the employment of its
                personnel.

            

    

     

    
      	(e)  	
              Notices.
                Promptly after receipt, Manager shall deliver to Owner all notices,
                from
                any tenant, or any governmental authority, that are not a routine
                nature.
                Managers shall also report expeditiously to Owner notice of any extensive
                damage to any part of the
                Properties.

            

    

     

    2.6  Subcontracting.
      Notwithstanding anything to the contrary contained in this Agreement, the
      Manager may subcontract any of its duties hereunder, without the consent of
      the
      Owner being required, for a fee that may be less than the Management Fees paid
      hereunder. In the event that the Manager does so contract any of its duties
      hereunder, such fees payable to such third parties may, at the instruction
      of
      the Manager, be deducted from the monthly Management Fee payable to the Manager
      hereunder and paid by the Owner to such parties, or paid directly by the Manager
      to such parties, in its discretion. 

     

    
      
        
        

      

      
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    ARTICLE
      III

    

    EXPENSES

     

    3.1  Owner’s
      Expenses.
      Except
      as otherwise specifically provided, all costs and expenses incurred hereunder
      by
      Manager in fulfilling its duties to Owner shall be for the account of and on
      behalf of Owner. Such costs and expenses may include reasonable wages and
      salaries and other employee-related expenses of all on-site and off-site
      employees of Manager who are engaged in the operation, management, maintenance
      and leasing or access control of the Properties, including taxes, insurance
      and
      benefits relating to such employees, and legal, travel and other out-of-pocket
      expenses which are directly related to the management of specific Properties.
      All costs and expenses for which Owner is responsible under this Management
      Agreement shall be paid by Manager out of the Account. In the event said account
      does not contain sufficient funds to pay all said expenses, Owner shall fund
      all
      sums necessary to meet such additional costs and expenses.

     

    3.2  Manager’s
      Expenses.
      Manager
      shall, out of its own funds, pay all of its general overhead and administrative
      expenses.

     

    ARTICLE
      IV

    

    MANAGER’S
      COMPENSATION

     

    4.1  Management
      Fees.
      Manager
      shall provide the services described in Article II in return for fees (the
      “Management
      Fees”),
      which
      shall be payable by the OP on a monthly basis, and shall equal 5% of Gross
      Revenues from Properties, including all rent-up, leasing, and re-leasing fees
      and bonuses paid to any person. Notwithstanding the foregoing, Manager may
      be
      entitled to receive higher fees in the event Manager can demonstrate to the
      satisfaction of the board of directors of the Company (including a majority
      of
      the Independent Directors) through empirical data that a higher competitive
      fee
      is justified for the services rendered and the type of Property managed. As
      described in Section
      2.6
      above,
      in the event that Manager properly engages one or more third parties to perform
      the services described herein, the fees payable to such parties for such
      services will be deducted from the monthly Management Fees payable by the OP
      to
      Manager, or paid directly by Manager, at Manager’s option. Manager’s
      compensation under this Section
      4.1
      shall
      apply to all renewals, extensions or expansions of leases which Manager has
      originally negotiated.

     

    4.2  Additional
      Fees.
      In the
      event that the Manager provides services other than those specified herein,
      the
      OP shall pay to Manager a monthly fee equal to no more than that which the
      OP
      would pay to a third party that is not an Affiliate of the Owner or the Manager
      to provide such services.

     

    4.3  Audit
      Adjustment.
      If any
      audit of the records, books or accounts relating to the Properties discloses
      an
      overpayment or underpayment of Management Fees, Owner or Manager shall promptly
      pay to the other party the amount of such overpayment or underpayment, as the
      case may be. If such audit discloses an overpayment of Management Fees for
      any
      fiscal year of more than the correct Management Fees for such fiscal year,
      Manager shall bear the cost of such audit.

     

    
      
        
        

      

      
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    ARTICLE
      V

    

    INSURANCE
      AND INDEMNIFICATION

     

    5.1  Insurance
      to be Carried.

     

    
      	(a)  	
              Manager
                shall obtain and keep in full force and effect insurance on the Properties
                against such hazards as Owner and Manager shall deem appropriate,
                but in
                any event insurance sufficient to comply with the leases and the
                Ownership
                Agreements shall be maintained. All liability policies shall provide
                sufficient insurance satisfactory to both Owner and Manager and shall
                contain waivers of subrogation for the benefit of
                Manager.

            

    

     

    
      	(b)  	
              Manager
                shall obtain and keep in full force and effect, in accordance with
                the
                laws of the state in which each Property is located, employer’s liability
                insurance applicable to and covering all employees of Manager at
                the
                Properties and all persons engaged in the performance of any work
                required
                hereunder, and Manager shall furnish Owner certificates of insurers
                naming
                Owner as a co-insured and evidencing that such insurance is in effect.
                If
                any work under this Management Agreement is subcontracted as permitted
                herein, Manager shall include in each subcontract a provision that
                the
                subcontractor shall also furnish Owner with such a
                certificate.

            

    

     

    5.2  Cooperation
      with Insurers.
      Manager
      shall cooperate with and provide reasonable access to the Properties to
      representatives of insurance companies and insurance brokers or agents with
      respect to insurance which is in effect or for which application has been made.
      Manager shall use its best efforts to comply with all requirements of
      insurers.

     

    5.3  Accidents
      and Claims.
      Manager
      shall promptly investigate and shall report in detail to Owner all accidents,
      claims for damage relating to the ownership, operation or maintenance of the
      Properties, and any damage or destruction to the Properties and the estimated
      costs of repair thereof, and shall prepare for approval by Owner all reports
      required by an insurance company in connection with any such accident, claim,
      damage, or destruction. Such reports shall be given to Owner promptly and any
      report not so given within 10 days after the occurrence of any such accident,
      claim, damage or destruction shall be noted in the monthly report delivered
      to
      Owner pursuant to Section
      2.5(b).
      Manager
      is authorized to settle any claim against an insurance company arising out
      of
      any policy and, in connection with such claim, to execute proofs of loss and
      adjustments of loss and to collect and receipt for loss proceeds. 

     

    5.4  Indemnification.
      Manager
      shall hold Owner harmless from and indemnify and defend Owner against any and
      all claims or liability for any injury or damage to any person or property
      whatsoever for which Manager is responsible occurring in, on, or about the
      Properties, including, without limitation, the Improvements when such injury
      or
      damage shall be caused by the negligence of Manager, its agents, servants,
      or
      employees, except to the extent that Owner recovers insurance proceeds with
      respect to such matter. Owner will indemnify and hold Manager harmless against
      all liability for injury to persons and damage to property caused by Owner’s
      negligence and which did not result from the negligence of misconduct of
      Manager, except to the extent Manager recovers insurance proceeds with respect
      to such matter.

     

    
      
        
        

      

      
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    ARTICLE
      VI

    

    TERM,
      TERMINATION

     

    6.1  Term.
      This
      Management Agreement shall commence on the date first above written and shall
      continue until terminated in accordance with the earliest to occur of the
      following:

     

    
      	(a)  	
              One
                year from the date of the commencement of the term hereof. However,
                this
                Management Agreement will be automatically extended for an additional
                one
                year period at the end of each year unless any party gives sixty
                (60) days
                written notice to the others of its intention to terminate this Management
                Agreement; or

            

    

     

    
      	(b)  	
              Immediately
                upon the occurrence of any of the
                following:

            

    

     

    (i)  A
      decree
      or order is rendered by a court having jurisdiction (A) adjudging Manager as
      bankrupt or insolvent, or (B) approving as properly filed a petition seeking
      reorganization, readjustment, arrangement, composition or similar relief for
      Manager under the federal bankruptcy laws or any similar applicable law or
      practice, or (C) appointing a receiver or liquidator or trustee or assignee
      in
      bankruptcy or insolvency of Manager or a substantial part of the property of
      Manager, or for the winding up or liquidation of its affairs, or

     

    (ii)  Manager
      (A) institutes proceedings to be adjudicated a voluntary bankrupt or an
      insolvent, (B) consents to the filing of a bankruptcy proceeding against it,
      (C)
      files a petition or answer or consent seeking reorganization, readjustment,
      arrangement, composition or relief under any similar applicable law or practice,
      (D) consents to the filing of any such petition, or to the appointment of a
      receiver or liquidator or trustee or assignee in bankruptcy or insolvency for
      it
      or for a substantial part of its property, (E) makes an assignment for the
      benefit of creditors, (F), is unable to or admits in writing its inability
      to
      pay its debts generally as they become due unless such inability shall be the
      fault of Owner, or (G) takes corporate or other action in furtherance of any
      of
      the aforesaid purposes.

     

    
      	 	
              (c)

            	
              Upon
                written notice from the Owner in the event that the Manager commits
                an act
                of gross negligence or willful misconduct in the performance of its
                duties
                hereunder.

            

    

     

    Upon
      termination, the obligations of the parties hereto shall cease, provided that
      Manager shall comply with the provisions hereof applicable in the event of
      termination and shall be entitled to receive all compensation which may be
      due
      Manager hereunder up to the date of such termination, and provided, further,
      that if this Management Agreement terminates pursuant to clauses (b) or (c)
      above, Owner shall have other remedies as may be available at law or in
      equity.

     

    6.2  Manager’s
      Obligations after Termination.
      Upon
      the termination of this Management Agreement, Manager shall have the following
      duties:

     

    
      	(a)  	
              Manager
                shall deliver to Owner, or its designee, all books and records with
                respect to the Properties.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	(b)  	
              Manager
                shall transfer and assign to Owner, or its designee, all service
                contracts
                and personal property relating to or used in the operation and maintenance
                of the Properties, except personal property paid for and owned by
                Manager.
                Manager shall also, for a period of sixty (60) days immediately following
                the date of such termination, make itself available to consult with
                and
                advise Owner, or its designee, regarding the operation, maintenance
                and
                leasing of the Properties.

            

    

     

    
      	(c)  	
              Manager
                shall render to Owner an accounting of all funds of Owner in its
                possession and shall deliver to Owner a statement of Management Fees
                claimed to be due Manager and shall cause funds of Owner held by
                Manager
                relating to the Properties to be paid to Owner or its
                designee.

            

    

     

    ARTICLE
      VII

    

    MISCELLANEOUS

     

    7.1.
        Notices.
      All
      notices, approvals, consents and other communications hereunder shall be in
      writing, and, except when receipt is required to start the running of a period
      of time, shall be deemed given when delivered in person or on the fifth day
      after its mailing by either party by registered or certified United States
      mail,
      postage prepaid and return receipt requested, to the other party, at the
      addresses set forth after their respect name below or at such different
      addresses as either party shall have theretofore advised the other party in
      writing in accordance with this Section
      7.1.

     

    
      	 	 	
              Owner:
                

            	 

    

    

    Lightstone
      Value Plus Real Estate Investment Trust II, Inc. 

    326
      Third
      Street

    Lakewood,
      New Jersey 08701

    Attn:
      David Lichtenstein

             
      Chief Executive Officer

     

    Lightstone
      Value Plus REIT II LP

    326
      Third
      Street

    Lakewood,
      New Jersey 08701

    Attn:
      David Lichtenstein

    

    With
      a
      copy to:

     

    Proskauer
      Rose LLP

    1585
      Broadway

    New
      York,
      New York 10036

    Attention:
      Peter M. Fass, Esq.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Manager:
       

    

    Beacon
      Property Management, LLC

    326
      Third
      Street

    Lakewood,
      New Jersey 08701

    Attn:
      David Lichtenstein

     

    With
      a
      copy to:

     

    Proskauer
      Rose LLP

    1585
      Broadway

    New
      York,
      New York 10036

    Attention:
      Peter M. Fass, Esq.

    

    7.2.
        Governing
      Law.
      This
      Management Agreement shall be governed by and construed in accordance with
      the
      laws of the State of New York.

     

    7.3.
        Assignment.
      Without
      derogating from Section
      2.6
      hereof,
      this Management Agreement may not be assigned by the Manager, except to an
      Affiliate of the Manager, and then only upon the consent of the Owner and the
      approval of a majority of the Independent Directors. Any assignee of the Manager
      shall be bound hereunder to the same extent as the Manager. This Agreement
      shall
      not be assigned by either Owner without the written consent of the Manager,
      except to a corporation, association, trust or other organization which is
      a
      successor to such Owner. Such successor shall be bound hereunder to the same
      extent as such Owner. Notwithstanding anything to the contrary contained herein,
      the economic rights of the Manager hereunder, including the right to receive
      all
      compensation hereunder, may be sold, transferred or assigned by the Manager
      without the consent of the Owners.

     

    7.4. Amendments.
      This
      Management Agreement may be amended only by an instrument in writing signed
      by
      the party against whom enforcement of the amendment is sought

     

    7.5. No
      Waiver.
      Neither
      the failure nor any delay on the party of a party to exercise any right, remedy,
      power or privilege under this Management Agreement shall operate as a waiver
      thereof, nor shall any single or partial exercise of any right, remedy, power
      or
      privilege preclude any other or further exercise of the same or of any other
      right, remedy, power or privilege, nor shall any waiver of any right, remedy,
      power or privilege with respect to any occurrence be construed as a waiver
      of
      such right, remedy, power or privilege with respect to any other occurrences.
      No
      waiver shall be effective unless it is in writing and is signed by the party
      asserted to have granted such waiver.

     

    7.6. Headings.
      The
      headings of the various subdivisions of this Management Agreement are for
      reference only and shall not define or limit any of the terms or provisions
      hereof.

     

    7.7. Counterparts.
      This
      Management Agreement may be executed in two or more counterparts, each of which
      shall be deemed an original, and it shall not be necessary in making proof
      of
      this Management Agreement to produce or account for more than one such
      counterpart.

     

    7.8. Entire
      Agreement.
      This
      Management Agreement contains the entire agreement and understanding among
      the
      parties hereto with respect to the subject matter hereof and supersedes all
      prior and contemporaneous agreements, understandings, inducements and
      conditions, express or implied, oral or written, of any nature whatsoever with
      respect to the subject matter hereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.9. Disputes.
      If
      there shall be a dispute between Owner and Manager relating to this Management
      Agreement resulting in litigation, the prevailing party in such litigation
      shall
      be entitled to recover from the other party to such litigation such amount
      as
      the court shall fix as reasonable attorneys’ fees.

     

    7.10. Activities
      of Manager.
      The
      obligations of Manager pursuant to the terms and provisions of this Management
      Agreement shall not be construed to preclude Manager from engaging in other
      activities or business ventures, whether or not such other activities or
      ventures are in competition with the Owner or the business of
      Owner.

     

    7.11. Independent
      Contractor.
      Manager
      and Owner shall not be construed as joint venturers or partners of each other
      pursuant to this Management Agreement, and neither shall have the power to
      bind
      or obligate the other except as set forth herein. In all respects, the status
      of
      Manager to Owner under this Management Agreement is that of an independent
      contractor.

     

    [Signature
      page follows.]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	
              LIGHTSTONE
                VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

              Title:

            

    

     

    
      	 	 	 
	 	
              
                LIGHTSTONE
                  VALUE PLUS REIT II LP

              

            
	 
 	 
 	 
 
	
            	By:  	
              Lightstone Value Plus Real Estate 

              Investment Trust II, Inc., 

              its
                General Partner

            
	 	 
	 	
              By:
                

            
	 	
              
                

              

              Name:
                

              Title:

            

    

     

    
      	 	 	 
	 	
              
                BEACON
                  PROPERTY MANAGEMENT, LLC

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

              Title:FORM
      OF
      MANAGEMENT AGREEMENT

     

      This
      management agreement (this “Management
      Agreement”)
      is
      made and entered into as of
      the            day of
            , 2008, by
      and among LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC., a
      Maryland corporation (the “Company”),
      LIGHTSTONE VALUE PLUS REIT II LP, a Delaware limited partnership (the
“OP”,
      and
      together with the Company, the “Owner”),
      and
HVM,
      LLC, a
      Delaware limited liability company (the “Manager”).

     

    WHEREAS,
      the OP was organized to acquire, own, operate, lease and manage real estate
      properties on behalf of the Company; and

     

    WHEREAS,
      the Company intends to continue to raise money from the sale of its common
      stock
      to be used, net of payment of certain offering costs and expenses, for
      investment in the acquisition or rehabilitation of income-producing real estate
      to be acquired and held by the Company or by the OP on behalf of the Company;
      and

     

    WHEREAS,
      Owner wishes to retain Manager to manage and coordinate the leasing of certain
      real estate properties acquired by Owner, and the Manager wishes to be so
      retained, all under the terms and conditions set forth in this Management
      Agreement. 

     

    NOW,
      THEREFORE, in consideration of the premises and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto, intending to be legally bound hereby, do hereby agree as
      follows:

     

    ARTICLE
      I.

     

    DEFINITIONS

     

    Except
      as
      otherwise specified or as the context may otherwise require, the following
      terms
      have the respective meanings set forth below for all purposes of this Management
      Agreement, and the definitions of such terms are equally applicable both to
      the
      singular and plural forms thereof

     

    “Account”
has
      the
      meaning set forth in Section
      2.3(i)
      hereof.

     

    “Affiliate”
means
      a
      person who is (i) in the case of an individual, any relative of such person,
      (ii) any officer, director, trustee, partner, manager, employee or holder of
      ten
      percent (10%) or more of any class of the voting securities of or equity
      interest in such person; (iii) any corporation, partnership, limited liability
      company, trust or other entity controlling, controlled by or under common
      control with such person; or (iv) any officer, director, trustee, partner,
      manager, employee or holder of ten percent (10%) or more of the outstanding
      voting securities of any corporation, partnership, limited liability company,
      trust or other entity controlling, controlled by or under common control with
      such person. For purposes of this definition, the term “controls,” “is
      controlled by,” or “is under common control with” shall mean the possession,
      direct or indirect, of the power to direct or cause the direction of the
      management and policies of an entity, whether through the ownership of voting
      rights, by contract or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Director”
means
      a
      member of the board of directors of the Company.

     

    “Funds
      From Operations”
shall
      mean net income (computed in accordance with GAAP), excluding gains or losses
      from debt restructuring and sales of Properties, plus depreciation of real
      property and amortization, and after adjustments for unconsolidated partnerships
      and joint ventures.

     

    “GAAP”
shall
      mean United States generally accepted accounting principals, consistently
      applied.

     

    “Gross
      Revenues”
means
      all amounts actually collected as rents or other charges for the use and
      occupancy of the Properties, but shall exclude interest and other investment
      income of Owner and proceeds received by Owner for a sale, exchange,
      condemnation, eminent domain taking, casualty or other disposition of assets
      of
      Owner.

     

    “Improvements”
means
      buildings, structures, equipment from time to time located on the Properties
      and
      all parking and common areas located on the Properties.

     

    “Independent
      Director”
shall
      have the meaning set forth in the charter of the Company as in effect from
      time
      to time.

     

    “Management
      Fees”
has
      the
      meaning set forth in Section
      4.1
      hereof.

     

    “Properties”
means
      all real estate properties owned by Owner and all tracts as yet unspecified
      but
      to be acquired by Owner containing income-producing Improvements or on which
      Owner will rehabilitate income-producing Improvements. For the purposes of
      this
      Management Agreement, the term “Properties” shall only refer to lodging
      properties and not residential, retail, industrial or office properties.

     

    “Share”
shall
      mean a share of the common stock, par value $0.01, of the Company.

     

    ARTICLE
      II

    

    APPOINTMENT
      OF MANAGER; SERVICES TO BE PERFORMED

     

    2.1    Appointment
      of Manager.
      Owner
      hereby engages and retains Manager as the sole and exclusive manager and agent
      of the Properties, and Manager hereby accepts such appointment, all on the
      terms
      and conditions hereinafter set forth, it being understood that this Management
      Agreement shall cause Manager to be, at law, Owner’s agent upon the terms
      contained herein.

     

    2.2    General
      Duties.
      Manager
      shall devote its best efforts to performing its duties hereunder to manage,
      operate, maintain and lease the Properties in a diligent, careful and vigilant
      manner. The services of Manager are to be of scope and quality not less than
      those generally performed by professional property managers of other similar
      properties in the area. Manager shall make available to Owner the full benefit
      of the judgment, experience and advice of the members of Manager’s organization
      and staff with respect to the policies to be pursued by Owner relating to the
      operation and leasing of the Properties.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.3    Specific
      Duties.
      Manager’s duties include the following:

     

    
      	 
              (a) 	
              Lease
                Obligations.
                Manager shall perform all duties of the landlord under all leases
                insofar
                as such duties relate to operation, maintenance, and day-to-day
                management. Manager shall also provide or cause to be provided, at
                Owner’s
                expense, all services normally provided to tenants of like premises,
                including, where applicable and without limitation, gas, electricity
                or
                other utilities required to be furnished to tenants under leases,
                normal
                repairs and maintenance, and cleaning, and janitorial service. Manager
                shall arrange for and supervise the performance of all installations
                and
                improvements in space leased to any tenant which are either expressly
                required under the terms of the lease of such space or which are
                customarily provided to tenants.

            

    

     

    
      	(b) 	
              Maintenance.
                Manager shall cause the Properties to be maintained in the same manner
                as
                similar properties in the area. Manager’s duties and supervision in this
                respect shall include, without limitation, cleaning of the interior
                and
                the exterior of the Improvements and the public common areas on the
                Properties and the making and supervision of repair, alterations,
                and
                decoration of the Improvements, subject to and in strict compliance
                with
                this Management Agreement and any applicable leases. Construction
                and
                rehabilitation activities undertaken by the Manager, if any, will
                be
                limited to activities related to the management, operation, maintenance,
                and leasing of the Property (e.g., repairs, renovations, and leasehold
                improvements).

            

    

     

    
      	(c) 	
              Leasing
                Functions.
                Manager shall coordinate the leasing of the Properties and shall
                negotiate
                and use its best efforts to secure executed leases from qualified
                tenants,
                and to execute same on behalf of Owner, if requested, for available
                space
                in the Properties, such leases to be in form and on terms approved
                by
                Owner and Manager, and to bring about complete leasing of the Properties.
                Manager shall be responsible for the hiring of all leasing agents,
                as
                necessary for the leasing of the Properties, and to otherwise oversee
                and
                manage the leasing process on behalf of the
                Owner.

            

    

     

    
      	(d) 	
              Notice
                of Violations.
                Manager shall forward to Owner promptly upon receipt all notices
                of
                violation or other notices from any governmental authority, and board
                of
                fire underwriters or any insurance company, and shall make such
                recommendations regarding compliance with such notice as shall be
                appropriate.

            

    

     

    
      	(e) 	
              Personnel.
                Any personnel hired by Manager to maintain, operate and lease the
                Property
                shall be the employees or independent contractors of Manager and
                not of
                the Owner. Manager shall use due care in the selection and supervision
                of
                such employees or independent contractors. Manager shall be responsible
                for the preparation of and shall timely file all payroll tax reports
                and
                timely make payments of all withholding and other payroll taxes with
                respect to each employee.

            

    

     

    
      	(f)  	
              Utilities
                and Supplies.
                Manager shall enter into or renew contracts for electricity, gas,
                steam,
                landscaping, fuel, oil, maintenance and other services as are customarily
                furnished or rendered in connection with the operation of similar
                rental
                property in the area.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	(g) 	
              Expenses.
                Manager shall analyze all bills received for services, work and supplies
                in connection with the maintaining and operating the Properties,
                pay all
                such bills, and, if requested by Owner, pay, when due, utility and
                water
                charges, sewer rent and assessments, any applicable taxes, including,
                without limitation, any real estate taxes, and any other amount payable
                in
                respect to the Properties. All bills shall be paid by Manager within
                the
                time required to obtain discounts, if any. Owner may from time to
                time
                request that Manager forward certain bills to Owner promptly after
                receipt, and Manager shall comply with any such request. It is understood
                that the payment of real property taxes and assessment and insurance
                premiums will be paid out of the Account (as hereinafter defined)
                by
                Manager. All expenses shall be billed at net cost (i.e., less all
                rebates,
                commissions, discounts and allowances, however
                designed).

            

    

     

    
      	(h) 	
              Monies
                Collected.
                Manager shall collect all rent and other monies from tenants and
                any sums
                otherwise due Owner with respect to the Properties in the ordinary
                course
                of business. In collecting such monies, Manager shall inform tenants
                of
                the Properties that all remittances are to be in the form of a check
                or
                money order. Owner authorizes Manager to request, demand, collect
                and
                receipt for all such rent and other monies and to institute legal
                proceedings in the name of Owner for the collection thereof and for
                the
                dispossession of any tenant in default under its lease.
                

            

    

     

    
      	(i)  	
              Banking
                Accommodations.
                Manager shall establish and maintain a separate checking account
                (the
                “Account”)
                for funds relating to the Properties. All monies deposited from time
                to
                time in the Account shall be deemed to be trust funds and shall be
                and
                remain the property of Owner and shall be withdrawn and disbursed
                by
                Manager for the account of Owner only as expressly permitted by this
                Management Agreement for the purposes of performing the obligations
                of
                Manager hereunder. No monies collected by Manager on Owner’s behalf shall
                be commingled with funds of Manager. The Account shall be maintained,
                and
                monies shall be deposited therein and withdrawn therefrom, in accordance
                with the following:

            

    

     

    (i)  All
      sums
      received from rents and other income from the Properties shall be promptly
      deposited by Manager in the Account. Manager shall have the right to designate
      two or more persons who shall be authorized to draw against the Account, but
      only for purposes authorized by this Management Agreement.

     

    (ii)  All
      sums
      due to Manager hereunder, whether for compensation, reimbursement for
      expenditures, or otherwise, as herein provided, shall be a charge against the
      operating revenues of the Properties and shall be paid and/or withdrawn by
      Manager from the Account prior to the making of any other disbursements
      therefrom.

     

    (iii)  
      By the
      30th day of the first month following each calendar quarter, Manager shall
      forward to Owner net operating proceeds from the preceding quarter, retaining
      at
      all times, however a reserve of $5,000, in addition to any amounts otherwise
      provided in the budget.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	(j)  	
              Tenant
                Complaints.
                Manager shall maintain business-like relations with the tenants of
                the
                Properties.

            

    

     

    
      	(k) 	
              Ownership
                Agreements.
                Manager has received copies of the Agreement of Limited Partnership
                of the
                OP and the constitutive documents of the Company (collectively, the
                “Ownership
                Agreements”)
                and is familiar with the terms thereof. Manager shall use reasonable
                care
                to avoid any act or omission which, in the performance of its duties
                hereunder, shall in any way conflict with the terms of the Ownership
                Agreements.

            

    

     

    
      	(l)  	
              Signs.
                Manager shall place and remove, or cause to be placed and removed,
                such
                signs upon the Properties as Manager deems appropriate, subject,
                however,
                to the terms and conditions of the leases and to any applicable ordinances
                and regulations.

            

    

     

    2.4    Approval
      of Leases, Contracts, Etc.
      In
      fulfilling its duties to the Owner, Manager may and hereby is authorized to
      enter into any leases, contracts or agreements on behalf of the Owner in the
      ordinary course of the management, operation, maintenance and leasing of the
      Property.

     

    2.5    Accounting,
      Records and Reports.

     

    
      	(a) 	
              Records.
                Managers shall maintain all office records and books of account and
                shall
                record therein, and keep copies of, each invoice received from services,
                work and supplies ordered in connection with the maintenance and
                operation
                of the Properties. Such records shall be maintained on a double entry
                basis. Owner and persons designated by Owner shall at all reasonable
                time
                have access to and the right to audit and make independent examinations
                of
                such records, books and accounts and all vouchers, files and all
                other
                material pertaining to the Properties and this Management Agreement,
                all
                of which Manager agrees to keep safe, available and separate from
                any
                records not pertaining to the Properties, at a place recommended
                by
                Manager and approved by Owner.

            

    

     

    
      	(b) 	
              Quarterly
                Reports.
                On or before the 30th day of the first month following each calendar
                quarter for which such report or statement is prepared and during
                the term
                of this Management Agreement, Manager shall prepare and submit to
                Owner
                the following reports and
                statements:

            

    

     

    
      	(i)  	
              Rental
                collection record;

            

    

     

    
      	(ii)  	
              Quarterly
                operating statement;

            

    

     

    
      	(iii)  	
              Copy
                of cash disbursements ledger entries for such period, if
                requested;

            

    

     

    
      	(iv)  	
              Copy
                of cash receipts ledger entries for such period, if
                requested;

            

    

     

    
      	(v)  	
              The
                original copies of all contracts entered into by Manager on behalf
                of
                Owner during such period, if requested;
                and

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(vi)  	
              Copy
                of ledger entries for such period relating to security deposits maintained
                by Manager, if requested.

            

    

     

    
      	(c) 	
              Budgets
                and Leasing Plans.
                Not later than November 15 of each calendar year, Manager shall prepare
                and submit to Owner for its approval an operating budget and a marketing
                and leasing plan on the Properties for the calendar year immediately
                following such submission. The budget and leasing plan shall be in
                the
                form of the budget and plan approved by Owner prior to the date thereof.
                As often as reasonably necessary during the period covered by any
                such
                budget, Manager may submit to Owner for its approval an updated budget
                or
                plan incorporating such changes as shall be necessary to reflect
                cost
                over-runs and the like during such period. If Owner does not disapprove
                any such budget within 30 days after receipt thereof by Owner, such
                budget
                shall be deemed approved. If Owner shall disapprove any such budget
                or
                plan, it shall so notify Manager within said 30-day period and explain
                the
                reasons therefor. Manager will not incur any costs other than those
                estimated in any budget except for:

            

    

     

    
      	(i)  	
              maintenance
                or repair costs under $5,000; 

            

    

     

    
      	(ii)  	
              costs
                incurred in emergency situations in which action is immediately necessary
                for the preservation or safety of the Property, or for the safety
                of
                occupant or other person (or to avoid the suspension of any necessary
                service of the Property);

            

    

     

    
      	(iii)  	
              expenditures
                for real estate taxes and assessment;
                and

            

    

     

    
      	(iv)  	
              maintenance
                supplies calling for an aggregate purchase price less than
                $25,000.

            

    

     

    
      	(d) 	
              Returns
                Required by Law.
                Manager shall execute and file when due all forms, reports, and returns
                required by law relating to the employment of its
                personnel.

            

    

     

    
      	(e) 	
              Notices.
                Promptly after receipt, Manager shall deliver to Owner all notices,
                from
                any tenant, or any governmental authority, that are not a routine
                nature.
                Managers shall also report expeditiously to Owner notice of any extensive
                damage to any part of the
                Properties.

            

    

     

    2.6    Subcontracting.
      Notwithstanding anything to the contrary contained in this Agreement, the
      Manager may subcontract any of its duties hereunder, without the consent of
      the
      Owner being required, for a fee that may be less than the Management Fees paid
      hereunder. In the event that the Manager does so contract any of its duties
      hereunder, such fees payable to such third parties may, at the instruction
      of
      the Manager, be deducted from the monthly Management Fee payable to the Manager
      hereunder and paid by the Owner to such parties, or paid directly by the Manager
      to such parties, in its discretion. 

     

    ARTICLE
      III

    

    EXPENSES

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3.1    Owner’s
      Expenses.
      Except
      as otherwise specifically provided, all costs and expenses incurred hereunder
      by
      Manager in fulfilling its duties to Owner shall be for the account of and on
      behalf of Owner. Such costs and expenses may include reasonable wages and
      salaries and other employee-related expenses of all on-site and off-site
      employees of Manager who are engaged in the operation, management, maintenance
      and leasing or access control of the Properties, including taxes, insurance
      and
      benefits relating to such employees, and legal, travel and other out-of-pocket
      expenses which are directly related to the management of specific Properties.
      All costs and expenses for which Owner is responsible under this Management
      Agreement shall be paid by Manager out of the Account. In the event said account
      does not contain sufficient funds to pay all said expenses, Owner shall fund
      all
      sums necessary to meet such additional costs and expenses.

     

    3.2    Manager’s
      Expenses.
      Manager
      shall, out of its own funds, pay all of its general overhead and administrative
      expenses.

     

    ARTICLE
      IV

    

    MANAGER’S
      COMPENSATION

     

    4.1    Management
      Fees.
      Manager
      shall provide the services described in Article II in return for fees (the
      “Management
      Fees”),
      which
      shall be payable by the OP on a monthly basis, and shall equal 5% of Gross
      Revenues from Properties, including all rent-up, leasing, and re-leasing fees
      and bonuses paid to any person. Notwithstanding the foregoing, Manager may
      be
      entitled to receive higher fees in the event Manager can demonstrate to the
      satisfaction of the board of directors of the Company (including a majority
      of
      the Independent Directors) through empirical data that a higher competitive
      fee
      is justified for the services rendered and the type of Property managed. As
      described in Section
      2.6
      above,
      in the event that Manager properly engages one or more third parties to perform
      the services described herein, the fees payable to such parties for such
      services will be deducted from the monthly Management Fees payable by the OP
      to
      Manager, or paid directly by Manager, at Manager’s option. Manager’s
      compensation under this Section
      4.1
      shall
      apply to all renewals, extensions or expansions of leases which Manager has
      originally negotiated.

     

    4.2    Additional
      Fees.
      In the
      event that the Manager provides services other than those specified herein,
      the
      OP shall pay to Manager a monthly fee equal to no more than that which the
      OP
      would pay to a third party that is not an Affiliate of the Owner or the Manager
      to provide such services.

     

    4.3    Audit
      Adjustment.
      If any
      audit of the records, books or accounts relating to the Properties discloses
      an
      overpayment or underpayment of Management Fees, Owner or Manager shall promptly
      pay to the other party the amount of such overpayment or underpayment, as the
      case may be. If such audit discloses an overpayment of Management Fees for
      any
      fiscal year of more than the correct Management Fees for such fiscal year,
      Manager shall bear the cost of such audit.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
       

      ARTICLE
        V

    INSURANCE
      AND INDEMNIFICATION

     

    5.1    Insurance
      to be Carried.

     

    
      	(a)  	
              Manager
                shall obtain and keep in full force and effect insurance on the Properties
                against such hazards as Owner and Manager shall deem appropriate,
                but in
                any event insurance sufficient to comply with the leases and the
                Ownership
                Agreements shall be maintained. All liability policies shall provide
                sufficient insurance satisfactory to both Owner and Manager and shall
                contain waivers of subrogation for the benefit of
                Manager.

            

    

     

    
      	(b)  	
              Manager
                shall obtain and keep in full force and effect, in accordance with
                the
                laws of the state in which each Property is located, employer’s liability
                insurance applicable to and covering all employees of Manager at
                the
                Properties and all persons engaged in the performance of any work
                required
                hereunder, and Manager shall furnish Owner certificates of insurers
                naming
                Owner as a co-insured and evidencing that such insurance is in effect.
                If
                any work under this Management Agreement is subcontracted as permitted
                herein, Manager shall include in each subcontract a provision that
                the
                subcontractor shall also furnish Owner with such a
                certificate.

            

    

     

    5.2    Cooperation
      with Insurers.
      Manager
      shall cooperate with and provide reasonable access to the Properties to
      representatives of insurance companies and insurance brokers or agents with
      respect to insurance which is in effect or for which application has been made.
      Manager shall use its best efforts to comply with all requirements of
      insurers.

     

    5.3    Accidents
      and Claims.
      Manager
      shall promptly investigate and shall report in detail to Owner all accidents,
      claims for damage relating to the ownership, operation or maintenance of the
      Properties, and any damage or destruction to the Properties and the estimated
      costs of repair thereof, and shall prepare for approval by Owner all reports
      required by an insurance company in connection with any such accident, claim,
      damage, or destruction. Such reports shall be given to Owner promptly and any
      report not so given within 10 days after the occurrence of any such accident,
      claim, damage or destruction shall be noted in the monthly report delivered
      to
      Owner pursuant to Section
      2.5(b).
      Manager
      is authorized to settle any claim against an insurance company arising out
      of
      any policy and, in connection with such claim, to execute proofs of loss and
      adjustments of loss and to collect and receipt for loss proceeds. 

     

    5.4     Indemnification.
      Manager
      shall hold Owner harmless from and indemnify and defend Owner against any and
      all claims or liability for any injury or damage to any person or property
      whatsoever for which Manager is responsible occurring in, on, or about the
      Properties, including, without limitation, the Improvements when such injury
      or
      damage shall be caused by the negligence of Manager, its agents, servants,
      or
      employees, except to the extent that Owner recovers insurance proceeds with
      respect to such matter. Owner will indemnify and hold Manager harmless against
      all liability for injury to persons and damage to property caused by Owner’s
      negligence and which did not result from the negligence of misconduct of
      Manager, except to the extent Manager recovers insurance proceeds with respect
      to such matter.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI

    

    TERM,
      TERMINATION

     

    6.1    Term.
      This
      Management Agreement shall commence on the date first above written and shall
      continue until terminated in accordance with the earliest to occur of the
      following:

     

    
      	(a)  	
              One
                year from the date of the commencement of the term hereof. However,
                this
                Management Agreement will be automatically extended for an additional
                one
                year period at the end of each year unless any party gives sixty
                (60) days
                written notice to the others of its intention to terminate this Management
                Agreement; or

            

    

     

    
      	(b)  	
              Immediately
                upon the occurrence of any of the
                following:

            

    

     

    (i)  A
      decree
      or order is rendered by a court having jurisdiction (A) adjudging Manager as
      bankrupt or insolvent, or (B) approving as properly filed a petition seeking
      reorganization, readjustment, arrangement, composition or similar relief for
      Manager under the federal bankruptcy laws or any similar applicable law or
      practice, or (C) appointing a receiver or liquidator or trustee or assignee
      in
      bankruptcy or insolvency of Manager or a substantial part of the property of
      Manager, or for the winding up or liquidation of its affairs, or

     

    (ii)  Manager
      (A) institutes proceedings to be adjudicated a voluntary bankrupt or an
      insolvent, (B) consents to the filing of a bankruptcy proceeding against it,
      (C)
      files a petition or answer or consent seeking reorganization, readjustment,
      arrangement, composition or relief under any similar applicable law or practice,
      (D) consents to the filing of any such petition, or to the appointment of a
      receiver or liquidator or trustee or assignee in bankruptcy or insolvency for
      it
      or for a substantial part of its property, (E) makes an assignment for the
      benefit of creditors, (F), is unable to or admits in writing its inability
      to
      pay its debts generally as they become due unless such inability shall be the
      fault of Owner, or (G) takes corporate or other action in furtherance of any
      of
      the aforesaid purposes.

     

    
      	 	
              (c)

            	
              Upon
                written notice from the Owner in the event that the Manager commits
                an act
                of gross negligence or willful misconduct in the performance of its
                duties
                hereunder.

            

    

     

    Upon
      termination, the obligations of the parties hereto shall cease, provided that
      Manager shall comply with the provisions hereof applicable in the event of
      termination and shall be entitled to receive all compensation which may be
      due
      Manager hereunder up to the date of such termination, and provided, further,
      that if this Management Agreement terminates pursuant to clauses (b) or (c)
      above, Owner shall have other remedies as may be available at law or in
      equity.

     

    6.2    Manager’s
      Obligations after Termination.
      Upon
      the termination of this Management Agreement, Manager shall have the following
      duties:

     

    
      	(a)  	
              Manager
                shall deliver to Owner, or its designee, all books and records with
                respect to the Properties.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	(b)  	
              Manager
                shall transfer and assign to Owner, or its designee, all service
                contracts
                and personal property relating to or used in the operation and maintenance
                of the Properties, except personal property paid for and owned by
                Manager.
                Manager shall also, for a period of sixty (60) days immediately following
                the date of such termination, make itself available to consult with
                and
                advise Owner, or its designee, regarding the operation, maintenance
                and
                leasing of the Properties.

            

    

     

    
      	(c)  	
              Manager
                shall render to Owner an accounting of all funds of Owner in its
                possession and shall deliver to Owner a statement of Management Fees
                claimed to be due Manager and shall cause funds of Owner held by
                Manager
                relating to the Properties to be paid to Owner or its
                designee.

            

    

     

    ARTICLE
      VII

    

    MISCELLANEOUS

     

    7.1.   
        Notices.
      All
      notices, approvals, consents and other communications hereunder shall be in
      writing, and, except when receipt is required to start the running of a period
      of time, shall be deemed given when delivered in person or on the fifth day
      after its mailing by either party by registered or certified United States
      mail,
      postage prepaid and return receipt requested, to the other party, at the
      addresses set forth after their respect name below or at such different
      addresses as either party shall have theretofore advised the other party in
      writing in accordance with this Section
      7.1.

     

    
      	 	 	
               

            	
              Owner:
                

               

              
                Lightstone
                  Value Plus Real Estate Investment Trust II, Inc. 

                326
                  Third Street

                Lakewood,
                  New Jersey 08701

                Attn:
                  David Lichtenstein

                         
                  Chief Executive Officer

                 

                Lightstone
                  Value Plus REIT II LP

                326
                  Third Street

                Lakewood,
                  New Jersey 08701

                Attn:
                  David Lichtenstein

                

                With
                  a copy to:

                 

                Proskauer
                  Rose LLP

                1585
                  Broadway

                New
                  York, New York 10036

                Attention:
                  Peter M. Fass, Esq.

              

            

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
    

    Manager:
       

    

    HVM,
      LLC

    326
      Third
      Street

    Lakewood,
      New Jersey 08701

    Attn:
      David Lichtenstein

     

    With
      a
      copy to:

     

    Proskauer
      Rose LLP

    1585
      Broadway

    New
      York,
      New York 10036

    Attention:
      Peter M. Fass, Esq.

    

    7.2.   
         Governing
      Law.
      This
      Management Agreement shall be governed by and construed in accordance with
      the
      laws of the State of New York.

     

    7.3.   Assignment.
      Without
      derogating from Section
      2.6
      hereof,
      this Management Agreement may not be assigned by the Manager, except to an
      Affiliate of the Manager, and then only upon the consent of the Owner and the
      approval of a majority of the Independent Directors. Any assignee of the Manager
      shall be bound hereunder to the same extent as the Manager. This Agreement
      shall
      not be assigned by either Owner without the written consent of the Manager,
      except to a corporation, association, trust or other organization which is
      a
      successor to such Owner. Such successor shall be bound hereunder to the same
      extent as such Owner. Notwithstanding anything to the contrary contained herein,
      the economic rights of the Manager hereunder, including the right to receive
      all
      compensation hereunder, may be sold, transferred or assigned by the Manager
      without the consent of the Owners.

     

    7.4.   Amendments.
      This
      Management Agreement may be amended only by an instrument in writing signed
      by
      the party against whom enforcement of the amendment is sought

     

    7.5.   
        No
      Waiver.
      Neither
      the failure nor any delay on the party of a party to exercise any right, remedy,
      power or privilege under this Management Agreement shall operate as a waiver
      thereof, nor shall any single or partial exercise of any right, remedy, power
      or
      privilege preclude any other or further exercise of the same or of any other
      right, remedy, power or privilege, nor shall any waiver of any right, remedy,
      power or privilege with respect to any occurrence be construed as a waiver
      of
      such right, remedy, power or privilege with respect to any other occurrences.
      No
      waiver shall be effective unless it is in writing and is signed by the party
      asserted to have granted such waiver.

     

    7.6.   Headings.
      The
      headings of the various subdivisions of this Management Agreement are for
      reference only and shall not define or limit any of the terms or provisions
      hereof.

     

    7.7.   
        Counterparts.
      This
      Management Agreement may be executed in two or more counterparts, each of which
      shall be deemed an original, and it shall not be necessary in making proof
      of
      this Management Agreement to produce or account for more than one such
      counterpart.

     

    7.8.   
        Entire
      Agreement.
      This
      Management Agreement contains the entire agreement and understanding among
      the
      parties hereto with respect to the subject matter hereof and supersedes all
      prior and contemporaneous agreements, understandings, inducements and
      conditions, express or implied, oral or written, of any nature whatsoever with
      respect to the subject matter hereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.9.   
        Disputes.
      If
      there shall be a dispute between Owner and Manager relating to this Management
      Agreement resulting in litigation, the prevailing party in such litigation
      shall
      be entitled to recover from the other party to such litigation such amount
      as
      the court shall fix as reasonable attorneys’ fees.

     

    7.10.  
        Activities
      of Manager.
      The
      obligations of Manager pursuant to the terms and provisions of this Management
      Agreement shall not be construed to preclude Manager from engaging in other
      activities or business ventures, whether or not such other activities or
      ventures are in competition with the Owner or the business of
      Owner.

     

    7.11.       
       Independent
      Contractor.
      Manager
      and Owner shall not be construed as joint venturers or partners of each other
      pursuant to this Management Agreement, and neither shall have the power to
      bind
      or obligate the other except as set forth herein. In all respects, the status
      of
      Manager to Owner under this Management Agreement is that of an independent
      contractor.

     

    [Signature
      page follows.]

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

    
      	 	 	 
	 	LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT
              TRUST II, INC.
	 
 	 
 	 
 
	
            	By:  	 
	 	
              
Name:

	 	Title: 

      	 	 	 
	 	LIGHTSTONE
              VALUE
              PLUS REIT II LP
	 
 	 
By:  	
              
Lightstone
                Value Plus Real Estate 

              Investment
                Trust II, Inc.,   

              its
                General Partner

               

               

            
	
            	By:  	 
	 	
              
Name:

	 	Title:

      	 	 	 
	 	HVM,
              LLC
	 
 	 
 	 
 
	
            	By:  	 
	 	
              
Name:
	 	Title:

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