Document:

EXCHANGE
      RIGHTS AGREEMENT 

     

    THIS
      EXCHANGE RIGHTS AGREEMENT (this “Agreement”), dated as of June __, 2008, is
      entered into by and among Lightstone Value Plus Real Estate Investment Trust,
      Inc., a Maryland corporation (the “Company”), Lightstone Value Plus REIT LP, a
      Delaware limited partnership (the “Operating Partnership”), and the Persons
      whose names are set forth on Exhibit A attached hereto (as it may be amended
      from time to time). 

     

    RECITALS:
      

     

    (a)
      The
      Company, together with certain other limited partners, has formed the Operating
      Partnership pursuant to the Amended and Restated Agreement of Limited
      Partnership of the Operating Partnership dated April 22, 2005 the
      (“Original Agreement”), as amended by that certain First Amendment to Amended
      and Restated Agreement of Limited Partnership dated June __, 2008 (the
“Amendment”) (as such agreement may be further amended or amended and restated
      from time to time, collectively the “Partnership Agreement”). 

     

    (b)
      Pursuant to the Partnership Agreement, the Limited Partners (as defined below)
      directly or indirectly hold units of limited partnership interest (“Partnership
      Units”) in the Operating Partnership. 

     

    (c)
      The
      Operating Partnership has agreed to provide the Limited Partners with certain
      direct or indirect rights to exchange their Partnership Units for cash or,
      at
      the election of the Company, for shares of the Company’s common stock, $0.01 par
      value per share (the “REIT Stock”). 

     

    Accordingly,
      the parties hereto do hereby agree as follows: 

     

    ARTICLE
      I

     

    DEFINED
      TERMS 

     

    The
      following definitions shall be for all purposes, unless otherwise clearly
      indicated to the contrary, applied to the terms used in this Agreement.

     

    “Assignee”
      means a Person to whom one or more Partnership Units have been transferred
      in a
      manner permitted under the Partnership Agreement, but who has not become a
      substituted Limited Partner in accordance therewith. 

     

    “Business
      Day” means any day except a Saturday, Sunday or other day on which commercial
      banks in New York, New York are authorized or required by law to close.

     

    “Cash
      Amount” means an amount of cash per Partnership Unit equal to the Value on the
      Valuation Date of the REIT Stock Amount. 

     

    “Common
      Units” has the meaning set forth in the Amendment. 

     

    “Exchange
      Factor” means 1.0, provided, that in the event that the Company (i) declares or
      pays a dividend on its outstanding REIT Stock in REIT Stock or makes a
      distribution to all holders of its outstanding REIT Stock in REIT Stock; (ii)
      subdivides its outstanding REIT Stock; or (iii) combines its outstanding REIT
      Stock into a smaller number of shares of REIT Stock, the Exchange Factor shall
      be adjusted by multiplying the Exchange Factor by a fraction, the numerator
      of
      which shall be the number of shares of REIT Stock issued and outstanding on
      the
      record date for such dividend, contribution, subdivision or combination
      (assuming for such purpose that such dividend, distribution, subdivision or
      combination has occurred as of such time), and the denominator of which shall
      be
      the actual number of shares of REIT Stock (determined without the above
      assumption) issued and outstanding on the record date for such dividend,
      distribution, subdivision or combination. Any adjustment to the Exchange Factor
      shall become effective immediately after the effective date of such event
      retroactive to the record date, if any, for such event. 

     

    “Exchanging
      Partner” has the meaning set forth in Section 2.1 hereof. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Exchange
      Right” has the meaning set forth in Section 2.1 hereof. 

     

    “Lien”
      means any lien, security interest, mortgage, deed of trust, charge, claim,
      encumbrance, pledge, option, right of first offer or first refusal and any
      other
      right or interest of others of any kind or nature, actual or contingent, or
      other similar encumbrance of any nature whatsoever. 

     

    “Limited
      Partner” means any Person, other than the Company, named as a Limited Partner on
      Exhibit A, as such Exhibit may be amended from time to time. 

     

    “Notice
      of Exchange” means the Notice of Exchange substantially in the form of Exhibit B
      to this Agreement. 

     

    “Offering”
      means the offering of the Company’s common stock, par value $.01 per share,
      pursuant to a registration statement on Form S-11 filed with the Securities
      and
      Exchange Commission (Registration No. 333-117367).

     

    “Person”
      shall mean an individual, partnership, corporation, limited liability company,
      trust, estate, or unincorporated organization, or other entity, or a government
      or agency or political subdivision thereof. 

     

    “REIT
      Stock Amount” means that number of shares of REIT Stock equal to the product of
      the number of Partnership Units offered for exchange by an Exchanging Partner,
      multiplied by the Exchange Factor as of the Valuation Date, provided, that
      in
      the event the Company or the Operating Partnership issues to all holders of
      REIT
      Stock rights, options, warrants or convertible or exchangeable securities
      entitling the stockholders to subscribe for or purchase REIT Stock, or any
      other
      securities or property (collectively, the “rights”), then the REIT Stock Amount
      shall also include such rights that a holder of that number of shares of REIT
      Stock would be entitled to receive. 

     

    “SEC”
      means the Securities and Exchange Commission. 

     

    “Series
      A
      Preferred Units” has the meaning set forth in the Amendment. 

     

    “Specified
      Exchange Date” means the tenth (10th) Business Day after receipt by the
      Operating Partnership and the Company of a Notice of Exchange; provided,
      however, that if the Operating Partnership has more than 99 partners, as
      determined in accordance with the provisions of Treasury Regulation Section
      1.7704-1(h), then the Specified Exchange Date shall mean the thirty-first (31st)
      calendar day after receipt by the Operating Partnership and the Company of
      a
      Notice of Exchange. 

     

    “Valuation
      Date” means the date of receipt by the Operating Partnership and the Company of
      a Notice of Exchange or, if such date is not a Business Day, the first Business
      Day thereafter. 

     

    “Value”
      means, with respect to shares of REIT Stock, the average of the daily market
      price for the five (5) consecutive trading days immediately preceding the
      Valuation Date. The market price for each such trading day shall be:

     

    (i)
      if
      the REIT Stock is listed or admitted to trading on the New York Stock Exchange
      (the “NYSE”), any other national securities exchange or the Nasdaq Stock Market
      (“Nasdaq”), the closing price on such day, or if no such sale takes place on
      such day, the average of the closing bid and asked prices on such day; or

     

    (ii)
      if
      the REIT Stock is not listed or admitted to trading on the NYSE, any national
      securities exchange or Nasdaq, the last reported sale price on such day; or
      

     

    (iii)
      if
      no sale takes place on such day, the average of the closing bid and asked prices
      on such day, as reported by a reliable quotation source designated by the
      Company or if the REIT Stock is not then traded on any market, as determined
      in
      good faith by the Company’s Independent Directors (as defined by the Company’s
      charter). 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    In
      the
      event the REIT Stock Amount includes rights that a holder of REIT Stock would
      be
      entitled to receive, then the Value of such rights shall be determined by the
      independent directors of the Company acting in good faith on the basis of such
      quotations and other information as they consider, in their reasonable judgment,
      appropriate. 

     

    ARTICLE
      II 

     

    EXCHANGE
      RIGHT 

     

    2.1
      Exchange Right. (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5 hereof, and
      subject to any limitations under applicable law, the Operating Partnership
      hereby grants to each Limited Partner and each Limited Partner hereby accepts
      the right (the “Exchange Right”), exercisable (i) on or after the date that is
      one (1) year after the closing of the Offering or (ii) upon the liquidation
      of
      the Operating Partnership or the sale of all or substantially all of the assets
      of the Operating Partnership, to exchange on a Specified Exchange Date all
      or a
      portion of the Partnership Units held by such Limited Partner at an exchange
      price equal to and in the form of the Cash Amount. Notwithstanding anything
      to
      the contrary herein, the Exchange Right shall only be applicable to such
      Partnership Units that are Common Units and not Series A Preferred Units
      prior to conversion of such Series A Preferred Units to Common Units pursuant
      to
      the Partnership Agreement.

     

    (b)
      The
      Exchange Right shall be exercised pursuant to a Notice of Exchange delivered
      to
      the Operating Partnership, with a copy delivered to the Company, by the Limited
      Partner who is exercising the Exchange Right (the “Exchanging Partner”);
      provided, however, that the Company, on behalf of the Operating Partnership,
      may
      elect, after a Notice of Exchange is delivered, to satisfy the Exchange Right
      which is the subject of such notice in accordance with Section 2.2.

     

    (c)
      A
      Limited Partner may exercise the Exchange Right from time to time with respect
      to part or all of the Partnership Units that it owns (including Common Units
      received upon conversion of Series A Preferred Units), as selected by the
      Limited Partner, provided that, except as provided in the Agreement, a Limited
      Partner may not exercise the Exchange Right for less than one thousand (1,000)
      Partnership Units unless such Limited Partner then holds less than one thousand
      (1,000) Partnership Units, in which event the Limited Partner must exercise
      the
      Exchange Right for all of the Partnership Units held by such Limited Partner.
      

     

    (d)
      An
      Exchanging Partner shall have no right with respect to any Partnership Units
      so
      exchanged to receive any distributions paid after the Specified Exchange Date
      with respect to such Partnership Units. 

     

    (e)
      Any
      Assignee of a Limited Partner may exercise the rights of such Limited Partner
      pursuant to this Article 2, and such Limited Partner shall be deemed to have
      assigned such rights to such Assignee and shall be bound by the exercise of
      such
      rights by such Assignee. 

     

    (f)
      In
      connection with any exercise of such rights by an Assignee on behalf of a
      Limited Partner, the Cash Amount or the REIT Stock Amount, as the case may
      be,
      shall be satisfied by the Operating Partnership or the Company, as the case
      may
      be, directly to such Assignee and not to such Limited Partner. 

     

    2.2
      Option of Company to Exchange for REIT Stock. (a) Notwithstanding the provisions
      of Section 2.1, the Company may, on behalf of the Operating Partnership, in
      its
      sole and absolute discretion (subject to the limitations on ownership and
      transfer of REIT Stock set forth in the Company’s charter), elect to assume
      directly the Operating Partnership’s obligation with respect to the Exchange
      Right and satisfy an Exchanging Partner’s Exchange Right by exchanging REIT
      Stock and rights equal to the REIT Stock Amount on the Specified Exchange Date
      for the Partnership Units offered for exchange by the Exchanging Partner,
      whereupon the Company shall acquire the Partnership Units offered for exchange
      by the Exchanging Partner and shall be treated for all purposes of the
      Partnership Agreement as the owner of such Partnership Units. Unless the
      Company, in its sole and absolute discretion, shall exercise its right to assume
      directly the Operating Partnership’s obligation with respect to the Exchange
      Right and satisfy the Exchange Right, the Company shall not have any obligation
      to the Exchanging Partner or to the Operating Partnership with respect to the
      Exchanging Partner’s exercise of the Exchange Right. If the Company shall
      exercise its right to satisfy the Exchange Right in the manner described in
      the
      first sentence of this Section 2.2 and shall fully perform its obligations
      in
      connection therewith, the Operating Partnership shall have no right or
      obligation to pay any amount to the Exchanging Partner with respect to such
      Exchanging Partner’s exercise of the Exchange Right, and each of the Exchanging
      Partner, the Operating Partnership and the Company shall, for federal income
      tax
      purposes, treat the transaction between the Company and the Exchanging Partner
      as a sale of the Exchanging Partner’s Partnership Units to the Company. Nothing
      contained in this Section 2.2 shall imply any right of the Company to require
      any Limited Partner to exercise the Exchange Right afforded to such Limited
      Partner pursuant to Section 2.1. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)
      In
      the event the Company shall elect to satisfy, on behalf of the Operating
      Partnership, an Exchanging Partner’s Exchange Right by exchanging REIT Stock for
      the Partnership Units offered for exchange, 

     

    (i)
      the
      Company hereby agrees so to notify the Exchanging Partner within five (5)
      Business Days after the receipt by the Company of such Notice of Exchange,
      

     

    (ii)
      each
      Exchanging Partner hereby agrees to execute such documents and instruments
      as
      the Company may reasonably require in connection with the issuance of REIT
      Stock
      upon exercise of the Exchange Right, and 

     

    (iii)
      the
      Company hereby agrees to deliver stock certificates representing fully paid
      and
      nonassessable shares of REIT Stock. 

     

    2.3
      Prohibition of Exchange for REIT Stock. Notwithstanding anything herein to
      the
      contrary, the Company shall not be entitled to satisfy an Exchanging Partner’s
      Exchange Right pursuant to Section 2.2 if the delivery of REIT Stock to such
      Limited Partner by the Company pursuant to Section 2.2 (regardless of the
      Operating Partnership’s obligations to the Limited Partner under Section 2.1)

     

    (a)
      would
      be prohibited under the Articles of Incorporation of the Company, 

     

    (b)
      if
      the Company has elected REIT status, would otherwise jeopardize the REIT status
      of the Company, or 

     

    (c)
      would
      cause the acquisition of the REIT Stock by the Limited Partner to be
“integrated” with any other distribution of REIT Stock by the Company for
      purposes of complying with the registration provisions of the Securities Act.
      

     

    2.4
      Payment Date. Any Cash Amount to be paid to an Exchanging Partner shall be
      paid
      on the Specified Exchange Date; provided, however, that the Operating
      Partnership may elect to cause the Specified Exchange Date to be delayed for
      up
      to an additional 180 days to the extent required for the Company to cause
      additional REIT Shares to be issued to provide financing to be used to make
      such
      payment of the Cash Amount by the Operating Partnership. 

     

    2.5
      Expiration of Exchange Right. The Exchange Right shall expire with respect
      to
      any Partnership Units for which an Exchange Notice has not been delivered to
      the
      Operating Partnership and the Company on or before December 31, 2040.

     

    2.6
      Effect of Exchange. (a) Any exchange of Partnership Units pursuant to this
      Article 2 shall be deemed to have occurred as of the Specified Exchange Date
      for
      all purposes, including without limitation the payment of distributions or
      dividends in respect of Partnership Units or REIT Stock, as applicable.

     

    (b)
      Any
      Partnership Units acquired by the Company pursuant to an exercise by any Limited
      Partner of an Exchange Right shall be deemed to be acquired by and reallocated
      or reissued to the Company. 

     

    (c)
      The
      Company, as general partner of the Operating Partnership, shall amend the
      Partnership Agreement to reflect each such exchange and reallocation or
      reissuance of Partnership Units and each corresponding recalculation of the
      Partnership Units of the Limited Partners. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      III 

     

    OTHER
      PROVISIONS 

     

    3.1
      Covenants of the Company. (a) At all times during the pendency of the Exchange
      Right, the Company shall reserve for issuance such number of shares of REIT
      Stock as may be necessary to enable the Company to issue such shares in full
      payment of the REIT Stock Amount in regard to all Partnership Units held by
      Limited Partners which are from time to time outstanding. 

     

    (b)
      During the pendency of the Exchange Right, the Company shall deliver to Limited
      Partners in a timely manner all reports filed by the Company with the SEC to
      the
      extent the Company also transmits such reports to its stockholders and all
      other
      communications transmitted from time to time by the Company to its stockholders
      generally. 

     

    (c)
      The
      Company shall notify each Limited Partner, upon request, of the then current
      Exchange Factor and such notice will include a reasonable explanation of the
      Exchange Factor calculation to be applied at such time. 

     

    3.2
      Fractional Shares. (a) No fractional shares of REIT Stock shall be issued upon
      exchange of Partnership Units. 

     

    (b)
      The
      number of full shares of REIT Stock which shall be issuable upon exchange of
      Partnership Units (or the cash equivalent amount thereof if the Cash Amount
      is
      paid) shall be computed on the basis of the aggregate amount of Partnership
      Units so surrendered. 

     

    (c)
      Instead of any fractional shares of REIT Stock which would otherwise be issuable
      upon exchange of any Partnership Units, the Operating Partnership shall pay
      a
      cash adjustment in respect of such fraction in an amount equal to the Cash
      Amount of a Partnership Unit multiplied by such fraction. 

     

    3.3
      Investment Representations and Warranties. By delivering to the Company a Notice
      of Exchange, each Exchanging Partner will be deemed to represent and warrant
      to
      the Company and the Operating Partnership that such Exchanging Partner is aware
      of the Company’s option to exchange such Exchanging Partner’s Partnership Units
      for REIT Stock pursuant to Section 2.2 hereof and that: 

     

    (a)
      (i)
      Such Exchanging Partner has received and reviewed 

     

    (A)
      a
      copy of the prospectus contained in the Registration Statement on Form S-11
      filed by the Company in connection with the Offering, any prospectus contained
      in any Registration Statement subsequently filed by the Company, and any
      supplement or amendment thereto (each, a “Prospectus”), and 

     

    (B)
      if
      the Company is filing reports under the Securities Exchange Act of 1934, as
      amended, copies of all reports and other filings (the “SEC Reports”), including
      Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
      on Form 8-K, made by the Company with the SEC pursuant to the Securities
      Exchange Act of 1934, as amended, and the rules and regulations thereunder,
      and
      understands the risks of, and other considerations relating to, an investment
      in
      REIT Stock. 

     

    (ii)
      Such
      Exchanging Partner, by reason of its business and financial experience, together
      with the business and financial experience of those persons, if any, retained
      by
      it to represent or advise it with respect to its investment in REIT Stock,
      

     

    (A)
      has
      such knowledge, sophistication and experience in financial and business matters
      and in making investment decisions of this type that it is capable of evaluating
      the merits and risks of and of making an informed investment decision with
      respect to an investment in REIT Stock, 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (B)
      is
      capable of protecting its own interest or has engaged representatives or
      advisors to assist it in protecting its interests and 

     

    (C)
      is
      capable of bearing the economic risk of such investment. 

     

    (iii)
      (A)
      Such Exchanging Partner is an “accredited investor” as defined in Rule 501 of
      the regulations promulgated under the Securities Act. 

     

    (B)
      If
      such Exchanging Partner has retained or retains a person to represent or advise
      it with respect to its investment in REIT Stock, such Exchanging Partner will
      advise the Company of such retention and, at the Company’s request, such
      Exchanging Partner shall, prior to or at delivery of the REIT Stock hereunder,
      

     

    (I)
      acknowledge in writing such representation and 

     

    (II)
      cause such representative or advisor to deliver a certificate to the Company
      containing such representations as may be reasonably requested by the Company.
      

     

    (b)    (i)
      Such Exchanging Partner understands that an investment in the Company involves
      substantial risks. 

     

    (ii)
      Such
      Exchanging Partner has been given the opportunity to make a thorough
      investigation of the activities of the Company and has been furnished with
      materials relating to the Company and its activities, including, without
      limitation, each Prospectus and the SEC Reports. 

     

    (iii)
      Such Exchanging Partner has relied and is making its investment decision based
      upon the Prospectus and any subsequent Prospectus, the SEC Reports and other
      written information provided to the Exchanging Partner by or on behalf of the
      Company and, as applicable, such Exchanging Partner’s position as a director or
      executive officer of the Company. 

     

    (c)    (i)
      The REIT Stock to be issued to such Exchanging Partner hereunder will be
      acquired by such Exchanging Partner for its own account, for investment only
      and
      not with a view to, or with any intention of, a distribution or resale thereof,
      in whole or in part, or the grant of any participation therein. 

     

    (ii)
      Such
      Exchanging Partner was not formed for the specific purpose of acquiring an
      interest in the Company. 

     

    (d)    (i)
      Such Exchanging Partner acknowledges that 

     

    (A)
      the
      shares of REIT Stock to be issued to such Exchanging Partner hereunder have
      not
      been registered under the Securities Act or state securities laws by reason
      of a
      specific exemption or exemptions from registration under the Securities Act
      and
      applicable state securities laws and, the certificates representing such shares
      of REIT Stock will bear a legend to such effect, 

     

    (B)
      the
      Company’s and the Operating Partnership’s reliance on such exemptions is
      predicated in part on the accuracy and completeness of the representations
      and
      warranties of such Exchanging Partner contained herein, 

     

    (C)
      the
      REIT Stock to be issued to such Exchanging Partner hereunder may not be resold
      or otherwise distributed unless registered under the Securities Act and
      applicable state securities laws, or unless an exemption from registration
      is
      available, 

     

    (D)
      there
      may be no market for unregistered shares of REIT Stock, and 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (E)
      the
      Company has no obligation or intention to register such REIT Stock under the
      Securities Act or any state securities laws or to take any action that would
      make available any exemption from the registration requirements of such laws,
      except as provided in the Registration Rights Agreement entered into by the
      Company and the Exchanging Partner (the “Registration Rights Agreement”).

     

    (ii)
      Such
      Exchanging Partner acknowledges that because of the restrictions on transfer
      or
      assignment of such REIT Stock to be issued hereunder, such Exchanging Partner
      may have to bear the economic risk of its investment in REIT Stock issued
      hereunder for an indefinite period of time, although the holder of any such
      REIT
      Stock will be afforded certain rights to have such REIT Stock registered under
      the Securities Act and applicable state securities laws pursuant to the
      Registration Rights Agreement. 

     

    (e)
      The
      address set forth under such Exchanging Partner’s name in the Notice of Exchange
      is the address of the Exchanging Partner’s principal place of business or, if a
      natural person, the address of the Exchanging Partner’s residence, and such
      Exchanging Partner has no present intention of becoming a resident of any
      country, state or jurisdiction other than the country and state in which such
      principal place of business or residence is situated. 

     

    ARTICLE
      IV 

     

    GENERAL
      PROVISIONS 

     

    4.1
      Addresses and Notice. Any notice, demand, request or report required or
      permitted to be given or made to the Operating Partnership, the Company, a
      Limited Partner or Assignee, as the case may be, under this Agreement shall
      be
      in writing and shall be deemed given or made when delivered in person or when
      sent by first class United States mail or by other similarly reliable means
      of
      written communication to the Operating Partnership, the Company, a Limited
      Partner or Assignee, as the case may be, (i) at the address listed on the
      records of the Operating Partnership, with respect to a Limited Partner or
      Assignee, and (ii) at 326 Third Street, Lakewood, NJ 08701, Attn: President,
      with respect to the Operating Partnership or the Company. 

     

    4.2
      Titles and Captions. All article or section titles or captions in this Agreement
      are for convenience only. They shall not be deemed part of this Agreement and
      in
      no way define, limit, extend or describe the scope or intent of any provisions
      hereof. Except as specifically provided otherwise, references to “Articles” and
“Sections” are to Articles and Sections of this Agreement. 

     

    4.3
      Pronouns and Plurals. Whenever the context may require, any pronoun used in
      this
      Agreement shall include the corresponding masculine, feminine or neuter forms,
      and the singular form of nouns, pronouns and verbs shall include the plural
      and
      vice versa. 

     

    4.4
      Further Action and Additional Restrictions. The parties shall execute and
      deliver all documents, provide all information and take or refrain from taking
      action as may be necessary or appropriate to achieve the purposes of this
      Agreement. 

     

    4.5
      Binding Effect. This Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective heirs, executors, administrators,
      successors, legal representatives and permitted assigns. 

     

    4.6
      Waiver. No failure by any party to insist upon the strict performance of any
      covenant, duty, agreement or condition of this Agreement or to exercise any
      right or remedy consequent upon a breach thereof shall constitute waiver of
      any
      such breach or any other covenant, duty, agreement or condition. 

     

    4.7
      Counterparts. This Agreement may be executed in counterparts, all of which
      together shall constitute one agreement binding on all of the parties hereto,
      notwithstanding that all such parties are not signatories to the original or
      the
      same counterpart. Each party shall become bound by this Agreement immediately
      upon affixing its signature hereto. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.8
      Applicable Law. This Agreement shall be construed and enforced in accordance
      with and governed by the laws of the State of Delaware, without regard to the
      principles of conflicts of law thereof. 

     

    4.9
      Invalidity of Provisions. If any provision of this Agreement is or becomes
      invalid, illegal or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions contained herein shall not be
      affected thereby. 

     

    4.10
      Entire Agreement. This Agreement contains the entire understanding and agreement
      among the Limited Partners, the Operating Partnership and the Company with
      respect to the subject matter hereof and supersedes any other prior written
      or
      oral understandings or agreements among them with respect thereto. 

     

    4.11
      Amendment. This Agreement may be modified or amended by a written instrument
      signed by a duly authorized representative of each of the Company, the Operating
      Partnership and the Limited Partners.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	
              THE
                COMPANY:

               

              
                LIGHTSTONE
                  VALUE PLUS REAL ESTATE 

                INVESTMENT
                  TRUST, INC.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      	 	 	 
	 	
              OPERATING
                PARTNERSHIP:

               

              
                LIGHTSTONE
                  VALUE PLUS REIT LP

              

               

              
                BY:
                  LIGHTSTONE
                  VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC., its general
                  partner

              

            
	
            	       	
            

    

    
      	 	 	 
	 	
              LIMITED
                PARTNERS:

               

              
                ARBOR
                  MILL RUN JRM LLC.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      	 	 	 
	 	
              ARBOR
                NATIONAL CJ LLC

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A
      - Exchange Rights Agreement 

     

    Name
      and
      Address of Limited Partner 

    

    Arbor
      Mill Run JRM LLC

    c/o
      Arbor
      Commercial Mortgage LLC

    333
      Earle
      Ovington Boulevard

    Uniondale,
      New York 11553

    

    Arbor
      National CJ LLC 

    c/o
      Arbor
      Commercial Mortgage LLC

    333
      Earle
      Ovington Boulevard

    Uniondale,
      New York 11553

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B
      - Exchange Rights Agreement 

     

    Notice
      of
      Exchange 

     

    The
      undersigned Limited Partner hereby irrevocably (i) exchanges
            
      Partnership Units in Lightstone Value Plus REIT LP, in accordance with the
      terms
      of the Exchange Rights Agreement, dated as of
            ,
      200     (the “Exchange Rights Agreement”), and the Exchange
      Right referred to therein; (ii) surrenders such Partnership Units and all right,
      title and interest therein; and (iii) directs that the Cash Amount or REIT
      Stock
      Amount (as determined by the Company) deliverable upon exercise of the Exchange
      Right be delivered to the address specified below, and if REIT Stock is to
      be
      delivered, such REIT Stock will be registered or placed in the name(s) and
      at
      the address(es) specified below. 

     

    The
      undersigned hereby represents, warrants, and certifies that the undersigned
      (a)
      has marketable and unencumbered title to such Partnership Units, free and clear,
      other than any encumbrance arising pursuant to the Partnership Agreement, of
      the
      rights or interests of any other person or entity; (b) has the full right,
      power, and authority to exchange and surrender such Partnership Units as
      provided herein; and (c) has obtained the consent or approval of all persons
      or
      entities, if any, (other than consent or approval that may be required of the
      Company or the Operating Partnership) having the right to consent or approve
      such exchange and surrender on the part of the undersigned. 

     

    The
      undersigned hereby makes the representations and warranties contained in Section
      3.3 of the Exchange Rights Agreement as if such representations and warranties
      had been set forth in full in this Notice of Exchange. 

     

    
      	 	 	 
	
              Dated:
                

              
                

              

            	
            	
            
	 	
              

              Name
                of Limited Partner (Please Print)

            

    

     

    
      	
              Signature
                guaranteed by:

            	 	 
	 	 	 
	 	
              

              (Signature
                of Limited Partner)

            

    

    
      	 	 	 
	 

              

            	 	 
	 	
              

              (Street
                Address)

            

    

     

    
      	 	 	 
	 	
              

              (City)
                (State)
                                        (Zip
                Code)

            
	 	 
	 	
              If
                REIT Stock is to be issued, issue
                to:

            

    

     

    
      	 	 	 
	 	
              
                Name:

              

              
                

              

            

    

     

    
      
        
        

      

      
        B-1FIRST
      AMENDMENT 

    TO

    AMENDED
      AND RESTATED

    AGREEMENT
      OF LIMITED PARTNERSHIP

    OF

    LIGHTSTONE
      VALUE PLUS REIT LP

     

    THIS
      FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
      LIGHTSTONE VALUE PLUS REIT LP (this “Amendment”) is made as of June 26, 2008 by
      and among Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland
      corporation (the “REIT”), as the General Partner of Lightstone Value Plus REIT
      LP., a Delaware limited partnership (the “Partnership”), Lightstone Value Plus
      REIT LLC, a Delaware limited liability company, as the Initial Limited Partner
      and sole existing limited partner of the Partnership, Lightstone SLP, LLC,
      a
      Delaware limited liability company, as Special General Partner of the
      Partnership, Arbor Mill Run JRM LLC, a Delaware limited liability company
      (“Arbor JRM”) and Arbor National CJ, LLC, a New York limited liability company
      (“Arbor CJ”). Capitalized terms used but not otherwise defined in this Amendment
      shall have the meanings given to such terms in the Amended and Restated
      Agreement of Limited Partnership of the Partnership, dated as of April 22,
      2005,
      by and among the REIT, the Initial Limited Partner and Special General Partner
      and the other parties signatory thereto (the “Partnership
      Agreement”).

     

    WITNESSETH:

     

    WHEREAS,
      on the date hereof, Arbor JRM has contributed a 22.08% common interest in Mill
      Run L.L.C., a Delaware limited liability company (“Mill Run”), representing all
      of its membership interest in Mill Run, to the Partnership (the “Arbor JRM
      Contribution”) pursuant to that certain Contribution and Conveyance Agreement
      dated as of the date hereof by and between Arbor JRM and the Partnership (the
      “Arbor JRM Contribution Agreement”); 

     

    WHEREAS,
      on the date hereof, Arbor CJ has contributed a 0.46% common interest in Mill
      Run, representing all of its membership interest in Mill Run, to the Partnership
      (the “Arbor CJ Contribution”) pursuant to that certain Contribution and
      Conveyance Agreement dated as of the date hereof by and between Arbor CJ and
      the
      Partnership (the “Arbor CJ Contribution Agreement”); 

     

    WHEREAS,
      AR Prime Holdings LLC, a Delaware limited liability company (“AR Prime”), the
      REIT and the Partnership are parties to that certain Contribution and Conveyance
      Agreement dated as the date hereof (the “AR Prime Contribution Agreement”)
      pursuant to which, upon the closing of the AR Prime Contribution Agreement,
      AR
      Prime will contribute its 25% membership interest in Prime Outlets Acquisition
      Company LLC, a Delaware limited liability company (“POAC”), representing all of
      its membership interest in POAC, to the Partnership (the “POAC
      Contribution”);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      pursuant to each of the Arbor JRM Contribution Agreement, the Arbor CJ
      Contribution Agreement and the AR Prime Contribution Agreement, and in exchange
      for each of the Arbor JRM Contribution, the Arbor CJ Contribution and the POAC
      Contribution, respectively, the Partnership has agreed to issue to Arbor JRM
      and
      Arbor CJ, respectively, on the date hereof, and to AR Prime, upon the closing
      of
      the POAC Contribution, certain common Limited Partner Interests in the
      Partnership as well as certain preferred Limited Partner Interests represented
      by a newly designated preferred class of Limited Partner Interest of the
      Partnership with the rights, privileges and preferences set forth on Exhibit
      A
      hereto (the “Series A Preferred Units”); and 

     

    WHEREAS,
      the parties to this Amendment desire to amend the Partnership Agreement to
      reflect the creation of the Series A Preferred Units and the rights, privileges
      and preferences thereof.

     

    NOW
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the parties to this Agreement hereby agree as
      follows.

     

    1. Pursuant
      to Section 4.3 of the Partnership Agreement, the Partnership Agreement is hereby
      amended (i) to create the Series A Preferred Units with the rights, privileges
      and preferences set forth on Exhibit A attached hereto and (ii) to admit each
      of
      Arbor JRM and Arbor CJ as a Limited Partner of the Partnership as of the date
      hereof in accordance with the provisions of the Arbor JRM Contribution Agreement
      and the Arbor CJ Contribution Agreement, respectively, and, upon and as of
      closing of the transactions contemplated by the POAC Contribution Agreement,
      to
      admit AR Prime as a Limited Partner of the Partnership effective as of the
      closing date of the POAC Contribution in accordance with the provisions of
      the
      AR Prime Contribution Agreement. 

     

    2. Section
      5.1 of the Partnership Agreement is hereby amended to provide that,
      notwithstanding anything in the Partnership Agreement to the contrary,
      distributions payable with respect to the Series A Preferred Units as provided
      in Section 4 of Exhibit A attached hereto or, in the event of a Liquidation
      (as
      defined in Exhibit A attached hereto) that is not a Liquidating Event, as
      provided in Section 5 of Exhibit A attached hereto, shall have priority over
      all
      of the other distributions to Partners pursuant to Section 5.1 of the
      Partnership Agreement. 

     

    3. Article
      6
      and Exhibit B of the Partnership Agreement are hereby amended to provide that,
      notwithstanding anything in the Partnership Agreement to the contrary,
      allocations of Net Income and Net Loss to holders of Series A Preferred Units
      in
      any year shall be limited as provided in Section 4(F) of Exhibit A attached
      hereto. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    4. Section
      13.2 of the Partnership Agreement is hereby amended to provide that,
      notwithstanding anything in the Partnership Agreement to the contrary,
      distributions payable with respect to the Series A Preferred Units as provided
      in Section 5 of Exhibit A attached hereto shall have priority over all of the
      other distributions to Partners following a Liquidating Event, including any
      distributions pursuant to Section 13.2(a)(iii)(D).

     

    5. The
      Partnership Agreement is hereby amended to the fullest extent necessary to
      effect all of the matters contemplated by this Amendment, including but not
      limited to the terms set forth on Exhibit A hereto, and including, without
      limitation, the voting rights of the holders of Series A Preferred Units and
      restrictions on the General Partner and the Partnership that are set forth
      in
      Section 8 of Exhibit A attached hereto. Except as specifically provided for
      in
      this Amendment, the provisions of the Partnership Agreement shall remain in
      full
      force and effect.

     

    6. The
      execution, delivery and effectiveness of this Amendment shall not operate (a)
      as
      an amendment or modification of any provision, right or obligation of any
      Partner under the Partnership Agreement except as specifically set forth in
      this
      Amendment or (b) as a waiver or consent to any subsequent action or
      transaction.

     

    7. This
      Amendment shall be construed and enforced in accordance with and governed by
      the
      laws of the State of Delaware, without regard to the principles of conflicts
      of
      laws thereof.

     

    8. This
      Amendment contains the entire understanding among the parties with respect
      to
      the subject matter hereof and supersedes any other prior written or oral
      understanding or agreements among their with respect thereto.

     

    9. This
      Amendment may be executed in one or more counterparts, each of which shall
      be an
      original and all of which, when taken together, shall constitute one and the
      same agreement.

     

    10. This
      Amendment shall become effective when each party hereto shall have received
      a
      counterpart hereof signed by all of the other parties hereto. 

     

    [SIGNATURE
      PAGE TO FOLLOW]

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      each of
      the undersigned has caused this Amendment to be duly executed on its behalf
      as
      of the date first above written.

     

    
      	 	 	 
	 	
              GENERAL
                PARTNER:

               

              LIGHTSTONE
                VALUE PLUS REAL ESTATE 

              INVESTMENT
                TRUST, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              David
                Lichtenstein

              Chief
                Executive Officer and President

            

    

     

    
      	 	 	 
	 	
              LIMITED
                PARTNER:

              

                LIGHTSTONE
                  VALUE PLUS REIT LLC

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              David
                Lichtenstein

              Authorized
                Person

            

     

    
      	 	 	 
	 	
              SPECIAL
                GENERAL PARTNER:

               

              
                LIGHTSTONE
                  SLP, LLC

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              David
                Lichtenstein

              Authorized
                Person

            

    

     

    
      	 	 	 
	 	
              ARBOR
                JRM:

              

                ARBOR
                  MILL RUN JRM LLC

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

            
	 	Title:

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              ARBOR
                CJ:

              

                ARBOR
                  NATIONAL CJ, LLC

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:
	 	Title:

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    TERMS
      OF SERIES A PREFERRED UNITS

     

    In
      accordance with Section 4.3 of the Partnership Agreement, set forth below are
      the terms and conditions of the Series A Preferred Units established by the
      Partnership on June 26, 2008.

     

    1. Definitions.
      For
      purposes of the Series A Preferred Units, the following terms shall have the
      meanings indicated in this Section 1. Capitalized terms used but not otherwise
      defined in this Exhibit A shall have the meanings set forth in Article I of
      the
      Partnership Agreement, as amended by the Amendment to which this Exhibit A
      is
      attached.

     

    “Common
      Units” shall mean any class or series of Partnership Interest that does not have
      a priority or preference in the payment of distributions in the distribution
      of
      assets upon any Liquidation, including but not limited to all partnership
      Interests issued to the General partner or to the Special General Partner.
      

     

    “Estimated
      Market Price” shall have the meaning set forth in Section 6(A) of this Exhibit
      A.

     

    “Liquidation”
      shall mean the occurrence of any Liquidating Event or any lease or transfer
      of
      all or substantially all of the Partnership’s property or assets. 

     

    “Lockout
      Date” shall mean June 26, 2013.

     

    “Series
      A
      Distribution Payment Date” shall mean with respect each calendar quarter a date
      that is no later than 30 days after the end of such calendar quarter.

     

    “Series
      A
      Distribution Period” shall mean quarterly distribution periods commencing on
      January 1, April 1, July 1 and October 1 of each year and ending on and
      including the day preceding the first day of the next succeeding Series A
      Distribution Period. 

     

    “Series
      A
      Distribution Record Date” shall have the meaning set forth in Section 6(C) of
      this Exhibit A.

     

    “Series
      A
      Junior Units” shall mean Common Units and any Partnership Units of any other
      class or series now or hereafter issued and outstanding that are not Series
      A
      Senior Units, Series A Preferred Units or Series A Parity Units.

     

    “Series
      A
      Liquidation Preference” shall have the meaning set forth in Section 5(A) of this
      Exhibit A.

     

    “Series
      A
      Parity Units” shall mean any class or series of Limited Partner Interest now or
      hereafter issued and outstanding, whether or not the distribution rates thereof
      shall be different from those of the Series A Preferred Units, if the holders
      of
      such class or series and the Series A Preferred Units shall be entitled to
      (i)
      the receipt of distributions in proportion to their respective amounts of
      accrued and unpaid distributions per unit and (ii) amounts distributable upon
      Liquidation in proportion to their respective liquidation preferences, in each
      case without preference or priority one over the other. 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Series
      A
      Senior Units” shall mean any class or series of Partnership Interest of the
      Partnership hereafter issued and outstanding, if the holders of such class
      or
      series shall be entitled to the receipt of distributions prior to a Liquidation
      or of amounts distributable upon any event of Liquidation, in preference or
      priority to the holders of Series A Preferred Units.

     

    2. Number
      of Preferred Units and Designation.
      This
      series of preferred Partnership Interests shall be designated as the 4.6316%
      Series A Preferred Limited Partner Interests (the “Series A Preferred Units”).
      The number of units which shall initially constitute such series shall be 80,000
      units.

     

    3. Ranking.
      The
      Series A Preferred Units shall, with respect to the payment of distributions
      and
      the right to receive the Series A Liquidation Preference upon a Liquidation,
      rank junior to all Series A Senior Units; rank senior to all Series A Junior
      Units, and rank in parity with all Series A Parity Units.

     

    4. Distributions.

     

    (A) Subject
      to the preferential rights of the holders of any Series A Senior Units, the
      holders of Series A Preferred Units shall be entitled to receive, when, as
      and
      if declared by the General Partner, cumulative preferential distributions
      payable in cash in an amount per unit equal to an annual rate of 4.6316% payable
      in arrears shall
      be
      calculated daily and shall be computed on the actual number of days elapsed
      over
      a month of 30 days and a year of 360 days; provided,
      however,
      that
      in
      the
      event that the Series A Preferred Units are not redeemed by the Partnership
      on
      the Lockout Date or within fifteen (15) days thereafter, the annual distribution
      rate applicable to the Series A Preferred Units shall increase from 4.6316%
      to
      fifteen percent (15%) per annum for so long as the Series A Preferred Units
      remain outstanding. The
      distributions shall begin to accrue and shall be fully cumulative from the
      day
      of issuance of any such Series A Preferred Units and shall be payable quarterly,
      when, as and if declared by the General Partner, in arrears, on each Series
      A
      Distribution Payment Date. Each such distribution shall be payable to the
      holders of record of Series A Preferred Units as they appear in the records
      of
      the Partnership at the close of business on such record date, not less than
      10
      nor more than 30 days preceding such Series A Distribution Payment Dates
      thereof, as shall be fixed by the General Partner. Accrued and unpaid
      distributions for any past Series A Distribution Periods may be declared and
      paid at any time and for such interim periods, without reference to any regular
      Series A Distribution Payment Date, to holders of record on such date, not
      less
      than 10 nor more than 30 days preceding the payment date thereof, as may be
      fixed by the General Partner. Any distribution payment made on Series A
      Preferred Units shall first be credited against the earliest accrued but unpaid
      distribution due with respect to Series A Preferred Units which remains
      payable.

     

    (B) The
      amount of distributions payable for any Series A Distribution Period shorter
      than a full calendar quarter on the Series A Preferred Units shall be computed
      by dividing the number of days in such period by 360 and multiplying the result
      by the product of the annual distribution rate (i.e., 4.6316%) multiplied by
      the
      Series A Liquidation Preference (i.e., $1,000.00 per Series A Preferred Unit).
      Holders of Series A Preferred Units shall not be entitled to any distributions,
      whether payable in cash, property or shares, in excess of cumulative
      distributions, as herein provided, on the Series A Preferred Units. No interest,
      or sum of money in lieu of interest, shall be payable in respect of any
      distribution payment or payments on the Series A Preferred Units which may
      be in
      arrears.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (C) So
      long
      as any Series A Preferred Units are outstanding, no distributions, except as
      described in the immediately following sentence, shall be declared or paid
      or
      set apart for payment on any class or series of Series A Junior Units for any
      period unless full cumulative distributions have been or contemporaneously
      are
      declared and paid or declared and a sum sufficient for the payment thereof
      set
      apart for such payment on the Series A Preferred Units for all Series A
      Distribution Periods terminating on or prior to the distribution payment date
      on
      such class or series of Series A Junior Units. 

     

    (D) So
      long
      as any Series A Preferred Units are outstanding, no distributions, except as
      described in the immediately following sentence, shall be declared or paid
      or
      set apart for payment on any class or series of Series A Parity Units for any
      period unless full cumulative distributions have been or contemporaneously
      are
      declared and paid or declared and a sum sufficient for the payment thereof
      set
      apart for such payment on the Series A Preferred Units for all Series A
      Distribution Periods terminating on or prior to the distribution payment date
      on
      such class or series of Series A Parity Units. When distributions are not paid
      in full or a sum sufficient for such payment is not set apart, as aforesaid,
      all
      distributions declared upon Series A Preferred Units and all distributions
      declared upon any other class or series of Series A Parity Units shall be
      declared ratably in proportion to the respective amounts of distributions
      accumulated and unpaid on the Series A Preferred Units and accumulated and
      unpaid on such Series A Parity Units.

     

    (E) No
      distributions on Series A Preferred Units shall be declared by the General
      Partner or paid or set apart for payment by the Partnership at such time as
      the
      terms and provisions of any agreement of the Partnership, including any
      agreement relating to its indebtedness, prohibits such declaration, payment
      or
      setting apart for payment or provides that such declaration, payment or setting
      apart for payment would constitute a breach thereof or a default thereunder,
      or
      if such declaration or payment shall be restricted or prohibited by
      law.

     

    (F) Subject
      at all times to Section 2 and Section 3(a), (b), (e) and (f) of Exhibit B to
      the
      Partnership Agreement, with respect to any Partnership Year, the holders
      of Series A Preferred Units shall
      be
      allocated Net Income, Net Loss and other allocable Partnership items of income,
      gain, loss or expense, only with respect to and to the extent of the amounts
      actually distributed to such holder of Series A Preferred Units for such
      Partnership Year (but in no event distributed later than 30 days after the
      end
      of that Partnership Year) pursuant to this Section 4 on account of the annual
      return accrued on the Series A Preferred Units, but none of such items shall
      be
      allocated to the holders of Series A Preferred Units on account of any other
      distributions (all such other distributions representing a return of contributed
      capital).

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5. Liquidation
      Preference.
      

     

    (A) In
      the
      event of any Liquidation, subject to the prior preferences and other rights
      of
      any Series A Senior Units, before any payment or distribution of the assets
      of
      the Partnership (whether capital or surplus) shall be made to or set apart
      for
      the holders of Series A Junior Units, the holders of the Series A Preferred
      Units shall be entitled to receive One Thousand Dollars ($1,000.00) (the “Series
      A Liquidation Preference”) per Series A Preferred Unit plus an amount equal to
      all distributions (whether or not earned or declared) accrued and unpaid thereon
      to the date of final distribution to such holders; but such holders shall not
      be
      entitled to any further payment. If, upon any Liquidation, the assets of the
      Partnership, or proceeds thereof, distributable among the holders of the Series
      A Preferred Units and all Series A Parity Units shall be insufficient to pay
      in
      full the preferential amount aforesaid and liquidating payments on any other
      units of any class or series of Series A Parity Units, then such assets, or
      the
      proceeds thereof, shall be distributed among the holders of Series A Preferred
      Units and any such other Series A Parity Units ratably in accordance with the
      respective amounts that would be payable on such Series A Preferred Units and
      any such other Series A Parity Units if all amounts payable thereon were paid
      in
      full. 

     

    (B) Subject
      to the rights of the holders of any Series A Parity Units or Series A Senior
      Units, upon any liquidation, dissolution or winding up of the Partnership,
      after
      payment shall have been made in full to the holders of the Series A Preferred
      Units, as provided in this Section 5, the holders of Series A Preferred Units
      shall have no other claim to the remaining assets of the Partnership and any
      other series or class or classes of Series A Junior Units shall, subject to
      the
      respective terms and provisions (if any) applying thereto, be entitled to
      receive any and all assets remaining to be paid or distributed, and the holders
      of the Series A Preferred Units shall not be entitled to share therein.

     

    6. Conversion.
      

     

    (A) Unless
      such Series A Preferred Units have previously been redeemed pursuant to Section
      8 hereof, at the option of the holder thereof, any Series A Preferred Units
      may
      be converted, in whole or in part, at any time and from time to time after
      the
      Lockout Date, into such number of Common Units obtained by dividing the
      aggregate Series A Liquidation Preference (including for this purpose any
      distributions accrued and unpaid in respect of any prior Series A Distribution
      Periods but not the then-current Series A distribution Period) of such Series
      A
      Preferred Units by the estimated fair market value of one common share in the
      REIT (the “Estimated Market Value”) as determined by Robert A. Stanger &
Co., Inc. or another nationally recognized independent valuation firm with
      expertise in valuing the securities of real estate investment trusts, reasonably
      acceptable to the Partnership and holders owning at least sixty six and two
      thirds percent (66 and 2/3%) of Series A Preferred Units.

     

    (B) In
      order
      to exercise the conversion right, the holder of each applicable Series A
      Preferred Unit shall surrender the certificate representing such Series A
      Preferred Unit, duly endorsed or assigned to the Partnership in blank, to the
      Partnership, accompanied by written notice to the Partnership that the holder
      thereof elects to convert such Series A Preferred Units.

     

    
      
        
        

      

      
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    (C) Holders
      of Series A Preferred Units at the close of business on the record date (a
      “Series A Distribution Record Date”) in respect if any Series A Distribution
      Payment Date shall be entitled to receive the distribution payable on such
      units
      on the corresponding Series A Distribution Payment Date notwithstanding the
      conversion thereof following such Series A Distribution Record Date and prior
      to
      such Series A Distribution Payment Date.

     

    (D) Each
      conversion shall be deemed to have been effected immediately prior to the close
      of business on the date on which the certificate for the Series A Preferred
      Units shall have been surrendered and such notice received by the Partnership
      as
      aforesaid.

     

    (E) No
      fractional units or scrip representing fractions of Common Units shall be issued
      upon conversion of the Series A Preferred Units. Instead of any fractional
      interest in a Common Unit that would otherwise be deliverable upon the
      conversion of a Series A Preferred Unit, the Partnership shall pay to the holder
      of such Series A Preferred Unit an amount equal in cash based upon the then
      Estimated Market Price. If more than one Series A Preferred Unit shall be
      surrendered for conversion at one time by the same holder, the number of Common
      Units issuable upon conversion thereof shall be computed on the basis of the
      aggregate number of Series A Preferred Units so surrendered.

     

    7. Redemption. The
      Series A Preferred Units shall have no mandatory redemption or maturity date.
      The Series A Preferred Units shall not be redeemable by the Partnership prior
      to
      the Lockout Date. On or after the Lockout Date, the Series A Preferred Units
      may
      be redeemed at the option of the Partnership (which notice may be delivered
      prior to the Lockout Date as long as the redemption does not occur prior to
      the
      Lockout Date), in whole but not in part, on thirty (30) days’ prior written
      notice at the option of the Partnership, at a redemption price per Series A
      Preferred Unit equal to the sum of the Series A Liquidation Preference plus
      an
      amount equal to all distributions (whether or not earned or declared) accrued
      and unpaid thereon to the date of redemption, and the redemption price shall
      be
      payable in cash. During any redemption notice period, the holders of the Series
      A Preferred Units shall retain any conversion rights with respect to the Series
      A Preferred Units. The Series A Preferred Units shall not be subject to any
      sinking fund or other obligation of the Partnership to redeem or retire the
      Series A Preferred Units.

     

    8. Voting.
      

     

    (A) Other
      than as expressly provided in below in this Section 8, the Series A Preferred
      Units shall not have any voting rights or powers, and the consent of the holders
      thereof, shall not be required for the taking of any Partnership
      action.

     

    (B) As
      long
      as any of the Series A Preferred Units shall remain outstanding, the Partnership
      shall not, and the General Partner shall not have the authority to cause the
      Partnership to, take any of the following actions without the prior written
      consent of holders owning at least sixty-six and two-thirds percent (66 and
      2/3%) of the Series A Preferred Units then issued and outstanding, voting as
      a
      single class, in person or by proxy:

     

    
      
        
        

      

      
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    (1) Issue
      any
      Series A Senior Units or additional Series A Preferred Units, except for Series
      A Preferred Units that are issued to AR Prime pursuant to the AR Prime
      Contribution Agreement; provided,
      however,
      nothing
      in this clause 8(B)(1) shall prohibit the Partnership from issuing Series A
      Junior Units or Series A Parity Units.

     

    (2) Issue
      any
      Series A Parity Units if (x) the liquidation preference for such units exceeds
      the value of the consideration received by the Partnership for the issuance
      of
      such units, as determined by the Board of Directors of the REIT in its sole
      discretion, (y) the rates at which distributions are payable on such units
      are
      calculated on a base amount that is higher than the liquidation preference
      for
      such units, or (z) the distribution payment dates for such units are not the
      same as those for the Series A Preferred Units.

     

    (3) Redeem
      or
      repurchase any Series A Junior Units.

     

    (4) Redeem
      or
      repurchase any Series A Parity Units on or after the Lockout Date, unless
      concurrently therewith all of the Series A Preferred Units are being
      redeemed.

     

    (5) Redeem
      or
      repurchase any Series A Party Units prior to the Lockout Date, unless the full
      cumulative distributions have been or contemporaneously are declared and paid
      or
      set apart for payment for any past Series A Distribution Periods; provided
      that in
      the case of a repurchase, Series A Parity Units may not be purchased by the
      Partnership at a price higher than the redemption price for such Series A Parity
      Units or if no redemption price is provided for, the liquidation preference
      for
      such Series A Parity Units, plus any accrued and unpaid distributions thereon
      to
      the extent not otherwise included in the calculation of the liquidation
      preference for such Series A Parity Units.

     

    (6) (x) Effectuate
      amendments to the Partnership Agreement (other than amendments to this Exhibit
      A) that would materially adversely affect the terms and conditions of, or the
      rights, privileges or preferences of the holders of the Series A Preferred
      Units
      or (y) effectuate amendments to any provisions set forth in this Amendment
      that
      would adversely affect the terms and conditions of, or the rights, privileges
      or
      preferences of the holders of the Series A Preferred Units.

     

    (C) In
      the
      event that the Series A Preferred Units have not been redeemed by the
Partnership
      on the Lockout Date or within fifteen (15) days thereafter, from and after
      such
      date the Partnership shall not, and the General Partner shall not have the
      authority to cause the Partnership to, take
      any
      of the following actions without the prior written consent of holders owning
      at
      least sixty-six and two-thirds percent (66 and 2/3%) of the Series A Preferred
      Units then issued and outstanding, voting as a single class in person or by
      proxy:

     

    (1) Issue
      any
      Partnership Interests other than Common Units.

     

    (2) Purchase
      or otherwise acquire any direct or indirect interest in real property, except
      that the Partnership shall be permitted to make purchases or acquisitions of
      interests in real property where the sole consideration for such purchases or
      acquisitions is exclusively the issuance of Common Units. Notwithstanding the
      foregoing, the Partnership shall be permitted to consummate any purchase or
      acquisition from a Person other than the REIT Advisor, the Special General
      Partner or any of their respective Affiliates provided that such purchase or
      acquisition (i) was the subject of an executed purchase agreement dated at
      least
      90 days prior to the Lockout Date or (ii) is a follow-on investment in existing
      real property owned by the Partnership that involves an acquisition (a) of
      property adjoining property already owned by the Partnership or (b) a greater
      ownership interest in property already owned by the Partnership; provided
      that, in
      the case of (a) and (b) above, such purchase or acquisition is being effected
      in
      order to protect, preserve or enhance the Partnership’s existing
      investment.

     

    
      
        
        

      

      
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    (3) Sell,
      transfer, lease as an entirety, or otherwise dispose of any direct or indirect
      interest in real property; provided,
      however,
      that
      the Partnership shall be permitted to sell, transfer, lease or otherwise dispose
      of any real property to a Person other than the REIT Advisor, the Special
      General Partner or any of their respective Affiliates if such transaction (i)
      was the subject of a binding executed purchase agreement dated at least 90
      days
      prior to the Lockout Date, or (ii) none of the net proceeds of such transaction
      (after customary third party transaction costs, other than those payable to
      Person the REIT Advisor, the Special General Partner or any of their respective
      Affiliates) shall be distributed to any holders of Series A Junior Units and
      all
      of such net proceeds shall instead either (x) be applied to redeem the Series
      A
      Preferred Units at the closing of such transaction or (y) be held in a
      segregated account which may be used solely for the redemption of the Series
      A
      Preferred Units.

     

    (4) Lend
      money to or guarantee the obligation of, any person other than direct or
      indirect subsidiaries of the REIT or the Partnership, in excess of $500,000
      per
      annum in the aggregate; provided
      that the
      Partnership shall be permitted to make any loan or guarantee that is required
      to
      be made pursuant to a binding executed agreement dated at least 90 days prior
      to
      the Lockout Date; provided,
      further,
      that
      any such loan or guarantee permitted by the previous proviso shall not be
      permitted to be made to the REIT Advisor, the Special General Partner or any
      of
      their respective Affiliates.

     

    (5) Effectuate
      a merger, consolidation or recapitalization of the Partnership or a conversion
      of the Partnership to an entity other than a Delaware limited
      partnership.

     

    (6) Enter
      into any new agreement or transaction, or modify or waive the terms of, or
      agree
      to terminate, any existing agreement or transaction, with the REIT Advisor,
      the
      Special General Partner or any of their respective Affiliates; provided,
      however,
      that
      the foregoing restriction shall not apply to the annual renewal of the advisory
      agreement with affiliates of the Partnership and the annual renewal of the
      management agreements with affiliates of the Partnership; and provided,
      further,
      that in
      addition to the renewal or extension of the term of any such advisory and
      management agreement, additional amendments or modifications to such agreements
      may be made as long as such amendments or modifications (including, without
      limitation with respect to fees payable pursuant to such agreements) are
      determined by the Board of Directors of the REIT to be market provisions and
      amendments as evidenced by a report produced or compiled by Robert A Stanger
      & Co., Inc. or another independent, nationally recognized valuation firm
      selected by the Board of Directors of the REIT.

     

    (D) Notwithstanding
      anything in this Section 8 to the contrary, no consent of the holders of the
      Series A Preferred Units shall be required with respect to any transaction
      if
      (x) prior to the closing of such transaction the Partnership has given written
      notice that it intends to fully redeem all of the Series A Preferred Units
      and
      (y) at the closing of such transaction the Series A Preferred Units are fully
      redeemed by the Partnership. 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (E) The
      Partnership shall not, and the General Partner shall not have the authority
      to
      cause the Partnership to, enter into any binding agreement to take any action
      that would violate the provisions of this Section 8 (a “Restricted Agreement”);
provided,
      however,
      that
      the General Partner shall have the authority to cause the Partnership to enter
      into a Restricted Agreement if, upon the closing of the transaction contemplated
      by such Restricted Agreement, the Series A Preferred Units will be redeemed
      in
      full by the Partnership.

     

    9. Transfers.
      Prior
      to the Lockout Date, no Series A Preferred Unit shall be transferred, sold,
      assigned, conveyed, gifted, pledged, encumbered, hypothecated, mortgaged,
      exchanged or otherwise disposed of by law or otherwise (collectively, a
“Transfer”) without the prior written consent of the General Partner, which may
      be withheld or denied by the General Partner it is sole and absolute discretion;
      provided,
      however,
      that
      notwithstanding anything in the Partnership Agreement to the contrary but
      subject to the limitations set forth in Sections 11.3 (c), (d), and (e) of
      the
      Partnership Agreement as in effect as of June 26, 2008, prior to the Lockout
      Date there
      shall be no approval required for, and no restrictions whatsoever on,
any
      Transfer of Series A Preferred Units to Arbor Realty Trust, Inc., Arbor
      Commercial Mortgage, LLC or any of their respective controlled Affiliates,
      and
      there shall be no approval required for, or restrictions on, the pledge of
      any
      Series A Preferred Units to the REIT. Notwithstanding anything in the
      Partnership Agreement to the contrary, (i) from and after the Lockout Date,
      the
      only restrictions in the Partnership Agreement on the Transfer of Series A
      Preferred Units are those set forth in Sections 11.3 (c), (d), and (e) of the
      Partnership Agreement as in effect as of June 26, 2008 and
      (ii)
      any Transfer in contravention of the terms of this Exhibit A shall be void
      and
      ineffectual and shall not be binding upon, or recognized by the
      Partnership.

     

    10. Opt-in
      to Article 8 of the Uniform Commercial Code.
      Pursuant to and in accordance with 6 Del. Code Section 8-103(c), all Series
      A
      Preferred Units shall be considered and treated as “securities” (within the
      meaning of Del. Code Section 8-102(a)(15)) governed by Article 8 of the Delaware
      Uniform Commercial Code. All Series A Preferred Units shall upon issuance be
      evidenced and represented by Certificates of Series A Preferred Units issued
      by
      the Partnership to each holder of Series A Preferred Units. Such Certificate
      of
      Series A Preferred Interest is intended to be and shall be considered a
“security certificate” within the meaning of 6 Del. Code Section 8-102(a)(16).
      The Series A Preferred Units represented or evidenced by such Certificate are
      intended to be treated and shall be considered “certificated securities” within
      the meaning of 6 Del. Code Section 8-102(a)(4). The General Partner and the
      officers thereof are hereby authorized, empowered and directed to execute and
      deliver any such Certificate and such Certificates shall be delivered by the
      Partnership to the applicable holder concurrently with the date of
      issuance.

     

    11. Miscellaneous.

     

    (A) Series
      A
      Preferred Units will not have any designations, preferences, conversion or
      other
      rights, voting powers, restrictions, limitations as to distributions,
      qualifications or terms and conditions of redemption, other than those
      specifically set forth herein, in the Partnership Agreement, and as may be
      provided under applicable law.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (B) The
      headings of the various subdivisions herein are for convenience only and will
      not affect the meaning if interpretation of any of the provisions
      herein.

     

    (C) The
      preferences, conversion and other rights, voting powers, restrictions,
      limitations as to distributions, qualifications and terms and conditions of
      redemption of the Series A Preferred Units may be waived, and any of such
      provisions of the Series A Preferred Units may be amended, with the approval
      of
      holders of at least sixty-six and two-thirds percent (66 and 2/3%) of the issued
      outstanding Series A Preferred Units, voting as a single class in person or
      by
      proxy.

     

    
      
        
        

      

      
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    12. Severability
      of Provisions.
      Whenever possible, each provision hereof shall be interpreted in a manner as
      to
      be effective and valid under applicable law, but if any provision hereof is
      held
      to be prohibited by or invalid under applicable law, such provision shall be
      ineffective only to the extent of such prohibition or invalidity, without
      invalidating or otherwise adversely affecting the remaining provisions hereof.
      If a court of competent jurisdiction should determine that a provision hereof
      would be valid or enforceable if a period of time were extended or shortened
      or
      a particular percentage were increased or decreased, the such court may make
      such change as shall be necessary to render the provision in question effective
      and valid under applicable law.

     

    
      
        
        

      

      
        15

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