Document:

TAX
      PROTECTION AGREEMENT

     

    THIS
      TAX
      PROTECTION AGREEMENT (“Agreement”), dated as of June 26, 2008, is made by
      LIGHTSTONE VALUE PLUS REIT, L.P., a Delaware limited partnership (“LVP”), PRIME
      OUTLETS ACQUISITION COMPANY LLC, a Delaware limited liability company (“POAC”),
      and AR PRIME HOLDINGS, LLC, a Delaware limited liability company (“ARP”) that
      will become a limited partner of LVP as a result of the Contribution (defined
      below).

     

    WHEREAS ARP
      owns a membership interest in POAC corresponding to a 25% Percentage of
      Membership Interest (as defined in the Amended and Restated Limited Liability
      Company Agreement of POAC, dated as of December 11, 2003);

     

    WHEREAS
      POAC owns, indirectly through certain entities that are treated as disregarded
      entities for U.S. federal tax purposes and certain other entities that are
      treated as partnerships for U.S. federal tax purposes (the “Subsidiary
      Partnerships”), the properties listed on Schedule A hereto (collectively, the
“Properties”); 

     

    WHEREAS,
      in that certain Contribution and Conveyance Agreement, dated as of the date
      hereof, by and among the Lightstone Value Plus Real Estate Investment Trust,
      Inc., ARP, and LVP (the “Contribution Agreement”), ARP and LVP have agreed that,
      within thirty (30) days of the completion of financial audits with respect
      to
      all of the subsidiaries of POAC, but not later than June 26,
      2009,
      ARP will contribute all of its membership interest in POAC (the “Contributed
      Interest”) to LVP in exchange for Units (as defined in the Contribution
      Agreement) of LVP (the “Contribution”); 

     

    WHEREAS,
      for federal income tax purposes, it is intended that the Contribution will
      be
      treated as a tax-free contribution by ARP to LVP of the Contributed Interest
      in
      exchange for Units under Section 721 of the Code;

     

    WHEREAS,
      pursuant to the Contribution Agreement, LVP has agreed to make certain
      undertakings to ARP as provided herein;

     

    WHEREAS
      POAC desires to induce ARP to enter into the Contribution Agreement, and the
      execution of this Agreement by POAC was a condition to ARP’s execution and
      delivery of the Contribution Agreement;

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which is hereby acknowledged, and intending to be legally bound hereby, the
      parties agree as follows:

     

    1. Definitions.
      All
      capitalized terms used and not otherwise defined in this Agreement shall have
      the meaning set forth in the Partnership Agreement (as defined below). As used
      herein, the following terms have the following meanings:

     

    “Applicable
      Lightstone Party” shall mean (i) before the Contribution, POAC, and (ii) from
      and after the Contribution, LVP.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Approved
      Firms” shall mean any of the following firms: Baker & McKenzie LLP, Deloitte
& Touche LLP, Dewey & LeBoeuf LLP, McKee Nelson LLP, Kaye Scholer LLP,
      and DLA Piper; and if any of the aforementioned law firms shall disband, the
      parties hereto shall each make a good faith effort to choose a replacement
      for
      each such firm.

     

    “Built-in
      Gain” means gain allocable under Section 704(c) of the Code or under so-called
“reverse” Section 704(c) principles pursuant to Treasury Regulation Section
      1.704-1(b)(4)(i) to ARP with respect to the Properties, the Subsidiary
      Partnership Interests, or the Contributed Interest (taking into account any
      special inside basis of ARP under Section 743(b) of the Code with respect to
      the
      Properties, the Subsidiary Partnership Interests, or the Contributed Interest);
      provided,
      however,
      that,
      subject to Section 2(a), the Built-in Gain with respect to the Contributed
      Interest as of the date hereof shall be treated for purposes of this Agreement
      as an amount equal to the excess of the fair market value of the Contributed
      Interest over its adjusted basis for federal income tax purposes, and such
      Built-in Gain shall thereafter be adjusted from time to time pursuant to the
      principles set forth in the Code and the Regulations thereunder. For purposes
      of
      determining Built-in Gain with respect to the Properties and the Subsidiary
      Partnership Interests, the assets of POAC and the Subsidiary Partnerships shall
      be deemed to have been revalued for federal income tax purposes, and the capital
      accounts of the partners therein adjusted, as of the date hereof pursuant to
      the
      principles of Treasury Regulation Section 1.704-2(b)(2)(iv)(f) (notwithstanding
      that no event described in Treasury Regulation Section 1.704-2(b)(2)(iv)(f)(5)
      occurs with respect to POAC or the Subsidiary Partnerships on the date hereof).
      After the date hereof, the Built-in Gain shall be reduced from time to time
      pursuant to the principles set forth in the Code and the Regulations thereunder.
      

     

    “Burnoff
      Date” shall mean the day that is 365 days after the date hereof. However, if the
      Contribution occurs after February 26, 2009, then the preceding sentence shall
      be applied as if the number “365” were replaced by the sum of (i) 365 and (ii)
      the number of days from (but excluding) February 26, 2009, through and including
      the Closing Date.

     

    “Closing”
      shall mean the closing of the exchange of the Contributed Interest for Units
      pursuant to the Contribution Agreement.

     

    “Closing
      Date” shall mean the date on which the Closing occurs. 

     

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

     

    “Contributed
      Interest” shall have the meaning set forth in the Recitals.

     

    “Contribution”
      shall have the meaning set forth in the Recitals.

     

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

     

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

     

    
      
        
        

      

      
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    “Nonrecourse
      Built-in Gain” means gain recognized under Section 731(a)(1) of the Code as a
      result of a deemed distribution under Section 752(b) of the Code or gain
      recognized under Section 465(e) of the Code as a result of a reduction of the
      amount of liabilities allocable to ARP under Section 752 of the Code below
      the
      Protected Amount.

     

    “Partnership
      Agreement” shall mean the Amended and Restated Agreement of Limited Partnership,
      dated as of April 22, 2005, of LVP, as amended. 

     

    “Permitted
      Transfer” shall mean (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against the Applicable
      Lightstone Party,
      (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings, or (iii) an Excluded
      Transfer.

     

    “Prohibited
      Transaction” shall mean a transaction that is prohibited under Section
      2(a).

     

    “Properties”
      shall have the meaning set forth in the Recitals.

     

    “Protected
      Amount” shall mean an amount equal to the product of (i) ARP’s negative tax
      capital account in POAC as of the date hereof and (ii) negative one (-1), as
      such amount may be reduced pursuant to the following sentence. Upon any other
      sale, exchange, transfer or disposition either (a) by ARP of some or all of
      its
      equity interest in the
      Applicable
      Lightstone Party or (b) by any person or entity of some or all of its direct
      or
      indirect equity interest in ARP, the Protected Amount shall be reduced to the
      extent of (x) in situation (a), any gain recognized by ARP, but only to the
      extent such gain is attributable to the amount of nonrecourse liabilities of
      the
      Applicable
      Lightstone Party of which ARP is deemed relieved under Section 752 of the Code
      and the regulations thereunder as a result of such transaction, and (y) in
      situation (b), any gain recognized by such person (or, in the case of a transfer
      resulting from the death of such person, the difference between the adjusted
      tax
      basis, for federal income tax purposes, of the transferee with respect to the
      transferred property and the adjusted tax basis, for federal income tax
      purposes, of such person with respect to such property), but only to the extent
      such gain is attributable to the amount of nonrecourse liabilities of
the
      Applicable
      Lightstone Party of which such person is deemed relieved under Section 752
      of
      the Code and the regulations thereunder as a result of such transaction.

     

    “Protected
      Period” means the five-year period beginning on the date hereof.

     

    “Qualifying
      Opinion” shall have the meaning set forth in Section 3(d).

     

    “Subsidiary
      Partnership” shall have the meaning set forth in the Recitals.

     

    “Subsidiary
      Partnership Interest” shall mean an interest in a Subsidiary Partnership held,
      directly or indirectly, by the
      Applicable
      Lightstone Party.

     

    
      
        
        

      

      
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    2. Restrictions
      on Disposition of the Properties.

     

    (a) Subject
      to Section 2(b), LVP and POAC agree that during the Protected Period neither
      the
      Applicable
      Lightstone Party, nor any entity in which the
      Applicable
      Lightstone Party holds a direct or indirect interest, will consummate a sale,
      transfer, exchange or other disposition of all or any portion of the Properties,
      the Contributed Interest, or any indirect interest in all or any portion of
      the
      Properties or the Contributed Interest (a “Disposition”), or engage in any other
      transaction, that results in the recognition and allocation to ARP of all or
      any
      portion of its Built-in Gain that it would not otherwise have recognized at
      such
      time as a result of the application of the Code and Regulations in the absence
      of such transaction or any other transaction. For purposes of the preceding
      sentence, the Contributed Interest shall not be treated as having any Built-in
      Gain until after the Contribution. In addition, the
      Applicable
      Lightstone Party shall
      not
      enter into any transaction described in the first sentence of Section 3(d)
      unless the
      Applicable
      Lightstone Party shall have first provided ARP with a Qualifying Opinion in
      a
      timely manner pursuant to the requirements of Section 3(d). ARP shall have
      the
      right to seek and obtain specific performance or injunctive relief as a remedy
      with respect to any breach or threatened breach of the covenant set forth in
      the
      preceding sentence.

     

    (b) The
      first
      sentence of Section 2(a) shall not apply to (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against the Applicable
      Lightstone Party or
      (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings. Furthermore,
      if in any calendar year, taking into account all direct or indirect Dispositions
      by LVP of one or more Properties or portions thereof that (i) are taxable in
      whole or in part and (ii) occur during such calendar year and after the Burnoff
      Date, LVP
      transfers Properties or portions thereof having an aggregate value as of the
      date hereof as set forth on Schedule A hereto that is less than or equal to
      ten
      percent (10%) of the total value of the Properties as of the date hereof as
      set
      forth on Schedule A hereto, then
      the
      first sentence of Section 2(a) shall not apply to such Dispositions (each such
      Disposition, an “Excluded Transfer”); moreover, if the aggregate value (as of
      the date hereof as set forth on Schedule A hereto) of the Properties transferred
      in such Dispositions is less than ten percent (10%) of the total value of the
      Properties as of the date hereof as set forth on Schedule A hereto, then such
      deficit shall carry over to the following calendar year and increase the amount
      of Properties the transfers of which may qualify as Excluded Transfers for
      such
      year, and if such amounts are not transferred, all such amounts shall carry
      over
      to the next successive year, and so on, until the term of this Agreement shall
      expire. If the preceding sentence does not apply to Dispositions by LVP in
      any
      calendar year because the aggregate value (as of the date hereof as set forth
      on
      Schedule A hereto) of the Properties (or portions thereof) disposed of exceeds
      ten percent (10%) of the total value of the Properties as of the date hereof
      as
      set forth on Schedule A hereto, then only a ratable portion of each such
      Disposition shall qualify as an Excluded Transfer not subject to Section 2(a).
      With respect to the calendar year that includes the day after the Burnoff Date,
      the preceding two sentences shall be applied by substituting for each occurrence
      of “ten percent (10%)” the product of (i) ten percent (10%) and (ii) a fraction,
      the numerator of which is the number of days from (but excluding) the Burnoff
      Date to December 31 of such calendar year, and the denominator of which is
      365.
      Notwithstanding anything to the contrary herein, a direct or indirect
      Disposition or other transfer of a Property or a portion thereof shall not
      constitute an Excluded Transfer if such transfer is effectuated with a party
      “related” to LVP (applying the principles of Code Sections 267(b) and 707(b)) in
      a transaction that lacks a bona fide commercially motivated business purpose.
      No
      later than the earlier of (i) the date that is 30 days after LVP consummates
      a
      direct or indirect Disposition, taxable in whole or in part, of one or more
      Properties or portions thereof and (ii) December 31 of the calendar year in
      which such Disposition occurs, LVP shall provide ARP with written notification
      of such disposition, including (I) the Property, Properties, or portions thereof
      disposed of, (II) the amount and nature of the consideration received, and
      (III)
      the amount of gain (including Built-in Gain) allocable to ARP as a result of
      such Disposition; provided,
      however,
      that
      LVP shall not be required to provide such notification if it shall have
      previously provided the identical information to ARP pursuant to the
      notification provisions of Section 3(a). 

     

    
      
        
        

      

      
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    (c) Any
      property that is exchanged for or replaces any of the Properties, a Subsidiary
      Partnership Interest, the Contributed Interest, or any portion thereof and
      that
      is “substituted basis property,” as defined in Section 7701(a)(42) of the
      Code, with respect thereto shall thereafter be treated as a “Property,” a
“Subsidiary Partnership Interest,” the “Contributed Interest,” or a portion
      thereof, as the case may be, for all purposes of this Agreement; provided,
      however,
      that
      (i) the Property, the Subsidiary Partnership Interest, the Contributed Interest,
      or the portion thereof that was exchanged for or replaced by such new property
      shall continue to be treated as a “Property,” a “Subsidiary Partnership
      Interest,” the “Contributed Interest,” or a portion thereof to the extent that a
      subsequent disposition of (or other transaction involving) the Property, the
      Subsidiary Partnership Interest, the Contributed Interest, or the portion
      thereof could result in the recognition and allocation to ARP of any Built-in
      Gain, and provided
      further
      that (ii) the Units received by ARP in exchange for the Contributed Interest
      in
      connection with the Contribution shall not be treated as the Contributed
      Interest or as having Built-in Gain under this Agreement.

     

    (d) Within
      18
      weeks after the date hereof, POAC shall provide to ARP a spreadsheet showing
      its
      calculation of (i) the Built-in Gain with respect to the Properties and the
      Contributed Interest as of the date hereof and (ii) ARP’s negative tax capital
      account in POAC as of the date hereof. The calculation of the Built-in Gain
      shall be based on the fair market values for the Properties and the Contributed
      Interest shown on Schedule A hereto. The calculation of the Built-in Gain shall
      also reflect any Section 704(c) or “reverse” Section 704(c) gain or loss
      existing with respect to the Properties immediately prior to the date hereof.
      In
      addition, at the time of the Contribution, the Built-in Gain with respect to
      the
      Properties, the Subsidiary Partnership Interests, and the Contributed Interest
      shall be increased by the Additional Amount, as defined in the Contribution
      Agreement. Within 2 weeks after the Contribution, LVP shall provide to ARP
      a
      spreadsheet showing the allocation of the Additional Amount among the
      Properties. Each Property shall be allocated its ratable share of the Additional
      Amount based on the fair market value of such Property relative to the fair
      market values of all of the Properties, as shown on Schedule A hereto. The
      allocation of the Additional Amount among the Subsidiary Partnership Interests
      shall be made based on and consistently with the allocation of the Additional
      Amount among the Properties.

     

    (e) For
      federal, state, and local income tax purposes, LVP shall report (i) ARP’s
      contribution of the Contributed Interest to LVP as a tax-free contribution
      pursuant to Section 721 of the Code (or
      the
      corresponding provision of state or local law, as applicable) and
      (ii)
      ARP as a partner in LVP with respect to all of the Units received by LVP;
provided
      that,
      upon a reasonable request from LVP’s accountant, ARP shall provide (at LVP’s
      expense) to the accountant, at ARP’s election, either (i) a letter from Cooley
      Godward Kronish LLP to the accountant, (ii) an opinion letter from Cooley
      Godward Kronish LLP which shall provide that the accountant is entitled to
      rely
      on it, or (iii) an opinion letter from an Approved Firm to the accountant,
      in
      each case providing the required level of comfort to the accountant to sign
      the
      return or returns. Notwithstanding
      the foregoing, LVP shall not be deemed to have breached its obligations under
      this Section 2(e) solely because a governmental taxing authority determines
      that
      LVP would be required to file an amended tax return or amended information
      statement that reports the Contribution other than as a contribution pursuant
      to
      Section 721 of the Code. 

     

    
      
        
        

      

      
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    3. Indemnity
      for Breach of Obligations set forth in Section 2.

     

    (a) In
      the
      event that either LVP or POAC engages in a Prohibited Transaction in breach
      of
      its obligations set forth in Section 2(a), LVP and POAC shall be jointly
      and severally liable to ARP for, and shall pay to ARP, an amount equal to (i)
      the aggregate federal, state and local income taxes deemed incurred by ARP
      with
      respect to any portion of its Built-in Gain that it recognizes as a result
      of
      such Prohibited Transaction plus (ii) a “gross-up” amount so that, after the
      hypothetical payment by ARP of all federal, state and local income taxes on
      amounts received pursuant to this Section 3(a), ARP would retain from such
      payments hereunder an amount equal to its total deemed income tax liability
      incurred as a result of the Prohibited Transaction and its recognition of such
      Built-in Gain. If (i) gain is recognized by ARP or allocated to ARP as a result
      of the closing of the transactions contemplated by the Contribution Agreement
      and (ii) such gain recognition is attributable to (I) incorrect information
      provided by POAC or an affiliate or agent thereof to ARP or (II) a breach of
      LVP’s or the Lightstone Value Plus Real Estate Investment Trust, Inc.’s
      obligations under the Contribution Agreement or this Agreement, then LVP and
      POAC shall indemnify ARP for such Built-in Gain under this Section 3(a) as
      if
      such Built-in Gain had resulted from a Prohibited Transaction. Notwithstanding
      anything herein to the contrary, it is the understanding and the intention
      of
      the parties hereto that this Agreement shall in no manner create liability
      for
      LVP as a result of any tax that may be recognized as a result of (i) the
      structure and effectuation of the transactions contemplated hereby and by the
      Contribution Agreement or (ii) any conversion of Units into stock of the REIT
      at
      ARP’s election and that the only liability that may arise as to LVP shall be as
      a result of its breach of its obligations imposed by this Agreement or the
      Contribution Agreement, if any, or as a result of any provision of incorrect
      information. At
      the
      time LVP enters into an agreement to consummate a Prohibited Transaction that,
      if consummated, would breach Section 2(a) hereof and result in the recognition
      by ARP of all or any portion of its Built-in Gain, and in any case not less
      than
      thirty (30) days prior to consummating such Prohibited Transaction, the
      Applicable
      Lightstone Party shall notify ARP in writing of such proposed Prohibited
      Transaction and of the approximate sales price or other amount to be realized
      for income tax purposes in connection therewith and all other relevant details
      of the Prohibited Transaction and shall request from ARP such information
that
      is
      within ARP’s possession or control as
      is
      reasonably necessary for the
      Applicable
      Lightstone Party to calculate the amount of the indemnity set forth herein.
      Upon
      receipt of such notice, ARP shall provide the
      Applicable
      Lightstone Party with any information reasonably requested by the
      Applicable
      Lightstone Party of ARP that is within ARP’s possession or control and is
      relevant to calculation of the indemnity set forth herein within ten (10) days
      of such request. Within ten (10) days after receipt of such information from
      ARP
(or,
      if
      no such information is requested, at the same time that the Applicable
      Lightstone Party notifies ARP of the Prohibited Transaction as provided
      above),
      the
      Applicable
      Lightstone Party shall provide to ARP (i) a computation of the indemnity
      payment, if any, owing to ARP under this Section 3(a). The
      Applicable
      Lightstone Party shall make any required indemnity payment owing to ARP pursuant
      to this Section 3(a) no later than five (5) days prior to the due date of the
      quarterly estimated tax payment for individuals which next follows the date
      that
      the Prohibited Transaction is consummated or, if later, ten (10) days after
      the
      date required for the
      Applicable
      Lightstone Party’s delivery of the computation of the indemnity payment to ARP.
      For purposes of determining the amount of the deemed income taxes incurred
      by
      ARP and the amount of the indemnity for Built-in Gain under this Section 3(a),
      (i) all income arising from a transaction or event that is taxable at ordinary
      income rates (including, without limitation, “recapture” under Code Sections
      1245 or 1250 and net short-term capital gain) under the applicable provisions
      of
      the Code and allocable to ARP shall be treated as subject to federal, state
      and
      local income tax at the then applicable effective tax rate imposed on ordinary
      income of individuals residing in the city of New York, New York, determined
      using the maximum federal rate of tax on ordinary income and the maximum state
      and local rates of tax on ordinary income then in effect in New York City and
      New York State, (ii) all long-term capital gain arising from the transaction
      or
      event allocable to ARP shall be treated as subject to federal, state, and local
      income tax at the then applicable effective tax rate imposed on long-term
      capital gains of individuals residing in the city of New York, New York,
      determined using the maximum federal, state and local rates on long-term capital
      gains then in effect (taking into account any special capital gains rate
      attributable to recapture of prior depreciation deductions), and (iii) any
      amounts payable with respect to state and local income taxes shall be assumed
      to
      be fully deductible (without limitation or phaseout) for federal income tax
      purposes. 

     

    
      
        
        

      

      
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    (b) Notwithstanding
      any provision of this Agreement to the contrary, other than the last sentence
      of
      Section 2(a), Section 3(c), and Section 3(d), the sole and exclusive rights
      and
      remedies of ARP for a breach or violation of the covenants set forth in
      Sections 2(a) and 3(a) shall be a claim for payment against LVP and/or
      POAC, computed as set forth in Section 3(a), and for interest and
      enforcement costs as provided in Section 9(e). Except as provided in Sections
      2(a), 3(c), and 3(d), ARP shall not be entitled to pursue a claim for specific
      performance of the covenant set forth in Section 2(a) or bring a claim
      against any person that acquires the Contributed Interest or any of the
      Properties in violation of Section 2(a).

     

    (c) Notwithstanding
      anything to the contrary herein, the
      Applicable
      Lightstone Party may not enter into a Prohibited Transaction unless, at least
      fourteen (14) days prior to entering into such transaction, the
      Applicable
      Lightstone Party will have provided ARP with evidence reasonably satisfactory
      to
      ARP that, following such transaction, and including any proceeds from such
      transaction, LVP and POAC will
      have
      the requisite liquidity to make any necessary indemnification payments required
      pursuant to this Agreement. ARP shall have the right to seek and obtain specific
      performance or injunctive relief as a remedy with respect to any breach or
      threatened breach of this covenant.

     

    (d) Prior
      to
      the time that the
      Applicable
      Lightstone Party enters into an agreement to consummate a transaction that
      (i)
      may result in the realization of Built-in Gain but (ii) which the
      Applicable
      Lightstone Party may report, for federal, state, or local income tax purposes,
      as not resulting (in whole or in part) in the recognition of such realized
      Built-in Gain, and in any case not less than thirty (30) days prior to
      consummating such transaction, the
      Applicable
      Lightstone Party shall provide ARP with a written description of the transaction
      containing all relevant details and shall thereafter, as promptly as possible
      upon ARP’s reasonable request, and in any case not less than twenty (20) days
      prior to consummating such transaction, provide ARP with an opinion from any
      Approved Firm that (i) meets all the requirements for “covered opinions” set
      forth in Section 10.35(c) of IRS Circular 230, including the requirement that
      a
      covered opinion consider all significant federal tax issues, (ii) is based
      on a
      statement of facts that is not inaccurate or unreasonable in any material
      respect, and (iii) concludes, at at least a “more likely than not” level of
      comfort, that all or part of the Built-in Gain realized in such transaction
      will
      not be recognized for tax purposes (such an opinion, a “Qualifying Opinion”). If
the
      Applicable
      Lightstone Party does not provide ARP with a description of the transaction
      and,
      if reasonably requested by ARP, a Qualifying Opinion in a timely manner pursuant
      to the first sentence of this paragraph, then the
      Applicable
      Lightstone Party shall not consummate such transaction. Furthermore,
the
      Applicable
      Lightstone Party shall not report any transaction as resulting (in whole or
      in
      part) in the realization, but not the nonrecognition, of Built-in Gain unless
      either (i) the
      Applicable
      Lightstone Party previously provided ARP with a Qualifying Opinion in a timely
      manner pursuant to the first sentence of this paragraph or (ii) the
      Applicable
      Lightstone Party obtains the consent of ARP prior to taking such reporting
      position. ARP shall have the right to seek and obtain specific performance
      or
      injunctive relief as a remedy with respect to any breach or threatened breach
      of
      the covenants set forth in this paragraph.

     

    
      
        
        

      

      
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    4. Section 704(c)
      Method.
      LVP
      and
      POAC shall
      use, and each of LVP and POAC shall cause any other entity in which it has
      a
      direct or indirect interest to use, the “traditional method” under Treasury
      Regulation Section 1.704-3(b) without curative allocations for purposes of
      making allocations under Section 704(c) of the Code or reverse Section
      704(c) allocations with respect to the Contributed Interest and the Properties
      to take into account the book-tax disparities as of the date hereof with respect
      to the Contributed Interest and the Properties. 

     

    5. Obligation
      to Maintain Certain Debt.

     

    (a) At
      all
      times through the Protected Period, the
      Applicable
      Lightstone Party agrees to maintain, directly or indirectly, an amount of
      indebtedness allocable to ARP under Section 752 of the Code (and specifically as
      one or more nonrecourse liabilities under Treasury Regulation Section 1.752-3)
      at least equal to the Protected Amount. ARP shall have the right to seek and
      obtain specific performance or injunctive relief as a remedy with respect to
      any
      breach or threatened breach of this covenant. For the avoidance of doubt, the
      purpose of this Section 5(a) is not to require the Applicable Lightstone Party
      to increase the amount of liabilities to which the Properties or
      any
      other properties are
      subject, provided
      that the
      Applicable Lightstone Party maintains in place the liabilities of POAC and
      its
      subsidiary entities existing as of the date hereof and does not take any actions
      (or cause or permit any actions to be taken) that would decrease the amounts
      of
      such liabilities that are allocable to ARP under Section 752 and the regulations
      thereunder.

     

    (b) Federal,
      state and local income tax returns filed by POAC (and, after the Contribution,
      by LVP) for all taxable periods beginning prior to the expiration of the
      Protected Period shall report allocations of nonrecourse liabilities to ARP
      in
      an amount at least equal to the Protected Amount. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    6. Indemnity
      for Breach of Obligations set forth in Section 5.
      In the
      event that (i) either LVP or POAC breaches its obligations set forth in Section
      5 and as a result ARP recognizes Nonrecourse Built-in Gain and
      (ii)
      such breach has not occurred in connection with a Permitted Transfer,
LVP
      and
      POAC shall be jointly and severally liable to ARP for, and shall pay to ARP
      upon
      written demand by ARP, an amount equal to (i) the aggregate federal, state
      and
      local income taxes deemed incurred by ARP as a result of such Nonrecourse
      Built-in Gain recognized by ARP by reason of such breach plus (ii) a “gross-up”
amount so that, after the hypothetical payment by ARP of all federal, state
      and
      local income taxes on amounts received pursuant to this Section 6, ARP would
      retain from such payments hereunder an amount equal to its total income tax
      liability deemed incurred as a result of the breach by LVP or POAC of its
      obligations set forth in Section 5 and ARP’s recognition of such Nonrecourse
      Built-in Gain. The principles and tax rates set forth in Section 3(a) shall
      apply for purposes of determining the timing and amount of payment to be made
      to
      ARP pursuant to this Section 6 (including, without limitation, the calculation
      of the aggregate federal, state and local income taxes deemed incurred by ARP).
      In addition, the notification procedures set forth in Section 3(a) shall apply
      for purposes of this Section 6 with respect to transactions that would result
      in
      a breach of Section 5. 

     

    7. Requests
      for Information.
      Upon
      the request of LVP or POAC, ARP shall provide to LVP or POAC copies of such
      tax
      returns, schedules and other information that is within the possession or
      control of ARP (including, without limitation, copies of state and federal
      tax
      returns and related working papers) reasonably requested by LVP or POAC (“Tax
      Protection Information”) to enable it to make any necessary calculations with
      respect to payments required to be made by LVP and POAC hereunder, including,
      without limitation, calculations of Built-in Gain and Nonrecourse Built-in
      Gain
      claimed to be recognized by ARP. No Tax Protection Information acquired by
      LVP
      or POAC or any of its representatives may be disclosed to any individual or
      entity other than (i) those representatives of LVP or POAC who need to know
      the
      Tax Protection Information for the purpose of assisting LVP or POAC in
      evaluating and performing its obligations under this Agreement (it being
      understood that prior to such disclosure LVP’s or POAC’s representatives will be
      informed of the confidential nature of the Tax Protection Information and shall
      agree in writing to be bound by the requirements of this Section 7 of this
      Agreement), (ii) as required by applicable law, or (iii) if necessary, upon
      the
      advice of counsel, in order to comply with any judicial order, civil or criminal
      subpoena or any discovery demand in pending litigation, whether or not LVP,
      POAC, or any of the representatives of LVP or POAC is a party thereto. LVP
      and
      POAC agree to be responsible for any breach of this Agreement by the
      representatives of LVP or POAC.

     

    8. Term.
      This
      Agreement shall terminate upon the expiration of the Protected Period;
provided,
      however,
      that if
      the Contribution does not occur prior to the effective date of the termination
      of the Contribution Agreement, then this Agreement shall terminate effective
      as
      of midnight (Eastern Standard Time) on the effective date of the termination
      of
      the Contribution Agreement; provided
      that, if
      the Contribution Agreement is terminated under circumstances that require LVP
      to
      pay liquidated damages to ARP, then this Agreement shall not be terminated
      until
      all such liquidated damages have been received by ARP. In addition, Section
      5 of
      this Agreement shall terminate in the event that the Protected Amount is reduced
      to zero. Notwithstanding the foregoing, LVP's and POAC’s payment obligations
      under Sections 3, 6 and 9(e) shall survive the termination of this Agreement
      or
      the termination of Section 5, as the case may be, to the extent such obligations
      relate to a breach of LVP’s or POAC’s obligations under Section 2 or 5 occurring
      before such termination of this Agreement (or in the case of liability under
      Section 6, the termination of Section 5). 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    9. General
      Provisions.

     

    (a) Notices.
      All
      notices, requests, claims, demands and other communications under this Agreement
      shall be in writing and shall be deemed given if delivered personally, sent
      by
      overnight courier (providing proof of delivery) or sent by telecopy (providing
      confirmation of transmission) to the parties at the following addresses or
      telecopy numbers (or at such other address or telecopy number for a party as
      shall be specified by like notice):

     

    (i) if
      to LVP
      or POAC, to:

     

    c/o
      The
      Lightstone Group

    326
      Third
      Street

    Lakewood,
      NJ 08701

    Attn:
      Joseph E. Teichman 

    Fax
      No.: 732-612-1444

    

    with
      a
      copy to:

     

    Herrick,
      Feinstein LLP

    2
      Park
      Avenue

    New
      York,
      NY 10016

    Attn:
      Sheldon Chanales, Esq. 

    Fax
      No.:
      (212) 545-3313 

    

    (ii) if
      to
      ARP, to:

     

    c/o
      Arbor
      Commercial Mortgage LLC

    333
      Earle
      Ovington Boulevard

    Uniondale,
      NY 11553

    Attention:
      Guy R. Milone, Jr. 

    Fax
      No.:
      (516) 506-4045

    

    with
      a
      copy to:

     

    Cooley
      Godward Kronish LLP

    1114
      Avenue of the Americas

    New
      York,
      NY 10036

    Fax
      No.:
      (212) 479-6275

    Attn:
      Thomas D. O’Connor, Esq. 

    

    (b) Counterparts.
      This
      Agreement may be executed in one or more counterparts, all of which shall be
      considered one and the same agreement and shall become effective when one or
      more counterparts have been signed by each of the parties and delivered to
      the
      other party.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (c) Governing
      Law.
      THIS
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
      OF
      THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
      APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.

     

    (d) Severability.
      If any
      term, covenant or condition of this Agreement shall be held to be invalid,
      illegal or unenforceable in any respect, this Agreement shall be construed
      without such provision.

     

    (e) Interest
      and Enforcement Costs.
      In the
      event that LVP and POAC fail to pay ARP any amount due pursuant to this
      Agreement on the date such amount is due, or, if no due date is specified
      herein, within five (5) days after demand by ARP for such payment, then such
      past due amount shall bear interest from such due date or the date demand for
      payment is made, as applicable, until the date paid at a rate equal to 15%
      per
      annum. In the event of any breach by LVP or POAC of any of its covenants in
      this
      Agreement, LVP and POAC shall be jointly and severally liable to pay, and shall
      pay, all of ARP’s costs of enforcement of its rights under this Agreement,
      including but not limited to reasonable attorneys’ fees, disbursements, expenses
      and court costs.

     

    (f) Subsidiary
      Entities.
      All
      references herein to the consummation, engaging in, entering into, or reporting
      of a Disposition or other transaction, or entering into an agreement to do
      any
      of the foregoing, by the
      Applicable Lightstone Entity, LVP,
      or POAC
      shall also apply to and include the consummation, engaging in, entering into,
      or
      reporting of a Disposition or other transaction, or entering into an agreement
      to do any of the foregoing, by any entity in which the Applicable Lightstone
      Entity, LVP, or POAC owns, directly or indirectly, an equity
      interest.

     

    (g) List
      of Properties Correct and Complete.
      LVP and
      POAC represent to ARP that the list of Properties on Schedule A hereto is
      correct and complete and that the Properties are owned indirectly by POAC.
      

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, LVP, POAC, and ARP have caused this Agreement to be signed
      by
      their respective authorized signatories all as of the date first written
      above.

    

    
      	 	 	 
	 	
              LIGHTSTONE
                VALUE PLUS REIT, L.P. 

              By
                Lightstone Value Plus Real Estate Investment Trust, Inc., its general
                partner

            
	 
 	 
 	 
 
	
            	
            	
              By:  

            
	 	
              
                
Name:

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
              PRIME
                OUTLETS ACQUISITION COMPANY LLC

              By
                Lightstone Prime, LLC, its managing member 

            
	 
 	 
 	 
 
	
            	
            	
              By:

            
	 	
              
                
Name:

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
               ARBOR
                MILL RUN JRM, LLC

               By
                Arbor Commercial Mortgage, LLC, Member 

            
	 
 	 
 	 
 
	
            	 By  	
            
	 	
              
Name:

	 	Title:

    

    

    
      
        
        

      

      
        12CONTRIBUTION
      AND CONVEYANCE AGREEMENT

     

    THIS
      CONTRIBUTION AND CONVEYANCE AGREEMENT (this “Agreement”), dated as of June 26,
      2008, by and between ARBOR MILL RUN JRM LLC, a Delaware limited liability
      company (“Transferor”), and LIGHTSTONE VALUE PLUS REIT, L.P., a Delaware limited
      partnership (“Transferee”).

     

    WITNESSETH:

     

    WHEREAS,
      Transferor owns a Class A membership interest in MILL RUN L.L.C., a Delaware
      limited liability company (the “Company”), corresponding to a 22.08% Common
      Interest (as defined in the Mill Run Operating Agreement), pursuant to that
      certain Second Amended and Restated Operating Agreement of the Company, dated
      as
      of September 20, 2005 (as amended by a First Amendment dated as of January
      1,
      2006, the “Mill Run Operating Agreement”); and

     

    WHEREAS,
      in consideration of Transferor’s transferring the Transferred Interests (as
      defined below) herewith to Transferee, Transferee shall issue to Transferor
      96,000 units of common limited partnership interest in Transferee (“Common
      Units”) and 18,240 units of Series A preferred limited partnership interest in
      Transferee (“Series A Units”, and collectively with the Common Units, the
“Units”); and 

     

    WHEREAS,
      Transferor has delivered on the date hereof a completed Representation Letter
      and Agreement in the form attached as Exhibit
      A
      hereto;
      and

     

    WHEREAS,
      in consideration of the receipt by Transferor of the Units, and the execution
      and delivery by Transferee of a Tax Protection Agreement in
      the
      form attached as Exhibit
      B
      hereto
      (the “Tax Protection Agreement”), Transferor desires to transfer and assign to
      Transferee all of Transferor’s right, title and interest (x) in the Company and
      (y) under the Mill Run Operating Agreement (collectively, the “Transferred
      Interests”), and Transferee desires to accept such transfer and assignment, all
      upon the terms and conditions hereinafter set forth; and

     

    WHEREAS,
      concurrently with the execution and delivery of this Agreement, Transferor,
      Transferee and Lightstone Value Plus Real Estate Investment Trust, Inc. (the
      “REIT”) are entering into an Exchange Rights Agreement with respect to the
      exchange of Transferor’s Common Units (including units received upon conversion
      of Series A Units) for cash or stock in the REIT (the “Exchange Rights
      Agreement”); and

     

    WHEREAS,
      for federal income tax purposes, it is intended that the transfer of the
      Transferred Interests will be treated as a tax-free contribution by Transferor
      to Transferee of the Transferred Interests in exchange for the Units under
      Section 721 of the Internal Revenue Code of 1986, as amended (the “Code”);
      and

     

    WHEREAS,
      concurrently with the transfer and assignment of the Transferred Interests
      to
      Transferee, Transferor is withdrawing as a member of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
      THEREFORE, the parties covenant and agree as follows:

     

    1. Contribution
      and Transfer.
      

     

    (a) For
      and
      in consideration of the issuance by Transferee to Transferor of the Units,
      Transferor hereby contributes and assigns to Transferee all of Transferor’s
      right, title and interest in and to the Transferred Interests, including,
      without limitation, all of Transferor’s rights and interest in all profits,
      losses, Cash Flow, Capital Proceeds (as such terms are defined in the Mill
      Run
      Operating Agreement), distributions and capital of the Company with respect
      to
      such Transferred Interests, except that the Transferor is retaining all right
      to
      distributions previously paid and allocations made by the Company on account
      of
      the Transferred Interests prior to the date hereof. In connection with its
      receipt of the Units, Transferor agrees to be bound by and comply with the
      terms
      of the Amended and Restated Agreement of Limited Partnership of Transferee
      dated
      as of April 22, 2005, as amended by the First Amendment to the Amended and
      Restated Agreement of Limited Partnership of Transferee, dated as of the date
      hereof (as so amended, the “Partnership Agreement”), and delivers herewith an
      executed counterpart of the Partnership Agreement.

     

    (b) Transferee
      hereby accepts Transferor’s contribution, transfer and assignment of the
      Transferred Interests.

     

    (c) Transferor
      hereby withdraws as a Member of the Company and grants Transferee the right
      to
      be admitted as a substitute member of the Company in Transferor’s place in
      accordance with the terms of the Mill Run Operating Agreement.

     

    (d) The
      Company hereby admits Transferee as a substitute member of the Company in
      Transferor’s place.

     

    2. Representations
      and Warranties.
      

     

    (a) Transferor
      hereby represents and warrants to Transferee that (i) Transferor is the sole
      legal and beneficial owner of the Transferred Interests; (ii) Transferor has
      not
      previously assigned, transferred, sold, pledged or otherwise disposed of or
      hypothecated the Transferred Interests or any portion thereof or interest
      therein, except for the granting of any security interests therein which have
      been released on or prior to the date hereof; (iii) the Transferred Interests
      transferred hereby are free and clear of any liens, security interests and
      other
      encumbrances, except for those, if any, arising under the Mill Run Operating
      Agreement; (iv) the execution of, and the transfer and assignment of the
      Transferred Interests pursuant to, this Agreement have been authorized by all
      necessary action on the part of Transferor; (v) Transferor has the full
      right, power and authority to execute and deliver this Agreement and to perform
      its obligations hereunder, without obtaining any consents or approvals from,
      or
      taking any actions with respect to, any governmental authorities or other third
      parties; (vi)  this Agreement has been duly and validly executed and
      delivered by Transferor and, when executed and delivered by Transferee, will
      constitute the valid and binding agreement of Transferor, enforceable against
      Transferor in accordance with its respective terms; and (vii) the execution
      and
      delivery by Transferor of this Agreement and the performance of Transferor’s
      obligations hereunder and the transaction contemplated hereby do not violate
      or
      conflict with the governing documents of Transferor, or, subject to the
      approvals of the Members of the Company, any other instrument or agreement
      to
      which Transferor is a party; provided,
      however,
      that
      notwithstanding anything herein to the contrary, Transferor is not making any
      representation or warranty as to whether any third party consents are or are
      not
      required under any loan or other financing agreements, mortgages or other
      instruments or agreements to which the Company or any entity directly or
      indirectly owned by the Company is a party, or by which any real or personal
      property owned by the Company or by any entity directly or indirectly owned
      by
      the Company is subject or encumbered.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) Transferee
      hereby represents and warrants to Transferor that: (i) the execution of this
      Agreement, the Tax Protection Agreement, the Partnership Agreement and the
      Exchange Rights Agreement, and the issuance of the Units to Transferor, have
      been authorized by all necessary action on the part of Transferee and the REIT,
      as applicable; (ii) each of Transferee and the REIT, as applicable, has full
      right, power and authority to execute, deliver and perform this Agreement,
      the
      Tax Protection Agreement, the Partnership Agreement and the Exchange Rights
      Agreement without obtaining any consents or approvals from, or taking any
      actions with respect to, any governmental authorities or other third parties;
      (iii) this Agreement, the
      Tax
      Protection Agreement, the Partnership Agreement and the Exchange Rights
      Agreement have
      been
      duly and validly executed and delivered by Transferee and the REIT, as
      applicable, and, when executed and delivered by Transferor, will constitute
      the
      valid and binding agreement of Transferee and the REIT, as applicable,
      enforceable against Transferee and the REIT, as applicable, in accordance with
      their respective terms; (iv) a true and complete copy of the Partnership
      Agreement (including Exhibit A thereto updated to reflect the transactions
      contemplated by this Agreement and any other transactions involving the
      Transferee that are consummated on or prior to the date hereof) is attached
      hereto as Exhibit C,
      and the
      Partnership Agreement has been duly executed and delivered by all parties
      thereto, is in full force and effect, and is binding and enforceable in
      accordance with its terms; (v) after giving effect to the transactions
      contemplated by this Agreement and any other transactions involving the
      Transferee that are consummated on or prior to the date hereof, the
      capitalization of Transferee (including the number of each class and series
      of
      units issued by Transferee and the related capital contributed with respect
      to
      such units) is set forth on Exhibit
      D
      hereto;
      (vi) the execution and delivery by each of Transferee and the REIT of this
      Agreement, the Tax Protection Agreement, the Partnership Agreement and the
      Exchange Rights Agreement and the performance of the obligations of Transferee
      and the REIT hereunder and thereunder and the transaction contemplated hereby
      and thereby do not violate or conflict with the governing documents of
      Transferee or the REIT or any other instrument or agreement to which either
      of
      them is a party, as the case may be (vii) on the date hereof immediately after
      the closing of the transfer and contribution by Transferor to Transferee
      described in Section 1 of this Agreement: (1) Transferor is
      simultaneously herewith being admitted as a limited partner in Transferee with
      respect to the Units; (2) the 704(b) “book” capital account of Transferor
      in Transferee is equal to $19,200,000; and (3) the Units have been duly
      issued to the Transferor and are fully paid and Transferor has no further
      obligation to contribute any amounts to the capital of Transferee or to
      reimburse Transferee for any expenses in respect of the Units;
      (viii) since
      May
      23, 2005, the REIT, has been subject to the reporting requirements of Section
      13
      or 15 of the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder (the “1934 Act”) and has filed with the
      Securities and Exchange Commission (“SEC”) all documents required to be filed
      under the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder (the “1933 Act”), and the 1934 Act (the “REIT SEC
      Documents”); (ix) as of their respective dates, the REIT SEC Documents complied
      in all material respects with the requirements of the 1933 Act and the 1934
      Act,
      as the case may be, and none of the REIT SEC Documents contained any untrue
      statement of a material fact or omitted a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading, taking into account
      all corrections made by the REIT in subsequent filings with the SEC through
      the
      date of this Agreement; (x) the prospectus of the REIT dated January 23, 2008
      and the supplements thereto do not contain any untrue statement of material
      fact
      or omit a material fact required to be stated therein or necessary to make
      the
      statements therein, in light of the circumstance under which they were made,
      not
      misleading as of the date hereof; (xi) as of their respective dates, the
      consolidated financial statements of the REIT included in the REIT SEC Documents
      complied as to form in all material respects with then applicable accounting
      requirements and the published rules and regulations of the SEC with respect
      thereto, were prepared in accordance with generally accepted accounting
      principles applied on a consistent basis during the periods involved (except
      as
      may be indicated therein or in the notes thereto) and fairly presented the
      consolidated financial position of the REIT and its consolidated subsidiaries
      as
      at the dates thereof and the consolidated results of their operations and
      statements of cash flows for the periods covered by such statements (subject,
      in
      the case of unaudited statements, to normal year-end audit adjustments and
      to
      any other adjustments described therein); and (xii) neither Transferee nor
      the
      REIT have entered into or is a party to any instrument or agreement with any
      limited partner of Transferee which grants registration rights with respect
      to
      shares in the REIT which such limited partner may own or acquire.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (c) Transferee
      hereby acknowledges, represents and warrants that it is not relying on any
      information, representations or warranties furnished or made by Transferor
      or
      any of Transferor’s representatives or agents as to any matter whatsoever
      concerning the Company or any entity that is directly or indirectly owned by
      the
      Company or in which the Company has any direct or indirect interest (including,
      without limitation, the legal status, good standing, organizational documents,
      business, prospects, assets, liabilities, financial condition or operations
      of,
      or the need for any third party consents to the transactions contemplated by
      this Agreement from any lenders to or other persons having any contractual
      relationship with or jurisdiction over, the Company or such other entity),
      or
      any matter (including, without limitation, physical condition, operating
      results, financing, liabilities, title, encumbrances, leases, zoning status,
      compliance with law, prospects and compliance with mortgages and other
      instruments and agreements) relating to any properties in which any of the
      Company or such other entities have a direct or indirect interest, and in
      entering into this Agreement and in accepting the Transferred Interests,
      Transferee is not relying upon any representations or warranties of Transferor
      or any of its representatives or agents whatsoever, except for the
      representations of Transferor expressly set forth in Section 2(a) hereof.
      Transferee further acknowledges, represents, warrants and covenants that in
      entering into this Agreement and in accepting the Transferred Interests, it
      is
      relying solely on its own independent investigation and due diligence with
      respect to the Company and any entity or property in which the Company has
      a
      direct or indirect interest, and Transferee further agrees that Transferee
      shall
      not seek to hold Transferor responsible or liable in any way for or in
      connection with any representations or warranties or other information furnished
      to Transferee by any person or entity, other than the representations and
      warranties of Transferor expressly set forth in Section 2(a)
      hereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3. Release.
      

     

    (a) Transferor
      hereby releases and discharges Transferee,
      BRM LLC, a New Jersey limited liability company, and the Company and their
      respective past, present and future subsidiaries, directors, officers, partners,
      shareholders, members, managers, affiliates, employees, beneficiaries, agents,
      representatives, predecessors, successors and assigns (collectively, “Transferee
      Releasees”) from any claims, liabilities, obligations, causes of action, suits,
      debts, accounts, reckonings, contracts, agreements, promises, covenants,
      damages, costs (including costs of suit and attorneys’ fees and expenses) and
      demands (collectively, “Claims”) of whatever nature, character, type or
      description, whether contingent, known or unknown, liquidated or unliquidated,
      at law or in equity, which Transferor or its affiliates now
      has,
      has ever had or may hereafter claim to have against the Transferee Releasees,
      provided that such release and discharge is specifically limited to only those
      Claims that are on account of, relating to or arising from or under the
      Company,
      the
      Transferred Interests or the Mill Run Operating Agreement. In amplification,
      and
      not in limitation, of the foregoing, BRM LLC and the Company are hereby released
      by Transferor from, among other things, any obligation or liability to make
      any
      further distributions to Transferor. The release herein given shall be and
      remain in effect as a full and complete release notwithstanding the discovery
      or
      existence of any such additional or different claims or facts.

     

    (b) Transferee
      and the Company hereby
      release and discharge Transferor
      and its respective past, present and future subsidiaries, directors, officers,
      partners, shareholders, members, managers, affiliates, employees, beneficiaries,
      agents, predecessors, representatives, successors and assigns (collectively,
      “Transferor Releasees”) from any Claims, of whatever nature, character, type or
      description, whether contingent, known or unknown, liquidated or unliquidated,
      at law or in equity, which Transferee or the Company now has, has ever had
      or
      may hereafter claim to have against the Transferor Releasees, provided that
      such
      release and discharge is specifically limited to only those Claims that are
      on
      account of, relating to or arising from or under the Company,
      the
      Transferred Interests or the Mill Run Operating Agreement. In amplification,
      and
      not in limitation, of the foregoing, Transferor is hereby released by Transferee
      and the Company from, among other things, any obligation or liability to make
      any capital contributions to the Company or to return to the Company all or
      any
      portion of any distributions previously made to it by the Company. The release
      herein given shall be and remain in effect as a full and complete release
      notwithstanding the discovery or existence of any such additional or different
      claims or facts.

     

    (c) Notwithstanding
      anything in this Section 3 to the contrary, in no event shall either Transferor
      or Transferee or their respective affiliates, be deemed to release, discharge
      or
      waive, pursuant to this Section 3 or any other provision of this Agreement,
      any
      Claim against the other party (or its affiliates) that is not on account of,
      relating to or arising from or under the Company, the Transferred Interests
      or
      the Mill Run Operating Agreement (“Unrelated Claims”), and all such Unrelated
      Claims are hereby fully preserved and reserved in all respects, and all such
      Unrelated Claims remain in full force and effect. In amplification, and not
      in
      limitation, of the foregoing, all rights, remedies, covenants and obligations
      of
      the parties under this Agreement and under the documents and agreements attached
      as Exhibit
      A,
      Exhibit
      B
      and
Exhibit
      C
      hereto
      (i) are hereby deemed to be Unrelated Claims, (ii) are not modified in any
      manner by the release provisions set forth in this Section 3, and (iii) remain
      in full force and effect.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    4. Indemnification. 

     

    (a) Transferee
      shall defend, indemnify and hold harmless Transferor from and against any and
      all loss, liability, damage, cost or expense (including, without limitation,
      reasonable attorneys’ fees and disbursements) incurred or sustained by
      Transferor on account of (i) any breach of any representation, warranty or
      covenant of Transferee set forth herein, or (ii) the Transferred Interests,
      provided and to the extent that such loss, liability, damage or cost accrues
      on
      or after the date hereof.

     

    (b) Transferor
      shall defend, indemnify and hold harmless Transferee from and against any and
      all loss, liability, damage, cost or expense (including, without limitation,
      reasonable attorneys’ fees and disbursements) incurred or sustained by
      Transferee on account of any breach of any representation, warranty or covenant
      of Transferor set forth herein, provided and to the extent that such loss,
      liability, damage or cost accrues on or after the date hereof.

     

    5. Initial
      Unit Distributions; Unit Redemption.
      Transferor and Transferee acknowledge and agree that the first quarterly
      distribution paid by Transferee in respect of the Series A Units shall (a)
      be
      with respect to the quarter ending June 30, 2008, and (b) be prorated based
      on
      the number of days during such quarter after the date hereof. Transferor
      acknowledges that notwithstanding anything to the contrary herein or in the
      Partnership Agreement, Transferor shall not have the right to convert or redeem
      any Series A Units prior to June 26, 2013.

     

    6. Tax
      Reporting; Audits.
      For
      federal, state, and local income tax purposes, Transferee shall report
      Transferor’s contribution of the Transferred Interests to Transferee as a
      tax-free contribution pursuant to Section 721 of the Code (or the corresponding
      provision of state or local law, as applicable). Notwithstanding anything to
      the
      contrary in this Agreement or the Partnership Agreement, neither Transferee
      nor
      the REIT shall settle any matter that involves the tax treatment of (i) the
      contribution of the Transferred Interests or (ii) any other matter that would
      have a tax impact on Transferor that is materially, adversely different from
      the
      tax impact such matter would have on the REIT, without the prior written consent
      of Transferor, which consent shall not be unreasonably withheld.

     

    7. Registration
      Rights.
      Each of
      Transferee and the REIT agrees that in the event that either of them enters
      into
      or becomes a party to any instrument or agreement with any limited partner
      of
      Transferee which grants registration rights with respect to shares in the REIT
      which such limited partner may own or acquire, or otherwise grants such
      registration rights to any limited partner of Transferee, then each of
      Transferee and the REIT shall promptly notify Transferor and shall grant to
      Transferor, by entering into a registration rights agreement with Transferor
      that is in form and substance reasonably acceptable to Transferor, registration
      rights with respect to any shares issued by the REIT that Transferor may acquire
      in connection with a transfer or redemption of any of its Units to or by
      Transferee or the REIT, and such registration rights shall be on terms that
      are
      no less favorable to Transferor in any respect than the most favorable
      registration rights granted to any other limited partner of Transferee by
      Transferee or the REIT. 

     

    8. Further
      Assurances.
      Each
      party to this Agreement will execute, acknowledge and deliver, or cause to
      be
      executed, acknowledged and delivered, any such further conveyances, assignments,
      approvals, consents and other documents, and do any other acts, as may be
      reasonably necessary to carry out the intent and purpose of this Agreement.
      Without limiting the generality of the foregoing, if any property, assets,
      collateral, funds, documents or other items which constitute a part of the
      Transferred Interests remains in or comes into either Transferor’s possession or
      control or remains or become vested or titled in Transferor, Transferor shall
      promptly take any and all actions necessary to transfer title and possession
      thereof to Transferee, all at Transferee’s sole cost and expense.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    9. Governing
      Law.
      This
      Agreement shall be construed and enforced in accordance with the laws of the
      State of New York.

     

    10. Binding
      Effect.
      This
      Agreement shall be binding upon, and shall inure to the benefit of, Transferor,
      Transferee and their respective successors and assigns.

     

    11. Severability.
      In the
      event that any phrase, clause, sentence, paragraph, section, article or other
      portion of this Agreement shall become illegal, null or void, or against public
      policy, for any reason, or shall be held by any court of competent jurisdiction
      to be illegal, null or void, or against public policy, the remaining portions
      of
      this Agreement shall not be affected thereby and shall remain in force and
      effect to the full extent permissible by law.

     

    12. Counterparts.
      This
      Agreement may be executed in several counterparts, each of which shall
      constitute an original and all of which, taken together, shall constitute one
      and the same Agreement, binding on each party hereto.

     

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        7

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, Transferor
      and Transferee have executed this Agreement as of the date first above
      written.

     

    
      	 	 	 
	 	
              TRANSFEROR: 

               

              ARBOR
                MILL RUN JRM LLC,
                

              a
                Delaware limited liability company 

              By:
                Arbor Commercial Mortgage, LLC, a
                New York limited liability company, its
                sole member

            
	 
 	 
 	 
 
	
            	
            	
              By:

            
	 	
              
                

              

              Name:

            
	 	
              Title:

            

    

     

    
      	 	 	 
	 	
              TRANSFEREE:

               

              LIGHTSTONE
                VALUE PLUS REIT, L.P., 

              
                a
                  Delaware limited partnership

                By
                   Lightstone
                  Value Plus Real Estate Investment Trust,
                  Inc., a Maryland corporation, its general partner

              

            
	 
 	 
 	 
 
	
            	
            	
              By:

            
	 	
              
                

              

              Name:
                

            
	 	
              Title:

            

    

     

     

    MILL
      RUN
      L.L.C. is executing this 

    Agreement
      for the sole purpose of 

    Sections
      1(d) and 3(b) hereof.

    

    MILL
      RUN
      L.L.C.

    By:
      BRM
      LLC, its managing member

    
      	 	 	 	 
	
              By:
                

            	 	 	
            
	
              
                

              

              Name:

              Title:

            	 	 	
            

    

     

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        8

        
          

        

      

      
        
        

      

    

    

    LIGHTSTONE
      VALUE PLUS REAL 

    ESTATE
      INVESTMENT TRUST, INC.,

    is
      executing this agreement for the sole 

    purpose
      of Sections 6 and 7 hereof.

    

    LIGHTSTONE
      VALUE PLUS REAL 

    ESTATE
      INVESTMENT TRUST, INC.,

    a
      Maryland Corporation

     

    
      	 	 	 	 
	By:	 	 	
            
	
              
                

              

              Name:

              Title:

            	 	 	
            

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    REPRESENTATION
      LETTER AND AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    TAX
      PROTECTION AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    PARTNERSHIP
      AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    CAPITALIZATION
      OF TRANSFEREE

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