Document:

Exhibit 10.1

 

ADVISORY AGREEMENT 

 

BETWEEN

 

LIGHTSTONE REAL ESTATE INCOME TRUST INC.

 

AND

 

LIGHTSTONE REAL ESTATE INCOME LLC

 

Dated as of March 4, 2015

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	1.	DEFINITIONS	1
	 	 	 
	2.	APPOINTMENT 	6
	 	 	 
	3.	DUTIES OF THE ADVISOR	6
	 	 	 
	4.	AUTHORITY OF ADVISOR 	10
	 	 	 
	5.	FIDUCIARY RELATIONSHIP 	10
	 	 	 
	6.	NO PARTNERSHIP OR JOINT VENTURE	10
	 	 	 
	7.	BANK ACCOUNTS	10
	 	 	 
	8.	RECORDS; ACCESS 	10
	 	 	 
	9.	LIMITATIONS ON ACTIVITIES 	10
	 	 	 
	10.	FEES 	11
	 	 	 
	11.	EXPENSES	15
	 	 	 
	12.	OTHER SERVICES 	16
	 	 	 
	13.	REIMBURSEMENTS 	16
	 	 	 
	14.	OTHER ACTIVITIES OF THE ADVISOR	17
	 	 	 
	15.	THE LIGHTSTONE NAME 	18
	 	 	 
	16.	TERM OF AGREEMENT	18
	 	 	 
	17.	TERMINATION BY THE PARTIES	18
	 	 	 
	18.	ASSIGNMENT TO AN AFFILIATE	18
	 	 	 
	19.	PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION 	18
	 	 	 
	20.	INCORPORATION OF THE ARTICLES OF INCORPORATION 	19
	 	 	 
	21.	INDEMNIFICATION BY THE COMPANY	19
	 	 	 
	22.	INDEMNIFICATION BY THE ADVISOR 	21
	 	 	 
	23.	NOTICES	21
	 	 	 

 

    	 	i	

     

    

 

	24.	MODIFICATION	22
	 	 	 
	25.	SEVERABILITY	22
	 	 	 
	26.	GOVERNING LAW	22
	 	 	 
	27.	ENTIRE AGREEMENT	22
	 	 	 
	28.	NO WAIVER	22
	 	 	 
	29.	PRONOUNS AND PLURALS	22
	 	 	 
	30.	HEADINGS 	23
	 	 	 
	31.	EXECUTION IN COUNTERPARTS 	23

 

    	 	ii	

     

    

 

ADVISORY AGREEMENT

 

THIS ADVISORY AGREEMENT, dated as
of March 4, 2015 (this “Agreement”), is entered into between Lightstone Real Estate Income Trust Inc., a Maryland
corporation (the “Company”) and Lightstone Real Estate Income LLC, a Delaware limited liability company.

 

WITNESSETH

 

WHEREAS, the Company is a Maryland
corporation created in accordance with the Maryland General Corporation Law and intends to qualify as a REIT (as defined below);

 

WHEREAS, the Company desires to
avail itself of the experience, sources of information, advice, assistance and certain facilities of the Advisor (as defined below)
and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision
of, the Board of Directors of the Company, all as provided herein; and

 

WHEREAS, the Advisor is willing
to render such services, subject to the supervision of the Board of Directors of the Company, on the terms and subject to the conditions
hereinafter set forth;

 

NOW, THEREFORE, in consideration
of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.          DEFINITIONS.
As used in this Agreement, the following terms have the definitions set forth below:

 

“2%/25% Guidelines” has the
meaning set forth in Section 13.

 

“Acquisition Expenses” has
the meaning set forth in the Articles of Incorporation.

 

“Acquisition Fee” means the
fee payable to the Advisor or its Affiliates pursuant to Section 10(a).

 

“Advisor”
means Lightstone Real Estate Income LLC, a Delaware limited liability company, any successor advisor to the Company, or any Person
to which Lightstone Real Estate Income LLC or any successor advisor subcontracts all or substantially all its functions. Notwithstanding
the foregoing, a Person hired or retained by Lightstone Real Estate Income LLC to perform property management and related services
for the Company that is not hired or retained to perform substantially all the functions of Lightstone Real Estate Income LLC with
respect to the Company as a whole shall not be deemed to be an Advisor.

 

“Affiliate”
or “Affiliated” has the meaning set forth in the Articles of Incorporation.

 

“Agreement”
has the meaning set forth at the head of this Agreement, and such term shall include any amendment or supplement hereto from time
to time.

 

     

     

    

 

“Annual Subordinated
Performance Fee” means the fees payable to the Advisor or its assignees pursuant to Section 10(e).

 

“Articles of Incorporation”
means the charter of the Company, as amended or supplemented from time to time.

 

“Asset Management Fee”
means the fees payable to the Advisor pursuant to Section 10(d).

 

“Asset Sale”
means any transaction or series of transactions resulting in a liquidation or the sale of all or substantially all the Investments
and the distribution of the Net Sales Proceeds therefrom to the holders of Common Shares whereby: (a) the Company directly or indirectly
sells, grants, transfers, conveys or relinquishes its direct or indirect ownership of or interest in (i) any real estate asset,
including through any event with respect to any real estate asset that gives rise to a significant amount of insurance proceeds
or condemnation awards, (ii) any Joint Venture, (iii) any Real Estate-Related Loan or portion thereof (including all payments thereunder
or in satisfaction thereof other than regularly scheduled interest payments), including through any event with respect to any Real
Estate-Related Loan or portion thereof that gives rise to a significant amount of insurance proceeds or similar awards, or (iv)
any other Investment not previously described in this definition, or any portion thereof; or (b) any Joint Venture directly or
indirectly sells, grants, transfers, conveys or relinquishes its direct or indirect ownership of or interest in any Investment
described in this definition, or any portion thereof.

 

“Average
Invested Assets” has the meaning set forth in the Articles of Incorporation. For an equity interest owned in a Joint
Venture, the calculation of Average Invested Assets shall take into consideration the underlying Joint Venture’s aggregate
book value for the equity interest.

 

“Board of Directors” or “Board”
means the Board of Directors of the Company.

 

“Business Day” means any
day on which the New York Stock Exchange is open for trading.

 

“Bylaws” means the bylaws
of the Company, as amended from time to time.

 

“Cause”
means (i) fraud, criminal conduct, willful misconduct or illegal or grossly negligent breach of fiduciary duty by the Advisor,
or (ii) if any of the following events occur: (A) the Advisor shall breach any material provision of this Agreement, and after
written notice of such breach, shall not cure such default within thirty (30) days or have begun action within thirty (30) days
to cure the default which shall be completed with reasonable diligence; (B) the Advisor shall be adjudged bankrupt or insolvent
by a court of competent jurisdiction, or an order shall be made by a court of competent jurisdiction for the appointment of a receiver,
liquidator, or trustee of the Advisor, for all or substantially all its property by reason of the foregoing, or if a court of competent
jurisdiction approves any petition filed against the Advisor for reorganization, and such adjudication or order shall remain in
force or unstayed for a period of thirty (30) days; or (C) the Advisor shall institute proceedings for voluntary bankruptcy or
shall file a petition seeking reorganization under the federal bankruptcy laws, or for relief under any law for relief of debtors,
or shall consent to the appointment of a receiver for itself or for all or substantially all its property, or shall make a general
assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts, generally, as they become
due.

 

    	 	2	 

     

    

 

“Change of Control”
means a change of control of the Company of a nature that would be required to be reported in response to the disclosure requirements
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as enacted and in force on the date hereof, whether or not the Company is then subject to such reporting requirements; provided,
however, that, without limitation, a Change of Control shall be deemed to have occurred if: (i) any “person”
(within the meaning of Section 13(d) of the Exchange Act, as enacted and in force on the date hereof) is or becomes the “beneficial
owner” (as that term is defined in Rule 13d-3, as enacted and in force on the date hereof, under the Exchange Act) of securities
of the Company representing 9.8% or more of the combined voting power of the Company’s securities then outstanding; (ii)
there occurs a merger, consolidation or other reorganization of the Company which is not approved by the Board of Directors; (iii)
there occurs a Sale, exchange, transfer or other disposition of substantially all the assets of the Company to another Person,
which disposition is not approved by the Board of Directors; or (iv) there occurs a contested proxy solicitation of the Stockholders
that results in the contesting party electing candidates to a majority of the Board of Directors’ positions next up for election.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision
of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto,
as interpreted by any applicable regulations as in effect from time to time.

 

“Common Shares” means shares
of the Company’s common stock, par value $0.01 per share.

 

“Company”
has the meaning set forth at the head of this Agreement.

 

“Competitive Real Estate
Commission” has the meaning set forth in the Articles of Incorporation.

 

“Contract Sales Price”
means the total consideration received by the Company for the Sale of an Investment.

 

“Cost
of Assets” means the amount funded by the Company for Investments, including expenses and any financing attributable
to such Investments, less any principal received by the Company for such Investments.

 

“Dealer
Manager” means the Person(s) selected by the Board of Directors to act as the dealer manager for an Offering.

 

“Director” means a member
of the Board of Directors.

 

“Disposition
Fee” means the fee payable to the Advisor or any of its Affiliates pursuant to Section 10(c).

 

    	 	3	 

     

    

 

“Distributions”
has the meaning set forth in the Articles of Incorporation.

 

“Excess Amount”
has the meaning set forth in Section 13.

 

“Exchange Act” has the meaning
set forth in the definition of “Change of Control.”

 

“Funding Amount” has the
meaning set forth in the Articles of Incorporation.

 

“Good Reason”
means: (i) any failure to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform obligations
under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the Company.

 

“Gross Proceeds” has the
meaning set forth in the Articles of Incorporation.

 

“include,”
“includes” and “including” shall be construed as if followed by the phrase
“without limitation.”

 

“Indemnitee” has the meaning
set forth in Section 21(a).

 

“Independent Director” has
the meaning set forth in the Articles of Incorporation.

 

“Invested Capital” has the
meaning set forth in the Articles of Incorporation.

 

“Investment” has the meaning
set forth in the Articles of Incorporation.

 

“Investment Company Act”
has the meaning set forth in Section 3(w).

 

“Investment Liquidity Event”
means: (a) an Asset Sale; or (b) a Merger.

 

“Joint Venture”
means any joint venture or partnership or other similar arrangement in which the Company or any of its subsidiaries is a co-venturer,
member or partner, which is established to originate, acquire or hold Investments.

 

“Listing”
means the listing of the Common Shares or any other securities into or for which the Common Shares are converted or exchanged on
a national securities exchange, or the inclusion of the Common Shares for trading in the over-the-counter market.

 

“Loan”
means any indebtedness or obligation in respect of borrowed money or evidenced by a bond, note, debenture, deed of trust, letter
of credit or similar instrument, including any mortgage or mezzanine loan.

 

“Market Value”
means: (a) in the case of a Listing, the weighted average closing price per Common Share over the Measurement Period multiplied
by the number of Common Shares outstanding on the day trading first commences or commenced upon a Listing; (b) in the case of a
Merger, the value accorded to one Common Share in the applicable transaction documents governing the Merger multiplied by the number
of Common Shares outstanding immediately prior to the effective time of the Merger; and (c) in the case of an Asset Sale, the Net
Sales Proceeds distributed to the holders of Common Shares. Notwithstanding (a), if a definitive agreement relating to a Merger
or an Asset Sale shall be entered into after a Listing, but before the Measurement Period shall be completed, then Market Value
shall be determined according to (b) or (c), as applicable.

 

    	 	4	 

     

    

 

“Measurement Period”
means the period beginning one hundred eighty (180) calendar days after a Listing, and continuing for a period of thirty (30) consecutive
trading days.

 

“Merger”
means any merger, reorganization, business combination, share exchange or acquisition by any Person or related group of Persons
of beneficial ownership of all or substantially all the Common Shares in one or more related transactions, or another similar transaction
involving the Company, pursuant to which the holders of Common Shares receive cash or the securities of another issuer that are
listed on a national securities exchange, as full or partial consideration for their Common Shares.

 

“NASAA
REIT Guidelines” means the Statement of Policy Regarding Real Estate Investment Trusts as revised and adopted by
the North American Securities Administrators Association on May 7, 2007, as the same may be amended from time to time.

 

“Net Income” has the meaning
set forth in the Articles of Incorporation.

 

“Net Sales Proceeds” has
the meaning set forth in the Articles of Incorporation.

 

“Notice” has the meaning
set forth in Section 23.

 

“Offering” means a public
offering of Shares pursuant to a Prospectus.

 

“Organization and Offering
Expenses” means all costs and expenses to be paid by the Company in connection with the formation of the Company
and an Offering, including (i) the Company’s legal, accounting, printing, mailing and filing fees, (ii) charges of the Company’s
escrow agent, (iii) reimbursements to the Dealer Manager and participating broker-dealers for due diligence expenses set forth
on detailed and itemized invoices, (iv) amounts to reimburse the Advisor for its portion of the salaries of the employees of its
Affiliates who provide services to the Advisor, and (v) other costs in connection with administrative oversight of such Offering
and the marketing process, such as preparing supplemental sales materials, holding educational conferences and attending retail
seminars conducted by the Dealer Manager or participating broker-dealers.

 

“Person” has the meaning
set forth in the Articles of Incorporation.

 

“Primary Offering”
means the portion of an Offering other than the offering of Common Shares pursuant to the Company’s distribution reinvestment
program.

 

“Prospectus”
means a final prospectus of the Company filed pursuant to Rule 424(b) of the Securities Act, as the same may be amended or supplemented
from time to time.

 

“Real Estate-Related
Loan” means any investment in mortgage loans and other types of real estate-related debt financing, including mezzanine
loans, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests
and participations in such loans, by the Company, directly, through one or more subsidiaries or through a Joint Venture.

 

    	 	5	 

     

    

 

“REIT” has the meaning set
forth in the Articles of Incorporation.

 

“Sale” has the meaning set
forth in the Articles of Incorporation.

 

“Securities Act”
means the Securities Act of 1933, as amended. “Shares” has the meaning set forth in the Articles of Incorporation.

 

“Sponsor” means The Lightstone
Group, LLC, a New Jersey limited liability company.

 

“Stockholder”
means a holder of record of the Shares, as maintained on the books and records of the Company or its transfer agent.

 

“Subordinated Fee upon
Termination” means the fee payable to the Advisor pursuant to Section 10(h).

 

“Subordinated Incentive
Listing Fee” means the fee payable to the Advisor pursuant to Section 10(g).

 

“Subordinated Participation
in Net Sales Proceeds” means the fee payable to the Advisor pursuant to Section 10(f).

 

“such as”
shall be construed as if followed by the phrase “without limitation.”

 

“Termination Date”
means the date of termination of this Agreement.

 

“Total Operating Expenses”
has the meaning set forth in the Articles of Incorporation. The definition of “Total Operating Expenses” set forth
above is intended to encompass only those expenses which are required to be treated as Total Operating Expenses under the NASAA
REIT Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the Company which is not part
of Total Operating Expenses under the NASAA REIT Guidelines shall not be treated as part of Total Operating Expenses for purposes
hereof.

 

2.          APPOINTMENT.
The Company hereby appoints the Advisor to serve as its advisor to perform the services set forth herein on the terms and subject
to the conditions set forth in this Agreement and subject to the supervision of the Board, and the Advisor hereby accepts such
appointment.

 

3.          DUTIES
OF THE ADVISOR. The Advisor will use its reasonable best efforts to find, evaluate, present and recommend to the Company investment
opportunities consistent with the Company’s investment policies and objectives as adopted from time to time by the Board.
In its performance of this undertaking, subject to the supervision of the Board and consistent with the provisions of the Articles
of Incorporation and the Bylaws, the Advisor, either directly or indirectly, shall, among other duties:

 

    	 	6	 

     

    

 

(a)          exercise
absolute discretion, subject to the Board’s review, in decisions to originate, acquire, retain or sell Investments; provided,
that the Advisor may originate or acquire on behalf of the Company any Investment with purchase price that is less than $15,000,000
without the prior approval of the Board (other than an Investment originated or acquired from the Advisor, a Director, the Sponsor
or their Affiliates, in which case the approval of the Independent Directors will be required) if and to the extent that:

 

(i)          the
proposed origination or acquisition would not, if consummated, violate or conflict with the Company’s investment objectives;

 

(ii)         the
proposed origination or acquisition would not, if consummated, violate the limitations on borrowing set forth in the Articles of
Incorporation; and

 

(iii)        the
consideration proposed to be paid for such Investment does not exceed the fair market value of such Investment, as determined by
a qualified independent valuer selected in good faith by the Advisor and acceptable to the

Independent Directors;

 

(b)          provide
daily management for the Company and perform and supervise the various administrative functions necessary for the day-to-day management
of the operations of the Company;

 

(c)          investigate,
select and, on behalf of the Company, engage and conduct business with and supervise the performance of such Persons as the Advisor
deems necessary to the proper performance of its obligations hereunder (including consultants, accountants, correspondents, lenders,
technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for
collection, insurers, insurance agents, banks, builders, developers, property owners, property managers, real estate management
companies, real estate operating companies, securities investment advisors, mortgagors, the registrar and the transfer agent and
any and all agents for any of the foregoing), including Affiliates of the Advisor and Persons acting in any other capacity deemed
by the Advisor necessary or desirable for the performance of any of the foregoing services (including entering into contracts in
the name of the Company with any of the foregoing);

 

(d)          consult
with the officers and Directors of the Company and assist the Directors in the formulation and implementation of the Company’s
financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of Investments
consistent with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken
by the Company;

 

    	 	7	 

     

    

 

(e)          subject
to the provisions of Section 4, (i) present a continuing and suitable investment program to the Board that is consistent
with the Company’s investment policies and objectives; (ii) locate, analyze and select potential Investments; (iii) structure
and negotiate the terms and conditions of transactions pursuant to which originations, acquisitions and dispositions of Investments
will be made; (iv) research, identify, review and recommend originations, acquisitions and dispositions of Investments to the Board
and make Investments on behalf of the Company in compliance with the investment objectives and policies of the Company; (v) arrange
for financing and refinancing and make other changes in the asset or capital structure of, and dispose of, reinvest the proceeds
from the Sale of, or otherwise deal with, Investments; (vi) perform all operational functions for the maintenance and administration
of Investments, including, with respect to Real Estate-Related Loans, servicing; (vii) actively oversee and manage Investments
for purposes of meeting the Company’s investment objectives and reviewing and analyzing financial information for each of
the Investments and the overall portfolio; (viii) select Joint Venture partners, structure corresponding agreements and oversee
and monitor these relationships; (ix) oversee Affiliated and non-Affiliated Persons with whom the Advisor contracts to perform
certain of the services required to be performed under this Agreement; (x) manage accounting and other recordkeeping functions
for the Company, including generating an annual budget for the Company; (xi) recommend various liquidity events to the Board when
appropriate; and (xii) source and structure Real Estate-Related Loans (if the Company retains the servicing rights, the Advisor
or one of its Affiliates will service the Real Estate-Related Loan or select a third-party provider to do so);

 

(f)          upon
request, provide the Board with periodic reports regarding prospective Investments;

 

(g)          make
investments in, and dispositions of, Investments within the discretionary limits and authority as granted by the Board;

 

(h)          perform
a diligence review on each Investment prior to the closing thereof;

 

(i)           negotiate
on behalf of the Company with banks or other lenders for Loans to be made to the Company or any of its subsidiaries, and negotiate
with investment banking firms and broker-dealers on behalf of the Company or any of its subsidiaries, or negotiate private sales
of Common Shares or obtain Loans for the Company or any of its subsidiaries, but in no event in such a manner that the Advisor
shall be acting as broker-dealer or underwriter; provided, however, that any fees and costs payable to third parties
incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company or any of its subsidiaries;

 

(j)          obtain
reports (which may be, but are not required to be, prepared by the Advisor or its Affiliates), where appropriate, concerning the
value of Investments or contemplated Investments of the Company;

 

(k)          from
time to time, or at any time reasonably requested by the Board, make reports to the Board of its performance of services to the
Company under this Agreement, including reports with respect to potential conflicts of interest involving the Advisor or any of
its Affiliates;

 

(l)           provide
the Company with all necessary cash management services;

 

(m)          deliver
to, or maintain on behalf of, the Company copies of all valuation reports;

 

(n)           notify
the Board of all proposed material transactions before they are completed;

 

    	 	8	 

     

    

 

(o)          effect
any private placement of tenancy-in-common (TIC) or other interests in Investments as may be approved by the Board;

 

(p)          perform
investor relations and Stockholder communications functions for the Company;

 

(q)          render
such services as may be reasonably determined by the Board of Directors consistent with the terms and conditions herein;

 

(r)          maintain
the Company’s accounting and other records and assist the Company in preparing, reviewing and filing all reports and returns
required to be filed by it with the Securities and Exchange Commission, the Internal Revenue Service and other regulatory agencies;

 

(s)          do
all things reasonably necessary to assure its ability to render the services described in this Agreement;

 

(t)          make
decisions regarding marketing methods with respect to the initial public Offering, the termination or extension of the initial
public Offering, the initiation of a follow-on Offering, mergers and other Change of Control transactions and certain significant
press releases;

 

(u)          periodically
review each Investment to determine the optimal time to sell the Investment and generate a strong return;

 

(v)         administer
the Company’s share repurchase program and, in connection therewith, consider various factors in determining the amount of
liquid assets the Company should maintain, including but not limited to the Company’s receipt of proceeds from sales of additional
Common Shares, the Company’s cash flow from operations, available borrowing capacity under a line of credit, if any, the
Company’s receipt of proceeds from any asset sale, and the use of cash to fund repurchases;

 

(w)          continually
review the Company’s investment activity to attempt to ensure that the Company will not be regulated as an “investment
company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”); and

 

(x)          continuously
monitor the Company’s capital needs and the amount of available liquid assets relative to the Company’s current business,
as well as the volume of repurchase requests relative to the sales of new Common Shares.

 

Notwithstanding the foregoing or
anything else that may be to the contrary in this Agreement, the Advisor may delegate any of the foregoing duties to any Person
so long as the Advisor or its Affiliate remains responsible for the performance of the duties set forth in this Section 3.

 

    	 	9	 

     

    

 

4.          AUTHORITY
OF ADVISOR.

 

(a)          Pursuant
to the terms of this Agreement (including the restrictions included in this Section 4 and in Section 9), and subject
to the continuing and exclusive authority of the Board over the supervision of the Company, the Company, acting on the authority
of the Board of Directors, hereby delegates to the Advisor the authority to perform the services described in Section 3.

 

(b)          If
a transaction requires approval by the Independent Directors, the Advisor will deliver to the Independent Directors all documents
and other information reasonably required by them to evaluate properly the proposed transaction.

 

(c)          The
Board may, at any time upon the giving of Notice to the Advisor, modify or revoke the authority set forth in this Section 4;
provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall
not be applicable to investment transactions to which the Advisor has committed the Company prior to the date of receipt by the
Advisor of such notification.

 

5.          FIDUCIARY
RELATIONSHIP. The Advisor, as a result of its relationship with the Company pursuant to this Agreement, has a fiduciary responsibility
and duty to the Company and the Stockholders.

 

6.          NO
PARTNERSHIP OR JOINT VENTURE. The parties to this Agreement are not partners or joint venturers with each other and nothing
herein shall be construed to make them partners or joint venturers or impose any liability as such on either of them.

 

7.          BANK
ACCOUNTS. The Advisor may establish and maintain one or more bank accounts in the name of the Company and may collect and deposit
into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such
terms and conditions as the Board may approve; provided, that no funds shall be commingled with the funds of the Advisor;
and, upon request, the Advisor shall render appropriate accountings of such collections and payments to the Board and to the auditors
of the Company.

 

8.          RECORDS;
ACCESS. The Advisor shall maintain appropriate records of all its activities hereunder and make such records available for
inspection by the Directors and by counsel, auditors and authorized agents of the Company, at any time and from time to time. The
Advisor shall at all reasonable times have access to the books and records of the Company.

 

9.          LIMITATIONS
ON ACTIVITIES. Notwithstanding anything herein to the contrary, the Advisor shall refrain from taking any action which, in
its sole judgment, or in the sole judgment of the Company, made in good faith, would (a) adversely affect the status of the Company
as a REIT, unless the Board has determined that REIT qualification is not in the best interests of the Company and its Stockholders,
(b) subject the Company to regulation under the Investment Company Act, or (c) violate any law, rule, regulation or statement of
policy of any governmental body or agency having jurisdiction over the Company or the Shares, or otherwise not be permitted by
the Articles of Incorporation or Bylaws, except if such action shall be ordered by the Board, in which case the Advisor shall notify
promptly the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action
until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for
acting in accordance with the specific instructions of the Board so given.

 

    	 	10	 

     

    

 

10.         FEES.

 

(a)          Acquisition
Fee. Subject to Section 10(b), the Company will pay to the Advisor or its Affiliates one percent (1%) of the Funding
Amount with respect to each Investment originated or acquired. The Company shall pay to the Advisor or its Affiliates the Acquisition
Fee promptly upon the closing of the Investment. If the Advisor is terminated without Cause pursuant to Section 17(a), the
Advisor or its Affiliates shall be entitled to an Acquisition Fee for any Investments originated or acquired after the Termination
Date for which a contract to originate or acquire any such Investment had been entered into at or prior to the Termination Date.
In the case of an Investment made through a Joint Venture, the Acquisition Fee shall be calculated based on the direct or indirect
ownership percentage in the Joint Venture held by the Company. For purposes of this Section 10(a), “ownership percentage”
means the percentage of capital stock, membership interests, partnership interests or other equity interests held by the Company,
without regard to classification of such equity interests. Notwithstanding anything to the contrary in this Section 10(a),
no Acquisition Fee shall be payable with respect to any transaction between the Company and the Sponsor, any affiliate of the Sponsor
or any program sponsored by the Sponsor.

 

(b)          Limitation
on Total Acquisition Fees and Acquisition Expenses; Reinvestments. In no event will the total of all Acquisition
Fees and Acquisition Expenses payable with respect to a particular Investment be unreasonable or exceed five percent (5%) of the
Funding Amount. In addition, subject to the final sentence of Section 10(a), if during the period ending two years after
the close of the initial Offering and any follow-on Offering, the Company sells an Investment and then reinvests in other Investments,
the Company will pay to the Advisor or its Affiliates, as applicable, any Acquisition Fees in respect of such other Investments,
and will reimburse the Advisor for any Acquisition Expenses in respect of such other Investments of the Advisor or any of its Affiliates;
provided, however, that in no event shall the total of all Acquisition Fees and Acquisition Expenses payable in respect
of such reinvestment be unreasonable or exceed five percent (5%) of the Funding Amount. Notwithstanding anything to the contrary
in this Section 10(b), a majority of the Directors (including a majority of the Independent Directors) not otherwise interested
in the transaction may approve fees and expenses in excess of the limits set forth in this Section 10(b) if they determine
the transaction to be commercially competitive, fair and reasonable to the Company.

 

(c)          Disposition
Fee. For substantial services in connection with the Sale of an Investment, the Company will pay the Advisor or any of
its Affiliates a Disposition Fee equal to up to one percent (1%) of the Contract Sales Price of each Investment sold; provided,
however, that the disposition fees paid to the Advisor, its Affiliates and non-Affiliates in respect of such Investment
shall not exceed the lesser of six percent (6%) of the Contract Sales Price or the Competitive Real Estate Commission in respect
of such Investment. The Independent Directors will determine whether the Advisor or its Affiliates have provided a substantial
amount of services to the Company in connection with the Sale of an Investment. A substantial amount of services in connection
with the Sale of an Investment includes the preparation by the Advisor or its Affiliates of an investment package for the Investment
(including an investment analysis, an asset description and other due diligence information) or such other substantial services
performed by the Advisor or its Affiliates in connection with a Sale. The Company will not pay a Disposition Fee upon the Sale
of any securities traded on a national securities exchange or included for trading in the over-the-counter market. The Company
will not pay a Disposition Fee upon the maturity, prepayment, workout, modification or extension of a debt Investment unless a
corresponding fee is paid by the borrower, in which case the Disposition Fee will be the lesser of: (i) 1% of the principal amount
of the debt prior to such transaction; and (ii) the amount of the fee paid by the borrower in connection with such transaction.
If the Company takes ownership of a property as a result of a workout or foreclosure of debt, the Company will pay a Disposition
Fee upon the Sale of such property.

 

    	 	11	 

     

    

 

(d)          Asset
Management Fee. The Company shall pay the Advisor or its assignees a monthly fee equal to one-twelfth (1/12) of one percent
(1%) of the Cost of Assets, calculated and payable on the first Business Day of each month.

 

(e)          Annual
Subordinated Performance Fee. The Company shall pay the Advisor an Annual Subordinated Performance Fee calculated on the
basis of the Company’s annual return to holders of Common Shares, payable annually in arrears in any year in which holders
of Common Shares receive payment of an eight percent (8%) annual cumulative, pre-tax, non-compounded return on their respective
pro rata shares of Invested Capital, in an amount equal to fifteen percent (15%) of the amount in excess of such eight percent
(8%) annual return; provided, however, that the Annual Subordinated Performance Fee shall not exceed ten percent
(10%) of the aggregate return for such year; and provided further, however, that the Annual Subordinated Performance
Fee will not be paid unless holders of Common Shares receive a return of their respective pro rata shares of Invested Capital.
The Annual Subordinated Performance Fee shall be payable only from Net Sales Proceeds.

 

(f)          Subordinated
Participation in Net Sales Proceeds. Upon an Investment Liquidity Event, the Company shall pay the Advisor, in one or more
payments solely out of Net Sales Proceeds, an amount equal to (i) fifteen percent (15%) of the amount, if any, by which (A) the
sum of (I) the Market Value, plus (II) total distributions attributable to Net Sales Proceeds paid through the date the Investment
Liquidity Event is consummated on Common Shares issued in all Offerings through such date, exceeds (B) the sum of (I) the Gross
Proceeds raised in all Offerings through the date the Investment Liquidity Event is consummated (less amounts paid on or prior
to such date to purchase or redeem any Common Shares purchased in an Offering pursuant to the Company’s share repurchase
program), plus (II) the minimum amount of cash that, if distributed to those Stockholders who purchased Common Shares in an Offering
on or prior to the date the Investment Liquidity Event is consummated, would have provided such Stockholders an eight percent (8%)
annual cumulative, pre-tax, non-compounded return on the Gross Proceeds raised in all Offerings through the date the Investment
Liquidity Event is consummated, measured for the period from inception through the date the Investment Liquidity Event is consummated,
less (ii) any prior payments to the Advisor of the Annual Subordinated Performance Fee. The Subordinated Participation in Net Sales
Proceeds will only be paid to the Advisor if this Agreement has not been terminated by the Company or the Advisor prior to the
date the Investment Liquidity Event is consummated.

 

    	 	12	 

     

    

 

(g)          Subordinated
Incentive Listing Fee. Upon a Listing, the Company shall pay the Advisor, in one or more payments solely out of Net Sales
Proceeds, an amount equal to (i) fifteen percent (15%) of the amount, if any, by which (A) the sum of (I) the Market Value, plus
(II) total distributions attributable to Net Sales Proceeds paid through the date of Listing on Common Shares issued in all Offerings
through such date, exceeds (B) the sum of (I) the Gross Proceeds raised in all Offerings through the date of Listing (less amounts
paid on or prior to such date to purchase or redeem any Common Shares purchased in an Offering pursuant to the Company’s
share repurchase program), plus (II) the minimum amount of cash that, if distributed to those Stockholders who purchased Common
Shares in an Offering on or prior to the date of Listing, would have provided such Stockholders an eight percent (8%) annual cumulative,
pre- tax, non-compounded return on the Gross Proceeds raised in all Offerings through the date of Listing, measured for the period
from inception through the date of Listing, less (ii) any prior payments to the Advisor of the Subordinated Participation in Net
Sales Proceeds or the Annual Subordinated Performance Fee, as applicable. The Subordinated Incentive Listing Fee will only be paid
to the Advisor if this Agreement has not been terminated by the Company or the Advisor prior to the date of Listing.

 

(h)          Subordinated
Fee upon Termination. Upon termination or non-renewal of this Agreement with or without Cause, the Company shall pay the
Advisor, in one or more payments solely out of Net Sales Proceeds, an amount equal to (i) fifteen percent (15%) of the amount,
if any, by which (A) the sum of (I) the estimated market value (determined by the Company in accordance with the Company’s
valuation policy) of the Investments on the Termination Date, less (II) any Loans secured by such Investments and any unsecured
Loans, plus or minus (III) any working capital surplus or deficit, as applicable, plus (IV) total distributions attributable to
Net Sales Proceeds paid through the Termination Date on Common Shares issued in all Offerings through the Termination Date, exceeds
(B) the sum of (I) the Gross Proceeds raised in all Offerings through the Termination Date (less amounts paid on or prior to the
Termination Date to purchase or redeem any Common Shares purchased in an Offering pursuant to the Company’s share repurchase
program), plus (II) the minimum amount of cash that, if distributed to those Stockholders who purchased Common Shares in an Offering
on or prior to the Termination Date, would have provided such Stockholders an eight percent (8%) annual cumulative, pre-tax, non-compounded
return on the Gross Proceeds raised in all Offerings through the Termination Date, measured for the period from inception through
the Termination Date, less (ii) any prior payments to the Advisor of the Subordinated Participation in Net Sales Proceeds or the
Annual Subordinated Performance Fee, as applicable; provided, however, that the Subordinated Fee upon Termination
will not be paid unless holders of Common Shares receive a return of their respective pro rata shares of Invested Capital. In addition,
on the Termination Date, the Advisor may elect to defer its right to receive a Subordinated Fee upon Termination until either a
Listing or an Investment Liquidity Event occurs.

 

(i)          Coordination.

 

(i)          The
Advisor shall not be entitled to earn both the Subordinated Participation in Net Sales Proceeds and the Subordinated Incentive
Listing Fee. Any portion of the Subordinated Participation in Net Sales Proceeds that the Company shall pay to the Advisor prior
to a Listing shall offset any amount of the Subordinated Incentive Listing Fee otherwise payable by the Company to the Advisor.
If the Advisor receives the Subordinated Fee upon Termination, the Advisor shall not be entitled to any further payment of the
Subordinated Participation in Net Sales Proceeds or the Subordinated Incentive Listing Fee.

 

    	 	13	 

     

    

 

(ii)         Upon
a Listing, any previous payments by the Company to the Advisor of the Subordinated Participation in Net Sales Proceeds shall offset
any amount of the Subordinated Incentive Listing Fee otherwise payable by the Company to the Advisor, and the Advisor shall not
be entitled to any further payment of the Subordinated Participation in Net Sales Proceeds or the Subordinated Fee upon Termination.

 

(iii)        If
the Advisor elects to defer its right to receive a Subordinated Fee upon Termination and there is a subsequent Listing, then the
Advisor shall be entitled to receive a Subordinated Fee upon Termination, payable in one or more payments solely out of Net Sales
Proceeds, in an amount equal to (A) fifteen percent (15%) of the amount, if any, by which (I) the sum of (x) the Market Value,
plus (y) total distributions attributable to Net Sales Proceeds paid through the date of Listing on Common Shares issued in all
Offerings through the Termination Date, exceeds (II) the sum of (x) the Gross Proceeds raised in all Offerings through the Termination
Date (less amounts paid on or prior to the date of Listing to purchase or redeem any Common Shares purchased in an Offering on
or prior to the Termination Date pursuant to the Company’s share repurchase program), plus (y) the minimum amount of cash
that, if distributed to those Stockholders who purchased Common Shares in an Offering on or prior to the Termination Date, would
have provided such Stockholders an eight percent (8%) annual cumulative, pre-tax, non-compounded return on the Gross Proceeds raised
in all Offerings through the Termination Date, measured for the period from inception through the date of Listing, less (B) any
prior payments to the Advisor of the Subordinated Participation in Net Sales Proceeds, the Subordinated Incentive Listing Fee or
the Annual Subordinated Performance Fee, as applicable; provided, however, that the Subordinated Fee upon Termination
will not be paid unless holders of Common Shares receive a return of their respective pro rata shares of Invested Capital.

 

(iv)        If
the Advisor elects to defer its right to receive a Subordinated Fee upon Termination and there is a subsequent Investment Liquidity
Event, then the Advisor shall be entitled to receive a Subordinated Fee upon Termination, payable in one or more payments solely
out of Net Sales Proceeds, in an amount equal to (A) fifteen percent (15%) of the amount, if any, by which (I) the sum of (x) the
Market Value, plus (y) total distributions attributable to Net Sales Proceeds paid through the date the Investment Liquidity Event
is consummated on Common Shares issued in all Offerings through the Termination Date, exceeds (II) the sum of (x) the Gross Proceeds
raised in all Offerings through the Termination Date (less amounts paid on or prior to the date the Investment Liquidity Event
is consummated to purchase or redeem any Common Shares purchased in an Offering on or prior to the Termination Date pursuant to
the Company’s share repurchase program), plus (y) the minimum amount of cash that, if distributed to those Stockholders who
purchased Common Shares in an Offering on or prior to the Termination Date, would have provided such Stockholders an eight percent
(8%) annual cumulative, pre-tax, non-compounded return on the Gross Proceeds raised in all Offerings through the Termination Date,
measured for the period from inception through the date the Investment Liquidity Event is consummated, less (B) any prior payments
to the Advisor of the Subordinated Participation in Net Sales Proceeds or the Annual Subordinated Performance Fee, as applicable;
provided, however, that the Subordinated Fee upon Termination will not be paid unless holders of Common Shares receive
a return of their respective pro rata shares of Invested Capital.

 

    	 	14	 

     

    

 

11.         EXPENSES.

 

(a)          In
addition to the compensation paid to the Advisor pursuant to Section 10, the Company shall pay directly or reimburse the
Advisor for all the expenses paid or incurred by the Advisor or its Affiliates in connection with the services it provides to the
Company pursuant to this Agreement, including the following:

 

(i)          Organization
and Offering Expenses (including third-party due diligence fees related to a Primary Offering, as set forth in detailed and itemized
invoices);

 

(ii)         Acquisition
Expenses, subject to the limitations set forth in Section10(b);

 

(iii)        the
actual cost of goods and services used by the Company and obtained from entities not Affiliated with the Advisor;

 

(iv)        interest
and other costs for Loans, including discounts, points and other similar fees;

 

(v)         taxes
and assessments on income of the Company or Investments;

 

(vi)        costs
associated with insurance required in connection with the business of the Company or by the Board;

 

(vii)       expenses
of managing and operating Investments owned by the Company, whether payable to an Affiliate of the Company or a non-Affiliated
Person;

 

(viii)      all
expenses in connection with payments to the Directors for attending meetings of the Board and Stockholders;

 

(ix)         expenses
associated with a Listing, if applicable, or with the issuance and distribution of Shares, such as selling commissions and fees,
advertising expenses, taxes, legal and accounting fees and Listing and registration fees;

 

(x)          expenses
connected with payments of Distributions;

 

(xi)         expenses
of organizing, revising, amending, converting, modifying or terminating the Company or any subsidiary thereof or the Articles of
Incorporation, Bylaws or governing documents of the Company or any subsidiary of the Company;

 

    	 	15	 

     

    

 

(xii)        expenses
of maintaining communications with Stockholders, including the cost of preparing, printing and mailing annual reports and other
Stockholder reports, proxy statements and other reports required by governmental entities;

 

(xiii)       administrative
service expenses, including all costs and expenses incurred by the Advisor or its Affiliates in fulfilling its duties hereunder,
including reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services;
provided, however, that no reimbursement shall be made for (A) services for which the Advisor or its Affiliates are
entitled to compensation in the form of a separate fee or (B) the salaries and benefits of the Company’s named executive
officers; and

 

(xiv)      audit, accounting
and legal fees.

 

(b)          Commencing
twelve (12) months after the commencement of the initial Offering, the Company will reimburse the Advisor’s costs of providing
administrative services at the end of each fiscal quarter, subject to the limitation set forth in Section 13, and provided,
that the initial Offering has first broken escrow.

 

12.         OTHER
SERVICES. Should the Board request that the Advisor or any director, officer or employee thereof render services for the Company
other than as set forth in Section 3, such services shall be separately compensated at such customary rates and in such
customary amounts as are agreed upon by the Advisor and the Board, including a majority of the Independent Directors, subject to
the limitations contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this
Agreement.

 

13.         REIMBURSEMENTS.
The Company shall not reimburse the Advisor at the end of any fiscal quarter in which Total Operating Expenses incurred by the
Advisor for the four consecutive fiscal quarters then ended exceed (the “Excess Amount”) the greater of two
percent (2%) of Average Invested Assets and twenty-five percent (25%) of Net Income (the “2%/25% Guidelines”)
for such year. Within 60 days after the end of any fiscal quarter for which there is an Excess Amount which the Independent Directors
conclude was justified and reimbursable to the Advisor based on such unusual and non-recurring factors that the Independent Directors
deem sufficient, there shall be sent to the holders of Common Shares a written disclosure of such fact, together with an explanation
of the factors the Independent Directors considered in determining that such Excess Amount was justified. If the Independent Directors
do not determine that excess expenses are justified, the Advisor shall reimburse the Corporation at the end of the twelve-month
period the amount by which the expenses exceeded the 2%/25% Guidelines.

 

    	 	16	 

     

    

 

14.         OTHER
ACTIVITIES OF THE ADVISOR.

 

(a)          Except
as set forth in this Section 14, nothing herein contained shall prevent the Advisor or any of its Affiliates from engaging
in or earning fees from other activities, including the rendering of advice to other Persons (including other REITs) and the management
of other programs advised, sponsored or organized by the Sponsor or its Affiliates; nor shall this Agreement limit or restrict
the right of any director, officer, member, partner, employee or stockholder of the Advisor or any of its Affiliates to engage
in or earn fees from any other business or to render services of any kind to any other Person and earn fees for rendering such
services; provided, however, that the Advisor must devote sufficient resources to the Company’s business to
discharge its obligations to the Company under this Agreement; and provided, further, however, that before
the Advisor and all Persons controlled by the Advisor may take advantage of an opportunity for their own account or present or
recommend it to others, they are obligated to present such opportunity to the Company if (i) such opportunity is compatible with
the Company’s investment objectives and policies, (ii) such opportunity is of a character which could be taken by the Company,
and (iii) the Company has the financial resources to take advantage of such opportunity. The Advisor may, with respect to any Investment
in which the Company is a participant, also render advice and service to each and every other participant therein, and earn fees
for rendering such advice and service. Specifically, it is contemplated that the Company may enter into Joint Ventures or other
similar co-investment arrangements with certain Persons, and pursuant to the agreements governing such Joint Ventures or arrangements,
the Advisor may be engaged to provide advice and service to such Persons, in which case the Advisor will earn fees for rendering
such advice and service.

 

(b)          If
an investment opportunity becomes available that is suitable for both the Company and a public or private entity with which
the Advisor or its Affiliates are Affiliated for which both entities have sufficient uninvested funds, and the requirements
of the second proviso in Section 14(a) have been satisfied, then the entity that has had uninvested funds for the
longest period of time will first be offered the investment opportunity. An investment opportunity will not be considered
suitable for an entity if the 2%/25% Guidelines could not be satisfied if the entity were to make the investment. In
determining whether or not an investment opportunity is suitable for more than one entity, the Board and the Advisor will
examine such factors, among others, as the cash requirements of each entity, the effect of the origination or acquisition
both on diversification of each entity’s investments, the policy of each entity relating to leverage, the anticipated
cash flow of each entity, the income tax effects of the origination or acquisition to each entity, the size of the
investment, the amount of funds available to each program and the length of time such funds have been available for
investment. If a subsequent development, such as a delay in the closing of the origination or acquisition, causes any such
investment, in the opinion of the Board and the Advisor, to be more appropriate for an entity other than the entity that
committed to make the investment, then the Advisor may determine that the other entity Affiliated with the Advisor or its
Affiliates will make the investment. It shall be the duty of the Board, including the Independent Directors, to ensure that
the method used by the Advisor for the allocation of investment opportunities among two or more affiliated programs seeking
to originate or acquire similar types of Investments is applied fairly to the Company.

 

    	 	17	 

     

    

 

15.         THE
LIGHTSTONE NAME. The Advisor and its Affiliates have or may have a proprietary interest in the name “Lightstone.”
The Advisor hereby grants to the Company, to the extent of any proprietary interest the Advisor may have in the name “Lightstone,”
a non- transferable, non-assignable, non-exclusive, royalty-free right and license to use the name “Lightstone” during
the term of this Agreement. The Company agrees that the Advisor and its Affiliates will have the right to approve any use by the
Company of the name “Lightstone,” such approval not to be unreasonably withheld or delayed. Accordingly, and in recognition
of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for
the Company, the Company will, promptly after receipt of a written request from the Advisor, cease to conduct business under or
use the name “Lightstone” or any derivative thereof and the Company shall change its name and the names of any of its
subsidiaries to a name that does not contain the name “Lightstone” or any other word or words that might, in the reasonable
discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any
its Affiliates. At such time, the Company also will make any changes to any trademarks, servicemarks or other marks necessary to
remove any references to the word “Lightstone.” Consistent with the foregoing, it is specifically recognized that the
Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other
investment vehicles (including vehicles for investment in real estate) and financial and service organizations having the name
“Lightstone” as a part of their name, all without the need for any consent (and without the right to object thereto)
by the Company. Neither the Advisor nor any of its Affiliates makes any representation or warranty, express or implied, with respect
to the name “Lightstone” licensed hereunder or the use thereof (including as to whether the use of the name “Lightstone”
will be free from infringement of the intellectual property rights of third parties). Notwithstanding the preceding, the Advisor
represents and warrants that it is not aware of any pending claims or litigation or of any claims threatened in writing regarding
the use or ownership of the name “Lightstone.”

 

16.         TERM
OF AGREEMENT. This Agreement shall continue in force for a period of one year from the date hereof. Thereafter, the term may
be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties.

 

17.         TERMINATION
BY THE PARTIES. This Agreement may be terminated upon sixty (60) days’ prior written Notice (a) by the Independent Directors
of the Company or the Advisor, without Cause and without penalty, (b) by the Advisor for Good Reason, or (c) by the Advisor upon
a Change of Control; provided, that termination of this Agreement with Cause shall be upon forty-five (45) days’ prior
written Notice. The provisions of Sections 15 and 19 through 31 (inclusive) of this Agreement shall survive
any expiration or earlier termination of this Agreement.

 

18.         ASSIGNMENT
TO AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate with the approval of a majority of the Directors
(including a majority of the Independent Directors). The Advisor may assign any rights to receive fees or other payments under
this Agreement to any Person without obtaining the approval of the Directors. This Agreement shall not be assigned by the Company
without the consent of the Advisor, except in the case of an assignment by the Company to a Person which is a successor to all
the assets, rights and obligations of the Company, in which case such successor Person shall be bound hereunder and by the terms
of said assignment in the same manner as the Company is bound by this Agreement.

 

19.         PAYMENTS
TO AND DUTIES OF ADVISOR UPON TERMINATION.

 

(a)          Amounts
Owed. After the Termination Date, the Advisor shall be entitled to receive from the Company within thirty (30) days after
the effective date of such termination all amounts then accrued and owing to the Advisor, including all its interest in the Company’s
income, losses, distributions and capital by payment of an amount equal to the then-present fair market value of the Advisor’s
interest, subject to the 2%/25% Guidelines to the extent applicable.

 

    	 	18	 

     

    

 

(b)          Advisor’s
Duties. The Advisor shall promptly upon termination of this Agreement:

 

(i)          pay
over to the Company all money collected and held for the account of the Company pursuant to this Agreement, after deducting any
accrued compensation and reimbursement for its expenses to which it is then entitled;

 

(ii)         deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by
it, covering the period following the date of the last accounting furnished to the Board;

 

(iii)        deliver
to the Board all assets, including all Investments, and documents of the Company then in the custody of the Advisor; and

 

(iv)        cooperate
with the Company and the Board and take all reasonable steps requested to provide an orderly transition of the advisory function.

 

20.         INCORPORATION
OF THE ARTICLES OF INCORPORATION. To the extent that the Articles of Incorporation impose obligations or restrictions on the
Advisor or grant the Advisor certain rights which are not set forth in this Agreement, the Advisor shall abide by such obligations
or restrictions and such rights shall inure to the benefit of the Advisor with the same force and effect as if they were set forth
herein. To the extent that a provision of the Articles of Incorporation conflicts with a provision of this Agreement, the provision
of the Articles of Incorporation shall prevail.

 

21.         INDEMNIFICATION
BY THE COMPANY.

 

(a)          The
Company shall indemnify and hold harmless the Advisor and every Affiliate of the Advisor (collectively, the “Indemnitees,”
and each, an “Indemnitee”), from all liabilities, claims, damages or losses arising in the performance of their
duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liabilities, claims, damages
or losses and related expenses are not fully reimbursed by insurance, and to the extent that such indemnification would not be
inconsistent with the laws of the State of New York or the Articles of Incorporation. Notwithstanding the foregoing, the Company
shall not provide for indemnification of an Indemnitee for any loss or liability suffered by such Indemnitee, nor shall the Company
provide that an Indemnitee be held harmless for any loss or liability suffered by the Company, unless all the following conditions
are met:

 

(i)          the
Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interest
of the Company;

 

(ii)         the
Indemnitee was acting on behalf of, or performing services for, the Company;

 

    	 	19	 

     

    

 

(iii)        such
liability or loss was not the result of negligence or misconduct by the Indemnitee; and

 

(iv)        such
indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from the Stockholders.

 

(b)          Notwithstanding
the foregoing, an Indemnitee shall not be indemnified by the Company for any loss, liability or expense arising from or out of
an alleged violation of federal or state securities laws by such Indemnitee unless one or more of the following

conditions is met:

 

(i)          there
has been a successful adjudication on the merits of each count involving alleged securities law violations as to the Indemnitee;

 

(ii)         such
claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or

 

(iii)        a
court of competent jurisdiction has approved a settlement of the claims against the Indemnitee and found that indemnification of
the settlement and the related costs should be made, and the court considering the request for indemnification has been advised
of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority
of a jurisdiction in which securities of the Company were offered or sold as to indemnification for violations of securities laws.

 

(c)          In
addition, the advancement of the Company’s funds to an Indemnitee for reasonable legal expenses and other costs incurred
in advance of the final disposition of a proceeding for which indemnification is being sought is permissible only if all the following
conditions are satisfied:

 

(i)          the
proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;

 

(ii)         the
Indemnitee provides the Company with a written affirmation of the Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification has been met;

 

(iii)        the
legal proceeding is initiated by a third party who is not a Stockholder or, if the legal action is initiated by a Stockholder acting
in such Stockholder’s capacity as such, a court of competent jurisdiction approves such advancement; and

 

(iv)        the
Indemnitee provides the Company with a written undertaking to repay the advanced funds to the Company, together with the applicable
legal rate of interest thereon, if it is ultimately determined that such Indemnitee is not entitled to indemnification.

 

    	 	20	 

     

    

 

22.         INDEMNIFICATION
BY THE ADVISOR. The Advisor shall indemnify and hold harmless the Company from all liabilities, claims, damages or losses,
and related expenses, including reasonable attorneys’ fees, to the extent that such liabilities, claims, damages or losses
and related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s bad faith, fraud,
willful misfeasance, intentional misconduct, gross negligence or reckless disregard of its duties; provided, however,
that the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation
given by the Advisor.

 

23.         NOTICES.
Unless some other method of giving Notice is required by the Articles of Incorporation or the Bylaws, any notice, report, approval,
waiver or other communication (each, a “Notice”) required or permitted to be given hereunder shall be in writing
and shall be sent by hand, by courier or overnight carrier or by registered or certified mail to the addresses set forth below:

 

	To the Company:	Lightstone Real Estate Income Trust Inc.
	 	1985 Cedar Bridge Avenue
	 	Suite 1
	 	Lakewood, New Jersey 08701
	 	Attention:	Joseph E. Teichman, Esq.
	 	 	General Counsel and Secretary 
	 	 	 
	 	with copies to:
	 	 
	 	Proskauer Rose LLP 
	 	Eleven Times Square
	 	New York, New York 10036
	 	Attention:	Peter M. Fass, Esq.
	 	 
	 	Proskauer Rose LLP
	 	Three First National Plaza
	 	70 West Madison, Suite 3800
	 	Chicago, IL 60602
	 	Attention:	Michael J. Choate. Esq.
	 	 
	To the Advisor:	Lightstone Real Estate Income LLC
	 	1985 Cedar Bridge Avenue
	 	Suite 1
	 	Lakewood, New Jersey 08701
	 	Attention:	Joseph E. Teichman, Esq.
	 	 	General Counsel and Secretary 
	 	 
	 	with copies to:

 

    	 	21	 

     

    

 

	 	Proskauer Rose LLP Eleven Times Square
	 	New York, New York 10036
	 	Attention:	Peter M. Fass, Esq.
	 	 
	 	Proskauer Rose LLP
	 	Three First National Plaza
	 	70 West Madison, Suite 3800
	 	Chicago, IL 60602
	 	Attention:	Michael J. Choate. Esq.

 

Either party may at any time give Notice in writing
to the other party of a change in its address for the purposes of this Section 23. Each Notice shall be deemed given and
effective upon actual receipt (or refusal of receipt).

 

24.         MODIFICATION.
This Agreement shall not be amended, supplemented, terminated or discharged, in whole or in part, except by an instrument in writing
signed by the parties hereto, or their respective successors or assignees.

 

25.         SEVERABILITY.
The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable
in whole or in part.

 

26.         GOVERNING
LAW. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York
as at the time in effect, without regard to the principles of conflicts of laws thereof.

 

27.         ENTIRE
AGREEMENT. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or
implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control
and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

 

28.         NO
WAIVER. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No

waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

 

29.         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.

 

    	 	22	 

     

    

 

 

30.         HEADINGS.
The titles of sections and subsections contained in this Agreement are for convenience only, and they neither form a part of this
Agreement nor are to be used in the construction or interpretation hereof.

 

31.         EXECUTION
IN COUNTERPARTS. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in
any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same instrument.

 

Remainder of page intentionally left blank

 

    	 	23	 

     

    

 

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

 

	 	LIGHTSTONE REAL ESTATE INCOME TRUST INC.
	 	 	 
	 	By:	/S/ David Lichtenstein 
	 		Name: David Lichtenstein
	 	  	Title: Chief Executive Officer

 

	 	LIGHTSTONE REAL ESTATE INCOME LLC
	 	 	 
	 	By:	/S/ David Lichtenstein 
	 		Name: David Lichtenstein
	 	 	Title: Chief Executive Officer

 

Lightstone Real Estate Income
Trust Inc. -Advisory AgreementExhibit 10.2

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

NYC ACQUISITIONS IV LLC

 

As of NOVEMBER 25, 2015

 

THE MEMBERSHIP INTERESTS (AS
DEFINED HEREIN) IN THE COMPANY (AS DEFINED HEREIN) ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD IN WHOLE OR IN PART EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. IN ADDITION, INVESTORS MAY NOT RESELL, TRANSFER OR OTHERWISE DISPOSE OF
ANY OFFERED INTEREST IN WHOLE OR IN PART EXCEPT IN COMPLIANCE WITH THE OPERATING AGREEMENT OF THE COMPANY. ACCORDINGLY, INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

     

    

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	
	ARTICLE 1       DEFINITIONS	1
	 	 	 
	Section 1.1	Definitions	1
	 	 	 
	ARTICLE 2       ORGANIZATIONAL MATTERS; PURPOSE; TERM 	7
	 	 	 
	Section 2.1	Formation of Company 	7
	Section 2.2	Name 	7
	Section 2.3	Registered Office; Registered Agent; Principal Office 7	 
	Section 2.4	Foreign Qualification 	7
	Section 2.5	Purpose and Scope 	7
	Section 2.6	Term 	8
	Section 2.7	No State Law Partnership 	8
	 	 	 
	ARTICLE 3   MEMBERSHIP; DISPOSITIONS OF INTERESTS; REPRESENTATIONS, WARRANTIES AND COVENANTS	8
	 	 	 
	Section 3.1	Members 	8
	Section 3.2	Dispositions of Membership Interests.	8
	Section 3.3	Creation of Additional Membership Interests	9
	Section 3.4	Resignation 	9
	Section 3.5	Information 	9
	Section 3.6	Liability to Third Parties 	10
	Section 3.7	Representations and Warranties of Developer Member 	10
	Section 3.8	Covenants of the Managers and the Developer Member 	12
	 	 	 
	ARTICLE 4       MANAGEMENT OF COMPANY	18
	 	 	 
	Section 4.1	Management	18
	Section 4.2	Construction. 	22
	Section 4.3	Operating Budgets and Expenditures	26
	Section 4.4	Meetings of Members. 	27
	Section 4.5	Officers 	28
	Section 4.6	Reimbursement of Expenses	28
	Section 4.7	Compensation of Members 	28
	Section 4.8	Transactions with Affiliates. 	28
	Section 4.9	Development Matters	29
	Section 4.10	Indemnification; Reimbursement of Expenses; Insurance 	29
	Section 4.11	Conflicts of Interest	29
	 	 	 
	ARTICLE 5       ACCOUNTING AND REPORTING; BUSINESS PLAN	29
	 	 	 
	Section 5.1	Fiscal Year, Accounts, Reports	29
	Section 5.2	Bank Accounts 	31

 

    	 	i	

    

    

 

	Section 5.3	Financial Accounting Matters Member	31
	Section 5.4	Business Plan	31
	 	 	 
	ARTICLE 6       CAPITAL CONTRIBUTIONS	32
	 	 	 
	Section 6.1	Initial Capital Contributions	32
	Section 6.2	Required Additional Capital Contributions	32
	Section 6.3	Failure to Make Additional Capital Contributions	32
	Section 6.4	Return of Contributions	33
	Section 6.5	Balances	33
	 	 	 
	ARTICLE 7       PREFERENCES	33
	 	 	 
	Section 7.1	Funding and Distribution of Preferred Return	33
	Section 7.2	Calculation of Preferred Return.	34
	 	 	 
	ARTICLE 8       REQUIRED PAYMENTS; NON-LIQUIDATION DISTRIBUTIONS	34
	 	 	 
	Section 8.1	Payments and Distributions Prior to a Developer Member Event of	 
	 	Default	34
	Section 8.2	Payments and Distributions on and After the Occurrence of a	 
	 	Developer Member Event of Default; Distributions of Capital	 
	 	Proceeds	34
	Section 8.3	Payments and Distributions of Pre-development Financing	35
	 	 	 
	ARTICLE 9       REDEMPTION	35
	 	 	 
	Section 9.1	Redemption; Redemption Premium	35
	 	 	 
	ARTICLE 10       {RESERVED}	36
	 	 	 
	ARTICLE 11       DEVELOPER MEMBER EVENTS OF DEFAULT; REMEDIES	36
	 	 	 
	Section 11.1	Developer Member Events of Default	36
	Section 11.2	Remedies	37
	 	 	 
	ARTICLE 12       {RESERVED}	38
	 	 	 
	ARTICLE 13       RECOURSE LIABILITIES	38
	 	 	 
	Section 13.1	Recourse Liabilities.	38
	 	 	 
	ARTICLE 14       {RESERVED}	39
	 	 	 
	ARTICLE 15       THIRD PARTY FINANCING	39
	 	 	 
	Section 15.1	Initial Financing	39
	Section 15.2	Permanent Financing	39
	Section 15.3	Consent to Exercise of Remedies; Notices and Cure Rights	39

 

    	 	ii	

    

    

 

	ARTICLE 16       CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS	40
	 	 	 
	Section 16.1	Definitions	40
	Section 16.2	Capital Accounts. 	41
	Section 16.3	Adjustment of Gross Asset Value	42
	Section 16.4	Profits, Losses and Distributive Shares of Tax Items 	43
	Section 16.5	Tax Returns 	46
	Section 16.6	Tax Elections 	46
	Section 16.7	Tax Matters Partner	47
	Section 16.8	Allocations on Transfer of Interests	47
	 	 	 
	ARTICLE 17       WITHDRAWAL, DISSOLUTION, LIQUIDATION, AND TERMINATION 	47
	 	 	 
	Section 17.1	Dissolution, Liquidation and Termination Generally 	47
	Section 17.2	Liquidation and Termination 	48
	Section 17.3	Deficit Capital Accounts	48
	Section 17.4	Cancellation of Certificate 	49
	 	 	 
	ARTICLE 18       PURCHASE OF MEMBERSHIP INTEREST	49
	 	 	 
	Section 18.1	General	49
	Section 18.2	Assignment of Membership Interest 	49
	Section 18.3	Transfer of Management	49
	Section 18.4	Release and Indemnity 	50
	Section 18.5	Transfer Tax	50
	Section 18.6	Assignment by Acquiring Member	50
	 	 	 
	ARTICLE 19       {RESERVED}	50
	 	 	 
	ARTICLE 20       MISCELLANEOUS PROVISIONS 	50
	 	 	 
	Section 20.1	Notices 	50
	Section 20.2	Approvals 	51
	Section 20.3	Governing Law 	51
	Section 20.4	Entireties; Amendments	51
	Section 20.5	Waiver	51
	Section 20.6	Severability 	51
	Section 20.7	Ownership of Property and Right of Partition 	51
	Section 20.8	Captions, References and Construction 	51
	Section 20.9	Involvement of Members in Certain Proceedings 	52
	Section 20.10	Interest	52
	Section 20.11	Counterparts	52
	Section 20.12	General Indemnification	52
	Section 20.13	Publicity	52
	Section 20.14	Intentionally deleted	52
	Section 20.15	Time of the Essence	52
	Section 20.16	Estoppel Certificate	52

 

    	 	iii	

    

    

 

	Section 20.17  	Right of Offset	52
	Section 20.18  	Waiver of Certain Defenses	53
	Section 20.19  	Waiver of Jury Trial	53

 

    	 	iv	

    

    

 

AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

NYC ACQUISITIONS IV LLC

 

This Amended
and Restated Limited Liability Company Agreement (this “Agreement”) of NYC ACQUISITIONS IV LLC,
a Delaware limited liability company (the “Company”) is entered into as of November 25, 2015 (the “Effective
Date”), between LSG FULTON STREET LLC, a Delaware limited liability company, as a Member (the “Developer
Member”), and LIGHTSTONE REAL ESTATE INCOME TRUST INC., a Delaware limited partnership, as a Member (the
“Preferred Member”).

 

WHEREAS, the
Company was formed pursuant to a Certificate of Formation (the “Certificate of Formation”), dated as
of August 10, 2015, and filed with the Secretary of State of Delaware on August 10, 2015;

 

WHEREAS, the
Company previously operated pursuant to that certain Limited Liability Company Agreement of the Company, dated as of August 10,
2015, executed by the Developer Member (the “Existing Operating Agreement”);

 

WHEREAS, the parties hereto desire to amend and restate
the Existing Operating

Agreement in its entirety with this Agreement;

 

WHEREAS, the
parties hereto desire to set forth provisions with respect to the Company pursuant to the terms and conditions of this Agreement;

 

NOW, THEREFORE,
in consideration of the mutual promises hereby made, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.1
Definitions. As used in this Agreement, the following terms shall have the following meanings:

 

“Act”
means the Delaware Limited Liability Company Act, as it may be amended from time to time.

 

“Additional
Capital Contributions” means, for the Developer Member, the amount of Capital Contributions made by that Member,
in excess of that Member’s Initial Capital Contribution.

 

     

    

    

 

“Adjusted
Operating Expenses” means Operating Expenses, as determined and adjusted by the Preferred Member in accordance with
its then current underwriting policies and procedures.

 

“Adjusted
Operating Revenues” means Operating Revenues, as determined and adjusted by the Preferred Member in accordance with
its then current underwriting policies and procedures.

 

“Affiliate”
means, as to any Member, (a) any corporation in which such Member or any partner, shareholder, director, officer, member, or manager
of such Member, directly or indirectly, owns or Controls more than ten percent (10%) of the beneficial interest, (b) any partnership,
joint venture or limited liability company in which such Member or any partner, shareholder, director, officer, member, or manager
of such Member is a partner, joint venturer or member, (c) any trust in which such Member or any partner, shareholder, director,
officer member or manager of such Member is a trustee or beneficiary, (d) any entity of any type which is directly or indirectly
owned or Controlled by such Member or any partner, shareholder, director, officer, member or manager of such Member, (e) any partner,
shareholder, director, officer, member, manager or employee of such Member, or (f) any Person related by birth, adoption or marriage
to any partner, shareholder, director, officer, member, manager or employee of such Member.

 

“Bankruptcy”
means, with respect to a Person, the occurrence of (1) an assignment by a Person for the benefit of creditors; (2) the filing by
a Person of a voluntary petition in bankruptcy; (3) the entry of a judgment by any court that a Person is bankrupt or insolvent,
or the entry against a Person of an order for relief in any bankruptcy or insolvency proceeding; (4) the filing of a petition or
answer by a Person seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation; (5) the filing by a Person of an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any proceeding for reorganization or of a similar nature; (6)
the consent or acquiescence of a Person to the appointment of a trustee, receiver or liquidator of the Person or of all or any
substantial part of its properties; (7) the admission by the Person in writing of its inability to pay its debts as they mature;
(8) the filing of a petition against the Person seeking to have an order for relief entered against such Person as debtor or seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation,
which petition is not dismissed within sixty (60 days after being filed; or (9) any other event which would cause a Person to cease
to be a member of a limited liability company under Section 18-304 of the Act.

 

“Capital
Contribution” means, with respect to each Member, the amount of cash and the initial Gross Asset Value of any property
(net of liabilities assumed by the Company resulting from such contribution and liabilities to which the property is subject) contributed
to the Company by that Member.

 

“Capital
Proceeds” means funds of the Company arising from a Capital Transaction, net of the actual costs incurred by the
Company with third parties in consummating such Capital Transaction.

 

    	 	2	 

    

    

 

“Capital Sharing Ratios”
means the percentages in which the Members participate in, and bear, certain Company items. The Capital Sharing Ratios of the Members
are as follows:

 

	Developer Member	100% 
	Preferred Member	0%

 

“Capital
Transaction” means the sale, financing, Refinancing or similar transaction of or involving the Project (including
condemnation, payment of title insurance proceeds or casualty loss insurance proceeds, other than business interruption or rental
loss insurance proceeds, to the extent not applied to mortgage indebtedness of the Company and not used to repair damage caused
by a casualty or taking or in alleviation of any title defect).

 

“Certificate of Formation”
has the meaning set forth in the Recitals to this Agreement.

 

“Change of Control Event”
shall mean if David Lichtenstein shall fail to own, directly or indirectly, more than fifty percent (50%) of the legal and beneficial
interests in the Developer Member and/or shall fail to Control the Developer Member.

 

“Closing Date” means the
date on which the Preferred Member makes its Initial Capital Contribution to the Company.

 

“Company”
means NYC ACQUISITIONS IV LLC, a Delaware limited liability company.

 

“Completion
Date” means the date specified for Substantial Completion of the construction of the Project, which is October 31,
2017. However, the Completion Date may be extended with the approval of the Preferred Member (which approval shall not be unreasonably
withheld, conditioned or delayed) based upon delays in the Construction Work (as defined in Section 4.2(b)(3)) caused by
Force Majeure.

 

“Control,”
“Controlling” and “Controlled by” means, when used with respect to any specified
Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or other
activities of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Cost
Overrun” means the amount by which the cost incurred for a line item in the Development Budget exceeds the amount
allocated for the line item in the Development Budget after the crediting of any Cost Savings from another line item in the Development
Budget to the extent expressly permitted under the terms of this Agreement or as otherwise specified in Section 4.2.

 

“Cost
Savings” means the amount by which the sum of all costs paid for a line item in the Development Budget on which all
work has been completed and all costs have been paid is less than the amount allocated for that line item.

 

“Debt
Service” means, except as otherwise provided in this Agreement, the aggregate of (i) interest, fixed principal, and
other payments due on the Loan under the terms of the Loan Documents and (ii) the Preferred Return due, for the period of time
for which calculated.

 

    	 	3	 

    

    

 

“Default Contribution” means
any Additional Capital Contribution made by the Preferred Member.

 

“Default Rate”
means the lesser of 17% per annum or the highest per annum interest rate permitted under the laws of the state in which the Project
is located.

 

“Developer Member” has the
meaning set forth in the initial paragraph of this Agreement.

 

“Developer
Member Event of Default” means the occurrence of one or more events described in Section 11.1 of this Agreement.

 

“Development
Budget” means the budget agreed among the Members that sets forth in detail all estimated expenditures required for
the acquisition and development of the Project, and the sources of funds therefor.

 

“Effective
Date” means the date set forth in the initial paragraph of this Agreement as the effective date of this Agreement.

 

“Environmental
Agreement” means that certain Environmental Indemnity Agreement dated as of the date hereof made for the
benefit of the Preferred Member.

 

“Existing Operating Agreement”
has the meaning set forth in the Recitals to this Agreement.

 

“Force
Majeure” means strikes, lock-outs, riots or other labor trouble; unavailability of materials; a national emergency;
any rule, order or regulation of governmental authorities; tornadoes, floods, hurricanes or other natural disasters; or other similar
causes not within the Developer Member’s control.

 

“Guaranty”
means that certain Guaranty and Indemnity Agreement dated as of the date hereof made for the benefit of the Preferred Member.

 

“Initial Capital Contributions”
means the Capital Contributions to be initially contributed by each Member to the Company in accordance with Section 6.1.

 

“Land” means the real property
described in Exhibit A located at 105-109 West 28th Street, New York, NY.

 

“Lender”
means the financial institution which from time to time provides any Loan to the Company.

 

“Loan”
means that certain construction loan secured by the Project to be obtained by the Company or a Subsidiary thereof and any loan
which Refinances such Loan from a Lender selected by the Managers and approved by all the Members (provided, however, such decision,
approval or consent shall be made in the sole discretion of the Preferred Member following a Developer Member Event of Default),
all as specified in Article 15.

 

    	 	4	 

    

    

 

“Loan Documents” mean the
documents evidencing or securing any Loan.

 

“Managers”
means the Preferred Member and the Developer Member as the initial Managers and each Person hereafter designated as a Manager in
accordance with this Agreement, until such Person ceases to be a Manager of the Company.

 

“Members”
means the Preferred Member, the Developer Member, and each Person hereafter admitted as a Member in accordance with this Agreement,
until such Person ceases to be a Member of the Company.

 

“Membership
Interests” means all of the rights and interests of whatsoever nature of the Members in the Company, including without
limitation, the right to participate in management to the extent herein expressly provided, to receive distributions of funds,
and to receive allocations of income, gain, loss, deduction and credit.

 

“Net Cash Flow” means Net
Operating Income less Debt Service.

 

“Net Operating Income” means,
for any period, the amount by which Adjusted Operating Revenues exceed Adjusted Operating Expenses.

 

“Operating
Budget” means the annual budget, prepared by the Manager and approved by the Preferred Member, and setting forth
the estimated capital and operating expenses of the Company for the then current or immediately succeeding calendar year and for
each month and each calendar quarter of said calendar year, in such detail as the Preferred Member shall require. Unless otherwise
requested by the Preferred Member or materially changed, the Development Budget shall constitute the Operating Budget until Substantial
Completion.

 

“Operating
Expenses” means, for any period, the current obligations of the Company for such period, determined in accordance
with sound accounting principles approved by the Preferred Member and applicable to commercial real estate, consistently applied,
for operating expenses of the Project, for capital expenditures not paid from the Members’ Capital Contributions to the Company
and for reserves actually funded. Operating Expenses shall not include Debt Service or any non-cash expenses such as depreciation
or amortization.

 

“Operating
Revenues” means, for any period, the gross revenues of the Company arising from the ownership and operation of the
Project during such period, including proceeds of any business interruption insurance maintained by the Company from time to time
and amounts funded from Company reserves, but specifically excluding Capital Proceeds and Capital Contributions of the Members.

 

“Person” means an individual
or entity.

 

“Plans”
means the plans and specifications for the construction of the Project, and all changes thereto, that have been made in accordance
with this Agreement.

 

“Preferred Member” has the
meaning set forth in the initial paragraph of this Agreement.

 

    	 	5	 

    

    

 

“Preferred
Return” means the return to be paid to the Preferred Member on its contributions to the capital of the Company as
set forth in Article 7 of this Agreement. The Preferred Return shall accrue on all Capital Contributions from the Preferred
Member from the date such contributions are made until they are returned. The Preferred Return shall be cumulative and shall compound
monthly.

 

“Principals” means the Person(s)
identified below who directly or indirectly Controls the Developer Member:

 

David Lichtenstein

 

“Prohibited
Act” means (1) any act in contravention of this Agreement; (2) possessing any Company assets or assigning the rights
of the Company in specific Company assets for other than Company purposes; (3) admitting a person or entity as a Member except
as provided in this Agreement; (4) permitting the Company to merge or consolidate with any other entity; (5) amending this Agreement
or (6) amending, modifying or otherwise altering the terms or conditions of any Loan or Loan Documents.

 

“Project”
means the Land together with the 343-key Moxy hotel to be constructed thereon.

 

 “Refinancing” means
indebtedness of the Company or a Subsidiary issued from time to time in exchange for, or the proceeds from the issuance and sale
or disbursement of which are used substantially and concurrently to refinance in whole or in part, the Loan.

 

“Required Redemption
Amount” means the amounts to be distributed to the Preferred Member under Sections 8.2 (a), (b), (c), and
(d) of this Agreement.

 

“Subsidiary”
means, with respect to any Person, (a) any corporation of which an aggregate of more than fifty percent (50%) of the outstanding
stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether,
at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person and/or one or more Subsidiaries
of such Person, or with respect to which any such Person has the right to vote or designate the vote of fifty percent (50%) or
more of such stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company
in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation
in profits or capital contribution) of more than fifty percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.

 

“Substantial
Completion” means that (a) construction of the Project has been substantially completed in accordance with the
Plans, as evidenced by the issuance from the appropriate governmental authority of all certificates of occupancy and/or other
approvals or permits that are required for the use and occupancy of all portions of the Project and issuance of a certificate
of substantial completion utilizing A.I.A. Form G-706 from the Project architect, all without condition other than the
completion of any minor punch-list items, and then currently out-of-season landscaping items, and (b) all Persons who have
performed work or provided materials for the construction have been paid in full other than for minor punch-list items and
out-of-season landscaping, as evidenced by lien releases and lien waivers from all such Persons. Notwithstanding the
foregoing, if only “shell” space is being constructed, only such certificates, approvals or permits normally
provided to evidence compliance with applicable governmental requirements shall be required to be provided by the appropriate
governmental authorities.

 

    	 	6	 

    

    

 

“Unpaid
Preferred Return” means, at anytime, the excess of (a) the aggregate return calculated for the Preferred Member pursuant
to Sections 6.3(a) and 7.2 of this Agreement for all prior periods, over (b) the aggregate amount theretofore distributed
to the Preferred Member pursuant to Sections 8.1(e), 8.1(g), 8.2(a) and 8.2(c) of this Agreement.

 

“Unreturned
Capital Contributions” means, at any time, with respect to the Preferred Member, the excess of (i) Capital Contributions
theretofore made to the Company by the Preferred Member, over (ii) the aggregate amount theretofore distributed to the Preferred
Member pursuant to Sections 8.1(f), 8.2(b) and 8.2(d).

 

ARTICLE 2

ORGANIZATIONAL MATTERS; PURPOSE;
TERM

 

Section 2.1
Formation of Company. The Company has been organized as a Delaware limited liability company by filing the Certificate
of Formation under the Act. The Company, from and after the date hereof, will be operated pursuant to the terms of this Agreement.
Except as expressly provided herein to the contrary, the rights and obligations of the Members and the administration, management
and termination of the Company shall be governed by the Act. The Membership Interest of each Member shall be personal property
for all purposes.

 

Section
2.2  Name. The name of the Company is NYC
Acquisitions IV LLC, and all Company business shall be conducted in that name or such other name as the Managers approve.

 

Section 2.3
 Registered Office; Registered Agent; Principal Office. The registered office and the registered agent of the Company
in the State of Delaware is as specified in the Certificate or as designated by the Managers. The principal office of the Company
and the mailing address shall be c/o The Lightstone Group, 1985 Cedar Bridge Avenue, Lakewood, New Jersey 08701. Unless otherwise
approved by the Preferred Member, all books and records of the Company shall be maintained at the Company’s principal office.

 

Section 2.4
Foreign Qualification. Before the Company conducts business in any jurisdiction other than Delaware, the Managers
shall cause the Company to comply with all requirements necessary to qualify the Company as a foreign limited liability company
in that jurisdiction. At the request of the Managers, each Member shall execute, acknowledge, swear to, and deliver all certificates
and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue, or terminate the Company
as a foreign limited liability company in all jurisdictions in which the Company may conduct business.

 

Section
2.5 Purpose and Scope. The purposes and scope of the Company’s activities are strictly limited to
acquiring, developing, constructing and/or renovating, improving, maintaining, owning, leasing, and selling the Project,
either individually or through an entity owned by the Company; financing the foregoing activities; and performing all other
activities reasonably necessary or incidental to the furtherance of such purposes.

 

    	 	7	 

    

    

 

Section
2.6 Term. The
Company shall commence on the effective date of the Certificate and shall be perpetual, unless sooner dissolved as herein
provided.

 

Section 2.7
No State Law Partnership. The Company shall not be a partnership or joint venture under any state or federal law,
and no Member or Manager shall be a partner or joint venturer of any other Member or Manager for any purposes, other than under
the Code (as defined in Section 16.1(d)) and other applicable tax laws, and this Agreement may not be construed otherwise.

 

ARTICLE 3

MEMBERSHIP; DISPOSITIONS OF
INTERESTS; REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 3.1
  Members. The initial Members of the Company are the Preferred Member and the Developer Member, each of which is admitted
to the Company as a Member as of the date hereof.

 

Section 3.2   Dispositions
of Membership Interests.

 

(a) General
Restriction. A Member may not make an assignment, transfer, or other disposition (voluntarily, involuntarily or by
operation of law) (a “Transfer”) of all or any portion of its Membership Interest, nor pledge,
mortgage, hypothecate, grant a security interest in, or otherwise encumber (an “Encumbrance”) all
or any portion of its Membership Interest, except with the consent of every other Member (provided, however, such decision,
consent or approval shall be made in the sole discretion of the Preferred Member following the occurrence of a Developer
Member Event of Default) or as permitted in Section 3.2(b). Any attempted Transfer of, or granting of an Encumbrance
on, all or any portion of a Membership Interest, other than in strict accordance with this Section 3.2, shall be void.
Except as permitted in Section 3.2(b), a Person to whom a Membership Interest is Transferred may be admitted to the
Company as a member only with the consent of the other Member, which may be given or withheld in the other Member’s
sole and absolute discretion (provided, however, such decision, consent or approval shall be made in the sole discretion of
the Preferred Member following the occurrence of a Developer Member Event of Default). In connection with any Transfer of a
Membership Interest or any portion thereof, and any admission of an assignee as a Member, the Member making such Transfer and
the assignee shall furnish the other Member with such documents regarding the Transfer as the other Member may reasonably
request (in form and substance reasonably satisfactory to the other Member), including a copy of the Transfer instrument, a
ratification by the assignee of this Agreement (if the assignee is to be admitted as a Member), a legal opinion that the
Transfer complies with applicable federal and state securities laws, and a legal opinion that the Transfer will not result in
the Company’s termination under Section 708 of the Code (as defined in Section 16.1(d)). No Transfer shall be
made directly or indirectly of any interest in the Developer Member without the prior consent of the Preferred Member, which
consent may be granted or withheld in the Preferred Member’s sole and absolute discretion. For purposes hereof,
a Transfer shall be deemed to have occurred with respect to the Developer Member upon (i) any assignment, transfer, or other
disposition (voluntary, involuntary, or by operation of law) of any interest in the Developer Member or (ii) any Transfer of
Control over any Person (other than an entity which is registered as a public company under the Securities Exchange Act of
1934, as amended) who is directly or indirectly vested with Control over the Developer Member; or (iii) any failure of the
Principal to maintain, directly and indirectly, the ownership and voting interests in the Developer Member which exists as of
the Effective Date, and the following shall be deemed to be Encumbrances with respect to the Developer Member: (1) any
pledge, mortgage, or hypothecation of, or granting of a security interest in, or otherwise encumbering (voluntary,
involuntary, or by operation of law) any interest in the Developer Member or (2) any pledge, mortgage, or hypothecation of,
or granting of a security interest in, or otherwise encumbering (voluntary, involuntary, or by operation of law) any interest
in any Person (other than an entity which is registered as a public company under the Securities Exchange Act of 1934, as
amended) who is directly or indirectly vested with Control over the Developer Member.

 

    	 	8	 

    

    

 

(b)    Permitted
Transfers. The Preferred Member may Transfer or otherwise grant Encumbrances on all or a portion of its Membership Interest,
and ownership interests in the Preferred Member may be Transferred or encumbered, without the consent of the Developer Member;
provided, however, that upon any such Transfer or encumbrance, the Preferred Member shall cease to be a Manager. Transfers of interests
in the Developer Member to the spouse or any lineal descendant of the owner of such interest, or to a trust for the benefit of
any one or more of such individual, spouse or lineal descendant, may be made for estate planning purposes provided that (a) such
Transfer will not result in a Change of Control Event and (b) such transfer is permitted under the terms of the Loan Documents.

 

Section 3.3
   Creation of Additional Membership Interests. Additional Membership Interests may be created and issued to existing
Members or to other Persons, and such other Persons may be admitted to the Company as Members, and any new class or group of Members
may be created, with the approval of the Managers and each other Member, on such terms and conditions, as the Managers may determine
at the time of admission (provided, however, such decision, consent or approval shall be made in the sole discretion of the Preferred
Member following the occurrence of a Developer Member Event of Default).

 

Section 3.4    
Resignation. A Member may not resign or withdraw from the Company without the consent of the other Members.

 

Section 3.5   
Information. In addition to the other rights specifically set forth in this Agreement, each Member and each permitted
assignee is entitled to (a) true and full information regarding the status of the business and financial condition of the Company;
(b) promptly after becoming available, a copy of the Company’s federal, state and local income tax returns for each year;
(c) a current list of the name and last known business, residence or mailing address of each Member and Manager; (d) a copy of
this Agreement, the Company’s certificate of formation, and all amendments to such documents; (e) true and full information
regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed
by each Member and which each Member has agreed to contribute in the future, and the date on which each became a Member; and (f)
other information regarding the affairs of the Company to which that Member or permitted assignee is entitled pursuant to Section
18-305 of the Act (including all Company books and records).  Under no circumstances shall
any information regarding the Company or its business be kept confidential from the Preferred Member.

 

    	 	9	 

    

    

 

Section 3.6     
Liability to Third Parties. Except as expressly set forth in this Agreement or in the Loan Documents, no Member or
Manager shall be liable for the debts, obligations or liabilities of the Company.

 

Section 3.7     
Representations and Warranties of Developer Member. As a material inducement for the Preferred Member to contribute
its Initial Capital Contribution to the Company, the Developer Member hereby represents and warrants to the Preferred Member that:

 

(a)     No bankruptcy
or insolvency proceedings are pending or contemplated by the Developer Member or, to the best knowledge of the Developer Member,
against the Developer Member or by or against the Principal;

 

(b)     All reports,
certificates, affidavits, statements and other data furnished by or on behalf of the Developer Member to the Preferred Member in
connection with the Project or this Agreement are true and correct in all material respects and do not omit to state any fact or
circumstance necessary to make the statements contained therein not misleading;

 

(c)     The execution,
delivery and performance of this Agreement has been duly authorized by all necessary action to be, and are, binding and enforceable
against the Developer Member in accordance with the respective terms thereof and do not contravene, result in a breach of or constitute
a default (nor upon the giving of notice or the passage of time or both will the same constitute a default) under the partnership
agreement, articles of incorporation, operating agreement or other organizational documents of the Developer Member, or any contract
or agreement of any nature to which the Developer Member is a party or by which the Developer Member or any of its property may
be bound and do not violate or contravene any law, order, decree, rule or regulation to which the Developer Member is subject;

 

(d)    The Project
and the current intended use thereof by the Company comply in all material respects with all applicable restrictive covenants,
zoning ordinances, subdivision and building codes, flood disaster laws, health and environmental laws and regulations and all other
ordinances, orders or requirements issued by any state, federal or municipal authorities having or claiming jurisdiction over the
Project. The Project constitutes one or more separate tax parcels for purposes of ad valorem taxation. The Project does not require
any rights over, or restrictions against, other property in order to comply with any of the aforesaid governmental ordinances,
orders or requirements;

 

(e)    All utility
services necessary and sufficient for the full use, occupancy, operation and disposition of the Project for its intended purposes
are available to the Project, including water, storm sewer, sanitary sewer, gas, electric, cable and telephone facilities, through
public rights-of-way or perpetual private easements approved by the Preferred Member;

 

(f)    There
are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or threatened against or
affecting the Developer Member, any Principal or the Project which, if adversely determined, would materially impair either
the Project or the Developer Member’s ability to perform the covenants or obligations required to be performed under
this Agreement;

 

    	 	10	 

    

    

 

(g)       The Project is free from delinquent water charges, sewer
rents, taxes and assessments;

 

(h)       As of
the date of this Agreement, the Project is free from unrepaired damage caused by fire, flood, accident or other casualty;

 

(i)        As of
the date of this Agreement, no part of the Project or the improvements thereon has been taken in condemnation, eminent domain or
like proceeding nor is any such proceeding pending or, to the Developer Member’s knowledge and belief, threatened or contemplated;

 

(j)        The Developer
Member has delivered to the Preferred Member true, correct and complete copies of all development, construction, management and
leasing contracts and agreements (collectively, the “Contracts”) relating to the Project and all amendments
thereto or modifications thereof;

 

(k)       Each Contract
constitutes the legal, valid and binding obligation of the Company and, to the best of the Developer Member’s knowledge and
belief, is enforceable against any other party thereto. No default exists, or with the passing of time or the giving of notice or
both would exist, under any Contract which would, in the aggregate, have a material adverse effect on the Company or the Project;

 

(l)        No Contract
provides any party with the right to obtain a lien or encumbrance upon the Project;

 

(m)      The
Company and the Project are free from any past due obligations for sales and payroll taxes;

 

(n)      There
are no security agreements or financing statements affecting all or any portion of the Project other than as disclosed in writing
by the Developer Member to the Preferred Member prior to the date hereof;

 

(o)      The
Developer Member is not a “foreign person” within the meaning of § 1445(f)(3) of the Code (as defined in Section
16.1(a) below) and the related Treasury Department regulations, including temporary regulations;

 

(p)      The
easements, covenants, conditions, restrictions and other encumbrances to title to the Project do not and will not materially and
adversely affect (i) the ability of the Company to pay in full the Loan in a timely manner (ii) the ability of the Company to pay
in full the Preferred Return in a timely manner or (iii) the use of the Project for the use currently being made thereof, the operation
of the Project as currently being operated or the value of the Project;

 

(q)      Any
right of any Affiliate of the Developer Member, or any Affiliate of any of the Developer Member’s constituent members, partners,
shareholders, employees or principals to receive any compensation, reimbursement of costs and expenses or other payments in consideration
for its management services for the Project or its asset management services for the Company shall be and remain subordinate in
all respects to the Preferred Member’s rights under this Agreement;

 

    	 	11	 

    

    

 

(r)        The
Developer Member has not dealt with any financial advisors, brokers, underwriters, placement agents, agents or finder in connection
with the subject matter of this Agreement; and

 

(s)       The
Project forms no part of any property owned, used or claimed by the Developer Member or any Principal as a residence or business
homestead and is not exempt from forced sale under the laws of the State in which the Land is located. The Developer Member hereby
disclaims and renounces each and every claim to all or any portion of the Project as a homestead.

 

Section 3.8         Covenants of the Managers and the Developer
Member.

 

(a)        The
Managers shall cause the Company to pay when due (i) the principal of and the interest on the Loan in accordance with the terms
of the Loan Documents and (ii) the Preferred Return and the Required Redemption Amount in accordance with the terms of this Agreement.
The Managers shall also cause the Company to pay all charges, fees and other sums required to be paid by the Company as provided
in the Loan Documents, in accordance with the terms of the Loan Documents, and shall cause the Company to observe, perform and
discharge all obligations, covenants and agreements to be observed, performed or discharged by the Company set forth in the Loan
Documents in accordance with their terms. Further, the Managers shall cause the Company to promptly and strictly perform and comply
with all covenants, conditions, obligations and prohibitions required of the Company in connection with any other document or instrument
affecting title to the Project, or any part thereof.

 

(b)        The
Developer Member shall cause the Company to maintain in force and effect on the Project at all times:

 

(i)         Insurance
against loss or damage to the Project by fire, windstorm, tornado and hail and against loss and damage by such other, further and
additional risks as may be now or hereafter embraced by an “all-risk” form of insurance policy. The amount of such insurance
shall be not less than one hundred percent (100%) of the full replacement cost (insurable value) of the improvements (as established
by an MAI appraisal), without reduction for depreciation. The determination of the replacement cost amount shall be adjusted annually
to comply with the requirements of the insurer issuing such coverage or, at the Preferred Member’s election, by reference
to such indices, appraisals or information as the Preferred Member determines in its reasonable discretion in order to reflect
increased value due to inflation. Absent such annual adjustment, each policy shall contain inflation guard coverage insuring that
the policy limit will be increased over time to reflect the effect of inflation. Full replacement cost, as used herein, means, with
respect to the improvements, the cost of replacing the improvements without regard to deduction for depreciation, exclusive of
the cost of excavations, foundations and footings below the lowest basement floor. The Developer Member shall also cause the Company
to maintain insurance against loss or damage to furniture, furnishings, fixtures, equipment and other items (whether personalty
or fixtures) included in the Project and owned by the Company from time to time to the extent applicable. Each policy shall contain
a replacement cost endorsement and either an agreed amount endorsement (to avoid the operation of any co- insurance provisions)
or a waiver of any co-insurance provisions, all subject to the Preferred Member’s approval. The maximum deductible shall be
$50,000.

 

    	 	12	 

    

    

 

(ii)       Commercial
General Liability Insurance against claims for personal injury, bodily injury, death and property damage occurring on, in or about
the Project or the improvements thereon in amounts not less than $5,000,000 per occurrence and $5,000,000 in the aggregate. The
Preferred Member hereby retains the right to periodically review the amount of said liability insurance being maintained by the
Company and to require an increase in the amount of said liability insurance should the Preferred Member deem an increase to be
reasonably prudent under then existing circumstances.

 

(iii)       Boiler and machinery insurance is required if steam boilers or other pressure-fired vessels are in operation at the Project. Minimum
liability coverage per accident must equal the greater of the replacement cost (insurable value) of the improvements at the Project
housing such boiler or pressure-fired machinery or $2,000,000. If one or more large HVAC units is in operation at the Project, “Systems
Breakdowns” coverage shall be required, as determined by the Preferred Member. Minimum liability coverage per accident must
equal the value of such unit(s).

 

(iv)      If
the improvements at the Project or any part thereof is situated in an area designated by the Federal Emergency Management Agency
(“FEMA”) as a special flood hazard area (Zone A or Zone V), flood insurance in an amount equal to the
lesser of: (a) the minimum amount required, under the terms of coverage, to compensate for any damage or loss on a replacement
basis (or the unpaid balance of the Loan if replacement cost coverage is not available for the type of building insured), or (b)
the maximum insurance available under the appropriate National Flood Insurance Administration program. The maximum deductible shall
be 5% of the projected cost per building or a higher minimum amount as required by FEMA or other applicable law.

 

(v)       During
the period of any construction, renovation or alteration of the Project, at the Preferred Member’s request, a completed value,
“All Risk” “Builder’s Risk” form or “Course of Construction” insurance policy in non-reporting
form, in an amount approved by the Preferred Member, may be required. During the period of any construction of any addition to the
existing improvements, a completed value, “All Risk” “Builder’s Risk” form or “Course of Construction”
insurance policy in non-reporting form, in an amount approved by the Preferred Member, shall be required.

 

(vi)      When
required by applicable law, ordinance or other regulation, worker’s compensation and employer’s liability insurance
covering all persons subject to the worker’s compensation laws of the state in which the Project is located.

 

(vii)     Business income (loss of rents) insurance in amounts sufficient to compensate the Company for all rents or income during a period
of not less than eighteen (18) months. The amount of coverage shall be adjusted annually to reflect the rents or income payable
during the succeeding twelve (12) month period.

 

    	 	13	 

    

    

 

(viii)    At the Preferred Member’s request, earthquake insurance in an amount approved by the Preferred Member.

 

(ix)       Both
(a) such other insurance on the Project or on any replacements or substitutions thereof or additions thereto as may from time to
time be required by the Preferred Member against other insurable hazards or casualties which at the time are commonly insured against
in the case of property similarly situated including, without limitation, sinkhole, mine subsidence, earthquake and environmental
insurance, due regard being given to the height and type of buildings, their construction, location, use and occupancy and (b)
such greater or other insurance on the Project or on any replacements or substitutions thereof or additions thereto as may be required
under the terms of the Loan Documents.

 

All such insurance shall (i) be
with insurers fully licensed and authorized to do business in the State within which the Project is located and who have and maintain
a rating of at least (A) AA from Standard & Poors, or equivalent or (B) A-X or higher from A.M. Best, (ii) contain the complete
address of the Project (or a complete legal description), (iii) be for terms of at least one year, with premium prepaid, (iv) be
subject to the approval of the Preferred Member as to insurance companies, amounts, content, forms of policies, method by which
premiums are paid and expiration dates, and (vi) naming EXACTLY:

 

LIGHTSTONE REAL ESTATE INCOME TRUST, INC. its Successors
and Assigns,

c/o The Lightstone Group

1985 Cedar Bridge Avenue

Lakewood, New Jersey 08701

 

as an additional insured under
all insurance policies.

 

The Developer Member shall, as
of the date hereof, deliver to the Preferred Member evidence that said insurance policies have been prepaid as required above and
certified copies of such insurance policies and original certificates of insurance signed by an authorized agent of the applicable
insurance companies evidencing such insurance satisfactory to the Preferred Member. The Developer Member shall renew all such insurance
and deliver to the Preferred Member certificates and policies evidencing such renewals at least thirty (30) days before any such
insurance shall expire. The Manager further agrees that each such insurance policy: (i) shall provide for at least thirty (30) days’
prior written notice to the Preferred Member prior to any policy reduction or cancellation for any reason other than non-payment
of premium and at least ten (10) days’ prior written notice to the Preferred Member prior to any cancellation due to non-
payment of premium; (ii) shall waive all rights of subrogation against the Preferred Member; (iii) in the event that the Project
constitutes a legal non-conforming use under applicable building, zoning or land use laws or ordinances, shall include an ordinance
or law coverage endorsement which will contain Coverage A: “Loss Due to Operation of Law” (with a minimum liability
limit equal to “Replacement Cost With Agreed Value Endorsement”), Coverage B: “Demolition Cost” and Coverage
C: “Increased Cost of Construction” coverages; and (iv) may be in the form of a blanket policy provided that, in the
event that any such coverage is provided in the form of a blanket policy, the Developer Member hereby acknowledges and agrees that
failure to pay any portion of the premium therefor which is not allocable to the Project or by any other action not relating to
the Project which would otherwise permit the issuer thereof to cancel the coverage thereof, would require the Project to be insured
by a separate, single-property policy. The blanket policy must properly identify and fully protect the Project as if a separate
policy were issued for 100% of replacement cost at the time of loss and otherwise meet all of the Preferred Member’s applicable
insurance requirements set forth in this Section. Approval of any insurance by the Preferred Member shall not be a representation
of the solvency of any insurer or the sufficiency of any amount of insurance. In the event the Developer Member fails to provide,
maintain, keep in force or deliver and furnish to the Preferred Member the policies of insurance required by this Agreement or
evidence of their renewal as required herein, the Preferred Member may, but shall not be obligated to, make a Default Contribution
to procure such insurance. The Preferred Member shall not be responsible for nor incur any liability for the insolvency of the insurer
or other failure of the insurer to perform, even though the Preferred Member has caused the insurance to be placed with the insurer
after failure of the Developer Member to furnish such insurance. The Developer Member shall not obtain insurance for the Project
in addition to that required by the terms of this Agreement and the Loan Documents without the prior written consent of the Preferred
Member, which consent will not be unreasonably withheld provided that (i) the Preferred Member is a named insured on such insurance,
(ii) the Preferred Member receives complete copies of all policies evidencing such insurance and (iii) such insurance complies
with all of the applicable requirements set forth herein.

 

    	 	14	 

    

    

 

 

(c)       The
Developer Member shall cause the Company to pay all taxes and assessments which are or may become a lien on the Project or which
are assessed against or imposed upon the Project. The Developer Member shall furnish the Preferred Member with receipts (or if receipts
are not immediately available, with copies of canceled checks evidencing payment with receipts to follow promptly after they become
available) showing payment of such taxes and assessments at least fifteen (15) days prior to the applicable delinquency date therefor.
Notwithstanding the foregoing, the Company may, in good faith, by appropriate proceedings and upon notice to the Preferred Member,
contest the validity, applicability or amount of any asserted tax or assessment so long as (a) such contest is diligently pursued,
(b) the Preferred Member determines, in its subjective opinion, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss, forfeiture or diminution of the Project or any part thereof
or any interest of the Preferred Member therein and (c) prior to the earlier of the commencement of such contest or the delinquency
date of the asserted tax or assessment, the Company deposits in a tax and insurance reserve account an amount determined by the
Preferred Member to be adequate to cover the payment of such tax or assessment and a reasonable additional sum to cover possible
interest, costs and penalties; provided, however, that the Developer Member shall promptly cause the Company to pay any amount
adjudged by a court of competent jurisdiction to be due, with all interest, costs and penalties thereon, promptly after such judgment
becomes final; and provided further that in any event each such contest shall be concluded and the taxes, assessments, interest,
costs and penalties shall be paid prior to the date any writ or order is issued under which the Project may be sold, lost or forfeited.

 

    	 	15	 

    

    

 

(d)      The
Developer Member shall cause the Company to pay when due all claims and demands of mechanics, materialmen, laborers and others
for any work performed or materials delivered for the Project or the improvements thereon; provided, however, that, the Company
shall have the right to contest in good faith any such claim or demand, so long as same is permitted under the terms of the Loan
Documents, it does so diligently, by appropriate proceedings and provided that neither the Project nor any interest therein would
be in any danger of sale, loss or forfeiture as a result of such proceeding or contest. In the event the Company shall contest any
such claim or demand, the Developer Member shall promptly notify the Preferred Member of such contest and thereafter shall, upon
the Preferred Member’s request, promptly cause the Company to provide a bond, cash deposit or other security satisfactory
to the Preferred Member to protect the Company’s interest in the Project should the contest be unsuccessful. If the Developer
Member shall fail to cause the Company to immediately discharge or provide security against any such claim or demand as aforesaid,
the Preferred Member may make a Default Contribution to do so.

 

(e)        Developer
Member hereby represents, warrants and covenants as of the date hereof and until such time as the Preferred Member no longer owns
a Membership Interest in the Company and the Required Redemption Amount has been paid in full, that Developer Member:

 

(i)        will
not, nor will any partner, limited or general, member or shareholder thereof, as applicable, amend, modify or otherwise change
its partnership certificate, partnership agreement, articles of incorporation, by laws, operating agreement, articles of organization,
or other formation agreement or document, as applicable, in any material term or manner, or in a manner which adversely affects
Developer Member’s existence as a single purpose entity;

 

(ii)        will
not liquidate or dissolve (or suffer any liquidation or dissolution), or enter into any transaction of merger or consolidation,
or acquire by purchase or otherwise all or substantially all the business or assets of, or any stock or other evidence of beneficial
ownership of any entity;

 

(iii)       
except as expressly provided in this Agreement or in the Loan Documents, has not and will not guarantee, pledge its assets for
the benefit of, or otherwise become liable on or in connection with, any obligation of any other person or entity;

 

(iv)       does not own and will not own any asset other than its
interest in the Company;

 

(v)        is
not engaged and will not engage, either directly or indirectly, in any business other than owning its interest in the Company;

 

(vi)       will
not enter into any contract or agreement with any Affiliate except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms’-length basis with third parties other than an affiliate;

 

(vii)     
has not incurred and will not incur any debt, secured or unsecured, direct or contingent (including, but not limited to, guaranteeing
any obligation), other than the obligations incurred under or pursuant to this Agreement, and no other debt will be secured (senior,
subordinate or pari passu) by the Developer Member’s Membership Interest, provided, that debt generated pursuant to the EB-5
Program may be incurred to the extent the net proceeds thereof are used to redeem in whole or in part the Preferred Member’s
Membership Interest (including any Required Redemption Amount);

 

    	 	16	 

    

    

 

(viii)   has not made and will
not make any loans or advances to any third party (including any Affiliate);

 

(ix)      is and will be solvent and pay its debts from its assets
as the same shall become due;

 

(x)      has
done or caused to be done and will do all things necessary to preserve its existence, and will observe all formalities applicable
to it;

 

(xi)      will
conduct and operate its business in its own name and as presently conducted and operated;

 

(xii)    
will maintain financial statements, books and records and bank accounts separate from each Affiliate;

 

(xiii)   
will be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including,
without limitation, any Affiliate);

 

(xiv)    will file its own tax returns;

 

(xv)     will
maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations;

 

(xvi)   
will establish and maintain an office through which its business will be conducted separate and apart from those of its Affiliates
and shall allocate fairly and reasonably any overhead and expense for shared office space;

 

(xvii)    will not commingle
the funds and other assets of Developer Member with those of any Affiliate or any other person;

 

(xviii)  has and will maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or any other person;

 

(xix)    
except as expressly provided in this Agreement or in the Loan Documents, does not and will not hold itself out to be responsible
for the debts or obligations of any other person;

 

(xx)      will
pay any liabilities out of its own funds, including salaries of its employees, not funds of any Affiliate;

 

(xxi)     will use stationery, invoices, and checks separate
from its Affiliates;

 

    	 	17	 

    

    

 

(xxii)    will not do any act which
would make it impossible to carry on the ordinary business of Developer Member;

 

(xxiii)   will not sell, encumber or otherwise dispose of
all or substantially all of its assets;

 

(xxiv)   will not hold title
to Developer Member’s assets other than in Developer Member’s name; and

 

(xxv)   
will not institute proceedings to be adjudicated bankrupt or insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to, reorganization or relief under any applicable federal or state
law relating to bankruptcy; or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Developer Member or a substantial part of Developer Member’s property; or make any assignment for
the benefit of creditors; or admit in writing its inability to pay its debts generally as they become due; or take any action in
furtherance of any such action.

 

ARTICLE 4

MANAGEMENT OF COMPANY

 

Section 4.1
        Management. (a)         
The Managers shall manage the affairs of the Company and make all decisions with regard thereto, except where (1) if the Preferred
Member is no longer a Manager, the Preferred Member’s approval is required under this Agreement or (2) the approval of any
of the Members is expressly required by a non-waivable provision of applicable law. Notwithstanding the foregoing, the Preferred
Member shall have sole authority to enforce any agreement between the Company and the Developer Member or its Affiliates and to
make all determinations on behalf of the Company with respect thereto.

 

(b)         No action
shall be taken, sum expended, or obligation incurred by the Managers or the Company (which for this purpose shall include any Subsidiary
thereof) regarding the matters described below (the “Major Decisions”) without the prior approval of
the Preferred Member (except to the extent the same is otherwise expressly authorized by the terms of this Agreement or expressly
provided for (and not in excess of any amount set forth) in the Development Budget or any Operating Budget); provided, that no
such approval shall be required if the Preferred Member is the Manager:

 

		(1)	regarding Company assets, any acquisition, sale, transfer, exchange, mortgage, financing, hypothecation
or encumbrance of all or any part thereof, or any lease of the entire Project; however, the Managers may make incidental sales,
exchanges, conveyances, or transfers of Company personalty or fixtures in the ordinary course of business;

 

    	 	18	 

    

    

 

		(2)	regarding Company financial affairs, (A) determination of major accounting policies, including
selection of accounting methods and making various decisions regarding treatment and allocation of transactions for federal and
state income, franchise or other tax purposes, (B) determination of all significant tax decisions, including preparation of tax
returns, (C) determination of the terms and conditions of all Company borrowings and the identity of the lender thereof, including
amending, modifying or otherwise altering the terms and conditions thereof, (D) selection of banks for deposit of Company funds,
and the designation of Persons with signatory authority over withdrawal of such funds, and (E) making of any expenditure or incurrence
of any obligation by or for the Company; however, if emergency repairs to the Project are necessary to avoid imminent danger of
injury to the Project or to an individual, the Managers may make such expenditures as may be necessary to alleviate such situations
and shall promptly notify the Preferred Member of the event giving rise to such repairs and the actions taken with respect thereto;

 

		(3)	regarding adopting, updating, supplementing, amending or revising, or deviating from, the Development Budget or any Operating
Budget;

 

		(4)	regarding Additional Capital Contributions (except to the extent required by Section 6.2 or Section 6.3) of this
Agreement;

 

		(5)	regarding construction or renovation of the Project, including approval of the Plans, development
schedule, budgets, construction draw requests, change orders and all other material matters relating to the acquisition, construction,
renovation or refurbishment of the Project (including, without limitation, tenant improvement work); any construction contracts;
selection of contractors, architects and engineers; insurance coverages, the underwriters thereof, and claims related thereto;
and any variation from or amendment to any of the foregoing;

 

		(6)	regarding lending funds belonging to the Company or extending credit on behalf of the Company to
any person, firm or corporation;

 

		(7)	regarding granting any concessions by or placing restrictions on the Company or the Project in
connection with obtaining zoning, variances, map approval, entitlements, permits or other governmental approvals, and the creation
of any title exceptions;

 

		(8)	regarding all leases of space in the Project, including approval of the form of lease agreements,
guidelines for minimum rental rates, minimum and maximum length of lease terms, brokerage commissions, credit standing of tenants,
and the forms of any tenant estoppel certificates and subordination, non-disturbance and attornment agreements; however, entering
into leases with tenants in the ordinary course of business in accordance with Section 4.1(f) of this Agreement shall not
constitute a Major Decision;

 

    	 	19	 

    

    

 

 

		(9)	regarding Project operations, approval of property manager, leasing agents, management agreements,
construction contracts, and brokerage agreements; insurance coverages, the underwriters thereof and claims related thereto; zoning
changes, reciprocal operating agreements, cross-easement agreements and similar agreements; annual Operating Budgets, including
the amount of reserves for capital improvements, replacements, and purchases, improvements and leasing commissions; modifications
of any of the foregoing; and all material matters relating to the Project’s compliance with environmental, health, access,
and other laws;

 

		(10)	{reserved};

 

		(11)	taking of or settlement of any legal action, except initiating action to collect rentals and other
amounts payable to the Company under leases and other occupancy agreements affecting the Project or to dispossess any occupant
who is in default in its obligations to the Company and defending against tenant claims and liability claims for which the Company
maintains insurance;

 

		(12)	confessing judgment on behalf of the Company;

 

		(13)	making, executing or delivering on behalf of the Company any assignment for the benefit of creditors
or any guaranty, indemnity bond or surety bond, or the taking of any action that obligates the Company or any Member as a surety,
guarantor or accommodation party;

 

		(14)	filing of any petition or consenting to the filing of any petition that would subject the Company
to a Bankruptcy;

 

		(15)	other than with respect to collection of rentals or eviction of tenants, the selection of attorneys
or other professionals;

 

		(16)	entering into any agreement with an Affiliate of any
Manager;

 

		(17)	regarding any distributions of Net Cash Flow or Capital
Proceeds by Company;

 

		(18)	engaging in any act of self-dealing by any Manager, including the payment of any compensation or
reimbursement to any Manager or its Affiliates or any other person or entity with which any Manager or any of its Affiliates has
a significant business relationship;

 

		(19)	regarding any environmental matter relating to the Project, including selection of environmental
consultants and adoption of and implementation of any operation and maintenance program or any other program to remove or otherwise
remediate hazardous materials; and

 

		(20)	regarding any transaction that is not in the ordinary
course of the Company’s business or that, considered before the taking thereof, could reasonably be expected to have a material
affect on the Company’s business or affairs.

 

    	 	20	 

    

    

 

Notwithstanding the foregoing provisions of this Section
4.1(b) or anything in this Agreement to the contrary:

 

(i)         Solely
with respect to the items described in Sections 4.1(b)(2), (4), (8) and (15) above, if the Managers desire to take
any of the actions described in Sections 4.1(b)(2), (4), (8), or (15), the Preferred Member shall be deemed to have
approved of such action if the Preferred Member fails to respond to a written request for its approval given in accordance with
the notice provisions set forth in Section 20.1 of this Agreement (the “Approval Request”) within
ten (10) business days after receipt by the Preferred Member of the Approval Request. The Approval Request shall include all information
known to the Managers which would be relevant to the Preferred Member’s making the determination of whether to approve such
action. In addition, the Approval Request shall state in upper case, bold lettering as follows “FAILURE TO RESPOND TO THIS
NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL BE DEEMED AN APPROVAL UNDER THE OPERATING AGREEMENT.”

 

(ii)       
As to requests for approval of Major Decisions, other than Approval Requests governed by the provisions of Section 4.1(b)(i)
above, each Member agrees that its response to any such request for approval shall not be unreasonably withheld, conditioned or
delayed.

 

Upon the occurrence of a Developer
Member Event of Default, whether or not the Preferred Member is then a Manager, the Preferred Member shall have the authority to
unilaterally make and/or effect all Major Decisions in its sole discretion.

 

(c)        Except
as otherwise expressly provided in this Section 4.1, the Managers shall have the authority to execute a contract on behalf
of the Company provided that (1) such contract is a normal and customary contract in the operation of the Project anticipated by
the Development Budget or Operating Budget, as applicable, and the other provisions of this Agreement and is with an unaffiliated
third party; (2) the expenditures to be made pursuant to such contract are consistent with the Development Budget or Operating
Budget, as applicable; (3) such contract may be terminated without penalty by the Company without cause on not more than 30 days’
prior written notice; and (4) such contract does not obligate the Company to make payments in any year in excess of $50,000.

 

(d)       Except
as otherwise expressly provided in this Agreement, without the prior consent of all Members, no Member shall have any authority
to do any Prohibited Act and any attempted doing of any Prohibited Act without the consent of all Members shall be null and void.

 

(e)       Each
Manager shall discharge duties in a good and proper manner as provided for in this Agreement. The Managers, on behalf of the Company,
shall in good faith use all commercially reasonable efforts to implement all Major Decisions approved by the Managers and the Preferred
Member, enforce agreements entered into by the Company, and conduct the ordinary business and affairs of the Company in accordance
with good industry practice and this Agreement. Each Manager shall not be required to devote a particular amount of time to the
Company’s business, but shall devote sufficient time to perform its duties hereunder. Each Manager shall not delegate any
of its rights or powers to manage and control the business and affairs of the Company without the prior consent of the Preferred
Member.

 

    	 	21	 

    

    

 

Section 4.2            Construction.

 

(a)         
Construction of Project. Promptly following the Closing Date, the Managers shall cause the Company to perform certain
capital improvements and other work to construct the Project in accordance with this Section 4.2 (collectively, the “Construction”).
The general scope of the Construction is described in the Plans and the Development Budget. Each Manager shall use commercially
reasonable efforts to cause the Company to complete the Construction in accordance with this Section 4.2 by utilizing the
proceeds of the Preferred Member’s Initial Capital Contributions and advances made under the Loan for such purpose (the
“Construction Advances”) in accordance with the following provisions of this Section 4.2.

 

(b)         
 Development Budget and Completion Schedule. The Development Budget has been prepared by the Developer Member and
approved by the Preferred Member and describes in detail the Construction Work (as defined below) to be performed and the estimated
cost thereof, and includes a completion schedule (the “Completion Schedule”) showing the timing of the
completion of various aspects of such work.

 

		(1)	The Development Budget and the Completion Schedule may be amended from time to time only with the
prior consent of the Managers and the Preferred Member, which consent shall not be unreasonably withheld, conditioned or delayed
(and, if required by the Loan Documents, the Lender); provided, however, that the Preferred Member may withhold consent in its
sole and absolute discretion to any amendment which increases the total cost of the Construction or extends any scheduled Completion
Date for any matter within the reasonable Control of the Managers.

 

		(2)	Any expenditure required to implement the Construction as shown on the construction budget is herein
called a “Construction Expenditure.”

 

		(3)	The work and expenditures required to finish the Construction and allow it to be utilized by the
Company in accordance with the Development Budget are herein collectively referred to as the “Construction Work.”

 

(c)         
Performance of Construction Work. The Developer Member shall cause the Company to perform the Construction Work
in accordance with the following requirements:

 

		(1)	If appropriate, as reasonably determined by the Preferred Member, the Developer Member shall cause
detailed Plans for the Construction Work, or such portions thereof as may be specified by the Preferred Member, to be prepared
by a qualified architect reasonably satisfactory to the Preferred Member.

 

    	 	22	 

    

    

 

		(2)	All Construction Work shall be done
                                         in a good and workmanlike manner and substantially in accordance with the Plans (if any)
                                         that have previously been approved by the Preferred Member. The Developer Member shall
                                         cause the Company to make expenditures consistent with the Development Budget and to
                                         enter into contracts consistent with the Development Budget, subject, however, to the
                                         terms of Section 4.1(b). The Developer Member shall be permitted to reallocate
                                         Cost Savings realized in any line item of the Development Budget (other than Cost Savings
                                         in the Interest Reserve line item) to other line items provided, however, that unless
                                         the prior consent of the Preferred Member is obtained, the Developer Member shall not
                                         reallocate Cost Savings by more than the greater of 5% in excess of the amount set forth
                                         in any particular line item in the Development Budget and $10,000 in excess of the amount
                                         set forth in such line item. If the Developer Member believes that it will be necessary
                                         to expend more than is permitted by the preceding sentence in completing the Construction
                                         Work, the Developer Member will promptly inform the Preferred Member of such anticipated
                                         Cost Overrun, and shall follow the Preferred Member’s directions with respect thereto,
                                         including causing such Cost Overrun to be funded in accordance with Section 6.2.

 

		(3)	Subject to Force Majeure, the Developer Member shall cause the Construction Work to be completed
in accordance with the Completion Schedule and the Developer Member shall cause Substantial Completion of the Project to be achieved
by the Completion Date.

 

		(4)	The Developer Member shall ensure that all of the Construction Work shall be done in compliance
with the applicable provisions, covenants and conditions of the Loan Documents and the applicable requirements of all laws, as
well as all real property restrictions and contractual obligations to which the Company may be subject.

 

		(5)	The Developer Member shall cause the Company or the general contractor to obtain all licenses and
permits, including building permits and certificates of occupancy, if applicable, required to be obtained in connection with the
performance of the Construction Work by any laws pertaining to the Construction Work, or by any governmental authorities having
jurisdiction over the Construction Work (with such licenses and permits to be obtained as, if and when required by such applicable
laws or such governmental entities). The Developer Member shall (a) cause the Company to satisfy all conditions shown on any temporary
certificates of occupancy issued in connection with the Construction Work, (b) cause each such temporary certificate of occupancy
to be renewed until a final and unqualified certificate of occupancy is issued in replacement thereof and (c) cause to be delivered
to the Company (as, if and when required by any laws) final, unqualified and unconditional certificates of occupancy pertaining
to the Construction Work.

 

    	 	23	 

    

    

 

 

		(6)	The Developer Member shall, at the expense of the Company, cause the Construction Work to be performed
on a lien-free basis, and, in the event of the filing of a mechanic’s or materialman’s lien or liens with respect thereto,
shall cause the same to be immediately discharged or bonded over at the expense of the Company; subject, however, to the right
of the Developer Member, acting on behalf of the Company, to dispute a claim in good faith, so long as the continuation of such
dispute does not constitute a violation of the Loan Documents or permit enforcement of any lien against the Project or any portion
thereof. In the event of any such dispute in excess of $10,000, the Developer Member shall promptly notify the Preferred Member,
and if the Preferred Member elects to participate in resolution of such dispute, the Developer Member and the Preferred Member
shall jointly approve all matters of a material nature related to resolution thereof.

 

(d)          Fees.         The
Developer Member shall not be entitled to any fees in connection with its oversight and performance of the Construction Work except
as provided in Section 4.10(b).

 

(e)          Funding Procedure.

 

(1)         
 Requisitions.           The Construction Work shall be funded by the Initial Capital Contributions of the Members and
the Construction Advances. In that connection, as and when required for the performance of the Construction Work, but not more frequently
than monthly, the Developer Member shall prepare and submit to the Preferred Member a request for an Initial Capital Contribution
and/or a request for a Construction Advance under the Loan Documents, if applicable (each, a “Requisition”)
which shall:

 

		1.	set forth the amounts and purposes for which the amount
requested (the “Requisition Amount”) is to be utilized,

 

		2.	set forth a certification from the Developer Member that all sums included in the Requisition Amount
are due and payable for work and/or services performed and that such amount is to be utilized solely to pay Construction Expenditures
in compliance with the Development Budget (taking into account the flexibility provided to the Managers to deviate from the Development
Budget to the extent herein expressly permitted),

 

		3.	contain a reconciliation with the Development Budget in form reasonably satisfactory to the Preferred
Member showing all amounts spent on Construction Expenditures through the date of the Requisition,

 

    	 	24	 

    

    

 

		4.	set forth a certification from the Developer Member
that no Developer Member Event of Default exists, and

 

		5.	contain such other information as may be reasonably requested by the Preferred Member.

 

The Preferred
Member shall have the right to approve each Requisition in its reasonable discretion (and, without limitation, each Requisition
shall be approved by the Preferred Member before the same is submitted to the Lender, if applicable), and the Preferred Member
shall use commercially reasonable efforts to approve or disapprove a Requisition (or request additional information regarding such
Requisition) within three (3) business days after its receipt of the same. Upon the approval of a Requisition by the Preferred Member
and the Lender, if applicable, the Requisition Amount shall be funded or transferred by the Preferred Member and from a Construction
Advance, if applicable, into a separate Company bank account (the “Payment Account”), and the Developer
Member shall withdraw funds from such Payment Account to pay Construction Expenditures in accordance with such Requisition and
the other provisions of this Agreement.

 

Except for
the first Requisition, concurrently with the delivery of each Requisition to the Preferred Member, the Developer Member shall provide
to the Preferred Member (or cause the property manager to provide to the Preferred Member) a statement (a “Reconciliation
Statement”), which shall:

 

		(i)	detail how the prior month’s Requisition Amount was utilized,

 

		(ii)	reconcile such usage with the prior Requisition, and

 

(iii)        
set forth an explanation of any material variances (which provision, however, shall not be construed as a waiver of the requirement
that each Requisition Amount shall be utilized in conformity with the applicable Requisition).

 

The Reconciliation
Statement shall be certified as accurate by an officer of the Developer Member. If any portion of the prior Requisition Amount has
not yet been expended as of the date of the Reconciliation Statement, the Reconciliation Statement shall so state and provide an
explanation therefor, and the Requisition accompanying the Reconciliation Statement shall take into account such unused prior Requisition
Amount.

 

If the Developer
Member withdraws funds from the Payment Account except in accordance with a Requisition approved by the Preferred Member, or fails
to use any amounts so withdrawn in conformity with the applicable Requisition (excluding from the foregoing, however, any cost
savings or immaterial variations), then, without limitation on the Preferred Member’s and the Company’s other rights
and remedies, the Preferred Member may thereafter require that all checks or other withdrawals on the Payment Account must be counter-signed
by a designated representative of the Preferred Member, and the procedure set forth in this Section 4.2(e) pertaining to
funding the Requisition Amount into the Payment Account may, at the option of the Preferred Member, be discontinued (in which event,
thereafter all checks for Construction Expenditures shall be signed by the Preferred Member).

 

    	 	25	 

    

    

 

		(1)	Supporting Evidence.
                                         If requested by the Preferred Member, the Reconciliation Statements shall be accompanied
                                         by receipts, canceled checks or other evidence reasonably satisfactory to the Preferred
                                         Member showing the actual utilization of the prior Requisition Amount.

 

		(2)	Conditions. The decision
                                         whether or not to approve any Requisition shall be made by the Preferred Member in its
                                         discretion. Without limitation, the Preferred Member may condition its approval of any
                                         Requisition on the non-existence of any Developer Member Event of Default or such other
                                         conditions as the Preferred Member may from time to time reasonably establish.

 

(f)           Reports.
On a monthly basis (and to the extent not already covered by the Requisition and Reconciliation Statements prepared by the Developer
Member on a monthly basis), the Developer Member shall prepare and deliver to the Preferred Member a report showing the progress
of construction of the Construction Work, listing all expenditures made to date on a cumulative basis, and reconciling such expenditures
with the Development Budget, with each such report to be delivered not later than the 20th day of the following calendar month.
In addition, and without limitation on the Managers’ duties under Article 5 hereof, the Developer Member shall prepare
and deliver to the Preferred Member such other reports and information pertaining to the Construction Work as the Preferred Member
may reasonably request from time to time (but not more often than monthly, absent the occurrence of some unexpected event which
has or may have a material adverse impact on the progress of the Construction Work), and such reports and information as may be
required under the Loan Documents with respect to the performance of the Construction Work.

 

(g)       
Development Consultant. The Preferred Member reserves the right to retain a development, architectural and/or engineering
consultant (collectively, the “Development Consultant”), at the Company’s expense, as the Preferred
Member’s consultant in connection with the Construction and the administration of all Requisitions in order to advise the
Preferred Member in connection with the progress of the Construction Work and all approvals requested of the Preferred Member
under this Agreement (including the Major Decisions as defined below). If a Development Consultant is retained, the Developer Member
shall furnish such Development Consultant with copies of all information, reports, documents, notices and other materials required
to be provided to the Preferred Member or the Company under this Agreement, at the same time as the same are furnished to the
Preferred Member or the Company.

 

Section 4.3           Operating Budgets and Expenditures.

 

    	 	26	 

    

    

 

(a)         
Implementation of Operating Budgets. The Developer Member, or the property manager under the supervision of the
Developer Member, shall prepare and deliver to the Preferred Member for its approval budgets for the operation of the Project,
prepared on both a cash basis and an accrual basis, which budgets shall be delivered not later than forty-five (45) days prior
to the commencement of a particular calendar year (except that the budget for the calendar year in which the Closing Date occurs
shall be delivered prior to the Closing Date). The Developer Member shall not implement any budget unless the same has been approved
in writing by the Preferred Member, whereupon the same shall be deemed the Operating Budget for the Project. The Developer Member
shall implement each Operating Budget and the Developer Member shall be authorized, without the need for further approval by the
Preferred Member, to make the specified expenditures and incur the specified obligations provided for in such Operating Budget
(but only if the Developer Member acts in strict conformance with such Operating Budget in all respects with regard to, among
other matters, the nature and amount of each such expenditure or obligation, and the other provisions of this Agreement).

 

(b)        
Deviation from Operating Budgets. In implementing any Operating Budget, and unless the consent of the Preferred
Member is first obtained, the Developer Member shall not cause or permit the Company to expend more than the lesser of 105% or
$10,000 in excess of the total amount designated for any line item in such Operating Budget without the prior consent of the Preferred
Member. The Developer Member shall promptly notify the Preferred Member in writing if the Developer Member concludes that compliance
with its obligations under this Agreement would necessitate the expenditure of sums that are not permitted by the foregoing sentence.

 

(c)         
Failure to Approve Operating Budgets. If any proposed Operating Budget for any calendar year has not been approved
by January 1 of that year, the Developer Member shall continue to operate under the Operating Budget for the previous year with
such adjustments as may be necessary to reflect deletion of non-recurring expense items set forth in the previous Operating Budget
and increased insurance costs, taxes, utility costs, and debt service payments; however, no capital expenditures shall be made
for that year until an Operating Budget for such year is approved by the Preferred Member.

 

Section 4.4          Meetings of Members.

 

(a)        
Regular Meetings. The Members shall hold annual meetings after the Developer Member submits an Operating Budget
to the Preferred Member for its review, to discuss the Project, and to discuss such other matters regarding Company business as
the Members may elect.

 

(b)        
Special Meetings. Special meetings of the Members may be called by any Manager, the Developer Member or the Preferred
Member at any time by delivering at least two (2) business days’ prior notice thereof to the other Members to discuss such
matters regarding Company business as the Members may elect.

 

    	 	27	 

    

    

 

(c)         
Procedure. Each Company meeting shall be held at the principal place of business of the Company, unless the Members
otherwise agree. Attendance of a Person at a meeting shall constitute a waiver of notice of such meeting, unless such Person attends
the meeting for the purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called
or convened. As to any matter requiring a vote of Members, the Members’ relative voting power shall be based upon the Members’
respective Capital Sharing Ratio; however, this provision shall not be interpreted to substitute a vote of Members for any approval
or consent by any Member expressly required by this Agreement. A Person may vote at such meeting by written proxy executed by that
Person and delivered to a Manager or Member. A proxy shall be revocable unless it is stated to be irrevocable. Any action required
or permitted to be taken at such meeting may be taken without a meeting, without prior notice, and without a vote if a consent
or consents in writing, setting forth the action so taken, is signed by the Managers and the Members that would be necessary to
take the action at a meeting at which all Members were present and voted. Any meeting may take place by means of telephone conference,
video conference, or similar communication equipment by means of which all Persons participating therein can hear each other.

 

Section 4.5          Officers.   The Managers, with the consent of the Preferred Member if the Preferred Member is not then a Manager,
may designate one or more Persons to be officers of the Company (“Officers”), and any Officer so designated
shall have such title, authorities, duties, and salaries as the Managers, with the Preferred Member’s approval (if applicable),
may delegate to them. Any Officer may be removed as such, either with or without cause, by the Managers, with the approval of the
Preferred Member (if applicable).

 

Section 4.6         Reimbursement of Expenses.   The Managers and the Development Member shall be reimbursed for all reasonable
out-of-pocket expenses actually incurred by it directly in connection with the business and affairs of the Company (including travel
and entertainment expenses, telephone costs, and the like, but not overhead expenses), to the extent set forth on an Operating
Budget or as otherwise approved in writing by the Preferred Member. Additionally, the Preferred Member shall be reimbursed for its
reasonable out-of-pocket expenditures incurred for an annual site inspection of the Project and for its inspections occurring after
a Developer Member Event of Default or other event which in the sole discretion of the Preferred Member, materially affects the
Project or the Company. Upon request, a Member shall provide reasonable supporting verification to the other Members for all expenditures
for which any reimbursement is requested.

 

Section 4.7         Compensation
of Members.  Except as herein otherwise specifically provided, no compensatory payment shall be made by the
Company to any Member for the services to the Company of such Member or any member or employee of such Member.

 

Section 4.8           Transactions with Affiliates.

 

(a)        
General.    When any service or activity to be performed on behalf
of the Company is performed by an Affiliate of a Member, a written contract shall be entered into and the fee payable for such
service or activity shall not exceed the fee which would be payable by the Company to an unaffiliated third party of comparable
standing providing the same services. In addition, the non-Affiliate Member shall have full power and authority to approve all
terms and conditions of the written contract and enforce the provisions thereof for the benefit of the Company, including terminating
the contract if a default occurs thereunder and otherwise pursuing all other available remedies.

 

    	 	28	 

    

    

 

(b)         
Termination of Agreements with Affiliates.   In the event of any Developer Member Event of Default, the Company
may terminate all agreements with the Developer Member’s Affiliates, and all such agreements shall contain a provision that
allows for the exercise of the right of termination under this Section 4.8(b). The Preferred Member may enforce this provision
on behalf of the Company.

 

Section 4.9           {Reserved.}

 

Section 4.10
        Indemnification; Reimbursement of Expenses; Insurance.  To the fullest
extent permitted by the Act: (a) the Company shall indemnify each Manager and Member (including any officers, employees and agents)
who was, is or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (a “Proceeding”),
any appeal therein, or any inquiry or investigation preliminary thereto, solely by reason of the fact that said Person is or was
a Manager or Member and was acting within scope of its authorized duties or under the authority of the Members and (b) the Company
shall pay or reimburse a Manager or Member for expenses incurred by said Person (1) in advance of the final disposition of a Proceeding
to which such Manager or Member was, is or is threatened to be made a party, and (2) in connection with said Person’s appearance
as a witness or other participation in any Proceeding. The Company, by adoption of a resolution of the Members, may indemnify
and advance expenses to an Officer, employee or agent of the Company to the same extent and subject to the same conditions under
which it may indemnify and advance expenses to Managers and Members under the preceding sentence. The provisions of this Section
4.10 shall not be exclusive of any other right under any law, provision of the Certificate or this Agreement, or otherwise.
Notwithstanding the foregoing, this indemnity shall not apply to actions constituting gross negligence, willful misconduct or
bad faith, or involving a breach of this Agreement, but shall apply to actions constituting simple negligence. The Company may
purchase and maintain insurance to protect itself and any Manager or Member, Officer, employee or agent of the Company, whether
or not the Company would have the power to indemnify such Person under this Section 4.10. Except to the extent otherwise
provided in this Agreement, this indemnification obligation shall be limited to the assets of the Company and no Member shall
be required to make a Capital Contribution in respect thereof.

 

Section 4.11
       Conflicts of Interest. Subject to the other express provisions of this Agreement,
each Member, Manager, Officer or Affiliate thereof may engage in and possess interests in other business ventures of any and every
type and description, independently or with others, including ones in competition with the Company, with no obligation to offer
to the Company or any other Member, Manager or Officer the right to participate therein or to account therefore. The Company may
transact business with any Member, Manager, Officer or Affiliate thereof with the prior written consent of the Preferred Member
and provided that the terms of those transactions are no less favorable to the Company than those the Company could obtain from
unrelated third parties.

 

ARTICLE 5

ACCOUNTING AND REPORTING; BUSINESS PLAN

 

Section 5.1          Fiscal Year, Accounts, Reports.

 

(a)          The fiscal year of the Company shall be the
calendar year.

 

    	 	29	 

    

    

 

(b)        The
Managers shall cause to be kept proper and complete records and books of account in which shall be entered fully and accurately
all transactions and other matters relating to the Company’s business as are usually entered into such records and books
of account kept for businesses of a like character. The Company’s records and books shall be kept on an accrual basis and
in accordance with generally accepted accounting principles, consistently applied (“GAAP”), except as
may otherwise be approved by the Preferred Member to the extent it is not the Manager. Notwithstanding Section 18-305(c) of the
Act, the Managers shall not have the right to keep confidential from any Member any information relating to the Company, the Project
or a Member’s interest in the Company.

 

(c)         The
Managers, to the extent the Preferred Member is not the Manager, shall provide to the Preferred Member, in addition to any other
financial statements required hereunder or under any of the other Loan Documents, the following financial statements and information,
all of which must be certified to the Preferred Member as being true and correct by the Manager or the person or entity to which
they pertain, as applicable, and, with respect to the financial statements and information set forth in subsection (iii) hereof,
audited by an independent certified public accountant, and be in form and substance acceptable to the Preferred Member:

 

(i)         copies
of all tax returns filed by the Managers on behalf of the Company, within thirty (30) days after the date of filing;

 

(ii)       monthly
operating statements for the Project, which shall show monthly activity and year-to-date activity and state operating revenues,
operating expenses, operating income and Net Cash Flow for the month then just ended, a balance sheet for the Project and, as requested
by the Preferred Member, a written statement setting forth any variance from the Operating Budget;

 

(iii)      
annual balance sheets for the Project, within one hundred and twenty (120) days after the end of each calendar year, as well as
financial information which shall show operating revenues, operating expenses, operating income and Net Cash Flow for the Project,
a statement of the Members’ Capital Accounts (as defined in Section 16.2(a)), applicable Balances (as defined in Section
6.5) and a statement setting forth the Profits and Losses (as defined in Section 16.1(k)) of the Company for such fiscal
year and, if required by the Preferred Member, prepared on a review basis and certified by an independent public accountant satisfactory
to the Preferred Member; and

 

(iv)       such
other information with respect to the Project, the Managers, the principals or general partners or managing members in the Managers
which may be reasonably requested from time to time by the Preferred Member, within a reasonable time after the applicable request.

 

If any of the aforementioned materials
are not furnished to the Preferred Member within the applicable time periods or the Preferred Member is dissatisfied with the contents
of any of the foregoing and has notified the Managers of its dissatisfaction, in addition to any other rights and remedies of the
Preferred Member contained herein, the Preferred Member shall have the right, but not the obligation, to obtain the same by means
of an audit by an independent certified public accountant selected by the Preferred Member, in which event the Company agrees to
pay, or to reimburse the Preferred Member for, any expense of such audit and further agrees to provide all necessary information
to said accountant and to otherwise cooperate in the making of such audit.

 

    	 	30	 

    

    

 

(d)         Each
Member, at its expense, may at all reasonable times during usual business hours audit, examine, and make copies of or extracts
from the books of account records, files, and bank statements of the Company. Such right may be exercised by any Member, or by its
designated agents or employees.

 

Section 5.2
         Bank Accounts.    The Managers shall open and maintain
(in the name of the Company) a special bank account or accounts in a bank or savings and loan association, the deposits of which
are insured, up to the applicable limits, by an agency of the United States government, in which shall be deposited all funds
of the Company. Withdrawals therefrom shall be made upon the signatures of such Persons as the Managers shall designate with the
approval of the Preferred Member.

 

Section 5.3
       Financial Accounting Matters Member.   The Preferred Member shall
be the “Financial Accounting Matters Member”, and, notwithstanding anything to the contrary provided in Section
4.1(b), shall have sole responsibility for the following:

 

(a)        Selection
from among sound accounting principles for the purpose of usage in the Company’s financial statements prepared in conformity
with sound accounting principles as described under this Section 5.3 (including, but not limited to the allocation of all
revenues and expenses, including depreciation, to the respective Member’s Capital Accounts (as defined in Section 16.2(a))),
and

 

(b)       
Selection of a nationally recognized independent firm of certified public accountants as described under this Article 5.

 

Section 5.4
        Business Plan.     The Members shall establish a business
plan (the “Business Plan”), setting forth objectives, strategy, operating budgets and capital improvement
plans and budgets (if applicable) relating to the operation and construction of the Project. All budgets pertaining to the construction
of the Project shall be subject to review by the Development Consultant selected by the Preferred Member but paid for by the Company,
if the Preferred Member so elects. The Business Plan shall also set forth leverage limitations, anticipated holding period, anticipated
terms of any sale of the Project, projected occupancy of the Project, and other essential elements of the Company’s operation.
The Business Plan, and all amendments or modifications thereto, shall be subject to the Preferred Member’s prior approval
(which approval shall not be unreasonably withheld, conditioned or delayed). A draft of the initial Business Plan will be delivered
by the Managers to the Preferred Member prior to the Closing Date. The Business Plan shall be updated by the Managers semi-annually,
or more frequently as the Members may decide is appropriate, or if the Lender requests. Nothing in the Business Plan shall be deemed
a waiver or modification of any Member’s rights under this Agreement, including Article 10, even if a sale is not
in compliance with the Business Plan.

 

    	 	31	 

    

    

 

ARTICLE 6

CAPITAL CONTRIBUTIONS

 

Section 6.1
        Initial Capital Contributions.    Prior to the date hereof, the Developer Member has made an initial contribution
of $25,475,000 to the Company related to the Project. The Preferred Member shall make Initial Capital Contributions to the Company
as and when required to pay for the development of the Project in accordance with the Development Budget in an aggregate amount
not to exceed $20,000,000.

 

Section 6.2
      Required Additional Capital Contributions.     Developer Member
shall have the sole responsibility to make Additional Capital Contributions to the capital of the Company from time to time, including,
without limitation if:

 

(a)         the
Operating Revenues of the Project are insufficient to (i) pay budgeted operating expenses of the Operating Budget (excluding budgeted
operating expenses, the payment of which are reasonably contested), (ii) pay debt service on the Loan, (iii) distribute to the
Preferred Member any portion of the Preferred Return then due, (iv) return to the Preferred Member any unreturned Default Contribution,
(v) distribute to the Preferred Member any portion of the Required Redemption Amount then due, or (vi) pay any Cost Overrun; or

 

(b)         it is
necessary in order for the Company to conduct its business, maintain its assets or discharge its liabilities.

 

The Developer Member shall make
any such Additional Capital Contributions by the date necessary to enable the Company to pay the applicable expense or distribution
prior to the delinquency date thereof.

 

Section 6.3           Failure to Make Additional Capital Contributions.

 

(a)          In the
event that the Developer Member shall fail to make any Additional Capital Contribution, the Preferred Member or any other Member
admitted to the Company may, but shall not be obligated to:

 

(i)        make
a Default Contribution to the capital of the Company in the amount of the Additional Capital Contribution not made by the Developer
Member, which Default Contribution shall earn a Preferred Return at the Default Rate compounded monthly (such Preferred Return
sometimes hereinafter referred to as the “Default Contribution Return”); and

 

(ii)       make
a demand loan to the Developer Member in the amount of the Additional Capital Contribution which the Developer Member failed to
make, which loan will accrue interest at the Default Rate, will be secured by the Developer Member’s Membership Interest,
and will be payable out of the first distributions otherwise distributable to the Developer Member under this Agreement.

 

    	 	32	 

    

    

 

(b)         The
Developer Member hereby grants to the other Member(s) and the Company, equally and ratably, a security interest in its Membership
Interest to secure performance of its obligations hereunder (collectively, the “Secured Obligations”).
Upon any default in the Secured Obligations, the Persons to whom such obligations are owed (each, a “Secured Party”)
shall have all the rights and remedies of a secured party under the Uniform Commercial Code with respect to the security interest
granted herein, and the proceeds arising from any foreclosure of the security interest herein granted may be applied to attorneys’
fees and expenses incurred by the Secured Party in exercising such rights and remedies. Each Member shall execute and deliver to
the other Member and to the Company all such financing statements and other instruments as may be requested by the other Member
to evidence the security interest provided for herein. This Agreement may serve as the necessary financing statement, or the Secured
Party may execute and file a financing statement on behalf of the other Member and the other Member hereby appoints the Secured
Party as its attorney-in-fact to execute such financing statements and other instruments as may be necessary to evidence or continue
the perfection of the security interest herein granted. Each such power of attorney is coupled with an interest and is irrevocable.

 

Section 6.4
          Return of Contributions. Except as expressly provided in
this Agreement or the Guaranty, no Member shall be entitled to (a) the return of any part of its Capital Contributions, (b) any
Preferred Return in respect of any Capital Contribution, or (c) the fair market value of its Membership Interest in connection
with a withdrawal from the Company or otherwise. Except as expressly provided in this Agreement, unrepaid Capital Contributions
shall not be a liability of the Company or of any Member. Except as expressly provided in this Agreement, no Member shall be required
to contribute or lend any cash or property to the Company to enable the Company to return the Capital Contribution of any Member.

 

Section 6.5
         Balances.  The Company’s books and records shall contain entries indicating the type and amount of
Capital Contributions made to the Company and the type of Preferred Return applicable to such Capital Contribution. When used herein,
the following terms shall refer to the following balances (collectively, “Balances”) (to the extent applicable):

 

“Default
Capital Contribution Balance” means, for the Preferred Member, the cumulative Default Capital Contributions of that
Member, less the cumulative distributions to that Member in return thereof pursuant to Sections 8.1 and 8.2.

 

ARTICLE 7

PREFERENCES

 

Section 7.1
      Funding and Distribution of Preferred Return. The Preferred Member’s Unreturned
Capital Contributions shall earn, and the Company shall be obligated to distribute to the Preferred Member, a Preferred Return
calculated as provided in Section 7.2 below. The Preferred Return shall be funded as follows:

 

(a)         Prior
to the occurrence of any Developer Member Event of Default, the Preferred Return shall be funded from the following sources, in
the following order of priority: (i) Net Cash Flow, as provided in Section 8.1 and (ii) Additional Capital Contributions
required of the Developer Member pursuant to Section 6.2 of this Agreement.

 

(b)         Upon the occurrence of any Developer Member
Event of Default, the Preferred Return shall be funded from the following sources, in the following order of priority: (i) Net
Cash Flow, as provided in Section 8.2 and (ii) Additional Capital Contributions required of the Developer Member pursuant
to Section 6.2 of this Agreement.

 

    	 	33	 

    

    

 

Section 7.2         Calculation of Preferred Return.

 

(a)         Prior
to the occurrence of any Developer Member Event of Default, the Preferred Return shall be calculated on the Preferred Member’s
Unreturned Capital Contributions at a rate equal to twelve percent (12%) per annum. Preferred Return payable for any partial distribution
period will be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

(b)         Upon
the occurrence of any Developer Member Event of Default, the Preferred Return shall be calculated on the Preferred Member’s
Unreturned Capital Contributions at the Default Rate.

 

ARTICLE 8

REQUIRED PAYMENTS; NON-LIQUIDATION DISTRIBUTIONS

 

Section 8.1
        Payments and Distributions Prior to a Developer Member Event of Default.
  Operating Revenues shall be used to pay the following expenses and make the following distributions in the following
order:

 

(a)         Operating
Expenses of the Project authorized for payment in accordance with Section 4.3 of this Agreement;

 

(b)         capital
expenditures for the Project authorized for payment in accordance with Section 4.3 of this Agreement;

 

debt service on and other payments due under the Loan;

 

(d)         to the Preferred Member to pay any unpaid Default
Contribution Return;

 

(e)         to
the Preferred Member to return to the Preferred Member any unreturned Default Contribution;

 

(f)         on the first day of each calendar
month, to the Preferred Member to pay any Unpaid Preferred Return;

 

(g)         following a Developer Member
default, to the Preferred Member to return to the Preferred Member its Unreturned Capital Contribution;

 

(h)         any
remaining Net Cash Flow from the Project shall be distributed to the Developer Member.

 

Section 8.2          Payments
Distributions of Capital Proceeds. Distributions of Capital Proceeds shall be made in the following order:

 

    	 	34	 

    

    

 

(a)         To
the Preferred Member to pay the Default Contribution Return on any Default Contribution made by the Preferred Member;

 

(b)         To the Preferred Member to
return to the Preferred Member any unreturned Default Contribution;

 

(c)         To the Preferred Member to pay any Unpaid Preferred
Return;

 

(d)         To the Preferred Member to return its Unreturned Capital
Contributions; then

 

(e)         The remaining balance to the Developer Member.

 

For purposes of this Section
8.2, Net Cash Flow shall mean the amount by which Operating Revenue exceeds Operating Expenses, less Debt Service, and Debt
Service shall mean the interest, fixed principal and other payments due on the Loan under the terms of the Loan Documents.

 

Section 8.3         Restructuring
and Redemption Rights. Before the Company obtains construction financing for the Project, the Preferred Member shall have
the option to request a restructuring of the terms and conditions of the Preferred Member interest based on the anticipated capital
structure or request a full redemption in accordance with Section 9.1.

 

ARTICLE 9

REDEMPTION

 

Section 9.1              Redemption

 

(a)           At any
time prior to a Developer Member Event of Default, the Developer Member may elect, in its sole discretion, to cause the Company
to distribute to the Preferred Member all, but not less than all, of the Required Redemption Amount.

 

(b)          Prior
to acceptance of construction financing if requested by the Preferred Member in connection with any accepted construction financing,
the Developer Member shall cause the Company to distribute to the Preferred Member, all, but not less than all, of the Required
Redemption Amount.

 

(c)           Notwithstanding
anything to the contrary in this Agreement, the Developer Member shall cause the Company to distribute to the Preferred Member
all of the Required Redemption Amount on or prior to the earlier of (i) the date that is two (2) years from the date the Preferred
Member made its final Capital Contribution hereunder and (ii) the third anniversary of this Agreement.

 

    	 	35	 

    

    

 

ARTICLE 10 

[RESERVED]

 

ARTICLE 11

DEVELOPER MEMBER EVENTS OF DEFAULT; REMEDIES

 

Section 11.1          Developer Member
Events of Default.     The occurrence of any of the following events or circumstances shall constitute a Developer Member
Event of Default:

 

(a)          
Events or Circumstances for Which No Cure Period is Allowed.      The occurrence of any
of the following events shall immediately constitute a Developer Member Event of Default:

 

		(1)	A Prohibited Act by the Developer Member, provided, however, that any Prohibited Act for which
a cure period is otherwise expressly provided in this Agreement shall not constitute a Developer Member Event of Default until
the expiration of such cure period;

 

		(2)	The Developer Member’s, any Developer Member’s Affiliate’s or any Principal’s
(i) commission of a criminal act, (ii) misapplication or misappropriation of any funds derived from or relating to the Project,
including without limiting the generality of the foregoing, security deposits, insurance proceeds, condemnation awards, advances
of the Loan and operating revenue from the Project (each, a “Misappropriation”), (iii) fraud, willful
misconduct, misrepresentation of a material fact, failure to disclose a material fact or gross negligence or (iv) liquidation,
dissolution or Bankruptcy;

 

		(3)	Notice from the Lender of the occurrence of a default and expiration of any applicable cure period
under any Loan Document;

 

		(4)	The Bankruptcy of (i) the Company, (ii) any Subsidiary of the Company or (iii) the Principal;

 

		(5)	The Company’s failure to maintain the insurance coverage required under this Agreement or
the Loan Documents;

 

		(6)	The Company’s failure to pay on a timely basis any taxes or assessments affecting the Project,
other than (i) taxes and assessments contested in good faith in accordance with established legal principles or (ii) mechanic’s
or materialman’s liens which are resolved or protected by bond to the reasonable satisfaction of the Preferred Member within
thirty (30) days of filing;

 

		(7)	A default by the Developer Member under the Environmental Agreement or a default by any Principal
under the Environmental Agreement or the Guaranty beyond the expiration of any cure period.

 

(b)          Events
or Circumstances With a Five Day Cure Period.     The Developer Member’s failure to make
a required Additional Capital Contribution in accordance with the terms of this Agreement shall constitute a Developer Member
Event of Default unless cured within five (5) calendar days after the due date of such payment.

 

    	 	36	 

    

    

 

(c)          
Events or Circumstances With a Thirty Day Cure Period From Date of Notice.  The occurrence of any of
the following events or circumstances shall constitute a Developer Member Event of Default unless cured within thirty (30) calendar
days after the delivery of notice from the Preferred Member to the Developer Member of such event or circumstance; provided, however,
that such event or occurrence shall not constitute a Developer Member Event of Default if such breach cannot by its nature be
cured within thirty (30) days provided the Developer Member commences to cure such breach within such thirty (30) day period and
thereafter diligently pursues and cures such event or occurrence within ninety (90) days of the original notice:

 

		(1)	Except to the extent described in Sections 11.1(a)
or (b) above, any act by the Developer Member that is in contravention of this Agreement;

 

		(2)	Except to the extent described in Sections 11.1(a) or (b) above, the Developer Member’s
failure to meet its obligations or liabilities under this Agreement; or

 

		(3)	Except to the extent described in Sections 11.1(a) or (b) above, the Developer Member’s
breach of any of its covenants, warranties or representations in this Agreement.

 

To the extent that an event or
circumstance described in this Section 11.1(c) is also described in Sections 11.1(a) or (b) above, the applicable
provisions of Section 11.1(a) or (b) shall apply.

 

(d)          Events
or Circumstances With a Thirty Day Cure Period From Date of Occurrence. The occurrence of any default by any Affiliate
of the Developer Member in any management or service contract with the Company shall constitute a Developer Member Event of Default.

 

Section 11.2           Remedies.  Upon the occurrence of any Developer Member Event of Default, in addition to any other rights
or remedies available to the Preferred Member at law or in equity, the Preferred Member shall be entitled to exercise any one
or more of the following remedies:

 

(a)          remove
the Developer Member as a Manager, whereupon the Preferred Member may appoint itself, an Affiliate of the Preferred Member,
or a third party as Manager;

 

(b)          purchase
the Developer Member’s entire interest in the Company, or cause the Company to redeem the entire interest of the Developer
Member under this Agreement, on payment to the Developer Member of an amount equal to the amount which, pursuant to Section
8.2, the Developer Member would receive on a sale of the Project at its then fair market value, as determined in accordance
with an “as is” appraisal of the Project made by an appraiser selected by the Preferred Member who is a member of the
Appraisal Institute and which has experience appraising property similar to the Project, minus (i) all reasonable and customary
costs associated with the sale; (ii) the Required Redemption Amount; and (iii) the total of all loss and expense suffered by the
Company as a result of any fraud, gross negligence, willful misconduct or Developer Member Event of Default; or

 

    	 	37	 

    

    

 

(c)          cause
the Company to sell the Project.

 

ARTICLE 12

{RESERVED}

 

ARTICLE 13

RECOURSE LIABILITIES

 

Section 13.1          Recourse Liabilities.

 

(a)         Notwithstanding
any other provision of this Agreement including, without limitation, Section 6.4 hereof, Developer Member shall be personally
liable for, and shall indemnify the Preferred Member and hold the Preferred Member harmless for, all losses, damages, costs and
expenses including attorneys’ fees incurred by the Preferred Member as a result of (i) any fraud, Misappropriation, misrepresentation
or failure to disclose a material fact, whether prior to or following the Closing Date, (ii) damage to the Land or improvements
that comprise the Project as a result of the intentional misconduct or gross negligence of the Developer Member, its Principals
or any of their officers, agents or employees, (iii) any waste or abandonment of the Land or improvements which comprise the Project,
(iv) any removal of all or any portion of the improvements on the Land in violation of the terms of the Loan Documents or this
Agreement or any damage to any portion of the Project as a result of the intentional misconduct or gross negligence of the Developer
Member, any Affiliate of the Developer Member or any Affiliate of the Developer Member, (v) the existence, or alleged existence,
of any hazardous, toxic or harmful substances, wastes, materials, pollutants or contaminants or any other substances or materials
which are included under or regulated by Federal, state or local governmental authorities, on, in, under or affecting all or any
portion of the Project or any surrounding areas, regardless of whether or not caused by or within the Control of Developer Member,
(vi) the occurrence of any recourse event claimed by the Lender under the Loan Documents, (vii) failure to maintain the insurance
policies required to be maintained by the Developer Member under this Agreement or under the Loan Documents, (viii) failure to
pay any valid taxes, assessments, mechanic’s liens, materialmen’s liens or other liens which could create liens on
any portion of the Project, to the full extent of the amount claimed by any such lien claimant, (ix) the failure to make any Additional
Capital Contribution required to pay the costs associated with any Cost Overrun and/or (x) the Preferred Return in respect of the
period of time commencing on the Effective Date through and including the distribution date identified in Section 9.1(c) not being
paid for any reason. Notwithstanding anything in this Agreement to the contrary, the Developer Member shall not be required to indemnify
the Preferred Member against losses, damages, costs or expenses caused solely by the gross negligence or willful misconduct of
the Preferred Member.

 

    	 	38	 

    

    

 

 

(b)         Notwithstanding
any other provision of this Agreement including, without limitation, Section 6.4 hereof, the Developer Member shall be personally
liable for and have full recourse liability under this Agreement for the payment to the Preferred Member of the Required Redemption
Amount and any other amounts owing to the Preferred Member pursuant to Section 13.1(a) above, in the event of the Bankruptcy
of the Developer Member, any Affiliate of the Developer Member or any Principal, or in the event that the Project becomes an asset
in any bankruptcy estate. The obligations and liabilities of the Developer Member described in this Article 13 are herein
referred to as the “Recourse Obligations.” The Developer Member’s liability for the Recourse Obligations
shall not be limited to the Developer Member’s interest in the Company, and the Preferred Member shall have available to
it any and all remedies available at law or in equity to recover from the Developer Member for the Recourse Obligations.

 

(c)         An Affiliate
of the Developer Member acceptable to the Preferred Member shall guaranty and indemnify the Preferred Member for the Recourse Obligations
pursuant to the Guaranty and the Environmental Agreement.

 

ARTICLE 14 

[RESERVED]

 

ARTICLE 15

THIRD PARTY FINANCING

 

Section 15.1         Initial
Financing.     The Company will obtain a Loan for the construction of the Project. The Loan will
be secured by a first-priority mortgage lien on the Project and shall be made on the terms and conditions as approved by the Members.
The Developer Member shall cause one of its Affiliates reasonably acceptable to the Lender to execute and deliver such indemnities
and guarantees as may be required by the Lender.

 

Section 15.2         Permanent
Financing.     If the Company does not dispose of its entire interest in the Project on or before maturity of the initial Loan,
the Managers shall use all reasonable efforts to obtain a Loan for the permanent financing of the Project on terms and conditions
no less favorable than those generally available for real estate projects similar to the Project; however, the Loan shall be non-recourse
except for “carve-outs” generally required for permanent loans to be sold in the secondary market. The Loan will be
secured by a first-priority mortgage lien on the Project and shall be made on such terms and conditions as may be approved by
the Managers and the Preferred Member. The Developer Member shall cause an acceptable Affiliate of the Developer Member to execute
and deliver all indemnities or guarantees as may be required for any recourse obligations by the Lender providing any permanent
financing.

 

Section 15.3         Consent
to Exercise of Remedies; Notices and Cure Rights.     The Loan Documents for any Loan shall be
required to provide that (a) the Preferred Member shall be entitled to exercise the buy/sell option or otherwise receive a transfer
of the Developer Member’s Membership Interest and/or to remove the Developer Member as a Manager of the Company in accordance
with the terms of this Agreement without the applicable Lender’s consent, (b) the Preferred Member shall be entitled to
receive copies of all notices, correspondence, and information delivered to or received from the applicable Lender by the Company
and (c) the Preferred Member shall have the right, but not the obligation, to cure any default thereunder during any applicable
grace period.

 

    	 	39	 

    

    

 

ARTICLE 16

CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS

 

Section 16.1Definitions.
The following terms shall have the following meanings:

 

(a)          “Adjusted
Capital Account” means, with respect to a Member, such Member’s Capital Account as of the end of each fiscal
year, as the same is specially computed to reflect the adjustments required or permitted to be taken into account in applying Regulations
Section 1.704-l(b)(2)(ii)(d) (including adjustments for Company Minimum Gain and Member Nonrecourse Debt Minimum Gain).

 

(b)          “Adjusted
Capital Account Deficit” means, for each Member, the deficit balance, if any, in that Member’s Adjusted Capital
Account.

 

(c)          “Capital
Account” shall have the meaning set forth in Section 16.2.

 

(d)          “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any corresponding provisions of succeeding law.

 

(e)          “Depreciation”
means, for each taxable year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for the year or other period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of the year or other period, Depreciation will be an amount
which bears the same ratio to the beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost
recovery deduction for the year or other period bears to the beginning adjusted tax basis, provided that if the federal income
tax depreciation, amortization, or other cost recovery deduction for the year or other period is zero, Depreciation will be determined
with reference to the beginning Gross Asset Value using any reasonable method selected by the Managers and the Preferred Member.

 

(f)          “Gross
Asset Value” has the meaning assigned to it in Section 16.3.

 

(g)          “Partner
Nonrecourse Debt” has the meaning assigned to it in Regulations Sections 1.704-2(b)(4) and 1.752-2.

 

(h)          “Partner
Nonrecourse Debt Minimum Gain” has the meaning assigned to it in Regulations Section 1.704-2(i)(3).

 

(i)          “Partner
Nonrecourse Deductions” has the meaning assigned to it in Regulations Section 1.704-2(i)(2).

 

(j)          “Partnership
Minimum Gain” has the meaning assigned to it in Regulations Section 1.704-2(d).

 

(k)          “Profits”
and “Losses” mean, for each taxable year or other period, an amount equal to the Company’s taxable
income or loss for the year or other period, determined in accordance with Section 703(a) of the Code (including all items of income,
gain, loss or deduction required to be stated separately under Section 703(a)(1) of the Code), with the following adjustments:

 

    	 	40	 

    

    

 

		(1)	Any income of the Company that is exempt from federal income tax and not otherwise taken into account
in computing Profits or Losses will be added to taxable income or loss;

 

		(2)	Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Section 705(a)(2)(B)
expenditures under Regulations Section 1.704-l(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses,
will be subtracted from taxable income or loss;

 

		(3)	Gain or loss resulting from any disposition of Company property with respect to which gain or loss
is recognized for federal income tax purposes will be computed by reference to the Gross Asset Value of the property, notwithstanding
that the adjusted tax basis of the property differs from its Gross Asset Value:

 

		(4)	In lieu of depreciation, amortization and other cost recovery deductions taken into account in
computing taxable income or loss, there will be taken into account Depreciation for the taxable year or other period;

 

		(5)	Any items which are specially allocated under Section
16.4(c), 16.4(d), or 16.4(e) will not affect calculations of Profits or Losses;

 

		(6)	Any items which are specifically allocated to the Preferred Member under Section 16.4(f)
will affect calculations of Profits and Losses (and thus generally will have the effect of reducing Profits, and/or increasing
Losses, otherwise allocable to the Developer Member); and

 

		(7)	If the Gross Asset Value of any Company asset is adjusted under Section 16.3(b) or 16.3(c),
the adjustment will be taken into account as gain or loss from disposition of the asset for purposes of computing Profits or Losses.

 

(l)           “Regulations”
means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the
Code. All references herein to sections of the Regulations shall include any corresponding provisions of succeeding, similar, substitute
proposed or final Regulations.

 

(m)         “Regulatory
Allocations”hasthemeaningassignedtoitin Section 16.4(d).

 

Section 16.2         Capital Accounts

 

    	 	41	 

    

    

 

(a)          Establishment
and Maintenance. A separate capital account (a “Capital Account”) will be maintained
for each Member. The Capital Account of each Member will be determined and adjusted as follows:

 

		(1)	Each Member’s Capital Account will be credited with the Member’s Capital Contributions,
the Member’s distributive share of Profits, any items in the nature of income or gain that are specially allocated to the
Member under Sections 16.4(c), 16.4(d), or 16.4(e), and the amount of any Company liabilities that are assumed by the
Member or secured by any Company property distributed to the Member.

 

		(2)	Each Member’s Capital Account will be debited with the amount of cash and the Gross Asset
Value of any Company property distributed to the Member under any provision of this Agreement, the Member’s distributive
share of Losses, any items in the nature of deduction or loss that are specially allocated to the Member under Section 16.4(c)
or 16.4(d), and the amount of any liabilities of the Member assumed by the Company or which are secured by any property contributed
by the Member to the Company.

 

		(3)	If any interest in the Company is transferred in accordance with the terms of this Agreement, the
transferee will succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

 

(b)          Modifications
by Managers. The provisions of this Section 16.2 and the other provisions of this Agreement relating to the maintenance
of Capital Accounts have been included in this Agreement to comply with Section 704(b) of the Code and the Regulations promulgated
thereunder and will be interpreted and applied in a manner consistent with those provisions. The Managers may, with the consent
of the Preferred Member if it is not then the Managers, modify the manner in which the Capital Accounts are maintained under this
Section 16.2 to comply with those provisions, as well as upon the occurrence of events that might otherwise cause this
Agreement not to comply with those provisions; however, without the unanimous consent of all Members, the Managers may not make
any modification to the way Capital Accounts are maintained if such modification would have the effect of changing the amount
of distributions to which any Member would be entitled during the operation, or upon the liquidation, of the Company.

 

Section 16.3         Adjustment
of Gross Asset Value. “Gross Asset Value” with respect to any noncash asset, is the adjusted
basis of that asset for federal income tax purposes, except as follows:

 

(a)          The
initial Gross Asset Value of any asset contributed (or deemed contributed under Code Sections 704(b) and 752 and the Regulations
promulgated thereunder) by a Member to the Company will be the gross fair market value of the asset on the date of the contribution,
as determined by the Managers and the Preferred Member.

 

    	 	42	 

    

    

 

(b)          The
Gross Asset Values of all Company assets will be adjusted to equal the respective fair market values of the assets, as determined
by the Managers and the Preferred Member, as of (1) the acquisition of an additional interest in the Company by any new or existing
Member in exchange for more than a de minimis capital contribution, (2) the distribution by the Company to a Member of more than
a de minimis amount of Company property as consideration for an interest in the Company if an adjustment is necessary or appropriate
to reflect the relative economic interests of the Members in the Company, and (3) the liquidation of the Company within the meaning
of Regulations Section 1.704-l(b)(2)(ii)(g).

 

(c)          The
Gross Asset Value of any Company asset distributed to any Member will be the gross fair market value of the asset on the date of
distribution.

 

(d)          The
Gross Asset Values of Company assets will be increased or decreased to reflect any adjustment to the adjusted basis of the assets
under Code Section 734(b) or 743(b), but only to the extent that the adjustment is taken into account in determining Capital Accounts
under Regulations Section 1.704-l(b)(2)(iv)(m), provided that Gross Asset Values will not be adjusted under this Section 16.3
to the extent that the Managers determine that an adjustment under Section 16.3(b) is necessary or appropriate in connection
with a transaction that would otherwise result in an adjustment under this Section 16.3(d).

 

(e)          After
the Gross Asset Value of any asset has been determined or adjusted under Section 16.3(a), 16.3(b) or 16.3(d), Gross
Asset Value will be adjusted by the Depreciation taken into account with respect to the asset for purposes of computing Profits
or Losses.

 

Section 16.4          Profits, Losses and Distributive Shares
of Tax Items.

 

(a)          Profits.
Except as otherwise provided in Sections 16.4(c) and 16.4(d), Profits for any taxable year shall be allocated to the
Members in the following manner:

 

		(1)	first, to the Members in proportion to the cumulative Losses allocated to the Members under
Section 16.4(b)(3) until the Members have been allocated a cumulative amount under this Section 16.4(a)(1) and Section
16.4(f) equal to the cumulative Losses allocated to the Members under Section 16.4(b)(3), and then to the Members in proportion
to the cumulative Losses allocated to the Members under Section 16.4(b)(2) until the members have been allocated a cumulative
amount under this Section 16.4(a)(1) and Section 16.4(f) equal to the cumulative Losses allocated to the Members under
Section 16.4(b)(2);

 

		(2)	next, to the Developer Member until it has been allocated a cumulative amount under this
Section 16.4(a)(2) equal to its cumulative Losses allocated to it under Section 16.4(b)(1); and

 

(3)         finally,
to the Members in accordance with their respective Capital Sharing Ratios.

 

(b)          Losses.     Except
as otherwise provided in Sections 16.4(c) and 16.4(d), Losses for any taxable year shall be allocated in the following
manner:

 

    	 	43	 

    

    

 

		(1)	first, to the Developer Member in reverse order of any Profits previously allocated to it
in accordance with Sections 16.4(a)(2) until Losses have been allocated to the Developer Member in a cumulative amount equal
to all such prior allocations of Profits;

 

		(2)	next, to the Developer Member, but not in excess of the Adjusted Capital Account balance
of the Developer Member before the allocation provided for in this Section 16.4(b)(2); and

 

		(3)	next, to the Preferred Member, but not in excess of the Adjusted Capital Account balance of the
Preferred Member before the allocation provided for in this Section 16.4(b)(3), and

 

		(4)	finally, to the Members in accordance with their
respective Capital Sharing Ratios.

 

(c)          Special
Allocations. The following special allocations will be made in the following order and priority before allocations of Profits
and Losses:

 

		(1)	Partnership Minimum Gain Chargeback. If there is a net decrease in Partnership Minimum
Gain during any taxable year or other period for which allocations are made, before any other allocation under this Agreement,
each Member will be specially allocated items of Company income and gain for that period (and, if necessary, subsequent periods)
in proportion to, and to the extent of, an amount equal to such Member’s share of the net decrease in Partnership Minimum
Gain during such year determined in accordance with Regulations Section 1.704-2(g)(2). The items to be allocated will be determined
in accordance with Regulations Section 1.704-2(g). This Section 16.4(c)(1) is intended to comply with the Partnership Minimum
Gain chargeback requirements of the Regulations, will be interpreted consistently with the Regulations and will be subject to all
exceptions provided therein.

 

		(2)	Partner Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other
                                                                               provision of this Section 16.4 (other than Section 16.4(c)(1) which shall be applied first), if there is a net
                                                                               decrease in Partner Nonrecourse Debt Minimum Gain with respect to a Partner Nonrecourse Debt during any taxable year or other
                                                                               period for which allocations are made, any Member with a share of such Partner Nonrecourse Debt Minimum Gain
                                                                               (determined under Regulations Section 1.704-2(i)(5)) as of the beginning of the year will be specially allocated items of
                                                                               Company income and gain for that period (and, if necessary, subsequent periods) in an amount equal to such Member’s
                                                                               share of the net decrease in the Partner Nonrecourse Debt Minimum Gain during such year determined in accordance with
                                                                               Regulations Section 1.704-2(g)(2). The items to be so allocated will be determined in accordance with Regulations Section
                                                                               1.704-2(g). This Section 16.4(c)(2) is intended to comply with the
Partner Nonrecourse Debt Minimum Gain chargeback requirements of the Regulations, will be interpreted consistently with the Regulations
and will be subject to all exceptions provided therein.

 

    	 	44	 

    

    

 

		(3)	Qualified Income Offset. A Member who unexpectedly receives any adjustment, allocation
or distribution described in Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of Company
income and gain in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of the Member as quickly as possible.

 

		(4)	Nonrecourse Deductions. Nonrecourse Deductions for any taxable year or other period
for which allocations are made will be allocated among the Members in proportion to their respective Capital Sharing Ratios in
the Company.

 

		(5)	Partner Nonrecourse Deductions. Notwithstanding anything to the contrary in this
Agreement, any Partner Nonrecourse Deductions for any taxable year or other period for which allocations are made will be allocated
to the Member who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which the Partner Nonrecourse
Deductions are attributable in accordance with Regulations Section 1.704-

2(i).

 

		(6)	Code Section
754 Adjustments.  To the extent an adjustment to the adjusted
tax basis of any Company asset under Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital
Accounts under Regulations Section 1.704-l(b)(2)(iv)(m), the amount of the adjustment to the Capital Accounts will be treated
as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis), and the
gain or loss will be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted under Regulations Section 1.704- l(b)(2(iv)(m).

 

(d)          Curative
Allocations. The allocations set forth in Section 16.4(c) (the “Regulatory Allocations”)
are intended to comply with certain requirements of Regulations Sections 1.704-l(b) and 1.704-2. The Regulatory Allocations may
effect results that would be inconsistent with the manner in which the Members intend to divide Company distributions. Accordingly,
the Managers are authorized to divide other allocations of Profits, Losses, and other items among the Members, to the extent that
they exist, so that the net amount of the Regulatory Allocations and the special allocations to each Member is zero. The Managers
will have discretion to accomplish this result in any reasonable manner that is consistent with Code Section 704 and the related
Regulations.

 

    	 	45	 

    

    

 

(e)          Tax
Allocations-Code Section 704(c). For federal, state and local income tax purposes, Company income, gain, loss, deduction
or expense (or any item thereof) for each fiscal year shall be allocated to and among the Members to reflect the allocations made
pursuant to the provisions of this Section 16.4 for such fiscal year. In accordance with Code Section 704(c) and the related
Regulations, income, gain, loss and deduction with respect to any property contributed to the capital of the Company, solely for
tax purposes, will be allocated among the Members so as to take account of any variation between the adjusted basis to the Company
of the property for federal income tax purposes and the initial Gross Asset Value of the property (computed in accordance with
Section 16.3). If the Gross Asset Value of any Company asset is adjusted under Section 16.3(b), subsequent allocations
of income, gain, loss and deduction with respect to that asset will take account of any variation between the adjusted basis of
the asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the related
Regulations. Any elections or other decisions relating to allocations under this Section 16.4(e) will be made in any manner
that the Managers determine reasonably reflects the purpose and intention of this Agreement. Allocations under this Section
16.4(e) are solely for purposes of federal, state and local taxes and will not affect, or in any way be taken into account
in computing, any Member’s Capital Account or share of Profits, Losses or other items or distributions under any provision
of this Agreement.

 

(f)          Priority
Allocation to the Preferred Member. All or a portion of the remaining items of Company gross income or gain, if any, shall
be specifically allocated to the Preferred Member to the extent of (i) its Default Preferred Return and its Preferred Return on
its Initial Capital Contributions, over (ii) the cumulative items of gross income and gain allocated to the Preferred Member pursuant
to this Section 16.4(f).

 

(g)          Members
shall be bound by the provisions of this Section 16.4 in reporting their shares of Company income and loss for income tax
purposes.

 

Section 16.5          Tax Returns. The Managers shall cause to be prepared and filed all necessary federal and state income tax returns
for the Company, including making the elections described in Section 16.6. Each Member shall furnish to the Managers all
pertinent information in its possession relating to Company operations that is necessary to enable such income tax returns to be
prepared and filed.

 

Section 16.6         Tax
Elections. The following elections shall be made on the appropriate returns of the Company:

 

(a)          to
adopt the calendar year as the Company’s fiscal year;

 

(b)          to adopt
the cash method of accounting and to keep the Company’s books and records on the income-tax method;

 

(c)          if there
is a distribution of Company property as described in Section 734 of the Code or if there is a transfer of a Company interest as
described in Section 743 of the Code, upon written request of any Member, to elect, pursuant to Section 754 of the Code, to adjust
the basis of Company properties; and

 

    	 	46	 

    

    

 

(d)          to
elect to amortize the organizational expenses of the Company ratably over a period of 60 months as permitted by Section 709(b)
of the Code.

 

No election shall be made by the
Company or any Member to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code
or any similar provisions of applicable state laws.

 

Section 16.7          Tax Matters Partner. The Developer Member shall be the “tax matters partner” of the Company pursuant
to Section 6231 (a)(7) of the Code. As tax matters partner, such Member shall take such action as may be necessary to cause every
other Member to become a “notice partner” within the meaning of Section 6223 of the Code. Such Member shall inform
each other Member of all significant matters that may come to its attention in its capacity as tax matters partner by giving notice
thereof within ten (10) days after becoming aware thereof and, within such time, shall forward to each other Member copies of all
significant written communications it may receive in such capacity. Such Member shall not take any action contemplated by Sections
6222 through 6232 of the Code without the consent of the Managers and the Preferred Member. This provision is not intended to authorize
such Member to take any action left to the determination of an individual Member under Sections 6222 through 6232 of the Code.

 

Section 16.8          Allocations on Transfer of Interests. All items of income, gain, loss, deduction, and credit allocable to any
interest in the Company that may have been transferred shall be allocated between the transferor and the transferee based upon
that portion of the calendar year during which each was recognized as owning such interest, without regard to the results of Company
operations during any particular portion of such calendar year and without regard to whether cash distributions were made to the
transferee or the transferee during such calendar year; however, such allocation shall be made in accordance with a method permissible
under Section 706 of the Code and the Regulations thereunder.

 

ARTICLE 17

WITHDRAWAL, DISSOLUTION, LIQUIDATION,
AND TERMINATION

 

Section 17.1          Dissolution, Liquidation and Termination Generally. The Company shall be dissolved upon the first to occur of
any of the following:

 

(a)          The
sale or disposition of all of the assets of the Company and the receipt, in cash, of all consideration therefor;

 

(b)          The
determination of each Manager and the Preferred Member to dissolve the Company; and 

 

(c)          The
occurrence of any event which, as a matter of law, requires that the Company be dissolved.

 

Notwithstanding the foregoing,
if the Company is dissolved pursuant to Section 17.1(c) because an event described in Section 18-801(a)(4) of the Act, then
the other Member may elect to continue the Company business within ninety (90) days after the Members have actual notice of such
event, and, at the option of the electing Member, may admit a new Member to the Company with a “Residual Sharing
Ratio” and “Capital Sharing Ratio” determined by the electing Member. The “Residual Sharing Ratio”
and “Capital Sharing Ratio” of the electing Member then shall be reduced by the “Residual Sharing Ratio”
and “Capital Sharing Ratio” allocated to the new Member.

 

    	 	47	 

    

    

 

Section 17.2         Liquidation and Termination. Upon dissolution of the Company, unless it is continued as provided above, the
Managers shall act as liquidator or may appoint one or more other Persons as liquidator; however, if the Company is dissolved because
of an event occurring with respect to the Managers or if a Developer Member Event of Default has occurred, the liquidator shall
be one or more Persons selected in writing by the other Member. The liquidator shall proceed diligently to wind up the affairs
of the Company and make final distributions as provided herein. The costs of liquidation shall be a Company expense. Until final
distribution, the liquidator shall continue to operate the Company properties with all of the power and authority of the Managers
hereunder. The steps to be accomplished by the liquidator are as follows:

 

(a)          as promptly
as possible after dissolution and again after final liquidation, the liquidator shall cause a proper accounting to be made by a
firm of certified public accountants acceptable to the Preferred Member of the Company’s assets, liabilities, and operations
through the last day of the calendar month in which the dissolution shall occur or the final liquidation shall be completed, as
applicable;

 

(b)          the
liquidator shall pay all of the debts and liabilities of the Company or otherwise make adequate provision therefor (including the
establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the liquidator may reasonably
determine); and

 

(c)          all
remaining assets of the Company shall be distributed to the Members as follows:

 

		(1)	the liquidator may sell any or all Company property and the sum of (A) any resulting gain or loss
from each sale plus (B) the fair market value of such property that has not been sold shall be determined and (notwithstanding
the provisions of Article 16) income, gain, loss, and deduction inherent in such property (that has not been reflected in
the Capital Accounts previously) shall be allocated among the Members to the extent possible to cause the Capital Account balance
of each Member to equal the amount distributable to such Member under Section 17.2(c)(2); and

 

		(2)	Company property shall be distributed to the Members as provided in Section 8.2 (which is
anticipated to reduce the Adjusted Capital Account balances of the Members to zero).

 

Section
17.3         Deficit Capital
Accounts.   Except as otherwise provided in this
Agreement, no Member shall be required to pay to the Company, to any other Member or to any third party any deficit balance which may exist from
time to time in the Member’s capital account.

 

    	 	48	 

    

    

 

Section 17.4         Cancellation of Certificate. On completion of the distribution of Company assets, the Member (or such other
person as the Act may require or permit) shall file a Certificate of Cancellation with the Secretary of State of Delaware, cancel
any other filings made pursuant to Article 2, and take such other actions as may be necessary to terminate the existence
of the Company.

 

ARTICLE 18

PURCHASE OF MEMBERSHIP INTEREST

 

Section 18.1          General. This Article 18 sets forth certain provisions that are applicable if a Member (the “Acquiring
Member”) or its assignee purchases all or a portion of the entire Membership Interest of the other Member in the
Company (the “Exiting Member”). The date on which the Acquiring Member or its assignee acquires the Membership
Interest of the Exiting Member is herein called the “Acquisition Date.” The provisions of this Article
18 are intended to supplement any other provisions of this Agreement that give a Member the right to purchase or sell a Membership
Interest. Nothing contained in this Article 18 shall be deemed to give to any Member any right to purchase or sell a Membership
Interest, such rights, if any, being contained in the other Articles of this Agreement.

 

Section 18.2         Assignment of Membership Interest. Concurrently with the payment of any purchase price then payable to the Exiting
Member pursuant to the applicable provisions of this Agreement (which payment may be reduced by the offset provisions of Section
20.17), or if no amount shall then be payable for such interest, then upon demand of the Acquiring Member or its assignee,
the Exiting Member shall deliver or cause to be delivered to the Acquiring Member or its assignee (1) an assignment of its Membership
Interest (or the portion thereof that is being transferred, as applicable), and (2) such evidence of the due authorization and
execution of such assignment (including corporate resolutions, company authorizations or partner consents, as applicable) as the
Acquiring Member or its assignee may reasonably request in connection therewith. Such assignment shall represent and warrant that
the Exiting Member is the owner of such Membership Interest free and clear of any liens, encumbrances, claims and rights, and that
it has the free and unrestricted right and power to sell and assign such interest to the Acquiring Member or its assignee; provided,
however, the foregoing shall not constitute a representation or warranty that such assignment is permitted by the Loan Documents.
Except as set forth above, the Exiting Member shall not make any representations or warranties of any kind or nature, express,
implied or otherwise, in connection with such sale.

 

Section 18.3        Transfer of Management. If the Exiting Member is a Manager, or if the property manager is an Affiliate of the
Exiting Member, and if the Exiting Company Member is transferring all of its Membership Interest or is otherwise withdrawing from
or being removed as a Manager, then the Exiting Member shall reasonably cooperate (and cause its Affiliates to reasonably cooperate)
with the Acquiring Member in order to effect an orderly transition of management of the Project to the Acquiring Member or its
designee and minimize any disruption to the ongoing operation of the Project.

    	 	49	 

    

    

 

Section 18.4         Release
and Indemnity.

 

(a)          Release.
If the sale of the Membership Interest of the Exiting Member is consummated and if such sale is of the entire Membership Interest
of the Exiting Member, then the Exiting Member shall be released from any liability first arising under this Agreement after the
consummation of such sale.

 

(b)          Indemnity.
In addition, if the sale of the Membership Interest of the Exiting Member is consummated and if the sale is of the entire Membership
Interest of the Exiting Member, the Company shall and hereby does indemnify, defend and hold harmless the Exiting Member for,
from and against (1) any liability, damage, cost or expense (including reasonable attorneys’ fees incurred in connection
with the enforcement of the foregoing indemnity) arising out of or relating to any action or proceeding commenced by any third
party relating to any Loan, the Company, the Project or this Agreement, and which action is based on facts or circumstances first
arising on or after the Acquisition Date, and (2) any liability actually known to both Members prior to the date on which the
price payable for the Membership Interest of the Exiting Member was determined in accordance with this Agreement to the extent
such liability was taken into account in the determination of such price. Such indemnity shall survive the closing of the sale
of the Membership Interest of the Exiting Member.

 

Section 18.5         Transfer Tax. Any transfer tax or similar taxes arising out of or in connection with the sale and transfer of
the Membership Interest (other than any tax based upon the net income of either Member) and all other closing costs of the sale
and purchase of the Membership Interest (if any) shall be borne by the Developer Member.

 

Section 18.6          Assignment by Acquiring Member. The Acquiring Member shall have the right to assign its rights to acquire the
Membership Interest of the Exiting Member to a third party, which may or may not be an Affiliate of the Acquiring Member.

 

ARTICLE 19

{RESERVED}

 

ARTICLE 20

MISCELLANEOUS PROVISIONS

 

Section 20.1         Notices. All notices provided for or permitted to be given pursuant to this Agreement must be in writing and
shall be given or served (a) by depositing the same in the United States mail addressed to the party to be notified, postpaid and
certified with return receipt requested, (b) by depositing the same with a nationally recognized overnight courier service which
requires recipients to sign for all deliveries, (c) by delivering such notice in person to such party or (d) by prepaid telegram,
telex, or telecopy. All notices are to be sent to or made at the addresses set forth on the signature pages hereto. All notices
given in accordance with this Agreement shall be effective upon delivery at the address of the addressee. By giving written notice
thereof, each Member shall have the right from time to time to change its address pursuant hereto.

 

    	 	50	 

    

    

 

Section 20.2         Approvals. All consents, approvals and other matters of similar import required pursuant to the terms of this
Agreement shall be in effect only if in writing signed by the party sought to be bound.

 

Section 20.3        Governing Law. This Agreement and the obligations of the Members hereunder shall be construed and enforced in
accordance with the laws of the State of Delaware, excluding any conflicts of law rule or principle which might refer such construction
to the laws of another state or country. Each Member submits to the jurisdiction of the state and federal courts of the State of
New York.

 

Section 20.4         Entireties; Amendments. This Agreement and its exhibits constitute the entire agreement between the Members
relative to the Company. Neither this Agreement nor any provisions hereof may be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of any Member, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination
is sought.

 

Section 20.5        Waiver. No consent or waiver, express or implied, by any Member of any breach or default by any other Member
in the performance by the other Member of its obligations hereunder shall be deemed or construed to be a consent or waiver to or
of any other breach or default in the performance by such other Member of the same or any other obligation hereunder. Failure on
the part of any Member to complain of any act or to declare any other Member in default, irrespective of how long such failure
continues, shall not constitute a waiver of rights hereunder.

 

Section 20.6       Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall
be invalid or unenforceable to any extent, and such invalidity or unenforceability does not destroy the basis of the bargain between
the parties, then the remainder of this Agreement and the application of such provisions to other Persons or circumstances shall
not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

Section 20.7        Ownership of Property and Right of Partition. A Member’s interest in the Company shall be personal property
for all purposes. No Member shall have any right to partition the property owned by the Company.

 

Section 20.8        Captions, References and Construction. Pronouns, wherever used herein, and of whatever gender, shall include
natural persons and corporations and associations of every kind and character, and the singular shall include the plural wherever
and as often as may be appropriate. Article and section headings are for convenience of reference and shall not affect the construction
or interpretation of this Agreement. Whenever the terms “hereof,” “hereby,” “herein,” or words
of similar import are used in this Agreement, they shall be construed as referring to this Agreement in its entirety rather than
to a particular section or provision, unless the context specifically indicates to the contrary. Whenever the word “including”
is used herein, it shall be construed to mean including without limitation. Any reference to a particular “Article”,
“Section”, “Schedules” or “Exhibit” herein shall be construed as referring to the indicated
article, section or exhibit of this Agreement unless the context indicates to the contrary. Each
party hereto acknowledges participating in the drafting of this Agreement and agrees that this Agreement shall not be construed
more stringently against one party than the other.

 

    	 	51	 

    

    

 

Section 20.9        Involvement of Members in Certain Proceedings. Should any Member become involved in legal proceedings unrelated
to the Company’s business in which the Company is required to provide books, records, an accounting, or other information,
then such Member shall indemnify the Company from all expenses incurred in conjunction therewith.

 

Section 20.10      Interest. No amount charged as interest on loans hereunder shall exceed the maximum rate from time to time allowed
by applicable law.

 

Section 20.11     Counterparts. This Agreement may be executed in multiple counterparts, with signature pages signed by each party
affixed to constitute a fully executed instrument.

 

Section 20.12      General Indemnification. The Developer Member shall indemnify, defend and hold harmless the Company and the
Preferred Member from any loss, claim, damage or liability relating to any brokerage commissions or finder’s fees claimed
by any broker or other party in connection with the transactions which are the subject of this Agreement, and any claim arising
out of any conduct of the Developer Member accruing prior to the date of this Agreement (excluding, however, any of the foregoing
to the extent caused solely by the Preferred Member or its Affiliates).

 

Section 20.13      Publicity. Upon the acquisition of the Project, the Preferred Member may issue press releases, advertisements
and other promotional materials describing in general terms or in detail as to its participation in such transaction. All references
to the Preferred Member or its Affiliates in any press release, advertisement or promotional material issued by the Developer Member
must be approved in advance of issuance by the Preferred Member.

 

Section 20.14      
Intentionally deleted.

 

Section 20.15      Time of the Essence. Time shall be of the essence as to all deadlines and time permits set forth in this Agreement.

 

Section 20.16      Estoppel Certificate. Each Member agrees to give the other member or any proposed permitted transferee of such
Member, on not less than ten (10) days’ written request, a certificate, binding upon the issuing Member and its successors
and assigns, stating (a) whether or not, to its then current knowledge, the other Member is then in default under this Agreement
and whether an event has occurred which, with the passage of time or giving of notice or both, would constitute such a default
(and stating with particularity the nature of any claimed defaults or potential defaults); and (b) that this Agreement is in full
force and effect and has not been amended, or if amended, the date of each amendment.

 

Section 20.17      Right
of Offset. Notwithstanding any other provision of this Agreement, in the event that a Member (“Debtor Member”)
or one of its Affiliates owes the Company or any other Member (the “Creditor Member”) any sums, arising
out of or related directly or indirectly to the matters which are the subject of this Agreement or Project, the Company or the
Creditor Member, as the case may be, shall be entitled to withhold the distributions and payments that would otherwise be paid
to such Debtor Member pursuant to this Agreement or any contractual arrangement with the Company and use the amount so withheld
to pay to the Company or the Creditor Member, as appropriate, the sums owed to it by the Debtor Member or such Affiliate of the
Debtor Member. For all purposes of this Agreement, any such amounts that are so withheld from the distributions or payments to
be made to the Debtor Member under this Agreement shall be deemed to have been distributed or paid to the Debtor Member and then
paid by such Debtor Member or its Affiliate to the Company or the Creditor Member, as appropriate. To the extent applicable, each
Member hereby waives any all defenses of a guarantor, surety and accommodation maker, to the fullest extent possible, to the extent
such defenses pertain to the exercise by the Company or any other Member of the offset rights set forth in this Section 20.17.

 

    	 	52	 

    

    

 

Section 20.18      Waiver of Certain Defenses. THE PARTIES HERETO ACKNOWLEDGE THAT THEY WERE REPRESENTED BY COMPETENT COUNSEL IN
CONNECTION WITH THE NEGOTIATION, DRAFTING AND EXECUTION OF THIS AGREEMENT. THE PREFERRED MEMBER SHALL NOT BE SUBJECT TO ANY LIMITATION
WHATSOEVER IN THE EXERCISE OF ANY RIGHTS OR REMEDIES AVAILABLE TO IT UNDER THIS AGREEMENT OR UNDER ANY OTHER DOCUMENTS EVIDENCING
OR RELATING TO THE EQUITY INVESTMENT DESCRIBED HEREIN BY VIRTUE OF THE EXTENSION OF A MORTGAGE LOAN SECURED BY THE PROJECT BY IT,
OR ANY PARENT, SUBSIDIARY, OR AFFILIATE OF THE PREFERRED MEMBER, AND THE DEVELOPER MEMBER HEREBY IRREVOCABLY WAIVES THE RIGHT TO
RAISE ANY DEFENSE OR TAKE ANY ACTION ON THE BASIS OF THE FOREGOING WITH RESPECT TO THE PREFERRED MEMBER’S EXERCISE OF ANY
SUCH RIGHTS OR REMEDIES.

 

Section 20.19      Waiver of Jury Trial. EACH PARTY HERETO, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE PROJECT OR ANY CONDUCT,
ACT OR OMISSION OF ANY PARTY HERETO, OR ANY RESPECTIVE DIRECTOR, OFFICER, PARTNER, MEMBER, EMPLOYEE, AGENT OR ATTORNEY, OR ANY
OTHER PERSONS AFFILIATED WITH SUCH PARTY, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

SIGNATURE PAGE OF LIMITED LIABILITY COMPANY AGREEMENT
FOLLOWS:

 

    	 	53	 

    

    

 

Executed effective as of the date above written.

 

	 	DEVELOPER MEMBER:
	 	 
	 	LSG FULTON STREET LLC
	 	 
	 	By:	/s/ Joseph
    E. Teichman
	 	Name: 	Joseph E. Teichman
	 	Title:	Executive Vice President

 

	 	Address: 	LSG FULTON STREET LLC
	 	 	c/o The Lightstone Group
	 	 	1985 Cedar Bridge Avenue
	 	 	Lakewood, New Jersey 08701
	 	 	Attn:  General Counsel

 

	 	PREFERRED MEMBER:
	 	 
	 	LIGHTSTONE REAL ESTATE INCOME TRUST INC.
	 	 	 
	 	By:	/s/ Donna Brandin
	 	Name: 	Donna Brandin
	 	Title: 	Chief Financial Officer

 

	 	Address: 	LIGHTSTONE REAL ESTATE INCOME TRUST INC.
	 	 	c/o  The Lightstone Group
	 	 	1985 Cedar Bridge Avenue
	 	 	Lakewood, New Jersey 08701
	 	 	Attn:  General Counsel

 

     

    

    

 

EXHIBIT A

 

LEGAL DESCRIPTION OF THE LAND

 

PARCEL I:

 

ALL that certain plot piece or parcel of land, situate,
lying and being in the Borough of Manhattan, County of New York, City and State of New York, bounded and described as follows:

 

BEGINNING at a point on the Northerly side of West 28th
Street, distant 142 feet 11 inches Westerly from the corner formed by the intersection of the Northerly side of West 28th Street
with the Westerly side of Avenue of the Americas;

 

RUNNING THENCE Northerly and parallel with the Westerly
side of Avenue of the Americas, a distance of 98 feet 9 inches to a point on the center line of the block between West 28th Street
and West 29th Street;

 

THENCE Westerly along the center line of said block
between West 28th Street and West 29th Street and parallel with the Northerly side of West 28th Street, a distance of 21 feet 5
inches (deed), 21 feet 4 3/7 inches (survey), to a point;

 

THENCE Southerly and parallel with
the Westerly side of Avenue of the Americas and part of the distance through a party wall, a distance of 98 feet 9 inches to a
point on the Northerly side of West 28th Street;

 

THENCE Easterly along the Northerly
side of West 28th Street, 21 feet 5 inches (deed), 21 feet 4 3/7 inches (survey), to the point or place of BEGINNING.

 

PARCEL II:

 

ALL that certain plot piece
or parcel of land, situate, lying and being in the Borough of Manhattan, City, County and State of New York, bounded and
described as follows:

 

BEGINNING at a point on the Northerly sideline of West
28th Street, therein distant 121 feet 5 inches Westerly from the corner formed by the intersection of the Northerly sideline of
West 28th Street with the Westerly sideline of Avenue of the Americas;

 

RUNNING THENCE Northerly and parallel with the Westerly
sideline of Avenue of the Americas and part of the distance through a party wall, a distance of 98 feet 9 inches to a point on
the center of the block;

 

THENCE Westerly along the center
line of said block parallel with the Northerly sideline of West 28th Street, a distance of 21 feet 5 inches to a point;

 

     

    

    

 

THENCE Southerly and parallel with the Westerly sideline
of Avenue of the Americas and part of the distance through a party wall, a distance of 98 feet 9 inches to a point on the Northerly
sideline of West 28th Street;

 

THENCE Easterly along the Northerly sideline of West
28th Street, 21 feet 5 inches to a point and place of BEGINNING.

 

PARCEL III:

 

ALL that certain plot piece
or parcel of land, situate, lying and being in the Borough of Manhattan, City, County and State of New York, bounded and
described as follows:

 

BEGINNING at a point on the Northerly sideline of West
28th Street, therein distant 100 feet Westerly from the corner formed by the intersection of the Northerly sideline of West 28th
Street with the Westerly sideline of Avenue of the Americas;

 

RUNNING THENCE Northerly and
parallel with the Westerly sideline of Avenue of the Americas, a distance of 98 feet 9 inches to a point on the center of the
block;

 

THENCE Westerly along the center
line of the block parallel with the Northerly sideline of West 28th Street, a distance of 21 feet 5 inches to a point;

 

THENCE Southerly and parallel with the Westerly sideline
of Avenue of the Americas and part of the distance through a party wall, a distance of 98 feet 9 inches to a point on the Northerly
sideline of West 28th Street;

 

THENCE Easterly along the Northerly sideline of West
28th Street, 21 feet 5 inches to the point and place of BEGINNING.

 

FOR CONVEYANCING ONLY: TOGETHER with all the
right, title and interest of the party of the first part, of in and to the land lying in the street in front of and adjoining said
premises.

 

     

    

    

 

EXHIBIT B

 

{RESERVED}

 

     

    

    

 

EXHIBIT C

 

Index of Defined Terms

 

	 	Section
	 	 
	Acquiring Member	18.1
	Acquisition Date 	18.1
	Act	1.1
	Additional Capital Contributions	1.1
	Adjusted Capital Account 	16.1(a)
	Adjusted Capital Account Deficit	16.1(b)
	Adjusted Operating Expenses	1.1
	Adjusted Operating Revenues 	1.1
	Affiliate	1.1
	Agreement	Preamble
	Approval Request	4.1(b)
	Balances 	6.5
	Bankruptcy 	1.1
	Business Plan 	5.4
	Capital Account	16.1(c), 16.2(a)
	Capital Contribution 	1.1
	Capital Proceeds	1.1
	Capital Sharing Ratios 	1.1
	Capital Transaction 	1.1
	Certificate of Formation 	1.1
	Change of Control Event	1.1
	Closing Date	1.1
	Code	16.1(d)
	Company 	1.1
	Completion Date	1.1
	Completion Schedule 	4.2(b)
	Construction 	4.2(a)
	Construction Advances	4.2(a)
	Construction Expenditure	4.2(b)(2)
	Construction Work 	4.2(b)(
	Contracts 	3.7(j)
	Control 	1.1
	Controlled by 	1.1
	Controlling	1.1
	Cost Overrun 	1.1
	Cost Savings	1.1
	Creditor Member 	20.17
	Debt Service 	1.1
	Debtor Member 	20.17

 

     

    

    

 

	Default Capital Contribution Balance 	6.5
	Default Contribution 	1.1
	Default Contribution Return 	6.3(a)(i)
	Default Rate 	1.1
	Depreciation	16.1(e)
	Developer Member	1.1
	Developer Member Event of Default	1.1
	Development Budget 	1.1
	Development Consultant 	4.2(g)
	Development Coordinator	4.9(b)
	Effective Date 	1.1
	Encumbrance	3.2(a)
	Environmental Agreement 	1.1
	Exiting Member 	18.1
	Existing Operating Agreement 	1.1
	FEMA	3.8(b)(iv)
	Force Majeure 	1.1
	Gross Asset Value 	16.1(f), 16.3
	Guaranty 	1.1
	Initial Capital Contributions 	1.1
	Land 	1.1
	Lender 	1.1
	Loan	1.1
	Loan Documents	1.1
	Losses 	16.1(k)
	Major Decisions	4.1(b)
	Managers 	1.1
	Members 	1.1
	Membership Interests 	1.1
	Misappropriation 	11.1(a)(2)
	Net Cash Flow 	1.1
	Net Operating Income 	1.1
	Officers	4.5
	Operating Budget	1.1
	Operating Expenses 	1.1
	Operating Revenues	1.1
	Partner Nonrecourse Debt 	16.1(g)
	Partner Nonrecourse Debt Minimum Gain	16.1(h)
	Partner Nonrecourse Deductions 	16.1(i)
	Partnership Minimum Gain	16.1(j)
	Payment Account 	4.2(e)(1)5
	Person	1.1
	Plans 	1.1
	Preferred Member 	1.1
	Preferred Return	1.1
	Principals 	1.1

 

     

    

    

 

	Proceeding 	41.0
	Profits 	16.1(k)
	Prohibited Act 	1.1
	Project 	1.1
	Reconciliation Statement	4.2(e)(1)5
	Recourse Obligations 	13.1(b)
	Redemption Premium	1.1
	Refinancing 	1.1
	Regulations 	16.1(l)
	Regulatory Allocations 	16.1(m), 16.4(d)
	Required Redemption Amount	1.1
	Requisition 	4.2(e)(1)
	Requisition Amount 	4.2(e)(1)1
	Secured Obligations 	6.3(b)
	Secured Party 	6.3(b)
	Subsidiary 	1.1
	Substantial Completion 	1.1
	Transfer 	3.2(a)
	Unpaid Preferred Return 	1.1
	Unreturned Capital Contributions	1.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00255-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00255-of-00352.parquet"}]]