Document:

TAX
      PROTECTION AGREEMENT

     

    THIS
      TAX
      PROTECTION AGREEMENT (“Agreement”), dated as of June 26, 2008, is made by
      LIGHTSTONE VALUE PLUS REIT, L.P., a Delaware limited partnership (“LVP”), and
      ARBOR MILL RUN JRM, LLC, a Delaware limited liability company (“AMR”) that will
      become a limited partner of LVP as a result of the Contribution (defined
      below).

     

    WHEREAS AMR
      owns a membership interest in Mill
      Run
      LLC
      (“MRL”)
      corresponding to a 22.08% Common Interest (as defined in the Second Amended
      and
      Restated Operating Agreement of Mill Run LLC, dated as of September 20, 2005,
      as
      amended);

     

    WHEREAS
      MRL owns, indirectly through entities that are treated as disregarded entities
      for U.S. federal tax purposes, a property known as the Orlando Design Center
      and
      a property known as Orlando Outlet World (collectively, the “Properties”);

     

    WHEREAS,
      pursuant to that certain Contribution and Conveyance Agreement, dated as of
      the
      date hereof, between AMR and LVP (the “Contribution Agreement”), AMR will
      contribute all of its membership interest in MRL (the “Contributed Interest”) to
      LVP in exchange for Units (as defined in the Contribution Agreement) of LVP
      (the
“Contribution”); 

     

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

     

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

     

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

     

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

     

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

     

    “Built-in
      Gain” means gain allocable under Section 704(c) of the Code or under so-called
“reverse” Section 704(c) principles pursuant to Treasury Regulation Section
      1.704-1(b)(4)(i) to AMR with respect to the Properties or the Contributed
      Interest (taking into account any special inside basis of AMR under Section
      743(b) of the Code with respect to the Properties or the Contributed Interest).
      For purposes of determining Built-in Gain with respect to the Properties, the
      assets of MRL shall be deemed to have been revalued for federal income tax
      purposes, and the capital accounts of the partners therein adjusted, immediately
      prior to the Contribution pursuant to the principles of Treasury Regulation
      Section 1.704-2(b)(2)(iv)(f) (notwithstanding that no event described in
      Treasury Regulation Section 1.704-2(b)(2)(iv)(f)(5) occurs with respect to
      MRL
      in connection with the Contribution). After the Closing Date, the Built-in
      Gain
      shall be reduced from time to time pursuant to the principles set forth in
      the
      Code and the Regulations thereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Permitted
      Transfer” shall mean (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against MRL, (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings, (iii) if LVP elects the Application
      of Section 2(f), a transfer of the Orlando Design Center, or (iv) if LVP elects
      the Application of Section 2(g), an Excluded Transfer.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    “Protected
      Period” means the period beginning on the Closing Date, but after the Closing,
      and ending on the date that is five (5) years after the Closing
      Date.

     

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

     

    2. Restrictions
      on Disposition of the Properties.

     

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

     

    (b) The
      first
      sentence of Section 2(a) shall not apply to (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against MRL or (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings. 

     

    (c) Any
      property that is exchanged for or replaces any of the Properties, the
      Contributed Interest, or any portion thereof and that is “substituted basis
      property,” as defined in Section 7701(a)(42) of the Code, with respect
      thereto shall thereafter be treated as a “Property,” the “Contributed Interest,”
or a portion thereof, as the case may be, for all purposes of this Agreement;
      however, the Property, the Contributed Interest, or the portion thereof that
      was
      exchanged for or replaced by such new property shall continue to be treated
      as a
“Property,” the “Contributed Interest,” or a portion thereof to the extent that
      a subsequent disposition of (or other transaction involving) the Property,
      the
      Contributed Interest, or the portion thereof could result in the recognition
      and
      allocation to AMR of any Built-in Gain.

     

    
      
        
        

      

      
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    (d) Within
      18
      weeks after the Closing Date, LVP shall provide to AMR a spreadsheet showing
      its
      calculation of (i) the Built-in Gain with respect to the Properties and the
      Contributed Interest and (ii) AMR’s negative tax capital account in MRL as of
      the Closing Date. The calculation of the Built-in Gain shall be based on the
      fair market values for the Properties and the Contributed Interest shown on
      Schedule A hereto. The calculation of the Built-in Gain shall also reflect
      any
      Section 704(c) or “reverse” Section 704(c) gain or loss existing with respect to
      the Properties immediately prior to the Closing.

     

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

     

    (f) LVP
      may
      elect to apply this Section 2(f) by treating any taxable direct or indirect
      disposition of the Orlando Design Center as not subject to indemnification
      under
      the first sentence of Section 2(a); provided,
      however,
      that
      LVP shall not be entitled to elect the application of this Section 2(f) if
      LVP
      shall have previously elected the application of Section 2(g). If LVP elects
      the
      application of this Section 2(f), then the first sentence of Section 2(a) shall
      not apply to a transfer of the Orlando Design Center.

     

    (g) LVP
      may
      elect to apply this Section 2(g) by treating all or part of one or more taxable
      direct or indirect Dispositions of Properties (other than the Orlando Design
      Center), occurring at any time after the one year anniversary of the Closing
      Date, as an Excluded Transfer or Excluded Transfers (as defined below) not
      subject to indemnification under the first sentence of Section 2(a), within
      the
      limits set forth in the following sentence; provided,
      however,
      that
      LVP shall not be entitled to elect the application of this Section 2(g) if
      LVP
      shall have previously or concurrently elected the application of Section 2(f).
      If LVP elects or has elected the application of this Section 2(g) and in any
      calendar year, taking into account all direct or indirect Dispositions by LVP
      of
      one or more Properties or portions thereof that (i) are taxable in whole or
      in
      part and (ii) occur during such calendar year and after the one year anniversary
      of the Closing Date, LVP transfers Properties or portions thereof having an
      aggregate value as of the date hereof as set forth on Schedule A hereto that
      is
      less than or equal to ten percent (10%) of the total value of the Properties
      as
      of the date hereof as set forth on Schedule A hereto, then the first sentence
      of
      Section 2(a) shall not apply to such Dispositions (each such Disposition, an
      “Excluded Transfer”); moreover, if the aggregate value of the Properties
      transferred in such Dispositions is less than ten percent (10%) of the total
      value (as of the date hereof as set forth on Schedule A hereto) of the
      Properties as of the date hereof as set forth on Schedule A hereto, then such
      deficit shall carry over to the following calendar year and increase the amount
      of Properties the transfers of which may qualify as Excluded Transfers for
      such
      year, and if such amounts are not transferred, all such amounts shall carry
      over
      to the next successive year, and so on, until the term of this Agreement shall
      expire. If the preceding sentence does not apply to Dispositions by LVP in
      any
      calendar year because the aggregate value (as of the date hereof as set forth
      on
      Schedule A hereto) of the Properties (or portions thereof) disposed of exceeds
      ten percent (10%) of the total value of the Properties as of the date hereof
      as
      set forth on Schedule A hereto, then only a ratable portion of each such
      Disposition shall qualify as an Excluded Transfer not subject to Section 2(a).
      With respect to the first calendar year that begins after the date hereof,
      the
      preceding two sentences shall be applied by substituting for each occurrence
      of
“ten percent (10%)” the product of (i) ten percent (10%) and (ii) a fraction,
      the numerator of which is the number of days from the one year anniversary
      of
      the date hereof to December 31 of such calendar year, and the denominator of
      which is 365. Notwithstanding anything to the contrary herein, a direct or
      indirect Disposition or other transfer of a Property or a portion thereof shall
      not constitute an Excluded Transfer if such transfer is effectuated with a
      party
“related” to LVP (applying the principles of Code Sections 267(b) and 707(b)) in
      a transaction that lacks a bona fide commercially motivated business purpose.
      

     

    
      
        
        

      

      
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    (h) No
      later
      than the earlier of (i) the date that is 30 days after LVP consummates a direct
      or indirect Disposition, taxable in whole or in part, of one or more Properties
      or portions thereof and (ii) December 31 of the calendar year in which such
      Disposition occurs, LVP shall provide AMR with written notification of such
      disposition, including (I) the Property, Properties, or portions thereof
      disposed of, (II) the amount and nature of the consideration received, and
      (III)
      the amount of gain (including Built-in Gain) allocable to AMR as a result of
      such Disposition; provided,
      however,
      that
      LVP shall not be required to provide such notification if it shall have
      previously provided the identical information to AMR pursuant to the
      notification provisions of Section 3(a).

     

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

     

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

     

    
      
        
        

      

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

     

    
      
        
        

      

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

     

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

     

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

     

    5. Obligation
      of LVP to Maintain Certain Debt.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    8. Term.
      This
      Agreement shall terminate upon the expiration of the Protected Period. In
      addition, Section 5 of this Agreement shall terminate in the event that the
      Protected Amount is reduced to zero. Notwithstanding the foregoing, LVP's
      payment obligations under Sections 3, 6 and 9(e) shall survive the termination
      of this Agreement or the termination of Section 5, as the case may be, to the
      extent such obligations relate to a breach of LVP’s obligations under Section 2
      or 5 occurring before such termination of this Agreement (or in the case of
      liability under Section 6, the termination of Section 5). 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    9. General
      Provisions.

     

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

     

    (i) if
      to
      LVP, to:

     

    c/o
      The
      Lightstone Group

    326
      Third
      Street

    Lakewood,
      NJ 08701

    Attn:
      Joseph E. Teichman 

    Fax
      No.: 732-612-1444

    

    with
      a
      copy to:

     

    Herrick,
      Feinstein LLP

    2
      Park
      Avenue

    New
      York,
      NY 10016

    Attn:
      Sheldon Chanales, Esq. 

    Fax
      No.:
      (212) 545-3313 

    

    (ii) if
      to
      AMR, to:

     

    c/o
      Arbor
      Commercial Mortgage LLC

    333
      Earle
      Ovington Boulevard

    Uniondale,
      NY 11553

    Attention:
      Guy R. Milone, Jr. 

    Fax
      No.:
      (516) 506-4045

    

    with
      a
      copy to:

     

    Cooley
      Godward Kronish LLP

    1114
      Avenue of the Americas

    New
      York,
      NY 10036

    Fax
      No.:
      (212) 479-6275

    Attn:
      Thomas D. O’Connor, Esq. 

    

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

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (e) Interest
      and Enforcement Costs.
      In the
      event that LVP fails to pay AMR any amount due pursuant to this Agreement on
      the
      date such amount is due, then such past due amount shall bear interest until
      the
      date paid at a rate equal to 15% per annum. In the event of any breach by LVP
      of
      any of its covenants in this Agreement, LVP shall pay all of AMR’s costs of
      enforcement of its rights under this Agreement, including but not limited to
      reasonable attorneys’ fees, disbursements, expenses and court
      costs.

     

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

     

    (g) List
      of Properties Correct and Complete.
      LVP
      represents to AMR that MRL owns, indirectly through entities that are treated
      as
      disregarded entities for U.S. federal tax purposes, the Orlando Design Center
      and Orlando Outlet World, and that LVP does not own, directly or indirectly,
      any
      properties other than the Orlando Design Center and Orlando Outlet World and
      holding entities for the Orlando Design Center and Orlando Outlet World.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

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

    

    
      	 	 	 
	 	
              LIGHTSTONE
                VALUE PLUS REIT, L.P. 

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

            
	 
 	 
 	 
 
	
            	       	By:
	 	
              
                
Name:

            
	 	
              Title:

            

    

    

    
      	 	 	 
	 	
              ARBOR
                MILL RUN JRM, LLC

              By
                Arbor Commercial Mortgage, LLC, Member 

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:

	 	Title:

    

     

    
      
        
        

      

      
        11TAX
      PROTECTION AGREEMENT

     

    THIS
      TAX
      PROTECTION AGREEMENT (“Agreement”), dated as of June 26, 2008, is made by
      LIGHTSTONE VALUE PLUS REIT, L.P., a Delaware limited partnership (“LVP”), and
      ARBOR NATIONAL CJ, LLC, a New York limited liability company (“ANCJ”) that will
      become a limited partner of LVP as a result of the Contribution (defined
      below).

     

    WHEREAS ANCJ
      owns a membership interest in Mill
      Run
      LLC
      (“MRL”)
      corresponding to a .46% Common Interest (as defined in the Second Amended and
      Restated Operating Agreement of Mill Run LLC, dated as of September 20, 2005,
      as
      amended);

     

    WHEREAS
      MRL owns, indirectly through entities that are treated as disregarded entities
      for U.S. federal tax purposes, a property known as the Orlando Design Center
      and
      a property known as Orlando Outlet World (collectively, the “Properties”);

     

    WHEREAS,
      pursuant to that certain Contribution and Conveyance Agreement, dated as of
      the
      date hereof, between ANCJ and LVP (the “Contribution Agreement”), ANCJ will
      contribute all of its membership interest in MRL (the “Contributed Interest”) to
      LVP in exchange for Units (as defined in the Contribution Agreement) of LVP
      (the
“Contribution”); 

     

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

     

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

     

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

     

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

     

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

     

    “Built-in
      Gain” means gain allocable under Section 704(c) of the Code or under so-called
“reverse” Section 704(c) principles pursuant to Treasury Regulation Section
      1.704-1(b)(4)(i) to ANCJ with respect to the Properties or the Contributed
      Interest (taking into account any special inside basis of ANCJ under Section
      743(b) of the Code with respect to the Properties or the Contributed Interest).
      For purposes of determining Built-in Gain with respect to the Properties, the
      assets of MRL shall be deemed to have been revalued for federal income tax
      purposes, and the capital accounts of the partners therein adjusted, immediately
      prior to the Contribution pursuant to the principles of Treasury Regulation
      Section 1.704-2(b)(2)(iv)(f) (notwithstanding that no event described in
      Treasury Regulation Section 1.704-2(b)(2)(iv)(f)(5) occurs with respect to
      MRL
      in connection with the Contribution). After the Closing Date, the Built-in
      Gain
      shall be reduced from time to time pursuant to the principles set forth in
      the
      Code and the Regulations thereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Permitted
      Transfer” shall mean (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against MRL, (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings, (iii) if LVP elects the Application
      of Section 2(f), a transfer of the Orlando Design Center, or (iv) if LVP elects
      the Application of Section 2(g), an Excluded Transfer.

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Protected
      Period” means the period beginning on the Closing Date, but after the Closing,
      and ending on the date that is five (5) years after the Closing
      Date.

     

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

     

    2. Restrictions
      on Disposition of the Properties.

     

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

     

    (b) The
      first
      sentence of Section 2(a) shall not apply to (i) a
      transfer of any of the Properties or the Contributed Interest in an involuntary
      bankruptcy against MRL or (ii)
      the
      condemnation or other taking of any of the Properties by a governmental entity
      or authority in eminent domain proceedings. 

     

    (c) Any
      property that is exchanged for or replaces any of the Properties, the
      Contributed Interest, or any portion thereof and that is “substituted basis
      property,” as defined in Section 7701(a)(42) of the Code, with respect
      thereto shall thereafter be treated as a “Property,” the “Contributed Interest,”
or a portion thereof, as the case may be, for all purposes of this Agreement;
      however, the Property, the Contributed Interest, or the portion thereof that
      was
      exchanged for or replaced by such new property shall continue to be treated
      as a
“Property,” the “Contributed Interest,” or a portion thereof to the extent that
      a subsequent disposition of (or other transaction involving) the Property,
      the
      Contributed Interest, or the portion thereof could result in the recognition
      and
      allocation to ANCJ of any Built-in Gain.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (d) Within
      18
      weeks after the Closing Date, LVP shall provide to ANCJ a spreadsheet showing
      its calculation of (i) the Built-in Gain with respect to the Properties and
      the
      Contributed Interest and (ii) ANCJ’s negative tax capital account in MRL as of
      the Closing Date. The calculation of the Built-in Gain shall be based on the
      fair market values for the Properties and the Contributed Interest shown on
      Schedule A hereto. The calculation of the Built-in Gain shall also reflect
      any
      Section 704(c) or “reverse” Section 704(c) gain or loss existing with respect to
      the Properties immediately prior to the Closing.

     

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

     

    (f) LVP
      may
      elect to apply this Section 2(f) by treating any taxable direct or indirect
      disposition of the Orlando Design Center as not subject to indemnification
      under
      the first sentence of Section 2(a); provided,
      however,
      that
      LVP shall not be entitled to elect the application of this Section 2(f) if
      LVP
      shall have previously elected the application of Section 2(g). If LVP elects
      the
      application of this Section 2(f), then the first sentence of Section 2(a) shall
      not apply to a transfer of the Orlando Design Center.

     

    (g) LVP
      may
      elect to apply this Section 2(g) by treating all or part of one or more taxable
      direct or indirect Dispositions of Properties (other than the Orlando Design
      Center), occurring at any time after the one year anniversary of the Closing
      Date, as an Excluded Transfer or Excluded Transfers (as defined below) not
      subject to indemnification under the first sentence of Section 2(a), within
      the
      limits set forth in the following sentence; provided,
      however,
      that
      LVP shall not be entitled to elect the application of this Section 2(g) if
      LVP
      shall have previously or concurrently elected the application of Section 2(f).
      If LVP elects or has elected the application of this Section 2(g) and in any
      calendar year, taking into account all direct or indirect Dispositions by LVP
      of
      one or more Properties or portions thereof that (i) are taxable in whole or
      in
      part and (ii) occur during such calendar year and after the one year anniversary
      of the Closing Date, LVP transfers Properties or portions thereof having an
      aggregate value as of the date hereof as set forth on Schedule A hereto that
      is
      less than or equal to ten percent (10%) of the total value of the Properties
      as
      of the date hereof as set forth on Schedule A hereto, then the first sentence
      of
      Section 2(a) shall not apply to such Dispositions (each such Disposition, an
      “Excluded Transfer”); moreover, if the aggregate value (as of the date hereof as
      set forth on Schedule A hereto) of the Properties transferred in such
      Dispositions is less than ten percent (10%) of the total value of the Properties
      as of the date hereof as set forth on Schedule A hereto, then such deficit
      shall
      carry over to the following calendar year and increase the amount of Properties
      the transfers of which may qualify as Excluded Transfers for such year, and
      if
      such amounts are not transferred, all such amounts shall carry over to the
      next
      successive year, and so on, until the term of this Agreement shall expire.
      If
      the preceding sentence does not apply to Dispositions by LVP in any calendar
      year because the aggregate value (as of the date hereof as set forth on Schedule
      A hereto) of the Properties (or portions thereof) disposed of exceeds ten
      percent (10%) of the total value of the Properties as of the date hereof as
      set
      forth on Schedule A hereto, then only a ratable portion of each such Disposition
      shall qualify as an Excluded Transfer not subject to Section 2(a). With respect
      to the first calendar year that begins after the date hereof, the preceding
      two
      sentences shall be applied by substituting for each occurrence of “ten percent
      (10%)” the product of (i) ten percent (10%) and (ii) a fraction, the numerator
      of which is the number of days from the one year anniversary of the date hereof
      to December 31 of such calendar year, and the denominator of which is 365.
      Notwithstanding anything to the contrary herein, a direct or indirect
      Disposition or other transfer of a Property or a portion thereof shall not
      constitute an Excluded Transfer if such transfer is effectuated with a party
      “related” to LVP (applying the principles of Code Sections 267(b) and 707(b)) in
      a transaction that lacks a bona fide commercially motivated business purpose.
      

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (h) No
      later
      than the earlier of (i) the date that is 30 days after LVP consummates a direct
      or indirect Disposition, taxable in whole or in part, of one or more Properties
      or portions thereof and (ii) December 31 of the calendar year in which such
      Disposition occurs, LVP shall provide ANCJ with written notification of such
      disposition, including (I) the Property, Properties, or portions thereof
      disposed of (II) the amount and nature of the consideration received, and (III)
      the amount of gain (including Built-in Gain) allocable to ANCJ as a result
      of
      such Disposition; provided,
      however,
      that
      LVP shall not be required to provide such notification if it shall have
      previously provided the identical information to ANCJ pursuant to the
      notification provisions of Section 3(a). 

     

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

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    5. Obligation
      of LVP to Maintain Certain Debt.

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    8. Term.
      This
      Agreement shall terminate upon the expiration of the Protected Period. In
      addition, Section 5 of this Agreement shall terminate in the event that the
      Protected Amount is reduced to zero. Notwithstanding the foregoing, LVP's
      payment obligations under Sections 3, 6 and 9(e) shall survive the termination
      of this Agreement or the termination of Section 5, as the case may be, to the
      extent such obligations relate to a breach of LVP’s obligations under Section 2
      or 5 occurring before such termination of this Agreement (or in the case of
      liability under Section 6, the termination of Section 5). 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    9. General
      Provisions.

     

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

     

    (i) if
      to
      LVP, to:

     

    c/o
      The
      Lightstone Group

    326
      Third
      Street

    Lakewood,
      NJ 08701

    Attn:
      Joseph E. Teichman 

    Fax
      No.: 732-612-1444

    

    with
      a
      copy to:

     

    Herrick,
      Feinstein LLP

    2
      Park
      Avenue

    New
      York,
      NY 10016

    Attn:
      Sheldon Chanales, Esq. 

    Fax
      No.:
      (212) 545-3313 

    

    (ii) if
      to
      ANCJ, to:

     

    c/o
      Arbor
      Commercial Mortgage LLC

    333
      Earle
      Ovington Boulevard

    Uniondale,
      NY 11553

    Attention:
      Guy R. Milone, Jr. 

    Fax
      No.:
      (516) 506-4045

    

    with
      a
      copy to:

     

    Cooley
      Godward Kronish LLP

    1114
      Avenue of the Americas

    New
      York,
      NY 10036

    Fax
      No.:
      (212) 479-6275

    Attn:
      Thomas D. O’Connor, Esq. 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

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

     

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

     

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

     

    (e) Interest
      and Enforcement Costs.
      In the
      event that LVP fails to pay ANCJ any amount due pursuant to this Agreement
      on
      the date such amount is due, then such past due amount shall bear interest
      until
      the date paid at a rate equal to 15% per annum. In the event of any breach
      by
      LVP of any of its covenants in this Agreement, LVP shall pay all of ANCJ’s costs
      of enforcement of its rights under this Agreement, including but not limited
      to
      reasonable attorneys’ fees, disbursements, expenses and court
      costs.

     

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

     

    (g) List
      of Properties Correct and Complete.
      LVP
      represents to ANCJ that MRL owns, indirectly through entities that are treated
      as disregarded entities for U.S. federal tax purposes, the Orlando Design Center
      and Orlando Outlet World, and that LVP does not own, directly or indirectly,
      any
      properties other than the Orlando Design Center and Orlando Outlet World and
      holding entities for the Orlando Design Center and Orlando Outlet
      World.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	
              LIGHTSTONE
                VALUE PLUS REIT, L.P. 

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

            
	 
 	 
 	 
 
	
            	      	
              By:

            
	 	
              
                
Name:

            
	 	
              Title:

            

      	 	 	 
	 	
              ARBOR
                NATIONAL CJ, LLC

              By
                Arbor Commercial Mortgage, LLC, its sole member 

            
	 
 	 
 	 
 
	
            	By  	
            
	 	
              
Name:

	 	Title:

    

    

    
      
        
        

      

      
        11

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