Lightstone Value Plus

Upon termination of the Advisor by reason of a change of control or without cause, the Advisor may require conversion of its subordinated profits interests into cash equal to the purchase price, or may continue to hold such interests after termination — creating ongoing economic exposure for the Company post-termination.

“Upon the termination of the Advisor by reason of a change of control of the Company, by the Company without cause, or by the Advisor for good reason ... the Advisor may require that its subordinated profits interests be converted into cash in an amount equal to the purchase price of the subordinated profits interests, or may otherwise continue to hold such subordinated profits interests after the termination of the advisory agreement.”

The Dealer Manager is Lightstone Securities, LLC, an affiliate of the Company and Sponsor, creating a conflict of interest in the distribution of Shares as the affiliated dealer manager receives Selling Commissions.

“'DEALER MANAGER' means Lightstone Securities, LLC, an Affiliate of the Company, or such other Person selected by the Board to act as the dealer manager for an Offering.”

The Company may purchase or lease assets from the Sponsor, Advisor, Directors or their Affiliates as long as a majority of independent directors approve and the price does not exceed appraised value — creating a recurring related-party conflict in asset acquisition.

“The Company may purchase or lease an Asset or Assets from the Sponsor, the Advisor, a Director or any Affiliate thereof upon a finding by a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction (i) that such transaction is fair and reasonable to the Company and (ii) that such transaction is at a price to the Company no greater than the cost of the Asset to such Sponsor, Advisor, Director, Affiliate or, if the price to the Company is in excess of such cost, substantial justification exists for the excess and the excess is reasonable.”

Article XIV imposes procedural protections for Roll-Up Transactions (independent appraisal, dissenters' right to cash or to remain as stockholders) but the charter permits Roll-Up Transactions to occur, creating a potential conflict between the sponsor's interest in consolidation and stockholders' interests.

“In connection with any proposed Roll-Up Transaction, an appraisal of all of the Company's assets shall be obtained from a competent Independent Appraiser. ... In connection with a proposed Roll-Up Transaction, the Person sponsoring the Roll-Up Transaction shall offer to holders of Common Shares who vote against the proposed Roll-Up Transaction the choice of: (a) accepting the securities of a Roll-Up Entity offered in the proposed Roll-Up Transaction; or (b) one (1) of the following: (I) remaining as Stockholders and preserving their interests therein on the same terms and conditions as existed previously; or (II) receiving cash in an amount equal to the Stockholder's pro rata share of the appraised value of the net assets of the Company.”