EXECUTION
COPY
  TAX
MATTERS AGREEMENT
  This TAX
MATTERS AGREEMENT (the “Agreement”), dated as of August 30, 2010, is made by and
among Simon Property Group, Inc., a Delaware corporation (“Parent REIT”), Simon
Property Group, L.P., a Delaware limited partnership (“Parent OP”), Marco LP
Units, LLC, a Delaware limited liability company (“New Company”), Prime Outlets
Acquisition Company LLC, a Delaware limited liability company (the “Company”),
Lightstone Value Plus Real Estate Investment Trust, Inc., a Maryland corporation
(“LVP REIT”), Lightstone Value Plus REIT, L.P., a Delaware limited partnership
(“LVP OP”), and Pro-DFJV Holdings LLC, a Delaware limited liability company
(“Pro-DFJV”), and solely for purposes of Section
14, Lightstone Prime, LLC, a Delaware limited liability company
(“Lightstone”), Lightstone Holdings, LLC, a Delaware limited liability company
(“Holdings”), BRM, LLC, a New Jersey limited liability company (“BRM”), and
David Lichtenstein, an individual with an address at1985 Cedar Bridge
Avenue, Lakewood, New Jersey (“Lichtenstein”).
  WHEREAS,
pursuant to the Contribution Agreement, Holdings, Lightstone, BRM, LVP OP, and
Pro-DFJV have agreed to contribute their interests in the Company and Holdings
and BRM have agreed to contribute their interests in Ewell Holdings, LLC, a
Delaware limited liability company, and Mill Run, L.L.C., a New Jersey limited
liability company, to Parent OP (the “Contributions”);
  WHEREAS,
it is intended that the Contributions will be treated as tax-free contributions
of property to Parent OP under Section 721(a) of the Internal Revenue Code of
1986, as amended (the “Code”); and
  WHEREAS,
the Parties desire to set forth their rights and responsibilities with respect
to certain tax matters arising in connection with the
Contributions.
  NOW, THEREFORE, in consideration of the
premises and the mutual promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
  1.           Definitions.  All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Contribution Agreement.
  “Adjusted Spreadsheet”
shall have the meaning set forth in Section
7.
  “Allocable Share”
shall mean, with respect to a given LVP Party, such Person’s economic interest
in New Company, expressed as a percentage, as set forth on Schedule
D.
  “Applicable
Spreadsheet” shall mean the Preliminary Spreadsheet, the Adjusted
Spreadsheet or the Final Spreadsheet, as applicable.
  “BRM” shall have the
meaning set forth in the recitals.
  
  “Built-In Gain” shall
mean gain allocable under Section 704(c) of the Code pursuant to Treasury
Regulations Section 1.704-1(b)(4)(i) to the LVP Parties (or their Indirect
Owners) with respect to the Properties, taking into account any special inside
basis of the LVP Parties (or their Indirect Owners) under Section 743(b) of the
Code with respect to the Properties.  Such Built-In Gain shall be the
amount determined on the Applicable Spreadsheet and thereafter shall be adjusted
from time to time pursuant to the principles set forth in the Code and the
Regulations thereunder.  Built-In Gain shall be reduced by any
Built-In Gain that is recognized for federal income tax purposes prior to or
during the Protected Period.
  “Capital Account”
shall have the meaning set forth in the OP Agreement.
  “Capital Contribution
Agreements” shall have the meaning set forth in Section
4(d).
  “Capital Contribution
Obligations” shall have the meaning set forth in Section
4(d).
  “CMBS Debt” shall mean
the indebtedness of the Company and its Subsidiaries set forth on Schedule C (the
“Original CMBS Debt”) and any indebtedness incurred in replacement thereof in
whole or in part that (i) is secured only by one or more of the Properties and
(ii) qualifies as both a “nonrecourse liability” for purposes of Treasury
Regulations Section 1.752-1(a)(2) and “qualified nonrecourse financing” for
purposes of Section 465(b)(6) of the Code.
  “Code” shall have the
meaning set forth in the recitals.
  “Company” shall have
the meaning set forth in the recitals.
  “Contribution
Agreement” shall mean that certain Contribution Agreement, dated as of
December 8, 2009, by and among Lightstone, Holdings, BRM, the Company, LVP OP,
LVP REIT, Parent OP, Parent REIT, New Company, and certain other parties
thereto, as amended on May 13, 2010, June 28, 2010, and the date
hereof.
  “Contributions” shall
have the meaning set forth in the recitals.
  “Dispute Firm” shall
have the meaning set forth in Section
6(c).
  “Distributable Amount”
means (a) the sum of the Special Distribution Amount plus (b) the amount
described in Section 2.6(b) of the Contribution Agreement plus (c) the amount
described in Section 2.3(e)(i) of the Contribution Agreement.
  “Final Spreadsheet”
shall have the meaning set forth in Section
7.
  “General Partner”
shall mean the general partner of Parent OP.
  “Guaranties” shall
mean the guaranties of collection by the LVP Parties in respect of the Section
15.28 Loan executed as of the Closing Date, which are substantially in the form
attached as Exhibit
B.
  “Holdings” shall have
the meaning set forth in the recitals.
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  “Indirect Owner”
means, in the case of a LVP Party that is an entity that is classified as a
partnership or disregarded entity for federal income tax purposes, any Person
owning an equity interest in such LVP Party and, in the case of any Indirect
Owner that itself is an entity that is classified as a partnership or
disregarded entity for federal income tax purposes, any Person owning an equity
interest in such entity.
  “Lichtenstein” shall
have the meaning set forth in the recitals.
  “Lichtenstein Parties”
shall mean Lightstone, Holdings, BRM and Lichtenstein.
  “LVP Guaranty Failure”
shall have the meaning set fort in Section 4(e).
  “Lightstone” shall
have the meaning set forth in the recitals.
  “LVP REIT” shall have
the meaning set forth in the recitals.
  “LVP Parties” shall
mean LVP and Pro-DFJV.
  “New Company” shall
have the meaning set forth in the recitals.
  “New Company
Agreement” shall mean the limited liability company operating agreement
of New Company, dated as of the date hereof.
  “Non-Parent TPA
Obligations” shall have the meaning set forth in Section
14.
  “OP Agreement” shall
mean the Eighth Amended and Restated Agreement of Limited Partnership of Parent
OP, dated as of May 8. 2008, as it may be amended.
  “Original CMBS Debt”
shall have the meaning set forth the in the definition of CMBS
Debt.
  “Parent OP” shall have
the meaning set forth in the recitals.
  “Parent OP Debt” shall
mean debt that is (i) indebtedness for U.S. federal tax purposes, (ii) either
(x) indebtedness of Parent OP or (y) indebtedness of an entity that is
disregarded as an entity separate from Parent OP for U.S. federal income tax
purposes for which Parent OP has provided a full recourse guaranty of payment in
respect of the entire principal amount, and (iii) not required to be registered
at any time with the Securities and Exchange Commission pursuant to the
Securities Act of 1933.
  “Parent REIT” shall
have the meaning set forth in the recitals.
  “Permitted Transfer”
shall have the meaning set forth in Section
2(b).
  “Preliminary
Spreadsheet” shall have the meaning set forth in Section
7.
  “Pro-DFJV” shall have
the meaning set forth in the recitals.
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  “Properties” shall
mean the properties transferred directly or indirectly by LVP and Pro-DFJV
pursuant to the Contributions, or any entity in which Parent OP or any of its
Subsidiaries subsequently holds a direct or indirect interest as “substituted
basis property” as defined in Section 7701(a)(42) of the Code with respect
to any of the Properties.
  “Property” shall mean
any one of the Properties.
  “Protected Period”
shall mean the period of time beginning on the Closing Date and ending on the
date set forth on Schedule B in respect
of each Property.
  “Refinancing” shall
mean debt that is (i) allocable under the rules of Treasury Regulations Section
1.163-8T to payments discharging the Section 15.28 Loan or an earlier
Refinancing and (ii) that is owed by Parent OP (or an entity that is disregarded
as an entity separate from Parent OP for U.S. federal income tax purposes) to a
Person that is not related to any partner of Parent OP for purposes of Treasury
Regulations Section 1.752-4(b).
  “Refinancing Guaranty”
shall have the meaning set forth in Section
4(b).
  “Representative” shall
mean Lightstone, acting as agent on behalf of each LVP Party, in its capacity as
representative of the LVP Parties.
  “Restricted Transfer”
means any transaction or series of transactions involving the sale, conveyance,
exchange, or other transfer of more than 50% of Parent OP’s gross assets,
whether in a single transaction or a series of transactions, other than
a  transaction entailing a transfer (i) to a Subsidiary of Parent OP,
(ii) to a Person other than a Subsidiary of Parent OP for consideration having a
fair market value approximately equal to that of the transferred assets, or
(iii) in a transaction pursuant to which the full amount of the LVP Parties’
Built-In Gain is recognized, resulting in Parent OP making payment in full to
the LVP Parties to the extent required hereunder.
  “Section 15.28 Loan”
shall mean the loan to Parent OP to be made in connection with the Closing
pursuant to Section 15.28 of the Credit Agreement dated December 8, 2009 by and
among Parent OP, the lenders party thereto, and JP Morgan Chase Bank, N.A., as
administrative agent.
  “Section 752 Gain”
shall mean without duplication (x) gain recognized under Section 731(a)(1) of
the Code because of a deemed distribution under Section 752(b) of the Code or
(y) gain recognized under Section 465(e) of the Code, in either case as a result
of a reduction of the amount of liabilities allocable to the LVP Parties for
purposes of Section 752 of the Code (including liabilities allocable to the LVP
Parties with respect to their interests in New Company).
  “Taking” shall have
the meaning set forth in Section
2(b).
  “Taxable Disposition”
shall have the meaning set forth in Section
2(c).
  “Taxable OP Unit
Disposition” shall have the meaning set forth in Section
2(c).
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  “Taxable Property
Disposition” shall have the meaning set forth in Section
2(a).
  “TPAs” shall have the
meaning set forth in Section
14.
  “Treasury Regulations”
shall mean the income tax regulations promulgated under the Code, as such
regulations may be amended from time to time.
  2.           Restrictions on Dispositions
of the Properties.
  (a)           Subject
to Section 2(b), at all times during the Protected Period, neither Parent OP nor
any entity in which Parent OP holds a direct or indirect interest will
consummate a sale, transfer, exchange, or other disposition of any Property (but
excluding any Permitted Transfer), or engage in any other transaction, that
would result in the recognition of all or any portion of the Built-In Gain by a
LVP Party or its Indirect Owner(s) (a “Taxable Property
Disposition”).
  (b)           Section
2(a) shall not apply to (i) the condemnation or other taking of any Property by
a governmental entity or authority in an eminent domain proceeding or otherwise
(such event, a “Taking”), or (ii) a transfer of any of the Properties in an
involuntary bankruptcy against Parent OP or any entity in which Parent OP holds
a direct or indirect interest in any of the Properties (each, a “Permitted
Transfer”); provided, however, that in the event that a Taking occurs with
respect to a Property, Parent OP and Parent REIT shall use their commercially
reasonable efforts to avoid recognition of gain with respect to such Taking by
acquiring appropriate replacement property and making any required elections in
accordance with Section 1033(a)(2) of the Code and the Regulations promulgated
thereunder; provided, however, nothing herein shall be deemed to require that
Parent OP, Parent REIT or the General Partner take any action to avoid or
prevent a Permitted Transfer.
  (c)           At
all times that the LVP Parties hold direct or indirect interests in Parent OP,
and so long as Parent OP or an Affiliate of Parent OP is the Manager, Manager
shall not cause New Company to (and New Company shall not) consummate a sale,
transfer, exchange, or other disposition of any Parent OP Common Units, or
engage in any other transaction that would result in the recognition of all or
any portion of the Built-In Gain by a LVP Party or its Indirect Owner(s) (a
“Taxable OP Unit Disposition”, and together with a Taxable Property Disposition,
a “Taxable Disposition”).
  (d)           For
the avoidance of doubt, a Taxable Disposition shall not include a sale,
transfer, exchange, or other disposition of any New Company Units or Parent OP
Common Units (including following a pledge of New Company Units or Parent OP
Common Units) by a LVP Party (or an Indirect Owner) or any Affiliate
thereof.
  3.           Obligation to Maintain and
Allocate Certain Debt.
  (a)           Parent
OP shall maintain the Section 15.28 Loan or the Refinancing with an outstanding
principal balance of no less than the Distributable Amount until the fourth
anniversary of the Closing Date, and shall not discharge the Section 15.28 Loan
(other than through a Refinancing) or the Refinancing prior to such
anniversary.
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  (b)           Parent
OP, directly or indirectly, shall maintain the CMBS Debt at all times through
the scheduled maturity dates listed on Schedule C, in the
principal amounts set forth on Schedule C, as
adjusted for regularly scheduled principal payments.
  (c)           At
all times up to and including the scheduled maturity of the Original CMBS Debt,
Parent OP shall allocate “excess nonrecourse liabilities” (as described in
Treasury Regulations Section 1.752-3(a)(3)) in respect of each Property subject
to the CMBS Debt to each LVP Party (through its interest in New Company) up to
the amount of such Person’s Allocable Share of the Built-In Gain with respect to
each such Property, after taking into account allocations described in Treasury
Regulations Sections 1.752-3(a)(1) and 1.752-3(a)(2).
  (d)           The
CMBS Debt shall be allocated among the Properties in accordance with Treasury
Regulations Section 1.752-3(b).  The allocation of the CMBS Debt among
the Properties as of the Closing Date shall be set forth on a schedule to be
delivered to Parent OP as soon as practicable following the date hereof;
provided, that the amount of CMBS Debt allocated to the Property at
Jeffersonville, Ohio (“Jeffersonville”) shall be determined by negotiation
and agreement reached between Simon OP and the applicable servicer of the CMBS
Debt with respect to Jeffersonville.  As a frame of reference only, the
original CMBS Debt documents allocated approximately $75.1 million of debt to
Jeffersonville.
  (e)           All
tax returns filed by Parent OP shall report the outstanding principal amount of
the Section 15.28 Loan and any Refinancing as a recourse liability allocable
solely to the LVP Parties (through their interests in New Company) to the extent
of the Guaranties or Refinancing Guaranties for purposes of Section 752 of the
Code, except as required by a change in law or a determination under Section
1313 of the Code with respect to a LVP Party after the date hereof.
  (f)           For
federal, state and local tax purposes, the Section 15.28 Loan and any
Refinancing with respect to which the LVP Parties provide Refinancing Guaranties
shall be Parent OP Debt that satisfies the requirements for treatment as a
“nonrecourse liability” for purposes of Treasury Regulations Section
1.752-1(a)(2), and would not constitute “partner nonrecourse debt” or a “partner
nonrecourse liability” within the meaning of Treasury Regulations Section
1.704-2(b)(4) in the absence of any Guaranty or Refinancing Guaranty. For
avoidance of doubt, any “significant modification” (within the meaning of
Treasury Regulations Section 1.1001-3(e)) of the Section 15.28 Loan or a
Refinancing occurring as a result of actions by Parent OP or any of its
Affiliates shall itself be treated as the incurrence of new indebtedness for
purposes of this Agreement and must satisfy the requirements set forth in the
previous sentence.
  4.           Guaranties; Capital
Contribution Obligations.
  (a)           At
all times up to and including the maturity of the Section 15.28 Loan, Parent OP
shall permit each LVP Party to maintain a Guaranty in an amount at least equal
to such Person’s Allocable Share of the Distributable Amount, as determined from
time to time.
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  (b)           Each
LVP Party shall be given the opportunity to provide a guaranty of collection
with respect to any Refinancing that is substantially identical to the Guaranty
in all respects including the amount of the guaranty (the “Refinancing
Guaranty”) contemporaneously with the consummation of each such Refinancing, and
shall be permitted to maintain such Refinancing Guaranty at all times up to and
including the maturity of each Refinancing in an amount at least equal to such
LVP Party’s Allocable Share of Distributable Amount; provided, that Parent OP
shall have no obligation to offer the LVP Parties the opportunity to provide
Refinancing Guaranties with respect to any Refinancing consummated after the
fourth anniversary of the Closing Date; provided further, at any time after the
fourth anniversary of the Closing Date, Parent OP shall be permitted to repay or
satisfy, in whole or in part, modify or otherwise take any actions with respect
to the 15.28 Loan or any Refinancing without limitation.
  (c)           Parent
REIT shall not be an obligor with respect to the Section 15.28 Loan or any
Refinancing with respect to which the LVP Parties provide Refinancing
Guaranties.
  (d)           At
all times that the LVP Parties hold direct or indirect interests in Parent OP
(other than through the ownership of stock of Parent REIT), Parent OP shall
offer the LVP Parties the opportunity to enter into capital contribution
agreements substantially in the form of Exhibit A (the
“Capital Contribution Agreements”), pursuant to which the LVP Parties shall have
capital contribution obligations in respect of indebtedness of Parent OP that
would qualify as “nonrecourse liabilities” for purposes of Treasury Regulations
Section 1.752-1(a)(2) in the absence of such agreements (the “Capital
Contribution Obligations”).  The LVP Parties shall designate the
initial amounts of the Capital Contribution Obligations on the Closing Date on
Schedule E, and
such amounts shall be increased from time to time pursuant to the terms of the
Capital Contribution Agreements.  Parent OP shall maintain sufficient
amounts of indebtedness described in the first sentence of this paragraph in
order to support the Capital Contribution Obligations, taking into account any
other similar obligations of other direct or indirect owners of Parent OP, at
all times that the LVP Parties hold direct or indirect interests in Parent
OP.
  (e)           If
a LVP Party declines to execute a Refinancing Guaranty that Parent OP tenders to
such LVP Party (a “LVP Guaranty Failure”), the loan to which such guaranty
opportunity relates, and any refinancing of such loan, shall no longer be
subject to the provisions of this Section 4 and, accordingly, Parent OP shall
not be required at any point in the future to offer such LVP Party an
opportunity to guaranty such Refinancing or any loan that refinances such
Refinancing.
  5.           Section 704(c)
Method.  Parent OP and any other entity in which Parent OP has
a direct or indirect interest shall use, to the extent permitted under the Code,
the “traditional method” (without “curative allocations”) under Treasury
Regulations Section 1.704-3(b) for purposes of making allocations under Code
Section 704(c) with respect to each Property to take into account the
book-tax disparities as of the Closing Date and with respect to any revaluation
of such Property pursuant to Treasury Regulations Sections 1.704-1(b)(2)(iv)(f),
1.704-1(b)(2)(iv)(g), and 1.704-3(a)(6).
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 6.           Indemnification.
  (a)
 (i)           In
the event that Parent OP or New Company breaches its obligations under Section 2, Parent OP
and Parent REIT shall indemnify and hold harmless each LVP Party from and
against, and Parent OP and Parent REIT shall  be jointly and severally
liable to each LVP Party for (x) the amount of Taxes deemed incurred by such LVP
Party with respect to such LVP Party’s Allocable Share of the Built-In Gain that
is recognized as a result of such Taxable Disposition and (y) a “gross-up”
amount so that, after the hypothetical payment by such LVP Party of all Taxes on
amounts received pursuant to this Section 6(a)(i), such LVP Party would retain
from such payments hereunder an amount equal to its total deemed income tax
liability incurred as a result of the Taxable Disposition and recognition of
Built-In Gain.
  (ii)           In
the event that Parent OP breaches its obligations under Section 3 or Section 4, Parent OP
and Parent REIT shall indemnify and hold harmless each LVP Party from and
against, and Parent OP and Parent REIT shall be jointly and severally liable to
each LVP Party for (x) the amount of Taxes deemed incurred by such LVP Party
with respect to the Section 752 Gain or other gain recognized by such LVP Party
as a result of such breach and (y) a “gross-up” amount so that, after the
hypothetical payment by such LVP Party of all Taxes on amounts received pursuant
to this Section 6(a)(ii), such LVP Party would retain from such payments
hereunder an amount equal to its total deemed income tax liability incurred as a
result of such breach and its recognition of Section 752 Gain or other
gain.
  (iii)           In
the event that Parent OP breaches its obligations under Section 5, Parent OP
and the REIT shall indemnify and hold harmless each LVP Party from and against,
and Parent OP and the REIT shall be jointly and severally liable to each LVP
Party for (x) the amount of Taxes deemed incurred by such LVP Party as a result
of, or in connection with, such breach (taking into account all Taxes imposed
with respect to items allocated to the LVP Party as a result of allocations not
permitted by Section
5) and (y) a “gross-up” amount so that, after the hypothetical payment by
such LVP Party of all Taxes on amounts received pursuant to this Section
6(a)(iii), such LVP Party would retain from such payments hereunder an amount
equal to its total deemed income tax liability incurred as a result of such
breach.
  (b)           Notwithstanding
anything herein to the contrary, it is the understanding and the intention of
the parties hereto that Parent OP and Parent REIT shall have no liability under
this Agreement as a result of (i) any actions or failure to take actions prior
to the Closing, (ii) any change in Law or interpretation thereof after the date
hereof, (iii) the structure and effectuation of the transactions contemplated by
this Agreement, the Contribution Agreement or any other Transaction Document or
(iv) any action taken by LVP OP or LVP REIT or any LVP Party (or its Indirect
Owner) or any Affiliate of any of the foregoing (regardless of when such action
is taken).
  (c)           For
purposes of determining the amount of the deemed income Taxes incurred by each
LVP Party and the amount of the indemnity under Section 6(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 a given LVP Party shall be treated as subject to federal,
state and local income tax at the then applicable effective tax rate imposed on
the income of corporations doing business in New Jersey, determined using the
maximum federal rate of tax on ordinary income and the maximum state and local
rates of tax on income then in effect in New Jersey and (ii) the benefits of the
deductibility of state and local income taxes shall be taken into
account.
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  7.           Determination of Built-In
Gain.  As soon as practicable following the Closing, the LVP
Parties shall provide to Parent OP, a spreadsheet (the “Preliminary
Spreadsheet”) showing their good faith estimate of the amount of Built-In Gain
with respect to the Properties as of the Closing Date.  Promptly
following the determination of the Actual Adjustment, the LVP Parties and Parent
OP shall jointly prepare a spreadsheet showing the amount of the Built-In Gain
with respect to the Properties as of the Closing Date, prepared on a basis
consistent with the Preliminary Spreadsheet and updated to reflect the Actual
Adjustment (the “Adjusted Spreadsheet”). Promptly following the disbursement of
all amounts from the Escrow Account, the LVP Parties and Parent OP shall jointly
prepare a spreadsheet showing the amount of the Built-In Gain with respect to
the Properties as of the Closing Date, prepared on a basis consistent with the
Adjusted Spreadsheet and updated to reflect the settlement of the Escrow (the
“Final Spreadsheet”).  Each Applicable Spreadsheet shall reflect any
sales of Properties prior to the preparation of such spreadsheet.
  8.           Cooperation Regarding
Post-Closing Tax Matters.  The LVP Parties agree to, and agree
to cause their Affiliates to, cooperate and to provide such information and
assistance as may be reasonably requested by Parent OP in connection with any
tax reporting or compliance obligations of Parent OP or its Affiliates or any
obligations of Parent OP under this Agreement.  Such cooperation shall
include the provision of information required for Parent OP to properly prepare
and file any U.S. federal or state tax returns or reports relating to the
transactions contemplated in the Contribution Agreement or the Properties and
any information reasonably relevant to the determination of any potential
liability of Parent OP under Section
6.
  9.           Reporting.
  (a)           For
Federal, state and local income tax purposes, the Contributions and the
distribution of the Distributable Amount shall be reported by all parties hereto
as follows:
  (i)           The
Contributions shall be treated as nontaxable contributions in exchange for
Parent OP Common Units under Section 721(a) of the Code.
  (ii)           The
distribution of the Distributable Amount from the proceeds of the Section 15.28
Loan shall be treated as a nontaxable distribution to a partner pursuant to
Section 731 of the Code and Treasury Regulations Section 1.707-5(b), without
separate disclosure pursuant to Section 6662(d)(2)(B)(ii) or any other provision
of the Code or Treasury Regulations or similar provisions of state and local
law, except as required by a change in law after the date hereof; provided that, upon a
reasonable request from Parent OP or its accountant, the LVP Parties shall
provide (at Parent OP’s expense) to Parent OP, at the LVP Parties’ election,
either (i) a letter from a nationally recognized accounting firm or law firm
with expertise in U.S. federal income taxation of partnerships addressed to
Parent OP or its accountant or (ii) an opinion letter from such a firm, which
shall provide that Parent OP or its accountant is entitled to rely on it, in
each case providing the required level of comfort to Parent OP or its accountant
in order to sign the return or returns.
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  (iii)           Pursuant
to Notice 89-35, 1989-1 C.B. 675, for purposes of applying the interest-tracing
rules of Treasury Regulations Section 1.163-8T, the Company shall treat the
distribution of the Distributable Amount as being made from the proceeds of the
Section 15.28 Loan.
  10.          No Limitations After
Expiration of Term of the Agreement; Sole and Exclusive Remedy; No
Representations or Warranties; Limitation on Rights.
  (a)           After
the expiration of the Protected Period with respect to any Property, (i) the
restriction set forth in Section 2 with respect to such Property shall be of no
force and effect, (ii) neither Parent OP nor the General Partner shall be under
any restriction or limitation as to the actions it can take with respect to such
Property, whether by reason of fiduciary duty or otherwise, regardless of the
tax consequences that such action (or any failure to act) might have for the LVP
Parties, and (iii) the Parent OP and the General Partner shall have no duty to
consider the tax consequences to LVP Parties of any action (or failure to act)
with respect to such Property.
  (b)           The
sole and exclusive remedy of LVP Parties against Parent OP and the General
Partner and any affiliates thereof with respect to any breach or alleged or
prospective breach of the covenants set forth in Sections 2, 3 or 4 shall be to
receive the payment from the Parent OP provided in Section 6 hereof, it being
intended by the parties that in no event shall any LVP Party have any right to
specific performance or equitable relief with respect to any obligation of
Parent OP under this Agreement or with respect to the breach of Section 2 any
right to money damages of any nature, consequential or otherwise, for any breach
under this Agreement, except for the specific payment provided for in Section
6(a) hereof.
  (c)           Each
of the LVP Parties acknowledges and agrees that none of the Parent OP, General
Partner, any Affiliate of Parent OP or Parent REIT, or any employee or officer
of any of the foregoing has made or hereby makes any representation or warranty
to any LVP Party regarding the federal income tax treatment of Parent OP (other
than to the extent set forth in the Contribution Agreement) or the federal
income tax consequences of any of the transactions contemplated by the
Contribution Agreement, including whether or not the transfer of the Properties
to Parent OP as contemplated under the Contribution Agreement will be effective
to avoid the recognition by any taxpayer of all or any portion of the gain that
otherwise would be required to be recognized for federal income tax purposes
upon a fully taxable disposition of the Properties, and in that event the LVP
Parties shall bear the cost of all income taxes associated therewith. Each LVP
Party further acknowledges and agrees that the transactions contemplated by the
Contribution Agreement shall be treated as having occurred outside of this
Agreement and, accordingly, are not intended to be, and shall not be, covered by
this Agreement.
  11.          Provision of Information to
theLVP
Parties.
  (a)           At
the time Parent OP and any entity in which Parent OP holds a direct or indirect
interest enters into an agreement to consummate a Taxable Disposition that, if
consummated, would result in the recognition by the LVP Parties of all or any
portion of their Built-In Gain, and in any case not less than thirty (30) days
prior to consummating such Taxable Disposition, Parent OP shall notify
Representative in writing of such proposed Taxable Disposition and all details
of the Taxable Disposition that are relevant to the calculation of the
indemnities set forth herein including, but not limited to (i) the Property, or
portion thereof disposed of, (ii) the amount and nature of the consideration to
be received, and (iii) the expected amount of gain (including Built-In Gain)
allocable to the LVP Parties (or their Indirect Owners, if applicable) as a
result of such Taxable Disposition.  The failure to provide any such
written notice shall not affect the amount, if any, of Parent OP’s
indemnification obligation.
  10
  (b)           At
the time Parent OP and any entity in which Parent OP holds a direct or indirect
interest enters into an agreement to consummate a transaction that, if
consummated, would result in the recognition by the LVP Parties of Section 752
Gain, and in any case not less than thirty (30) days prior to consummating such
transaction, Parent OP shall notify Representative in writing of such proposed
transaction and all details that are relevant to the calculation of the
indemnities set forth herein including, but not limited to the expected amount
of Section 752 Gain allocable to the LVP Parties (or their Indirect Owners, if
applicable) as a result of such transaction.  The failure to provide
any such written notice shall not affect the amount, if any, of Parent OP’s
indemnification obligation.
  (c)           Following
a request by a LVP Party, Parent OP shall deliver to such LVP Party (or the
direct or indirect owner of such LVP Party, if applicable) a good-faith estimate
of such Person’s Capital Account and allocation of  Partnership
liabilities pursuant to each of  Treasury Regulations Sections
1.752-2(a), 1.752-3(a)(1), (2), and (3).  Parent OP shall have no
liability (and its indemnification obligation under this Agreement shall not be
affected) if it fails to provide any such good faith estimate or if such
estimate is not accurate.
  12.          Contests.
  (a)           Nothing
in this Agreement shall be construed to prevent the General Partner from
contesting in good faith, as the tax matters partner of Parent OP in accordance
with the OP Agreement, any claim that, if successful, would result in an
indemnity payment pursuant to Section 6.
  (b)           The
LVP Parties shall provide written notice to Parent OP promptly after learning of
any audit or other proceeding involving a LVP Party for which Parent OP could
have an indemnification obligation under Section 6 (a “Proceeding”).  Failure
to provide prompt written notice of a Proceeding shall preclude any indemnity
hereunder to the extent Parent OP is materially prejudiced thereby.
  (i)           Upon
receipt of notice of a Proceeding, Parent OP shall either (i) assume the conduct
and control of the settlement or defense of such Proceeding, and the LVP Parties
shall cooperate with Parent OP in connection therewith (including, for example,
signing a power of attorney with respect to such Proceeding) or (ii) advise the
LVP Parties that it does not wish to control such Proceeding, in which case
Parent OP shall bear all costs and expenses of a nationally recognized law firm
retained to represent the LVP Parties in such Proceeding, which counsel shall be
reasonably acceptable to Parent OP. In either event, the party not controlling
the Proceeding shall be given the right to participate in such Proceeding, at
its own expense. So long as Parent OP is reasonably contesting any Proceeding,
the LVP Parties (or their Indirect Owners) shall not pay or settle any such
Proceeding without the consent of Parent OP, which consent may be withheld in
Parent OP’s sole discretion.
  11
  (ii)           Subject
to Section
12(b)(iii), (a) a final
determination under Section 1313 of the Code of the claim underlying the
Proceeding shall be binding on Parent OP and the LVP Parties and (b) if the LVP
Parties are found liable for the Taxes that were the subject of the Proceeding,
and it is determined that such Taxes were caused by Parent OP’s breach of this
Agreement, Parent OP shall promptly pay the LVP Parties the amount payable
pursuant to Section
6 of this Agreement.
  (iii)           Notwithstanding
the foregoing, if either Parent OP or the LVP Parties disputes the finding with
respect to causation, Parent OP shall select a nationally recognized accounting
firm or law firm experienced in tax protection matters and reasonably acceptable
to Representative (the “Dispute Firm”) to review the indemnification claim and
the applicable provisions of this Agreement.  The Dispute Firm shall
have fifteen (15) business days (or such additional time as the Dispute Firm
determines is reasonably necessary) to review such materials and deliver to
Parent OP and Representative its determination of whether any amount is due
under this Agreement.  The determination of the Dispute Firm shall be
final and binding on the parties to this Agreement, and Parent OP shall promptly
pay over to the LVP Parties such amounts determined by the Dispute Firm to be
due under this Agreement and the LVP Parties shall have no further recourse
against Parent OP for the indemnification claim with respect to which such
amounts have been paid.  Parent OP shall bear all costs and expenses
of the Dispute Firm; provided, the LVP
Parties shall bear such costs if Parent OP is found to have no liability
pursuant to this Agreement.
  (c)           Subject
to paragraphs (a) and (b) above, the LVP Parties shall have the right to
participate in any audit, claim for refund, or administrative or judicial
proceeding involving any asserted Tax liability, refund, or adjustment to the
taxable income of any party hereto that could result in disallowance of the tax
treatment set forth in Section9 at its own
expense.
  13.          Transfer of Parent OP’s
Assets.  For so long as the LVP Parties hold direct or indirect
interests in Parent OP, neither Parent OP nor its Affiliates shall consummate a
Restricted Transfer unless the transferee assumes the liabilities and
obligations of Parent OP under this Agreement; provided, that Parent OP shall
not be released from such liabilities and obligations as a result of such
assumption.
  14.          Assumption of Existing Tax
Protection Agreements.  Parent OP and Parent REIT shall
indemnify and hold harmless LVP OP, LVP REIT, each LVP Party, each Lichtenstein
Party, or any of their Affiliates from and against, and Parent OP and Parent
REIT shall be jointly and severally liable for all liabilities and obligations
arising under the Tax Protection Agreements set forth on Schedule F (such
Agreements, the “TPAs”)  solely
as a result of Parent OP, Parent REIT or any of their Affiliates (including the
Company) taking an action or failing to take an action after the Closing that
triggers an indemnification obligation under a TPA (such liabilities and
obligations, the “Parent TPA Obligations”).  For the avoidance of
doubt, the Parent TPA Obligations shall not include any liabilities or
obligations under the TPAs with respect to (a) the structure of the
contributions and debt arrangements that are the subject of the TPAs, (b) any
transactions occurring prior to the Closing, (c) the structure and effectuation
of the transactions contemplated by the Contribution Agreement or any other
Transaction Document, (d) any actions taken by any Member of the New Company,
LVP OP or LVP REIT (regardless of when such action is taken), or (e) a change in
Law or interpretation thereof after the date hereof.  The LVP OP and
LVP REIT shall indemnify and hold harmless Parent OP from and against and LVP OP
and LVP REIT shall be jointly and severally liable for any liability arising
under the TPAs that is not a Parent TPA Obligation (“Non-Parent TPA
Obligations”).  The Non-Parent TPA Obligations shall not be
subject to any limitations, including without limitation, the limitations on
indemnification described in Article 10 of the Contribution
Agreement.
  12
  15.          Miscellaneous
Provisions.
  (a)           Assignment.  No
party shall assign this Agreement or its rights hereunder to any Person without
the prior written consent of the other party, which consent such other party may
grant or withhold in its sole discretion, and any such assignment undertaken
without such consent shall be null and void.
  (b)           Integration,
Waiver.  This Agreement (including the Exhibits hereto)
embodies and constitutes the entire understanding among the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, representations and statements, whether oral or
written.  Neither this Agreement nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an instrument
signed by the party against whom the enforcement of such waiver, modification,
amendment, discharge or termination is sought, and then only to the extent set
forth in such instrument. No waiver by a party hereto of any failure or refusal
by any other party to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply.
  (c)           Governing
Law.  This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws.
  (d)           Captions Not Binding:
Exhibits.  The captions in this Agreement are inserted for
reference only and in no way define, describe or limit the scope or intent of
this Agreement or of any of the provisions hereof.  All Exhibits
attached hereto shall be incorporated by reference as if set out herein in
full.
  (e)           Binding Effect; No
Third-Party Beneficiaries.  This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  No Person, other than the parties
hereto, shall have any rights against Parent OP as a result of this
Agreement.  The parties hereto further acknowledge that there are no
intended third-party beneficiaries to this Agreement.
  (f)           Severability.  If
any term or provision of this Agreement or the application thereof to any
persons or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
Persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Agreement shall be valid and enforced to the fullest extent permitted by
law.
  13
  (g)           Notices.  All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by cable, telegram, facsimile, scanned pages or
telex, or by registered or certified mail (postage prepaid, return receipt
requested) as follows:
  To Parent REIT, Parent OP or
Parent Sub:
  Simon
Property Group, Inc
 225 West
Washington Street
 Indianapolis,
Indiana 46204
 Attention:       James
M. Barkley
 Facsimile:       317-685-7377
  with a
copy (which copy shall not constitute notice) to:
  Fried,
Frank, Harris, Shriver and Jacobson LLP
 One New
York Plaza
 New York,
New York 10004
 Tel:
212.859.8980
 Attention:       Peter
S. Golden
 Alan
S. Kaden
 Facsimile:       212.859.4000
  To the
Representative:
  Lightstone
Prime, LLC
 c/o The
Lightstone Group
 1985
Cedar Bridge Avenue
 Lakewood,
NJ  08701
 Attention:             
Joseph E. Teichman, Esq.
 Facsimile:             
732-612-1444
  with a copy (which shall not
constitute notice) to:
  Paul,
Weiss, Rifkind, Wharton & Garrison LLP
 1285
Avenue of the Americas
 New York,
New York  10019-6064
 Attention:       Jeffrey
D. Marell
 Jeffrey
B. Samuels
 Facsimile:      
212-757-3990
  or to
such other address as any party to whom notice is given may have previously
furnished to the others in writing in the manner set forth above.
  14
  (h)           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be an original
and all of which counterparts taken together shall constitute one and the same
agreement. The signature page of any counterpart may be detached therefrom
without impairing the legal effect of the signature(s) thereon provided such
signature page is attached to any other counterpart identical thereto except
having additional signature pages executed by other parties to this Agreement
attached thereto.
  (i)           Construction.  The
parties acknowledge that each party and its counsel have reviewed and revised
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendment or Exhibit
hereto.
  [Remainder
of Page Intentionally Left Blank]
  15
  IN WITNESS WHEREOF, EACH PARTY HERETO
HAS CAUSED THIS Agreement to be duly executed on its behalf on the date first
above written.
  Simon
      Property Group, Inc.By:
                                              /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief
                                                Financial
      OfficerSimon
      Property Group, L.P.By:
                                              Simon
      Property Group, Inc., its general partnerBy:
                                              /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief
                                                Financial
      OfficerPrime
      Outlets Acquisition Company LLCBy:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized SignatoryMarco
      LP Units, LLCBy:
                                              /s/ Stephen E. SterrettName:
      Stephen E. SterrettTitle:
      Executive Vice President and Chief Financial OfficerLightstone
      Prime, LLCBy:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized
Signatory
  [Signature
page to DL Tax Matters Agreement]
  
  Lightstone
      Holdings, LLCBy:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized SignatoryPro-DFJV
      Holdings LLCBy:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized SignatoryBRM,
      LLCBy:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized SignatoryLightstone
      Value Plus Real Estate Investment Trust, Inc.By:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized SignatoryLightstone
      Value Plus REIT, L.P.By:
                                              /s/ David LichtensteinName:
      David LichtensteinTitle:
      Authorized Signatory/s/ David LichtensteinDavid
      Lichtenstein
  [Signature
page to LVP Tax Matters Agreement]
  
  SCHEDULE
A
  Schedule
A intentionally omitted.
  
  SCHEDULE
B
  PROTECTED
PERIODS
  Property
                                                            
                                                            End of Protected PeriodEllenton
                                                            
                                                            Eighth
      anniversary of the ClosingSan
      Marcos
                                                            
                                                            Eighth
      anniversary of the ClosingOrlando
                                                            
                                                            Eighth
      anniversary of the ClosingGrove
      City
                                                            
                                                            Eighth
      anniversary of the ClosingJeffersonville
                                                            
                                                            Eighth
      anniversary of the ClosingPleasant
      Prairie I
                                                            
                                                            Sixth
      anniversary of the ClosingWilliamsburg
                                                            
                                                            Sixth
      anniversary of the ClosingPleasant
      Prairie II
                                                            
                                                            Sixth
      anniversary of the ClosingWilliamsburg
      Mazel
                                                            
                                                            Sixth
      anniversary of the ClosingQueenstown
                                                            
                                                            Sixth
      anniversary of the ClosingLee
                                                            
                                                            Sixth
      anniversary of the ClosingHagerstown
                                                            
                                                            Sixth
      anniversary of the ClosingCalhoun
                                                            
                                                            June
      26, 2013Naples
                                                            
                                                            June
      26, 2013Florida
      City
                                                            
                                                            June
      26, 2013Gaffney
                                                            
                                                            June
      26, 2013Gulfport
                                                            
                                                            June
      26, 2013Huntley
                                                            
                                                            June
      26, 2013Lebanon
                                                            
                                                            June
      26, 2013Pismo
      Beach
                                                            
                                                            June
      26, 2013Birch
      Run
                                                            
                                                            June
      26, 2013
  SCHEDULE
C
  CMBS
DEBT
 
 Lender
                                                                        
                                                                        Loan
                                                                        
                                                                        Property
                                                                        
                                                                        
                                                                        Amount
                                                                          Outstanding
                                                                        
                                                                        MaturityWachovia
                                                                        
                                                                        Megadeal
                                                                        
                                                                        Ellentown
                                                                        
                                                                        $
                                                                        609.1
      million
                                                                        
                                                                        January
      11, 2016Florida
      CityGrove
      CityGulfportHuntleyJeffersonvilleLebanonNaplesSan
      MarcosPleasant
      Prairie ICitigroup
                                                                        
                                                                        2nd
      Horizon
                                                                        
                                                                        Pismo
      Beach
                                                                        
                                                                        $
                                                                        100.0
      million
                                                                        
                                                                        November
      6, 2016QueenstownCIBC
                                                                        
                                                                        Bridge
      Portfolio
                                                                        
                                                                        Calhoun
                                                                        
                                                                        $
                                                                        112.0
      million
                                                                        
                                                                        September
      1, 2016GaffneyLeeWachovia
                                                                        
                                                                        Triple
      OutletWorld
      Loans
                                                                        
                                                                        Birch
      Run
                                                                        
                                                                        $
                                                                        308.1
      million
                                                                        
                                                                        April
      11, 2016HagerstownWilliamsburgCIBC
                                                                        
                                                                        Pleasant
      Prairie II
                                                                        
                                                                        Pleasant
      Prairie II
                                                                        
                                                                        $
                                                                        37.6
      million
                                                                        
                                                                        December
      1, 2016
  SCHEDULE
D
  ALLOCABLE
SHARES
  LVP Party
                            
                            Allocable SharesLightstone
      Value Plus REIT, L.P.
                            
                            
                            26.144
                            %Pro-DFJV
      Holdings, LLC
                            
                            
                            14.755
                            %
  
  SCHEDULE
E
  CAPITAL
CONTRIBUTION OBLIGATIONS
  LVP
      Party
                            
                            Amount
      of Capital Contribution Obligation
                              as
      of the Closing DateLightstone
      Value Plus REIT, L.P.
                            
                            $
                            100,000,000
  
  SCHEDULE
F
  TAX
PROTECTION AGREEMENTS
  1.
              Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and Central Jersey Holdings II
      LLC.
  2.
              Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and JT Prime
  LLC.
  3.
              Tax
      Protection Agreement, dated August 25, 2009, by and between
      Lightstone Value Plus REIT, L.P. and Trac Central Jersey
    LLC.
  4.
              Tax
      Protection Agreement, dated June 26, 2008, by and among Lightstone
      Value Plus REIT, L.P., the Company, and AR Prime Holdings,
      LLC.
  5.
              Series
      C Optional Tax Indemnification, attached as Exhibit H to Fourth Amended
      and Restated Agreement of Limited Partnership of Prime Retail,
      L.P.
  6.
              Tax
      Protection Agreement, dated June 26, 2008, by and between Lightstone
      Value Plus REIT, L.P. and Arbor National CJ,
  LLC.
  7.
              Tax
      Protection Agreement, dated June 26, 2008, by and between Lightstone
      Value Plus REIT, L.P. and Arbor Mill Run JRM
  LLC.
  
  EXHIBIT
A
  FORM
OF CAPITAL CONTRIBUTION AGREEMENT
  
  EXHIBIT
B
  FORM
OF GUARANTY OF COLLECTION
  
  EXECUTION
COPY
  GUARANTY
OF COLLECTION
  THIS
GUARANTY OF COLLECTION is made as of August 30, 2010 (this “Agreement”) by
Lightstone Value Plus REIT, L.P., a Delaware limited partnership (the
“Guarantor”), to and for the benefit of JPMorgan Chase Bank, N.A., as
Administrative Agent (the “Agent”), each of the Lenders (as such term is defined
in the Credit Agreement (as defined below)), and any of their respective
successors and assigns with respect to the obligations of Simon Property Group,
L.P., a Delaware limited partnership (the “Borrower”), in respect of the Loans
(as hereinafter defined), and is acknowledged by the Agent, as representative
acting on behalf of the Lenders.
  RECITALS:
  WHEREAS,
the Guarantor indirectly owns a limited partnership interest in the
Borrower;
  WHEREAS,
pursuant to the Credit Agreement dated December 8, 2009, by and among the
Borrower, the Lenders party thereto and the Agent (the “Credit Agreement”) and
the other Loan Documents (as defined in the Credit Agreement), the Lenders have
agreed to provide to Borrower a revolving credit facility in an aggregate amount
of $3,695,000,000 (the “Loans”);
  WHEREAS,
the Lenders have made certain Loans to the Borrower , a portion of which will be
drawn down for the purpose described in Section 15.28 of the Credit Agreement
(the “Section 15.28 Loan”) which draw down shall be accompanied by the delivery
of one or more Guarantees as defined and described in said Section 15.28;
and
  WHEREAS,
the Guarantor will directly benefit from the Section 15.28 Loan being made to
the Borrower;
  NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Guarantor hereby agrees as
follows:
  1.           Guaranty.  Subject
to the terms and conditions set forth in this Agreement, the Guarantor hereby
irrevocably, unconditionally, absolutely and directly agrees to pay to the Agent
(for the benefit of the Lenders) the principal amount of the Section 15.28 Loan
(which, for the avoidance of doubt, shall include any Loans to Borrower in
respect of amounts to be distributed or deposited pursuant to Sections
2.3(e)(i), 2.5, and 2.6(b) of the Contribution Agreement dated as of December 8,
2009, and amended on May 13, 2010, June 28, 2010, and the date hereof, by and
among Borrower, Simon Property Group, Inc., a Delaware corporation, Marco
Capital Acquisition LLC, a Delaware limited liability company, Prime Outlets
Acquisition Company LLC, a Delaware limited liability company, and the
Contributors party thereto (the “Contribution Agreement”)), together with
interest thereon, in each case to the extent provided for in the Loan Documents,
(the “Guaranteed Obligations”); provided, however, that the Guarantor shall have
no obligation to make a payment hereunder with respect to any other costs, fees,
expenses, penalties, charges or similar items payable by the Borrower and any
other person or entity (a “Person”) that has guaranteed any payment under the
Loan Documents other than the Guarantor (collectively, the “Borrower Parties”)
in respect of the Section 15.28 Loan or under the Credit
Agreement.
  1
  2.           Guaranty of Collection and
Not of Payment.  Notwithstanding any other provision of this
Agreement, this Agreement is a guaranty of collection and not of payment, and
the Guarantor shall not be obligated to make any payment hereunder until each of
the following is true: (a) Borrower shall have failed to make a payment due to
the Lenders in respect of such Guaranteed Obligations and the Section 15.28 Loan
shall have been accelerated, (b) the Lenders shall have exhausted all Lender
Remedies (as defined below), and (c) the Lenders shall have failed to collect
the full amount of the Guaranteed Obligations.  The term “Lender
Remedies” shall mean all rights and remedies at law and in equity that the Agent
or the Lenders may have against any Borrower Party, any collateral deposited in
the Letter of Credit Collateral Account (as such term is defined in the Credit
Agreement) (the “LC Collateral”) or any other Person that has provided credit
support in respect of the applicable Guaranteed Obligations, to collect, or
obtain payment of, the Guaranteed Obligations, including, without limitation,
foreclosure or similar proceedings, litigation and collection on all applicable
insurance policies, and termination of all commitments to advance additional
funds to the Borrower under the Loan Documents.  For the avoidance of
doubt, Lender Remedies shall not have been exhausted with respect to any LC
Collateral unless and until the value thereof has been included in Section
3(a)(y)(ii).
  3.           Cap.  Notwithstanding
any other term or condition of this Agreement it is agreed that Guarantor’s
maximum liability under this Agreement shall not exceed the sum of (a) the
difference between (x) the sum of $138,010,000.00 plus any amounts to be
received directly or indirectly by the Guarantor pursuant to Sections 2.3(e)(i)
and 2.6(b) of the Contribution Agreement, minus (y) the sum of (i) any payments
of principal made by or on behalf of Borrower or any other Borrower Party to the
Lenders (or any one of them) in respect of the Section 15.28 Loan following an
Event of Default under the Credit Agreement, plus (ii) any amount of cash
proceeds collected or otherwise realized (including by way of set off) by or on
behalf of any Lender, pursuant to, or in connection with, the Section 15.28
Loan, including, but not limited to, any cash proceeds collected or realized
from the exercise of any Lender Remedies (but excluding any cash payments of
principal (to the extent such payment is already included in clause (i) above),
premium or interest (it being understood that the paid premium or interest shall
not be deemed to be unpaid for purposes of clause (b) below) received from the
Borrower and any amount received as a reimbursement of expenses, indemnification
payment or fees), plus (iii) the amount of principal or accrued and unpaid
interest or accrued and unpaid premium otherwise owing by the Borrower Parties
which is affirmatively discharged, forgiven or otherwise compromised by the
Agent or the Lenders, plus (b) any unpaid premium on, or unpaid interest
accruing under the Loan Documents on, the amount described in clause (a)(x)
above.  For purposes of this Agreement, the Section 15.28 Loan will be
deemed to be outstanding and not repaid until all other Loans under the Credit
Agreement have been repaid and not reborrowed.
  2
  4.           Notice.  As
a condition to the enforcement of this Agreement, the Guarantor shall have
received written notice of any failure by Borrower to pay any Guaranteed
Obligations to the Lenders.  Except for the notice required under the
preceding sentence, the Guarantor hereby waives notice of acceptance of this
Agreement, demand of payment, presentment of this or any instrument, notice of
dishonor, protest and notice of protest, or other action taken in reliance
hereon and all other demands and notices of any description in connection with
this Agreement.  Subject to the last sentence of Section 2, the
Guarantor further waives and forgoes all defenses which may be available by
virtue of any valuation, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets, and all suretyship
defenses generally.
  5.           Absolute
Obligation.  Subject to the provisions of Sections 1, 2, 3 and
4, the obligations of the Guarantor hereunder shall be absolute and
unconditional and shall not be subject to any reduction, limitation, impairment
or termination for any reason, including, without limitation, any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any setoff, counterclaim, deduction, diminution, abatement, suspension,
reduction, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations.  Without
limiting the generality of the foregoing, subject to the provisions of Sections
1, 2, 3 and 4, the obligations of the Guarantor hereunder shall not be released,
discharged, impaired or otherwise affected by any circumstance or condition
whatsoever (whether or not the Borrower, any other Borrower Party, the
Guarantor, the Agent or any Lender has knowledge thereof) which may or might in
any manner or to any extent vary the risk of the Guarantor or otherwise operate
as a release or discharge of the Guarantor as a matter of law or equity (other
than the indefeasible payment in full of all of the Guaranteed Obligations),
including, without limitation:
  (a)           any
amendment, modification, addition, deletion or supplement to or other change to
any of the terms of the Loan Documents, or any assignment or transfer of any
thereof, or any furnishing, acceptance, surrender, substitution, modification or
release of any security for, or guaranty of, the Guaranteed
Obligations;
  (b)           any
failure, omission or delay on the part of the Borrower or any other Borrower
Party to comply with any term of any of the Loan Documents;
  (c)           any
waiver of the payment, performance or observance of any of the obligations,
conditions, covenants or agreements contained in the Loan Documents or any of
them or any delay on the part of the Agent or the Lenders to enforce, assert or
exercise any right, power or remedy conferred on the Agent or the Lenders in the
Loan Documents;
  (d)           any
extension of the time for payment of the principal of or premium (if any) or
interest on any of the Guaranteed Obligations, or of the time for performance of
any other obligations, covenants or agreements under or arising out of the Loan
Documents or any of them, or the extension or the renewal
thereof;
  3
  (e)           to
the extent permitted by applicable law, any voluntary or involuntary bankruptcy,
insolvency, reorganization, moratorium, arrangement, adjustment, readjustment,
composition, assignment for the benefit of creditors, receivership,
conservatorship, custodianship, liquidation, marshaling of assets and
liabilities or similar proceedings with respect to the Borrower, any other
Borrower Party or the Guarantor or any other Person or any of their respective
properties or creditors, or any action taken by any trustee or receiver or by
any court in any such proceeding (including, without limitation, any automatic
stay incident to any such proceeding);
  (f)           any
limitation, invalidity, irregularity or unenforceability, in whole or in part,
limiting the liability or obligation of the Borrower or any other Borrower Party
or any security therefor or guarantee thereof or the Agent’s or the Lenders’
recourse to any such security or limiting the Agent’s or the Lenders’ right to a
deficiency judgment against the Borrower, any other Borrower Party, the
Guarantor or any other Person; and
  (g)           any
other act, omission, occurrence, circumstance, happening or event whatsoever,
whether similar or dissimilar to the foregoing, whether foreseen or unforeseen,
and any other circumstance which might otherwise constitute a legal or equitable
defense, release or discharge (including the release or discharge of the
liabilities of a guarantor or surety or which might otherwise limit recourse
against the Borrower, any other Borrower Party, the Guarantor or any other
Person, whether or not the Borrower, any other Borrower Party, the Guarantor,
the Agent or any Lender shall have notice or knowledge of the
foregoing).
  6.           Subrogation.  To
the extent that the Guarantor shall have made any payments under this Agreement,
the Guarantor shall be subrogated to, and shall acquire, all rights of the
Lenders against the Borrower Parties and the LC Collateral with respect to such
payments, including without limitation, (a) all rights of subrogation,
reimbursement, exoneration, contribution or indemnification, and (b) all rights
to participate in any claim or remedy of any Lender or any trustee on behalf of
any Lender against any Borrower Party or the LC Collateral, in each case,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Borrower Parties, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim, remedy or right; provided, however, that the Guarantor shall not
exercise any right of subrogation, contribution, indemnity or reimbursement or
any other rights it may have now or hereafter have, and any and all rights of
recourse to any Borrower Party or any of its assets with respect to any payment
it makes under this Agreement until (x) all of the Obligations (as defined in
the Credit Agreement) (other than contingent indemnification obligations not yet
asserted by the Person entitled thereto) shall have been indefeasibly paid,
performed or discharged in full in cash, and (y) no Person has any further right
to obtain any loans, advances or other extensions of credit under any of the
Loan Documents.  If any amount is paid to the Guarantor in violation
of the foregoing limitation, then such amount shall be held in trust for the
benefit of the Lenders and shall forthwith be paid to the Agent (for the benefit
of the Lenders) to reduce the amount of the Guaranteed Obligations, whether
matured or unmatured.  Notwithstanding any other provision of this
Agreement or applicable law, the Guarantor shall not have, with respect to any
payments made by the Guarantor under this Agreement, any right of subrogation,
contribution, indemnity, reimbursement or other right whatsoever, whether by
contract at law, in equity or otherwise, against, and shall have no recourse
whatsoever to, any Borrower Party other than the Borrower and its Subsidiaries;
provided, that, (x) nothing in this sentence shall provide the Guarantor with
greater rights or recourse with respect to the Borrower or its Subsidiaries than
the Guarantor would otherwise have under applicable law, and (y) all such rights
and recourse shall subject in all respects to the other provisions of this
Section 6.  For the avoidance of doubt, this Agreement shall not limit
the ability of the Guarantor or its subsidiaries to ask for, sue, demand,
receive and retain payments and other consideration from the Borrower or any
other Borrower Party in respect of obligations of such Persons to the Guarantor
and/or its subsidiaries which do not arise under this
Agreement.
  4
  7.           Continuity of Guaranteed
Obligations; Bankruptcy or Insolvency.  If all or any part of
any payment applied to any Guaranteed Obligation is or must be recovered,
rescinded or returned to the Borrower, the Guarantor or any other Person (other
than the Lenders) for any reason whatsoever (including, without limitation,
bankruptcy or insolvency of any party), such Guaranteed Obligation shall be
deemed to have continued in existence and this Agreement shall continue in
effect as to such Guaranteed Obligation, all as though such payment had not been
made. For the avoidance of doubt, the bankruptcy, insolvency, or dissolution of,
or the commencement of any case or proceeding under any bankruptcy, insolvency,
or similar law in respect of, the Borrower or any other Borrower Party shall not
require the Guarantor to make any payment under this Agreement until all of the
conditions in Section 2 and Section 4 have been satisfied (including, without
limitation, the exhaustion of all Lender Remedies).
  8.           No
Waiver.  No delay or omission on the part of the Agent or any
Lender in exercising any rights hereunder shall operate as a waiver of such
rights or any other rights, and no waiver of any right on any one occasion shall
result in a waiver of such right on any future occasion or of any other rights;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other
right.
  9.           Representations and
Warranties.  The Guarantor represents and warrants that (a) it
is a limited partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) the execution,
delivery and performance by the Guarantor of this Agreement, and the
consummation of the transactions contemplated hereby, are within its powers and
have been duly authorized by all necessary action; (c) this Agreement has been
duly executed and delivered by the Guarantor, and constitutes the Guarantor’s
legal, valid and binding obligation enforceable in accordance with its terms;
(d) the making and performance of this Agreement does not and will not violate
the provisions of any applicable law, regulation or order applicable to or
binding on the Guarantor, and does not and will not result in the breach of, or
constitute a default or require any consent under, any material agreement,
instrument, or document to which the Guarantor is a party or by which the
Guarantor or any of its property may be bound or affected; (e) all consents,
approvals, licenses and authorizations of, and filings and registrations with,
any governmental authority or regulatory body or other third party for the
execution, delivery and performance of this Guarantee by the Guarantor have been
obtained or made and are in full force and effect; and (f) by virtue of the
Guarantor’s relationship with the Borrower, the execution, delivery and
performance of this Agreement is for the direct benefit of the Guarantor and the
Guarantor has received adequate consideration for this
Agreement.
  5
  10.           Enforcement
Expenses.  The Guarantor hereby agrees to pay all out-of-pocket
costs and expenses of the Agent and each Lender in connection with the
enforcement of this Agreement (including, without limitation, the reasonable
fees and disbursements of counsel employed by the Agent or any of the Lenders);
provided that no payment shall be due and owing under this Section 10 during the
pendancy of any good faith dispute between the Guarantor and the Agent or the
Lenders regarding the enforcement of this Agreement against the Guarantor and
such payment shall be due only if (A) Guarantor agrees to make such payment or
(B) a court of competent jurisdiction has determined pursuant to a final
non-appealable order that this Agreement may be enforced against the
Guarantor.
  11.           Fraudulent
Conveyance.  Notwithstanding any provision of this Agreement to
the contrary, it is intended that this Agreement, the Guarantor’s guarantee of
the Guaranteed Obligations hereunder and any liens and security interests
securing the Guarantor’s obligations under this Agreement, not constitute a
Fraudulent Conveyance (as defined below).  Consequently, Guarantor
agrees that if this Agreement, the Guarantor’s guarantee of the Guaranteed
Obligations hereunder or any liens or security interests securing the
Guarantor’s obligations under this Agreement, would, but for the application of
this sentence, constitute a Fraudulent Conveyance, this Agreement, such
guarantee and each such lien and security interest shall be valid and
enforceable only to the maximum extent that would not cause this Agreement, such
guarantee or such lien or security interest to constitute a Fraudulent
Conveyance, and this Agreement shall automatically be deemed to have been
amended accordingly at all relevant times.  For purposes of this
Section 11, the term “Fraudulent Conveyance” means a fraudulent conveyance under
Section 548 of the Bankruptcy Code (as defined in the Credit Agreement) or a
fraudulent conveyance or fraudulent transfer under the provisions of any
applicable fraudulent conveyance or fraudulent transfer law or similar law of
any state, nation or other governmental unit, as in effect from time to
time.
  6
  12.           Exculpation of
Lenders.  The Guarantor acknowledges and agrees, on behalf of
itself and each of its Affiliates, that none of J.P. Morgan Chase Bank, N.A.,
J.P. Morgan Securities Inc., Bank of America, N.A., Bank of America Securities
LLC or any of the other Lenders from time-to-time under the Credit Agreement, or
any of their respective Affiliates, successors or assigns, or any officer,
director, partner, trustee, equity holder, agent, employee, attorney,
attorney-in-fact, advisor or controlling Person of any of the foregoing
(collectively, the “Lender Parties”) shall have any duty (including any
fiduciary duty or any other express or implied duty), liability, obligation or
responsibility whatsoever to the Guarantor or any of its Affiliates arising
from, in connection with or relating to (i) the Loans and other extensions of
credit contemplated by the Credit Agreement and the other Loan Documents (the
“Debt Financing”), or (ii) any of the transactions contemplated by this
Agreement, the Credit Agreement or any of the other Loan Documents or any
agreement, instrument certificate or instrument referred to in the Loan
Documents, including, without limitation, any actual or alleged breach,
misrepresentation or failure to perform any of their respective duties or
obligations (including, but not limited to, any failure to fund or otherwise
extend credit) under any Loan Document or any agreement, certificate or
instrument related thereto (clauses (i) and (ii), collectively, the “Financing
Matters”).  No Lender Party shall be liable to the Guarantor or any of
its Affiliates for any action taken or not taken by such Lender Party in
connection with any of the Financing Matters; provided, that, for the avoidance
of doubt, the foregoing sentence shall not, in and of itself, operate as a
waiver of defenses by the Guarantor to enforcement of this Agreement. The
Guarantor hereby waives, releases and forever discharges each of the Lender
Parties from any and all actions, causes of action, suits, debts, losses, costs,
controversies, damages, liabilities, judgments, claims and demands whatsoever,
in law or equity or otherwise, whether known or unknown (collectively, “Claims”)
directly or indirectly arising out of or relating to any of the Financing
Matters, that the Guarantor or any of its Affiliates ever had, now has or
hereafter can, shall or may have against any of the Lender Parties, except to
the extent arising as a result of (x) a demand for payment hereunder prior to
the conditions in Section 2 and Section 4 being satisfied or (y) any act of
gross negligence or willful misconduct committed by such Person at any time
following the date hereof as determined by a court of competent jurisdiction
pursuant to a final non-appealable order.  Furthermore, the Guarantor
covenants not to sue any Lender Party in connection with or assert, and agrees
to cause its Affiliates not to sue any Lender Party in connection with or
assert, any Claims which they or any other party now or may hereafter have in
connection with any Financing Matter, except to the extent arising as a result
of (x) a demand for payment hereunder prior to the conditions in Section 2 and
Section 4 being satisfied or (y) any act of gross negligence or willful
misconduct committed by such Person at any time following the date hereof as
determined by a court of competent jurisdiction pursuant to a final
non-appealable order. Each of the Lender Parties shall be an intended third
party beneficiary of this Section 12 and may enforce the terms of this Section
12 as if such Lender Party were a direct party to this Agreement, and this
Section 12 may not be amended, supplemented, waived or otherwise modified
without the prior written consent of each of JPMorgan Chase Bank, N.A. and Bank
of America, N.A.
  13.           Miscellaneous.
  (a)           This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely in
New York.
  7
  (b)           The
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of any New York State court or federal
court of the United States of America sitting in New York City and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and the
Agent hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding shall be heard and determined exclusively in
any such New York State court or, to the extent permitted by law, in such
federal court.  The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any party (other than the
Guarantor) may otherwise have to bring any action or proceeding relating to this
Agreement in the courts of any jurisdiction.  The Guarantor
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any New York State or federal court.  The Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
  (c)           This
Agreement shall inure to the benefit of and be binding upon the Guarantor and
its successors and assigns and the Agent, the Lenders and their respective
successors and assigns.
  (d)           This
Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties related
thereto.
  (e)           Each
reference herein to the Guarantor shall be deemed to include the successors and
assigns of the Guarantor, all of whom shall be bound by the provisions of this
Agreement; provided, however, that the Guarantor shall not, without obtaining
the prior written consent of the Lenders (which consent may be withheld or
conditioned in the Lenders’ sole discretion), assign or transfer this Agreement
or the Guarantor’s obligations and liabilities under this Agreement, in whole or
in part, to any other Person (and any attempted assignment or transfer by
Guarantor without such prior written consent shall be null and void). Upon the
written request of the Lenders, the Guarantor shall assign this Agreement to any
Person who acquires all or substantially all of the assets of Guarantor;
provided, that the Lenders shall have no duty or obligation to make such
request. Each reference herein to the Lenders shall be deemed to include the
successors and assigns of the Lenders under the Credit Agreement; it being
understood that this Agreement shall not be for the benefit of, or be assigned
to, any refinancing or refunding source with respect to the Guaranteed
Obligations (it being acknowledged that an amendment, restatement, waiver or
other modification of the terms of the Credit Agreement or other Loan Documents
shall not constitute a refinancing or refunding for purposes of this provision)
without the prior written consent of the Guarantor, provided, that in no event
shall the foregoing prevent or restrict any Lender from making an assignment,
selling a participation in, pledging or granting a security interest in or
otherwise transferring all or any portion of its interests in the Loans (and its
corresponding interest in the guarantee provided for hereunder) under the
applicable provisions of Section 15.1 of the Credit Agreement (as in effect on
the date hereof, except to the extent the Guarantor consents to any subsequent
amendment or other modification to such provisions) or impair any Lender’s
rights under this Agreement as a result of any such assignment, participation,
pledge, security interest or transfer made in accordance with such
provisions.
  8
  (f)           This
Agreement is for the benefit only of the Agent and the Lenders, shall be
enforceable by them alone, is not intended to confer upon any third party any
rights or remedies hereunder, and shall not be construed as for the benefit of
any third party; provided, however, that (i) the Agent shall be permitted, in
its sole discretion, to pay or to direct the Guarantor to pay any and all
amounts payable pursuant to this Agreement to any Lender or any third party, and
(ii) each of the Lender Parties may enforce the provisions of Section 12 of this
Agreement.
  (g)           EACH
PARTY HERETO, FOR ITSELF AND ITS AFFILIATES, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE ACTIONS OF THE PARTIES HERETO OR
THEIR RESPECTIVE AFFILIATES PURSUANT TO THIS AGREEMENT IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF AND THEREOF. THE PARTIES AGREE
THAT ANY SUCH ACTION OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT
A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
  14.           Miscellaneous.
  (a)           This
Agreement may not be modified or amended except by an instrument or instruments
in writing signed by each of the parties hereto and, with respect to any
amendment or modification of Section 11, each of JPMorgan Chase Bank, N.A. and
Bank of America, N.A.
  (b)           All
notices and other communications hereunder will be in writing and given by
certified or registered mail, return receipt requested, nationally recognized
overnight delivery service, such as Federal Express or facsimile (or like
transmission) with confirmation of transmission by the transmitting equipment or
personal delivery against receipt to the party to whim it is given, in each
case, at such party’s address or facsimile number set forth below or such other
address or facsimile number as such party may hereafter specify by notice to the
other parties hereto given in accordance herewith. Any such notice or other
communication shall be deemed to have been given as of the date so personally
delivered or transmitted by facsimile or like transmission (with confirmation of
receipt), on the next business day when sent by overnight delivery services or
five days after the date so mailed if by certified or registered
mail:
  9
  If to the
Guarantor:
  c/o The
Lightstone Group
 1985
Cedar Bridge Avenue
 Lakewood,
NJ  08701
 Attention:              Donna
Brandin
 Facsimile:              732-612-1444
 
 with a
copy to:
 
 Paul,
Weiss, Rifkind, Wharton & Garrison LLP
 1285
Avenue of the Americas
 New York,
New York  10019-6064
 Attention:              Jeffrey
D. Marell
 Jeffrey B. Samuels
 Facsimile:              212-757-3990
 
 If to the
Agent:
 
 JPMorgan
Chase Bank, N.A., as Agent
 383
Madison Avenue
 New York,
NY 10172
 Attn:  Marc
Costantino
 Telecopy:  212-622-8167
 
 (c)           If
any term or provision of this Agreement, or the application thereof to any
Person or circumstance, shall to any extent be held invalid or unenforceable in
any jurisdiction, then (i) as to such jurisdiction, the remainder of this
Agreement, or the application of such term or provision to Persons or
circumstances other than those as to which such term or provision is held
invalid or unenforceable in such jurisdiction, shall not be affected thereby,
(ii) the court making such determination shall have the power to reduce the
scope, duration, area or applicability of such provision, to delete specific
words or phrases, or to replace any invalid or unenforceable provision with a
provision that is valid and enforceable and comes closest to expressing the
intention of the invalid or unenforceable provision, and (iii) each remaining
term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by applicable law. Any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
  (d)           This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and will become effective when one or
more counterparts have been signed by a party and delivered to the other
parties.  Copies of executed counterparts transmitted by telecopy,
telefax or other electronic transmission service shall be considered original
executed counterparts for purposes of this Section 14(d), provided that receipt
of copies of such counterparts is confirmed.
  [The next
page is the signature page]
  10
  IN
WITNESS WHEREOF, the Guarantor has executed this Agreement as of the date first
above written.
 
 By:
                    Lightstone
      Value Plus REIT, L.P.By:
                    Lightstone
      Value Plus Real Estate InvestmentTrust,
      Inc., its General PartnerBy:Name:Title:
  ACCEPTED
      AND AGREED TO:JPMORGAN
      CHASE BANK, N.A., as AgentBy:Name:Title:
  
 
 EXECUTION
COPY
 
 CAPITAL CONTRIBUTION
COMMITMENT AGREEMENT
  THIS
CAPITAL CONTRIBUTION COMMITMENT AGREEMENT (“Agreement”) is made
as of the 30th day of August 2010, by and among Lightstone Value Plus REIT,
L.P.(the “Committed
Party”), Pro-DFJV Holdings LLC, a Delaware limited liability company
(“Pro-DFJV”),
Marco LP Units, LLC, a Delaware limited liability company, its successors and
assigns, having an address at 225 West Washington Street, Indianapolis, Indiana
46204 (“New
Company”), and Simon Property Group, L.P., a Delaware limited
partnership, its successors and assigns, having an address at 225 West
Washington Street, Indianapolis, Indiana 46204 (“SPGLP”).
  WITNESSETH:
  WHEREAS,
the Committed Party is an indirect owner of an interest in SPGLP;
and
  WHEREAS,
SPGLP has obtained, or may in the future obtain, unsecured term indebtedness
that is nonrecourse with respect to its limited partners and the REIT (as
defined below), excluding any revolving credit facility obtained by SPGLP from
time-to-time (each a “Loan” and
collectively, the “Loans”) from one or
more financial institutions (each a “Lender” and
collectively, the “Lenders”);
and
  WHEREAS,
Simon Property Group, Inc. (the “REIT”) is the sole
general partner of SPGLP; and
  WHEREAS,
the Loans are or will be evidenced by one or more promissory notes
(collectively, the “Notes”) and other
loan documents (collectively, the “Loan Documents”);
and
  WHEREAS,
the Committed Party has agreed to contribute capital to SPGLP (the “Committed
Contribution”) in an amount set forth herein (the amount of such
Committed Contribution, taken together with the maximum aggregate amount of all
other similar capital contribution commitments of direct and indirect owners of
SPGLP pursuant to agreements similar to this Agreement, the “Total Committed
Capital”), all on the terms and conditions hereafter set
forth;
  WHEREAS,
SPGLP would use the proceeds of the Committed Contribution to repay a portion of
one or more of the Loans, if necessary; and
  WHEREAS,
the Committed Party expects to derive benefits, directly or indirectly, from the
Loans.
  NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Committed Party hereby covenants and agree with SPGLP, Pro-DFJV, and New Company
as follows:
  1
  1.           Loan
Documents.  The Committed Party acknowledges that it is
familiar with (x) the Loans that are outstanding as of the date hereof and the
Loan Documents evidencing such Loans, (y) the Limited Liability Company
Operating Agreement of New Company (the “New Company
Agreement”), and (z) the Eighth Amended and Restated Limited Partnership
Agreement of SPGLP (the “SPGLP
Agreement”).  On request of the Committed Party, SPGLP will
provide to the Committed Party (i) copies of Loan Documents entered into,
modified, or amended after the date hereof and all documents relating thereto
or, at SPGLP’s option, a summary of all material provisions of the Loans and all
such documents, and (ii) information as to the Total Committed Capital and the
total amount of the Loans from time to time.  SPGLP shall promptly
notify the Committed Party when SPGLP obtains new Loans or repays, modifies, or
amends existing Loans.
  2.           Intentionally
Omitted.
  3.           Capital Contribution
Obligations.
  (a)          The
Committed Party hereby irrevocably and unconditionally agrees to contribute
capital to SPGLP (the “Committed
Contribution”) in an amount, up to a maximum amount set forth opposite
its name on Exhibit A hereto (the “Maximum Amount”),
equal to the Committed Party’s Proportionate Share of any Loan Recovery
Shortfall Amount (such amount, with respect to the Committed Party, being
adjusted as provided herein and, as so adjusted, being referred to herein as its
“Capital Contribution
Obligation”) at the time and manner as required hereunder.
  (b)          The
Committed Party shall be permitted to designate a new Maximum Amount at the
following times: (i) on or before December 31, 2010, (ii) upon the fourth
anniversary of the date hereof or, if later, the expiration of the Refinancing
Guaranties (as defined in the Tax Matters Agreement dated as of the date hereof,
by and among the parties hereto, the REIT, and Prime Outlets Acquisition Company
LLC, a Delaware limited liability company (the “LVP Tax Matters
Agreement”)) that are in effect on such anniversary and (iii) as of the
first repayment in full or in part of the CMBS Debt (as defined in the Tax
Matters Agreement), other than through regularly scheduled principal payments
that are made prior to maturity.  SPGLP shall provide the Committed
Party with written notice of any repayment described in clause (iii) of the
preceding sentence at least ninety (90) days prior to such
repayment.
  2
  (c)           For
the purposes of this Agreement, (x) the term “Proportionate Share”
shall mean the proportion that the Committed Party’s Committed Contributions
bears to Total Committed Capital, (y) “Loan Recovery Shortfall
Amount” shall mean the excess of (i)  Total Committed Capital
(up to a maximum of the aggregate amount due under the Loans at the time that
notice is given under Section 5 of this Agreement ), over (ii) all Remedy
Proceeds, and (z) the term “Remedy Proceeds”
shall mean the aggregate amount received by one or more Lenders with respect to
Loans that are declared in default by the Lender, after the date of the
declaration of default with respect to each such Loan, and/or realized by any
Lender in any exercise of its remedies, whether under the applicable Loan
Documents or otherwise in connection with any Loan that is declared in default
by the Lender, and shall include all additional amounts any Lender would be
entitled to receive if such Lender realized on all remedies available to it,
whether by agreement or under law.  For avoidance of doubt, (i) the
amount of the Committed Party’s Capital Contribution Obligation shall be
reduced, dollar-for-dollar, by the product of (a) the Committed Party’s
Proportionate Share and (b) all Remedy Proceeds and, for this purpose, all
Remedy Proceeds shall be applied, based on their Proportionate Shares, solely
against the Capital Contribution Obligations of the Committed Party and all
other similar capital contribution obligations of direct and indirect owners of
SPGLP pursuant to agreements similar to this Agreement until the aggregate
amount thereof has been reduced to zero and (ii) SPGLP shall exhaust all other
remedies available to it for the repayment of any Loan that is declared in
default by the Lender prior to enforcing the obligations of the Committed Party
under this Agreement.  Notwithstanding anything to the contrary in
this Agreement, if at any time the Total Committed Capital exceeds 30% of the
aggregate principal amount of the Loans, then the Committed Contribution of the
Committed Party shall be reduced dollar for dollar by the amount that is the
product of the Committed Party’s Proportionate Share and the dollar amount of
such excess.
  4.           Commitment
Absolute.  This Agreement is an absolute, unconditional,
present and continuing obligation of the Committed Party to make its Committed
Contribution.  No setoff, counterclaim, reduction or diminution of an
obligation, except as set forth in Section 3 of this Agreement, or any defense
of any kind or nature (other than (a) performance by the Committed Party of the
Capital Contribution Obligations, (b) payment in full of the unpaid principal
balance of the Loans or, if less, the Loan Recovery Shortfall Amount, (c)
existence of Remedy Proceeds equal to or greater than the Loan Recovery
Shortfall Amount or (d) violation by New Company or SPGLP of any of its
agreements or obligations under this Agreement, including, without limitation,
those set forth in Section 10(c) of this Agreement) which the Committed Party
has or may have with respect to a claim under this Agreement shall be available
hereunder to the Committed Party against New Company or SPGLP.
  5.           Time, Method And Place Of
Payment.  All payments of Committed Contributions by the
Committed Party under or by virtue of this Agreement shall be made to SPGLP in
lawful money of the United States of America and in immediately available funds
at  SPGLP’s offices specified in Section 16 of this Agreement, or at
such other place or places as SPGLP may hereafter designate in
writing.  Any payments hereunder to be made by the Committed Party
will be due and payable within ten (10) business days after notice from New
Company and SPGLP stating the amount of the Capital Contribution Obligations, as
determined in accordance with the provisions of Section 3 of this Agreement,
accompanied by support documentation adequate to substantiate the amount
due.
  6.           SPGLPAgreement And New Company
Agreement; U.S. Federal Income Tax Treatment.  For purposes of
the New Company Agreement and the SPGLP Agreement, and for U.S. federal income
tax purposes, (a) the Committed Party shall be deemed to have made a
contribution of capital to Pro-DFJV in an amount equal to the product of (1) its
Committed Contribution and (2) the quotient of (A) Pro-DFJV’s Allocable Share
(as defined in the LVP Tax Matters Agreement) over (B) the sum of the Allocable
Shares of the Committed Party and Pro-DFJV (the amount of such contribution, the
“Pro-DFJV Amount”), (b) Pro-DFJV shall be deemed to have contributed the
Pro-DFJV Amount to New Company, (c) the Committed Party shall be deemed to have
made a contribution of capital to New Company in an amount equal to the
Committed Contribution minus the Pro-DFJV Amount, and (d) New Company shall be
deemed to have immediately contributed the Committed Contribution to
SPGLP.
  3
  7.           Waivers.  Except
as expressly provided herein to the contrary, the Committed Party hereby waives
notice of any liability to which this Agreement may apply, notice and proof of
reliance by New Company or SPGLP upon this Agreement, presentment and demand for
payment, notice of dishonor, protest and notice of protest of compliance with
the terms and provisions of any of the Loan Documents, or of non-performance or
non-observance thereof.
  8.           Committed Party’s Consent
Not Required .  Except
as otherwise provided herein, so far as the Committed Party is concerned, SPGLP
and the Lenders may agree at any time and from time to time, without the consent
of, or notice to, the Committed Party, and, without impairing or releasing any
of the Capital Contribution Obligations of the Committed Party, to:
  (a)           change
the manner, place or terms of, and/or change or extend the time of payment, or
modify, renew or alter, any of the Loan Documents, or any liability incurred
directly or indirectly in respect thereto, or waive any breach of, or any act,
omission or default under, the Loan Documents, or consent to any of the
foregoing, and this Agreement shall continue in full force and effect
notwithstanding any such changes, extensions, modifications, renewals or
alterations, and each reference in this Agreement to the Loan Documents shall
include such change, extension, modification, renewal or
alteration;
  (b)           settle
or compromise any claim pursuant to the Loan Documents, or any liability
incurred directly or indirectly in respect thereof (except for liabilities of
the Committed Party for Capital Commitments), or consent to any of the
foregoing; and
  (c)           apply
any sums by whomsoever paid or howsoever realized to whatever obligations of
SPGLP in respect of any Loan or the Loan Documents as are then outstanding, as
SPGLP and the Lenders may deem appropriate, regardless of what Capital
Contribution Obligations of the Committed Party then remain unsatisfied, the
order and method of such application to be in SPGLP's and the Lenders’
discretion; provided, however, that SPGLP shall not take any action described in
this Section 8, a principal purpose of which would be to cause the Committed
Party to become obligated to make payments of Committed Contributions to
SPGLP.
  9.           No Impairment or
Defense.  No invalidity, irregularity or unenforceability of
all or any part of the Capital Commitment Obligations or of any of the Loan
Documents (including, without limitation, by reason of any insolvency or
bankruptcy of SPGLP or other primary obligor or guarantor of any Loan or any
disaffirming of any such obligation by or on behalf of SPGLP or other primary
obligor or guarantor), nor any delay on the part of any Lender in exercising any
of its rights, powers or options under any of the Loan Documents or a partial or
single exercise thereof, shall, except as otherwise provided in this Agreement,
affect, impair or be a defense to this Agreement, and this Agreement shall be
construed as a continuing, absolute and unconditional commitment without regard
to the validity, regularity or enforceability of the Loan Documents or any other
instrument or document with respect thereto at any time or from time to time
held by Lenders.
  4
  10.           Certain Covenants
ofSPGLP.  At all times that the Committed Party holds a direct or
indirect interest in SPGLP, SPGLP and New Company represent, covenant and agree
as follows with the Committed Party:
  (a)           In
the absence of the obligations undertaken by the Committed Party hereunder, each
of the Loans would be a “nonrecourse liability,” within the meaning of Treas.
Reg. Sec. 1.752-1(a)(2) as in effect on the date hereof, and New Company and
SPGLP shall take such action as may be necessary to cause such Loans to retain
(and shall refrain from taking any action that would cause such Loans to lose)
such status as long as the Committed Party has any Capital Contribution
Obligation hereunder, unless SPGLP has made the offer to the Committed Party
described in Section 10(c) below;
  (b)           Taking
into account the obligations under this Agreement, SPGLP and New Company shall
take such action as may be necessary to cause the Loans to be treated (and shall
refrain from taking any action that would cause such obligation to cease to be
treated), for federal income tax purposes, as a “recourse liability,” as such
term is used in Treas. Reg. Sec. 1.752-2 as in effect on the date hereof with
respect to the Committed Party (including through its interest in Pro-DFJV), to
the extent of the Committed Party’s Committed Capital;
  (c)           In
the event that (i) (A) SPGLP incurs additional indebtedness in excess of one
billion dollars in the aggregate that is senior to any of the Loans or (B) any
Loan is refinanced or repaid in accordance with its terms, and (ii) SPGLP offers
any limited partner that has entered into a similar capital contribution
agreement an opportunity to have the “economic risk of loss,” within the meaning
of Treas. Reg. Sec. 1.752-1 and 1.752-2, with respect to any indebtedness of
SPGLP which is senior to the Loans, SPGLP shall provide a similar and no less
favorable opportunity to the Committed Party to replace all or a portion of its
obligation under this Agreement.
  (d)           SPGLP
shall maintain Loans with a sufficient principal balance such that the Committed
Party would be required to make a Committed Contribution equal to its Maximum
Amount, as determined from time to time, in the event that the Lender receives
no Remedy Proceeds, taking into account the limitations on Committed
Contributions imposed by this Agreement and all similar capital contribution
commitments of direct and indirect owners of SPGLP pursuant to agreements
similar to this Agreement.
  11.           Amendments; Governing
Law.  This Agreement may not be waived, modified, cancelled,
terminated or amended except by an agreement in writing signed by SPGLP, New
Company, Pro-DFJV, and the Committed Party, so long as it has not ceased to be
the Committed Party pursuant to Section 15 of this Agreement.  The
respective rights and obligations of the Committed Party, Pro-DFJV, New Company,
and SPGLP shall be governed by and construed in accordance with the laws of the
State of Delaware.
  5
  12.           Successors and
Assigns.  Subject to the remainder of this Section 12 and to
Section 15, below, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
assigns.  Except for the parties hereto and their respective
successors and assigns, no other person shall be entitled to the benefits of
this Agreement or to rely hereon and, in particular, the Lenders shall not be,
and shall not be deemed to be, a third party beneficiary of this
Agreement.  Upon the transfer of a portion or all of the Committed
Party’s indirect interest in SPGLP, the successors, assigns, distributees and/or
transferees of the Committed Party (the “Transferees”) may
assume or otherwise undertake the Capital Contribution Obligation of the
Committed Party, by entering into and delivering a substitute or replacement of
this Agreement which shall contain substantially the same terms and provisions
of this Agreement, in order to satisfy all or any portion of the obligations of
the Committed Party.  If one or more, but not all, of the Transferees
elect to assume or otherwise undertake the Capital Contribution Obligation of
the Committed Party, then all those making such election shall be severally
liable for the Committed Contribution, provided each such Transferee’s
proportionate share shall be either: (a) that percentage which results from
multiplying the Committed Party’s Committed Contribution by a fraction whose
numerator is one (1) and whose denominator is the aggregate number of
Transferees, or (b) such percentage as is agreed to by all of such
Transferees.  Any Transferee that does not elect to assume or
otherwise undertake the Capital Contribution Obligation of the Committed Party
shall have no liability for the Committed Party’s Capital Contribution
Obligation.
  13.           Actions and
Proceedings.  Any action or proceeding in connection with this
Agreement may be brought in a court of record of the State of domicile of the
party against whom the action or proceeding is brought or the United States
District Court for such State of domicile, the parties hereby consenting to the
jurisdiction thereof, and service of process may be made upon any party by
mailing a copy of the summons and complaint to such party, by registered or
certified mail, at its address to be used for the giving of notices under this
Agreement.  In an action or proceeding relating to this Agreement, the
parties mutually waive trial by jury.
  14.           Severability.  If
this Agreement would be held or determined to be void, invalid or unenforceable
by reason of the amount of the Committed Party’s liability under this Agreement,
then, notwithstanding any other provision of this Agreement to the contrary, the
maximum amount of the liability of the Committed Party under this Agreement
shall, without any further action by the Committed Party, Pro-DFJV, New Company,
SPGLP any other person, be automatically limited and reduced to an amount which
is valid and enforceable.
  15.           Termination Of Contribution
Obligation.  In the event that:
  (a)           the
Committed Party ceases to own a direct or indirect interest in
SPGLP;
  (b)           upon
request of the Committed Party, within six months of a substantial
reorganization of SPGLP or the REIT for business or tax purposes, which
reorganization results in a substantial increase in SPGLP debt; or
  (c)           upon
request of the Committed Party made at any time during the 60-day period
following each successive six-year anniversary of the date of this
Agreement,
  6
  then each
party’s obligations hereunder shall terminate and be of no further force or
effect and each shall execute such documents acknowledging the termination of
the such party’s obligations hereunder as the other parties may reasonably
request; except that, in the case of an event described in Section 15(a), (c) or
(d) above, if, in the reasonable judgment of SPGLP, there is a significant
possibility that within one year of such event the obligation of the Committed
Party hereunder would be called upon by SPGLP to satisfy the Loans, then the
Committed Party's obligations hereunder shall terminate and be of no further
force or effect only with respect to Capital Contribution Obligations arising
more than one year after the date of the event.
  16.           Notices.  All
notices or other communications hereunder to either party shall be in writing
and shall be sent by (a) overnight courier service or United States Express Mail
against receipt or (b) Certified Mail, Return Receipt Requested, postage
prepaid.  Notices shall be deemed given one (1) business day after
being sent if sent by overnight courier service or United States Express Mail or
three (3) business days after being sent if sent by Certified
Mail.  Notices to a party shall be sent to its or his address set
forth below or to such other address as shall be stated in a notice similarly
given:
  If to
SPGLP:
  Simon
Property Group, Inc
 225 West
Washington Street
 Indianapolis,
Indiana 46204
 Attention:              James
M. Barkley
 Facsimile:              317-685-7377
  With a
copy (which copy shall not constitute notice) to:
  Fried,
Frank, Harris, Shriver and Jacobson LLP
  One New
York Plaza
 New York,
New York 10004
 Tel:
212.859.8980
 Attention:              Peter
S. Golden
 Alan S. Kaden
 Facsimile:              212.859.4000
  If to New
Company:
  Marco LP
Units, LLC
 225 West
Washington Street
 Indianapolis,
Indiana 46204
  With a
copy (which copy shall not constitute notice) to:
  If to the Committed Party or
Pro-DFJV:
  c/o The
Lightstone Group
 1985
Cedar Bridge Avenue
 Lakewood,
NJ  08701
 Attention:              Donna
Brandin
 Facsimile:              732-612-1444
  7
  With a
copy (which copy shall not constitute notice) to:
  Paul,
Weiss, Rifkind, Wharton & Garrison LLP
 1285
Avenue of the Americas
 New York,
New York  10019-6064
 Attention:              Jeffrey
D. Marell
 Jeffrey B. Samuels
 Facsimile:              212-757-3990
 
 17.           Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall constitute one and the same
instrument.
  8
  IN
WITNESS WHEREOF, the Committed Party and Pro-DFJV have duly executed this
Agreement as of the day and year first above written.
  COMMITTED
      PARTY:By:
                          Lightstone
      Value Plus REIT, L.P.By:
      Lightstone Value Plus Real Estate
                            Investment
      Trust, Inc., its General PartnerBy:Name:Title:
 
 PRO-DFJV:PRO-DFJV
      HOLDINGS LLCBy:Print
      Name:Duly
      Authorized
 
 Signature
Page to Capital Commitment
  
  IN
WITNESS WHEREOF, SPGLP and New Company have duly executed this Agreement as of
the day and year first above written.
  SPGLP:SIMON
      PROPERTY GROUP, L.P., a Delaware
                                    limited
      partnershipBy:
                                  SIMON
      PROPERTY GROUP, INC., a
                                    Delaware
      corporation, its General PartnerBy:Print
      Name:Duly
      AuthorizedNEW
      COMPANY:MARCO
      LP UNITS, LLCBy:Print
      Name:Duly
      Authorized
 
 Signature
Page to Capital Commitment
  
  Exhibit A to Capital
Contribution Commitment Agreement
  Committed
      Party
                          
                          Committed
      ContributionLightstone
      Value Plus REIT, L.P.
                          
                          $
                          100,000,000.00
  A-1