Document:

Exhibit 10.18
	 
	AMENDED AND RESTATED
OPERATING AGREEMENT 

OF

LIGHTSTONE MEMBER II LLC 

 

 

Dated as of December 23, 2004

	

	
AMENDED AND RESTATED
OPERATING AGREEMENT 

OF

LIGHTSTONE MEMBER II LLC 

                                This Amended and Restated Operating Agreement is entered into this 23rd day of December, 2004, by and
among DAVID LICHTENSTEIN, an individual (“Managing Member”), with an address c/o The Lightstone
Group LLC, 326 Third Street, Lakewood, New Jersey 08701 and PRESIDENTIAL REALTY CORPORATION, a Delaware
corporation, with an address at 180 South Broadway, White Plains, New York 10605 (“PRC”).

                                WHEREAS, David Lichtenstein, as the sole member, formed the Company by the filing of a Certificate
of Formation with the Delaware Secretary of State, and entered into the Operating Agreement of the
Company dated December 1, 2004 (the “Original Agreement”); and

                                WHEREAS, on December 16, 2004, the Property Owners, each of which is wholly owned by the Company, acquired
the Properties, subject to the Mortgage Loan; and

                                WHEREAS, on the date hereof, the Mezzanine Lender is making the Mezzanine Loan to the Company; and

                                WHEREAS, David Lichtenstein desires to admit PRC as a member of the Company and to amend and restate
the terms and conditions of the Original Agreement.

                                NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Original Agreement is hereby amended and restated in its entirety to read as follows:

EXPLANATORY STATEMENT

                                The parties have agreed to organize and operate a Delaware limited liability company, which limited
liability company shall henceforth be organized and operated in accordance with the terms and subject
to the conditions set forth in this Agreement.

                                NOW, THEREFORE, for good and valuable consideration, the parties, intending legally to be bound, hereby
agree as follows:

ARTICLE I
Defined Terms

                                The following capitalized terms shall have the meanings specified in this Article I.

                                “Act”  means the Delaware Limited Liability Company Act, Delaware Code, Title 6, Sections 18-101, et
seq., as amended from time to time.

	

	
                                “Additional Capital Contribution”  shall have the meaning set forth in Section 3.2.

                                “Adjusted Book Value” means, with respect to each Company asset, the carrying value of each such asset on the books of the
Company for federal income tax accounting purposes, as calculated pursuant to the rules set forth
in Code (as hereinafter defined) Section 704 and Regulation (as hereinafter defined ) Section 1.704.

                                “Adjusted Capital Account Deficit”  means, with respect to any Member, the deficit balance, if any, in the Member’s Capital
Account as of the end of the relevant taxable year, after giving effect to the following adjustments:

                                (a)           credit to such Capital Account
the amounts which the Member is obligated to restore or is deemed obligated to restore pursuant to
the penultimate sentences of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

                                (b)           debit to such Capital Account
the items described in Regulation Sections 1.704-1(b)(2)(ii)-(d)(4), (5), and (6).

                                The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions
of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.

                                “Affiliate”  means, with respect to any Member, any Person which directly or indirectly through one or more
intermediaries Controls, is Controlled by or is under common Control with a specified Person.

                                “Agreement”  means this Operating Agreement, as amended from time to time.

                                “Approval” (and any variation thereof) of a Member shall mean the prior written approval of such Member. Use of
the term “reasonable” or “reasonably” in connection with the term “Approval”
or any variation thereof or with the term “satisfactory” means that such Approval shall
not be withheld, conditioned or delayed unreasonably. Unless either of such terms is used in connection
with the term “Approval” (or any variation thereof), such Approval may be granted or withheld
in a Member’s (or its authorized representative’s) sole discretion.

                                “Bankruptcy Action”  means, with respect to a Person, (a) instituting proceedings to be adjudicated bankrupt or insolvent;
(b) consenting to the institution of bankruptcy or insolvency proceedings against it; (c) filing
a petition seeking, or consenting to, reorganization or relief under any applicable federal or state
law relating to bankruptcy; (d) consenting to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of such Person or a substantial part of its property;
(e) making any assignment for the benefit of creditors; (f) admitting in writing its inability to
pay its debts generally as they become due or declare or effect a moratorium on its debts; or (g)
taking any action in furtherance of any such action described in (a) through (f), or (h) any other
event which would cause such Person to cease to be a member of a limited liability company under
Section 18-304 of the Act.

	

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                                “Capital Account”  means an account to be maintained by the Company for each Member in accordance with the provisions
of Regulation Section 1.704-1(b)(2)(iv).

                                “Capital Contribution”  means the total amount of cash contributed to the Company by a Member.

                                “Capital Proceeds”  means (A) the cash or other consideration received by the Company (including interest on installment
sales when received) as a result of (i) a sale, exchange, abandonment, foreclosure, insurance award,
condemnation, easement sale or other similar transaction relating to any Company Assets, (ii) any
financing or refinancing relating to any Company Assets, (iii) capital contributions to the Company
upon admission of new members and (iv) any other transaction which, in accordance with generally
accepted accounting principles, would be treated as a capital event, in each case less (B) any such
cash which is applied to (i) the payment of transaction costs and expenses, (ii) the repayment of
debt of the Company which is required under the terms of any indebtedness of the Company or which
has been authorized to be repaid by the Managing Member, (iii) the repair, restoration or other improvement
of Company Assets which is required under any contractual obligation of the Company or which has
been authorized by the Managing Member and (iv) the establishment of reserves as reasonably required
by the Managing Member. “Capital Proceeds” shall also mean any of the fore­going which
are received by a partnership or other vehicle in which the Company is a partner or investor or in
which the Company otherwise has an interest, to the extent received by the Company as dividends or distributions.

                                “Cash Flow”  means all cash funds derived from operations (including interest received on reserves), but
not including Capital Proceeds, without reduction for any noncash charges, but less cash funds used
to pay current operating expenses (including, without limitation, all property management and/or
asset management fees) and to pay or establish reasonable reserves for future expenses, debt payments,
capital improvements, and replacements as determined by the Managing Member. 

                                “Code”  means the Internal Revenue Code of 1986, as amended, or any corresponding provision of any succeeding
law.

                                “Company”  means the limited liability company formed in accordance with this Agreement.

                                “Company Assets”  means all right, title and interest of the Company in and to all or any portion of the assets
of the Company and any property (real or personal) or estate acquired in exchange therefor or in
connection therewith.

                                “Control”  shall mean, with respect to a specified Person, (i) the ownership, control or power to vote
fifty percent (50%) or more of (x) the outstanding shares of any class of voting securities or (y)
beneficial interests, of any such Person, directly or indirectly, or acting through one or more Persons,
(ii) the control in any manner over the managing member(s) or the election of more than one director
or trustee (or persons exercising similar functions) of such Person, or (iii) the power to exercise,
directly or indirectly, control over the management or policies of such Person. “Controlling” and “Controlled” have meanings correlative thereto.

	

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                                “Damages”  shall have the meaning set forth in Section 5.4.2.

                                “Distributions”  shall mean, as to any Member, all distributions of Proceeds made to such Member pursuant to
this Agreement.

                                “Economic Interest”  shall have the meaning set forth in Section 6.3.

                                “Indemnitee”  shall have the meaning set forth in Section 5.4.1.

                                “Initial Capital Contributions”  shall have the meaning set forth in Section 3.1.

                                “Involuntary Withdrawal”  means, with respect to any Member, the occurrence of any of the following events:

                                (a)           a Bankruptcy Action occurs with
respect to such Member;

                                (b)           such Member files an answer or
other pleading admitting or failing to contest the material allegations of a petition filed against
the Member in any proceeding described in the definition of Bankruptcy Action;

                                (c)           any proceeding against such Member
seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any statute, law, or regulation, continues for one hundred twenty (120) days after the
commencement thereof, or the appointment of a trustee, receiver, or liquidator for the Member or
all or any substantial part of the Member’s properties without the Member’s agreement or
acquiescence, which appointment is not vacated or stayed for one hundred twenty (120) days or, if
the appointment is stayed, for one hundred twenty (120) days after the expiration of the stay during
which period the appointment is not vacated;

                                (d)           if such Member is a partnership
or a limited liability company, the dissolution and commencement of winding up of the partnership
or limited liability company; or

                                (e)           if such Member is a corporation,
the dissolution of the corporation or the revocation of its charter.

                                “Managing Member”  shall mean David Lichtenstein or any successor Managing Member appointed pursuant to this Agreement.

                                “Member”  means each Person signing this Agreement as a member of the Company and any Person who subsequently
is admitted as a member of the Company.

                                “Member Nonrecourse Deduction”  means “partner nonrecourse deduction” within the meaning of Regulation Section 1.704-2(i).

                                “Membership Interest”  means all of the rights of a Member in the Company, including a Member’s: (a) Capital Account; (b)
share of the Profits and Losses of, and the right to receive distributions from, the Company; (c)
right to inspect the Company’s books and records; (d) to the extent provided in this Agreement,
the right to participate in the management 

	

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of and vote on matters coming before the Company; and (e) to the extent provided under this Agreement,
the right to act as an agent of the Company.

                                “Mezzanine Lender”  means PRC.

                                “Mezzanine Loan”  means that certain loan in the amount of $7,500,000 made by Mezzanine Lender to the Company
as evidenced by the Mezzanine Note and secured by a certain Pledge and Security Agreement each dated
the date hereof.

                                “Mezzanine Note”  means that certain Promissory Note dated the date hereof by the Company to Mezzanine Lender
in the amount of $7,500,000.

                                “Minimum Gain”  means “partnership minimum gain” as determined pursuant to Regulation Section 1.704-2(d).
Minimum Gain shall be computed separately for each Member in a manner consistent with the Regulations
under Code Section 704(b).

                                “Mortgage Borrower”  means the Property Owners.

                                “Mortgage Loan”  means that certain loan from Wachovia Bank to Property Owners in the aggregate maximum principal
amount of $39,500,000 made pursuant to that certain Mortgage with Power of Sale, Deed of Trust, Assignment
of Leases and Rents, Fixture Filing, Security Agreement and Financing Statement dated December 16,
2004. 

                                “Negative Capital Account”  means a Capital Account with a balance of less than zero.

                                “Non-Managing Member” shall mean PRC.

                                “Nonrecourse Deductions”  shall have the meaning ascribed to such term in Regulations Section 1.704-2(b)(1).

                                “Percentage”  means, as to a Member, the percentage set forth after the Member’s name on Exhibit A. 

                                “Person”  means and includes an individual, corporation, limited liability company, partnership, joint
venture estate, trust, unincorporated association, or other entity, any federal, state, county or
municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

                                “Proceeds”  means the collective reference to Capital Proceeds and Cash Flow.

                                “Profit”  and “Loss” means, for each taxable year of the Company (or other period for which Profit or Loss must be computed),
the Company’s net taxable income or loss determined in accordance with Code Section 703(a),
with the following adjustments:

                                (a)           all items of income, gain, loss,
deduction, or credit required to be stated separately pursuant to Code Section 703(a)(1) shall be
included in computing taxable income or loss; and

	

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                                (b)           any income of the Company that
is exempt from federal income tax and is not otherwise taken into account in computing Profit or
Loss shall be included in computing taxable income or loss; and

                                (c)           any expenditures of the Company
described in Code Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section 1.704-1(b)(2)(iv)(i))
and not otherwise taken into account in computing Profit or Loss, shall be subtracted from taxable
income or loss; and

                                (d)           gain or loss resulting from any
taxable disposition of Company property shall be computed by reference to the adjusted book value
of the property disposed of, notwithstanding the fact that the adjusted book value differs from the
adjusted basis of the property for federal income tax purposes; and

                                (e)           in lieu of the depreciation, amortization,
or cost recovery deductions allowable in computing taxable income or loss, there shall be taken into
account the depreciation computed based upon the adjusted book value of the asset; and

                                (f)            to the extent an adjustment
to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining
Capital Accounts as a result of a distribution other than in liquidation of a Member’s interest
in the Company, the amount of such adjustment shall be treated as an item of gain or loss from the
disposition of such asset for purposes of computing Profits or Losses; and

                                (g)           notwithstanding any other provision
of this definition, any items which are specially allocated pursuant to Section 4.3 hereof shall
not be taken into account in computing Profit or Loss.

                                “Properties”  means the properties owned by the Property Owners.

                                “Property Owners”  means Shawnee Mall LLC and Brazos Outlets Center LLC.

                                “Regulations”  means the income tax regulations, including any temporary regulations and proposed regulations
to the extent that their proposed effective date would cause them to be applicable as of the date
of any determination, from time to time promulgated under the Code.

                                “Removed Member”  means a member who withdraws from the Company as a result of an Involuntary Withdrawal.

                                “Sale”  means any sale or final disposition of the Property.

                                “Transfer”  means—when used as a noun—any sale, hypothecation, pledge, assignment, attachment,
or other transfer—and, when used as a verb—means to sell, hypothecate, pledge, assign,
or otherwise transfer, in each case whether accomplished directly or indirectly.

	

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                                “Treasury Regulations”  means the regulations issued from time to time by the Internal Revenue Service with respect
to the Code.

                                “Unreturned Capital Contribution”  means, as to each Member, such Member’s Capital Contribution less the aggregate amount
previously distributed to such Member under Section 4.1.2(b).

                                “Voluntary Withdrawal”  means a Member’s disassociation with the Company by means other than a Transfer or an Involuntary
Withdrawal.

ARTICLE II
Formation and Name: Office; Purpose; Term

                                 2.1          Organization. The parties hereby organize a limited liability company pursuant to the Act and the provisions of
this Agreement and, for that purpose, have caused the Certificate of Formation to be prepared, executed,
and filed with the Delaware Secretary of State on December 1, 2004. The Managing Member shall take
such further actions as shall be required by the Act or other laws of the jurisdiction in which the
Property is located, or as may be desirable thereunder, to form the Company and to qualify the Company
to do business in the State of New York. At all times during the term of this Agreement, each Member
shall execute, and, on behalf of the Company, the Managing Member shall promptly cause to be filed,
such other and further certificates or instruments and amendments thereto as may be necessary or
desirable (i) for the perfection and continued maintenance of the Company as a limited liability
company under the Act and under the laws of any state in which the Company is then doing business,
(ii) to cause such certificates or other documents to reflect accurately the agreement of the Members
and the amount (including reductions), if required, of their respective Capital Contributions, and
(iii) to permit the Company to own the membership interest in the Property Owner and transact business lawfully.

                                 2.2          Name of the Company. The name of the Company shall be Lightstone Member II LLC. The Company may do business under that
name and under any other name or names upon which the Members agree. If the Company does business
under a name other than that set forth in its Certificate of Formation, then the Managing Member
shall file a certificate as required by the Act.

                                 2.3          Purpose. (a) Notwithstanding anything to the contrary in this Agreement or in any other document governing
the formation, management or operation of the Company, the Company is organized solely for the following
purposes: (i) to own the membership interest in each Property Owner and to act as the sole member
of each Property Owner pursuant to the terms of the Limited Liability Company Agreement of each Property
Owner dated December 1, 2004, (ii) to enter into the Mezzanine Loan Agreement and all other documents
in connection with the Mezzanine Loan (the “Mezzanine Loan Documents”) with Mezzanine Lender, and to perform its obligations with respect thereto, and (iii) to engage
in any and all business permitted under the Act which are necessary and incidental thereto. The Company
has the power and authority to do anything permitted by the Act and other applicable law, subject
to the immediately preceding sentence. 

	

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                                (b)           The Company, by or through the
Managing Member on behalf of the Company, may enter into and perform the Mezzanine Loan, the Mezzanine
Loan Documents, and all documents, agreements, certificates, or financing statements contemplated
thereby or related thereto, all without any further act, vote or approval of any other Person notwithstanding
any other provision of this Agreement, the Act or applicable law, rule or regulation. The foregoing
authorization shall not be deemed a restriction on the powers of the Company or the Managing Member
to enter into other agreements on behalf of the Company.

                                 2.4          Duration. The duration of the Company shall begin upon the filing of the Certificate of Formation with the
Delaware Secretary of State and shall continue until its existence is terminated pursuant to Article
VII of this Agreement.

                                 2.5          Members. The name, present mailing address, taxpayer identification number, and Percentage of each Member
are set forth on Exhibit A.

                                 2.6          Principal Office. The Company shall maintain its principal place of business c/o The Lightstone Group LLC, 326 Third
Street, Lakewood, NJ 08701.

ARTICLE III
Members; Capital; Capital Accounts

                                 3.1          Capital Contributions. The parties hereto agree that the aggregate required initial capital contributions of all Members
shall be $2,500,000 (“Initial Capital Contributions”). Set forth on Exhibit A attached hereto is a description of the respective portion of the Initial Capital Contributions deemed
made by each Member on the date hereof.

                                 3.2          Additional Capital. The Managing Member shall make any additional capital contributions to the Company from time to time
in amounts in excess of the Initial Capital Contributions required to carry out the purpose of the
Company as set forth in Section 2.3 hereof (the “Additional Capital Contributions”).

                                 3.3          No Interest on Capital Contributions. No interest shall be paid on the Capital Contributions of Members. 

                                 3.4          Form of Return of Capital. If a Member is entitled to receive a return of a Capital Contribution, the Company shall distribute
cash to the Member in return of same.

                                 3.5          Capital Accounts. A separate Capital Account shall be maintained for each Member.

                                 3.6          Limited Liability of Members. No Member shall have any personal liability for any obligation of the Company except for any personal
liability expressly assumed in writing by the Managing Member in connection with the incurrence of
Company indebtedness.

	

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ARTICLE IV
Distributions and Profit, Loss Allocations

                                 4.1          Distributions Generally. Except as provided in Section 4.4 hereof, distributions of Proceeds shall be distributed to the Members
at the reasonable discretion of the Managing Member, subject to the terms and conditions of all indebtedness
of the Company; provided that Cash Flow shall be distributed not less than annually and Capital Proceeds
shall be distributed not later than forty-five (45) days from the closing of the transaction giving
rise to such Capital Proceeds.

                                4.1.1        Distributions of Cash Flow.

                                Except as provided in Section 4.4 hereof, distributions of Cash Flow shall be made to the Members as
follows:

                                (a)           First, to the Managing Member,
until the Managing Member has received an aggregate amount under this Section 4.1.1(a) and under
Section 4.1.2(a) below equal to an accrued return of eleven percent (11%) per annum on the Managing
Member’s Unreturned Capital Contribution;

                                (b)           Then, to the Members in accordance
with their respective Percentages.

                                4.1.2        Distribution of Capital Proceeds. 

                                Except as provided in Section 4.4 hereof, Capital Proceeds shall be distributed to the Members as follows:

                                (a)           First, to the Managing Member,
until the Managing Member has received an aggregate amount under this Section 4.1.2(a) and under
Section 4.1.1(a) above equal to an accrued return of 11% per annum on the Managing Member’s
Unreturned Capital Contribution;

                                (b)           Then, to the Managing Member,
until the Managing member has received an aggregate amount under this Section 4.1.2(b) equal to the
Managing Member’s Capital Contribution.

                                (c)           Then, to the Members in accordance
with their respective Percentages.

                                 4.2          Allocation of Profits and Losses. 

                                (a)           Allocations. The items of income, expense, gain and loss of the Company comprising Profits and Losses for a taxable
year shall be allocated among the persons who were Members during such taxable year in a manner that
will reduce, proportionately, the differences between their respective Partially Adjusted Capital
Accounts and Target Capital Accounts for such taxable year. No portion of the Losses for any taxable
year shall be allocated to a Member whose Target Capital Account is greater than or equal to its
Partially Adjusted Capital Account for such taxable year. No portion of the Profits for any taxable
year shall be allocated to any Member whose Partially Adjusted Capital Account is greater than or
equal to its Target Capital Account for such taxable year. For this purpose “Partially Adjusted
Capital Account” means, 

	

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with respect to any Member for any taxable year, the Capital Account of such Member at the beginning
of such taxable year, adjusted for all contributions and distributions during such year and all special
allocations pursuant to Section 4.3 respect to such taxable year, but before giving effect to
any allocations of Profits or Losses for such taxable year pursuant to this Section 4.2. For this
purpose “Target Capital Account” means the amount (which may be either a positive or a
deficit balance) equal to:

	 

	 	                (i)            the amount of the hypothetical
  distribution (if any) that such Member would receive if, on the last day of the taxable year, (x)
  all Company assets, including cash, were sold for cash equal to their respective Adjusted Book Values,
  taking into account any adjustments thereto for such taxable year, (y) all Company liabilities were
  satisfied in cash according to their terms (limited, with respect to each nonrecourse liability,
  to the respective Adjusted Book Values of the assets securing such liability), and (z) the net proceeds
  thereof (after satisfaction of such liabilities) were distributed in full pursuant to Section 4.1.2, over

		 
	 	                (ii)           the sum of (x) the amount, if
  any, without duplication, that such Member would be obligated to contribute to the capital of the
  Company pursuant to any provision of this Agreement, (y) such Member’s share of Company Minimum
  Gain determined pursuant to Regulations Section 1.704-2(g), and (z) such Member’s share
  of Member Nonrecourse Debt Minimum Gain determined pursuant to Regulations Section 1.704-2(j)(5),
  all computed immediately prior to the hypothetical sale described in Section 4.2(a)(i) hereof.

	 
	
                                (b)           Determination of Items Comprising Allocations.

	 

	 	                (i)            In the event that the Company
has Profits for a taxable year,
		 

	 	                (A)          for any Member whose Capital Account
  balance needs to be reduced pursuant to Section 4.2 hereof, the allocation required by Section 4.2
  shall be comprised of a proportionate share (based upon the relative amounts their Capital Accounts
  need to be reduced) of each of the Company’s items of expense or loss entering into the computation
  of Profits for such taxable year to the extent necessary to eliminate to the maximum extent possible
  for the taxable year in question, the differential between their respective Partially Adjusted Capital
  Accounts and Target Capital Accounts; and

		 
	 	                (B)           the allocation pursuant to Section
  4.2 hereof in respect of each Member (other than a Member referred to in Section 4.2(b)(i)(A) hereof)
  shall be comprised of a proportionate share (based upon the relative amounts their Capital Accounts
  need to be adjusted) of each Company item of income, gain, expense and loss entering into the computation
  of Profits for such taxable year (other than the portion of each Company item of expense and loss,
  if any, that is allocated pursuant to Section 4.2(b)(i)(A) hereof).

	

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	 	                (ii)           In the event the Company has
Losses for a taxable year,
		 

	 	                (A)          for any Member whose Capital Account
  balance needs to be increased pursuant to Section 4.2 hereof, the allocation required by Section
  4.2 shall be comprised of a proportionate share (based upon the relative amounts their Capital Accounts
  need to be increased) of each of the Company’s items of income and gain entering into the computation
  of Losses for such taxable year to the extent necessary to eliminate to the maximum extent possible
  for the taxable year in question, the differential between their respective Partially Adjusted Capital
  Accounts and Target Capital Accounts; and

		 
	 	                (B)           the allocation pursuant to Section
  4.2 hereof in respect of each Member (other than a Member referred to in Section 4.2(b)(ii)(A) hereof)
  shall be comprised of a proportionate share (based upon the relative amounts their Capital Accounts
  need to be adjusted) of each Company item of income, gain, expense and loss entering into the computation
  of Losses for such taxable year (other than the portion of each Company item of income and gain,
  if any, that is allocated pursuant to Section 4.2(b)(ii)(A) hereof).

		 

	 	                (iii)          To the maximum extent possible in
  each taxable year, the items of taxable income and gain that are required to be specially allocated
  among any Members who need to be allocated items of Profit under Section 4.2(b) shall be allocated
  among them in the same proportion as the total of all Profit items that need to be allocated among
  them under Section 4.2(b). Correspondingly, to the maximum extent possible in each taxable year,
  the items of tax-deductible items of expense and loss that are required to be specially allocated
  among all Members who need to be allocated items of Loss under Section 4.2(b) shall be allocated
  among them in the same proportion as the total of all Loss items that need to be allocated among
  them under Section 4.2(b). The purpose of this subsection is to assure that such taxable and tax-deductible
  items are fairly allocated among the Members each taxable year.

	 
	
                                 4.3          Special Allocations. 

                                4.3.1        Regulatory Allocations. Notwithstanding Section 4.2, allocations of net income, net gain and net loss shall be made consistent
with the qualified income offset and Minimum Gain chargeback provisions of the Regulations promulgated
under Section 704(b) of the Code. Member Nonrecourse Deductions of the Company for any fiscal year
shall be specially allocated to the Member who bears the economic risk of loss for the liability
in question. The foregoing provision relating to Member Nonrecourse Deductions is intended to satisfy
the requirements of Regulation Section 1.704-2(i)(1) and shall be interpreted in accordance therewith.
Nonrecourse Deductions of the Company for any fiscal year shall be specially allocated to the Members
in the same proportion as their respective Percentages.

	

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                                4.3.2        Residual Allocations; Code Section 704(c) Allocations. All items of income, gain, loss, deduction, and any other allocations not otherwise provided for
shall be allocated among the Members for federal, state and local income tax purposes consistent
with the manner that the corresponding constituent items of Profits and Losses shall be allocated
among the Members pursuant to this Agreement, except as may otherwise be provided herein or by the
Code. To the extent the Regulations promulgated pursuant to Subchapter K of Code (including under
Sections 704(b) and (c) of the Code) require allocations for tax purposes that differ from the foregoing
allocations, the Managing Member shall determine the manner in which such tax allocations shall be
made so as to comply more fully with such Regulations. Allocations required under Section 704(c)
(relating to items of income, gain, loss and deduction with respect to contributed property), or
under Section 704(c) principles applicable under Regulations Sections 1.704-1(b)(2)(iv) (relating
to Company property that has been revalued for Capital Account purposes) are solely for purposes
for federal, state and local taxes, and shall not be taken into account in computing any Member’s
Capital Account or share of Profit or Loss or other items or distributions under any provisions of this Agreement.

                                4.3.3        Gross Income Allocation. In the event any Member has an Adjusted Capital Account Deficit at the end of any fiscal year of
the Company, such Member shall be specially allocated items of Company income and gain in the amount
and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this
Section 4.3.3 shall be made only if and to the extent that such Member would have an Adjusted Capital
Account Deficit in excess of such amount after all other allocations provided for in Section 4.2
and this Section 4.3 have been tentatively made as if the provision for the qualified income offset
in Section 4.3.1 and this Section 4.3.3 were not in the Agreement.

                                4.3.4        Loss Limitation. No Member shall be allocated Losses or deductions if the allocation would cause the Member to have
an Adjusted Capital Account Deficit or would increase the Member’s Adjusted Capital Account
Deficit. Any allocation of Loss or deduction that cannot be made to a Member by reason of this Section
4.3.5 shall be made to such Members that have positive Capital Account balances in accordance with
their relative balances subject to the limitation set forth in the preceding sentence. If any Members
are allocated an amount of Loss or deduction by reason of the previous sentence, subsequent items
of income or gain in of an equal amount shall be allocated to such Members as soon as possible to
reverse such prior allocation of Loss.

                                 4.4          Liquidation and Dissolution.

                                4.4.1        If the Company is liquidated, in the year of such
liquidation the assets of the Company shall be distributed to the Members in accordance with the
positive balances in their respective Capital Accounts, after taking into account all adjustments
to Capital Accounts for the Company taxable year during which the liquidation occurs.

                                4.4.2        No Member shall be obligated to restore a Negative
Capital Account.

	

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                                 4.5          General.

                                4.5.1        Except as otherwise provided in this Agreement,
the timing and amount of all distributions shall be determined by the Managing Member.

                                4.5.2        All distributions shall be made to the Persons
shown on the records of the Company to be Members as of the day on which such distribution is made.
Notwithstanding the foregoing, unless the Company’s taxable year is separated into segments,
if there is a Transfer or an Involuntary Withdrawal during the taxable year, the Profit and Loss
for such taxable year shall be allocated between the original Member and the successor generally
on the basis of the number of days each was a Member during the taxable year; provided, however,
the Company’s taxable year shall be segregated into two or more segments in order to account
for Profit, Loss or proceeds attributable to any Sales on other extraordinary, non-recurring items
of the Company.

                                4.5.3        The Members are hereby authorized, upon the advice
of the Company’s tax counsel, to amend this Article IV to the extent required to comply with
the Code and the Regulations promulgated under Code Sections 514(c)(9)(E) and 704(b); provided, however,
that no amendment shall either (i) materially affect distributions to a Member without such Member’s
Approval or (ii) cause this Agreement to not comply with Code Section 514(c)(9)(E) and the Regulations
promulgated thereunder.

                                 4.6          Clawback. Notwithstanding the other provisions of this Article IV, (a) if, as a result of a mistake, any Member
has received more money under Section 4.1 than the amount to which it was entitled, the recipient
shall return the excess amounts distributed to it within 5 business days after written notice from
the Managing Member (or any Non-Managing Member if the Managing Member fails to do so) requesting
such return and (b) if for any reason after Managing Member has received money under Section 4.1.1(b)
it is determined that any Non-Managing Member has not received any amount to which it is entitled
under a higher distribution priority in Section 4.1.1(a) (whether on account of a subsequent contribution
of Capital by any Non-Managing Member, the making of a Contribution Loan or otherwise), then until
such Non-Managing Member receives such amount there shall be distributed to such Non-Managing Member
all sums otherwise distributable to Managing Member under Section 4.1, but such sums shall in no
event exceed the sums previously distributed to Managing Member pursuant to Section 4.1.1(b) and
Managing Member agrees (A) to relinquish and waive any right it may have under Section 4.1.1(b) to
receive such sums and (B) that the distribution of such sums to such Non-Managing Member shall, for
purposes of determining whether Managing Member has received the sums it is entitled to receive under
Section 4.1.1(b), be deemed to have satisfied such entitlement. If necessary, the Managing Member
shall have the authority to treat such payments to any Non-Managing Member as guaranteed payments
and to specially allocate the deduction to Managing Member to reduce any excess Capital Account of
Managing Member if permitted under Code Section 514(c)(9)(E) and the Regulations thereunder.

ARTICLE V
Management: Rights, Powers, and Duties

                                 5.1          Management. Except as otherwise expressly provided herein, the management and control of the Company shall be
vested in the Managing Member. Except as

	

13

	
otherwise expressly provided herein, the Managing Member shall have sole and exclusive continuing authority
to manage the Company, and shall have all of the rights, powers and authority conferred upon a manager
or a managing member under the Act to carry out any and all objects of the Company and to perform
all acts and enter into and perform all contracts and undertakings which, in its sole discretion,
it deems necessary, advisable or incidental thereto. No Member shall have authority to bind the Company
through its action or inaction in connection with any matter except for the Managing Member. Notwithstanding
the foregoing, Managing Member shall cause the Company, as the sole member of the Property Owners,
to cause each of the Property Owners to distribute all Cash Flow of the Property Owners to the Company
no less frequently than annually, subject to any restrictions or limitations imposed on the Property
Owners pursuant to the terms of the Mortgage Loan.

                                (a)           All Member Approval. Notwithstanding any other provisions of this Agreement, including Section 5.1, the Company and/or
the Managing Member may not, without the reasonable approval of PRC, sell any of the Properties or
refinance the Mortgage Loan.

                                5.1.1        Affiliate Contracts Approval. The Property Owners, the Company and/or the Managing Member may not, without the Approval of PRC,
enter into any agreements relating to the Property with any Affiliate of any Member (an “Affiliate Contract”).

                                 5.2          Personal Service. No Member shall be required to perform services for the Company solely by virtue of being a Member.

                                 5.3          Duties of Parties.

                                5.3.1        The Members shall devote such time to the business
and affairs of the Company as is necessary to carry out the Members’ duties set forth in this
Agreement.

                                5.3.2        Nothing in this Agreement shall be deemed to restrict
in any way the rights of any Member, or of any Affiliate of any Member, to conduct any other business
or activity whatsoever, and no Member shall be accountable to the Company or to any other Member
with respect to that business or activity even if the business or activity competes with the Company’s
business. The organization of the Company shall be without prejudice to the Members’ respective
rights (or the rights of their respective Affiliates) to maintain, expand, or diversify such other
interests and activities and to receive and enjoy profits or compensation therefrom. Each Member
waives any rights the Member might otherwise have to share or participate in such other interests
or activities of any other Member or the Member’s Affiliates. 

                                5.3.3        Managing Member shall cause the Company as the
sole member of the Property Owners, to use its best efforts to operate the Properties so that the
rental income derived from each lease with respect to the Properties will qualify as “rents
from real property” as that term is defined in the Internal Revenue Code Section 856(d)(1).

                                 5.4          Liability and Indemnification.

                                5.4.1        Except as specifically set forth elsewhere in
this Agreement to the contrary, or as otherwise required by law, no Member nor any of its officers,
directors, advisors or agents (each of whom is an “Indemnitee”) shall be liable, responsible or accountable in

	

14

	
damages or otherwise to any of the other Members or the Company for any act performed by Indemnitee
within the scope of the authority conferred upon him or it by this Agreement, or for any failure
or refusal by Indemnitee to perform any act, unless such act or failure or refusal to act constitutes
willful misconduct, gross negligence, or breach of fiduciary duty in the performance of Indemnitee’s
obligations to the Company or the Members. The doing of any act or the failure to do any act by any
Indemnitee, the effect of which may cause or result in loss or damage to the Company or the other
Members, shall not subject Indemnitee to any liability under this Agreement if done or omitted pursuant
to a favorable opinion of law issued by counsel of recognized standing engaged by the Company and
experienced in the matters at issue.

                                5.4.2        To the full extent permitted by the Act, the Company
shall indemnify, defend and hold harmless each Indemnitee from and against any direct claim, action,
suit or proceeding brought or threatened against such Indemnitee, and from and against any direct
loss or damage incurred by such Indemnitee (“Damages”) by reason of any act performed, or failure or refusal to act, by him or it for and on behalf
of the Company within the scope of his or its authority under this Agreement, provided that such
Indemnitee acted, or failed or refused to act, in good faith and reasonably believed that such act
or inaction was in the best interests of the Company, and, in the case of a criminal proceeding,
provided that such Indemnitee had no reasonable cause to believe its conduct was unlawful, and provided
further that in each case the act or failure or refusal to act did not constitute willful misconduct,
gross negligence, or breach of fiduciary duty. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, conclusively establish that the Person did not act in good
faith and in a manner which he or it reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe
that his or its conduct was unlawful. Expenses (including reasonable out-of-pocket attorneys’
fees and direct expenses) incurred by an Indemnitee in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the Company in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking (Approved by the Members) by or
on behalf of such Indemnitee to repay such amount if it shall ultimately be determined that it is
not entitled to be indemnified by the Company as authorized in this section. Notwithstanding anything
to the contrary in this Section 5.4.2, at any time prior to the indefeasible repayment in full of
the Mezzanine Loan, the Company’s indemnification obligation under this Section 5.4 shall (a)
be fully subordinated to the Loan and (b) not constitute a claim against the Company or its assets
until such time as the Loan has been indefeasibly paid in accordance with its terms and otherwise
has been fully discharged, unless otherwise agreed to by Lender in writing.

                                 5.5          Fees and Expenses. Neither the Members nor any of their Affiliates or the respective principals or employees of either
of them shall be entitled to any reimbursement for any costs and expenses or paid any salary or other
compensation incurred in furtherance of the business of the Company, except as expressly approved
by all Members; provided, however, that the Managing Member shall be reimbursed for reasonable out-of-pocket
costs and expenses incurred by it in the performance of its duties as Managing Member hereunder.
Notwithstanding anything to the contrary provided herein, in any Affiliate Contract or in any other
agreement, in no event shall the Company reimburse the Members for any overhead costs. 

	

15

	
ARTICLE VI
Transfer of Interests, Withdrawal of Members

                                 6.1          Transfers.

                                (a)           Except as set forth in Section
6.1(b) below, no Member and no direct or indirect owner of such Member, may directly or indirectly,
voluntarily Transfer all, or any portion of, or any interest or rights in, the Membership Interest
owned by such Member without the Approval of the other Members, which Approval may be withheld in
such Member’s sole and absolute discretion. Each Member hereby acknowledges the reasonableness
of this prohibition in view of the purposes of the Company and the relationship of the Members. The
voluntary Transfer, directly or indirectly, of any Membership Interests or interest in a Member in
violation of the prohibition contained in this Section 6.1 shall be deemed invalid, null and void,
and of no force or effect. Any Person to whom Membership Interests or interests in a Member are attempted
to be transferred in violation of this Section 6.1 shall not be entitled to vote on matters coming
before the Members, participate in the management of the Company, act as an agent of the Company,
receive distributions from the Company, or have any other rights in or with respect to the Membership Interests.

                                (b)           Notwithstanding anything contained
herein, each Member may Transfer its Membership Interest and/or any and all of its rights under this
Agreement to an Affiliate; provided, however, that David Lichtenstein shall at all times retain control
of the Managing Member.

                                (c)           If the transferring Member is
a corporation whose shares are not traded on a recognized stock exchange, the provisions of this
Section 6.1 shall apply to (x) a Transfer (by one or more Transfers) of a majority of the stock of
such Member, or (y) the creation of new stock (by one or more transactions) resulting in the vesting
of a majority of the stock of such Member in a party or parties who are nonstockholders as of the
date immediately prior to such transaction, as if such Transfer or vesting of a majority of the stock
of such Member were a Transfer of such Member’s Membership Interest in violation of the provisions
of this Section 6.1.

                                (d)           If the transferring Member is
a partnership or a limited liability company, the provisions of this Section 6.1 shall apply to a
Transfer (by one or more direct or indirect Transfers) of a majority interest in the partnership
or limited liability company, as if such Transfer were a Transfer of such Member’s Membership
Interest in violation of the provisions of this Section 6.1.

                                (e)           If the proposed transferor (whether
a Member or a constituent member, partner or shareholder of a Member) is a natural Person, Transfers
shall be permitted (i) to a trust for the benefit of any immediate family member (father, mother,
sister, brother, son, daughter, spouse, niece, nephew, grandson and/or granddaughter) with respect
to the proposed Transfer, but only if the proposed transferor retains management authority and control
of the interest so transferred or (ii) by succession or testamentary disposition upon death to any
such immediate family members.

	

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                                 6.2          Voluntary Withdrawal. No Member shall have the right or power to Voluntarily Withdraw from the Company, except as otherwise
provided by this Agreement. Any withdrawal in violation of this Agreement shall entitle the Company
to damages for breach, which may be offset against the amounts otherwise distributable to such Member.

                                 6.3          Involuntary Withdrawal. Immediately upon the occurrence of an Involuntary Withdrawal, the successor of the Removed Member
shall not become a Member, but such successor shall be entitled to the Removed Member’s share
of the Profits and Losses of, and the right to receive distributions from, the Company (“Economic Interest”). If the Company is continued as provided in Section 7.1(c), the successor of the Removed Member
shall have all the rights of a holder of an Economic Interest, including the right to receive the
fair market value of the Removed Member’s Economic Interest upon the liquidation of the Company
(and as of such date and no other date), in accordance with the provisions of Article VII of this
Agreement.

                                 6.4          New Members. Additional members who are not a party to this Agreement shall not be admitted to the Company except
as provided in this Article VI.

ARTICLE VII
Dissolution, Liquidation, and Termination of the Company

                                 7.1          Events of Dissolution. The Company shall be dissolved upon the happening of any of the following events:

                                (a)           upon the Sale of the Property
and the distribution of all Proceeds from such Sale, unless the Company provides purchase money financing
in connection with such Sale or obligates itself to retain certain contingent liabilities and proceeds,
in which case the Company shall be dissolved upon the repayment in full of such financing or the
expiration of such contingent liability period; 

                                (b)           upon the written agreement of
all of the Members; 

                                (c)           upon the occurrence of an Involuntary
Withdrawal, unless the remaining Members, within ninety (90) days after the occurrence of the Involuntary
Withdrawal, elect to continue the business of the Company pursuant to the terms of this Agreement;
or

                                (d)           as may otherwise be required under
the Act.

                                 7.2          Procedure for Winding Up and Distribution. If the Company is dissolved, the remaining Members shall wind up its affairs. On winding up of the
Company, the assets of the Company shall be distributed, first, to creditors of the Company, including
holders of Economic Interests who are creditors, in satisfaction of the liabilities of the Company,
and then to the Members and holders of Economic Interests in accordance with Section 4.4 of this
Agreement.

                                 7.3          Filing of Articles of Dissolution. If the Company is dissolved, the Members shall promptly file Articles of Dissolution with the Delaware
Secretary of State. If there are no remaining Members, the Articles shall be filed by the last Person
to be a Member; if

	

17

	
there are no remaining Members, or a Person who last was a Member, the Articles shall be filed
by the legal or personal representatives of the Person who last was a Member.

ARTICLE VIII
Books, Records, Accounting, and Tax Elections

                                 8.1          Bank Accounts. The Managing Member shall cause all funds of the Company to be deposited in a bank account or accounts
opened in the Company’s name. The Managing Member shall determine the institution or institutions
at which the accounts will be opened and maintained, the types of accounts, and the Persons who will
have authority with respect to the accounts and the funds therein.

                                 8.2          Books and Records. The Managing Member shall keep or cause to be kept complete and accurate books and records of the
Company as required under the Act as well as supporting documentation of transactions with respect
to the conduct of the Company’s business. The books and records shall be maintained in accordance
with GAAP accounting practices and shall be available at the Company’s principal office for
examination by any Member or the Member’s duly authorized representative at any and all reasonable
times during normal business hours.

                                 8.3          Annual Accounting Period; Accounting Methods; Tax Elections. The annual accounting period of the Company shall be its taxable year. The Company’s taxable
year shall be selected by the Managing Member, subject to the requirements and limitations of the
Code. The Company shall use such accounting methods as the Managing Member elects in its sole discretion,
subject to the requirements and limitations of the Code. The Managing Member shall cause the Company’s
accountants to prepare and file the Company’s tax returns and, together with such accountants,
will determine the positions of the Company on such tax returns subject to the requirements and limitations
of the Code. The Managing Member, on behalf of the Company, shall, from time to time, make all elections
for federal income tax purposes, including, without limitation, elections under Code Sections 704(c)
and 754, with the reasonable Approval of the Members holding at least 51% of the Percentages.

                                 8.4          Reports. 

                                (a)           Within ninety (90) days after
the end of each taxable year of the Company, the Managing Member shall cause to be sent to each Person
who was a Member at any time during the taxable year then ended a complete accounting of the affairs
of the Company for the taxable year then ended. In addition, within ninety (90) days after the end
of each taxable year of the Company, the Managing Member shall cause to be sent to each Person who
was a holder of an Economic Interest at any time during the taxable year then ended, that tax information
concerning the Company which is necessary for preparing the income tax returns of the holder of the
Economic Interest for that year. Any Member shall have the right to cause an audit of the Company’s
books and records to be prepared by independent accountants for any period deemed necessary or advisable
by such Member, the cost of which shall be borne by the party requesting the audit.

                                (b)           Within ninety (90) days after
the end of each taxable year of the Company,

	

18

	
the Managing Member will obtain from the Property Owners and deliver to the Members a statement itemizing
the sources and types of gross revenue for the preceding fiscal year paid by tenants at the Properties
and any other miscellaneous income from the Properties.

                                (c)           Managing Member will obtain and
deliver to the Members within thirty (30) days after the end of each calendar quarter a statement
reflecting any leasable space at the Properties that is vacant at the end of the calendar quarter
and all leases and/or renewals entered into by the Property Owners during such calendar quarter.

                                (d)           Within ninety (90) days after
the end of each taxable year of the Company, the Managing Member shall prepare and deliver to the
Members a certificate stating that, except as set forth in the certificate, to the best knowledge
of the Managing Member, the Properties have been operated during the immediately preceding fiscal
year in conformity with the provisions of Section 5.3.3.

                                 8.5          Tax Matters Member. The Members designate the Managing Member to be the “tax matters partner” (“Tax Matters Member”) of the Company within the meaning of Code Section 6231. The Tax Matters Member shall have all
powers and responsibilities granted to a “tax matters partner” (within the meaning of Code
Section 6231) under the Code and Regulations. The Tax Matters Member shall keep all Members informed
of all notices from government taxing authorities that may come to the attention of the Tax Matters
Member. The Company shall pay and be responsible for all reasonable third-party costs and expenses
incurred by the Tax Matters Member in performing those duties. Nothing in this Article VIII shall
limit the ability of any Member to take any action in its individual capacity relating to administrative
proceedings of Company matters that is left to the determination of any individual Member under the
Code or under any similar provision of state or local law. A Member shall be responsible for any
costs incurred by the Member with respect to any tax audit or tax-related administrative or judicial
proceeding against any Member, even though it relates to the Company. The Tax Matters Member shall
not compromise any dispute with the Internal Revenue Service or agree to extend the statute of limitations
with respect to tax liens of the Company without the Approval of all of the Members.

ARTICLE IX
General Provisions

                                 9.1          Assurances. Each Member shall execute all certificates and other documents and shall do all such filing, recording,
publishing, and other acts as the Managing Member deems appropriate pursuant to Section 2.1 or otherwise
to comply with the requirements of law for the formation and operation of the Company and to comply
with any laws, rules, and regulations relating to the acquisition, operation, or holding of the property
of the Company.

                                 9.2          Notifications. Any notice, demand, consent, election, offer, approval, request, or other communication (collectively
a “notice”) required or permitted under this Agreement must be in writing and either delivered personally,
by overnight mail using a nationally recognized overnight courier or sent by certified or registered
mail, postage prepaid, return receipt requested or by facsimile transmission, provided that the sender
of such transmission can produce evidence of electronic confirmation that such notice was received by

	

19

	
the Member or Member’s Agent to whom it was transmitted. A notice must be addressed to a Member
at the Member’s last known address on the records of the Company. A notice to the Company must
be addressed to the Company’s principal office. A notice delivered personally or by overnight
mail using a nationally recognized overnight courier will be deemed given only when acknowledged
in writing or rejected by the person to whom it is delivered. A notice that is sent by mail will
be deemed given three (3) business days after it is mailed. Any party may designate, by notice to
all of the others, substitute addresses or addressees for notices; and, thereafter, notices are to
be directed to those substitute addresses or addressees. A notice sent by facsimile is deemed given
when receipt is confirmed. 

                                 9.3          Specific Performance. The parties recognize that irreparable injury will result from a breach of any provision of this
Agreement and that money damages will be inadequate to fully remedy the injury. Accordingly, in the
event of a breach or threatened breach of one or more of the provisions of this Agreement, any party
who may be injured (in addition to any other remedies which may be available to that party) shall
be entitled to seek one or more preliminary or permanent orders (i) restraining and enjoining any
act which would constitute a breach or (ii) compelling the performance of any obligation which, if
not performed, would constitute a breach.

                                 9.4          Complete Agreement. This Agreement constitutes the complete and exclusive statement of the agreement among the Members
with respect to the subject matter thereof. It supersedes all prior written and oral statements,
including any prior representation, statement, condition, or warranty. 

                                 9.5          Applicable Law. All questions concerning the construction, validity, and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement shall be governed by the internal law, not
the law of conflicts, of the State of Delaware.

                                 9.6          Article and Section Titles. The headings herein are inserted as a matter of convenience only and do not define, limit, or describe
the scope of this Agreement or the intent of the provisions hereof.

                                 9.7          Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties hereto and their respective
heirs, executors, administrators, personal and legal representatives, successors, and permitted assigns.

                                 9.8          Exclusive Jurisdiction and Venue. Any suit involving any dispute or matter arising under this Agreement may only be brought in the
United States District Court for the Southern District of New York or any New York State Court located
in New York County having jurisdiction over the subject matter of the dispute or matter. All Members
hereby consent to the exercise of personal jurisdiction by any such court with respect to any such
proceeding.

                                 9.9          Terms. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular,
and plural, as the identity of the Person may in the context require.

	

20

	
                                 9.10        Separability of Provisions. Each provision of this Agreement shall be considered separable; and if, for any reason, any provision
or provisions herein are determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this Agreement that are
valid.

                                 9.11        Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be
deemed an original and all of which, when taken together, constitute one and the same document. The
signature of any party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.

                                 9.12        Amendments. Any amendment to this Agreement shall be effective only if such amendment is evidenced by a written
instrument duly executed and delivered by each Member.

ARTICLE X
Representations and Warranties

                                 10.1        Each Member represents, warrants and covenants
to each other Member and to the Company that:

                                (a)           such Member, if not a natural
person, is duly formed and validly existing under the laws of the jurisdiction of its organization
with full power and authority to conduct its business to the extent contemplated in this Agreement;

                                (b)           this Agreement has been duly authorized,
executed and delivered by such Member and constitutes the valid and legally binding agreement of
such Member enforceable in accordance with its terms against such Member except as enforceability
hereof may be limited by bankruptcy, insolvency, moratorium and other similar laws relating to creditors’
rights generally and by general equitable principles;

                                (c)           the execution and delivery of
this Agreement by such Member and the performance of its duties and obligations hereunder do not
result in a breach of any of the terms, conditions or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness,
or any lease or other agreement, or any license, permit, franchise or certificate, to which such
Member is a party or by which it is bound or to which its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or violate any statute, regulation,
law, order, writ, injunction, judgment or decree to which such Member is subject;

                                (d)           such Member is not in default
(nor has any event occurred which with notice, lapse of time, or both, would constitute a default)
in the performance of any obligation, agreement or condition contained in any indenture, mortgage,
deed of trust, credit agreement, note or other evidence of indebtedness or any lease or other agreement,
or any license, permit, franchise or certificate, to which it is a party or by which it is bound
or to which the properties of it are subject, nor is it in violation of any statute, regulation,
law, order, writ, injunction, judgment or decree to which it is subject, which default or violation
would materially adversely affect such Member’s ability to carry out its obligations under this
Agreement;

	

21

	
                                (e)           there is no litigation, investigation
or other proceeding pending or, to the knowledge of such Member, threatened against such Member or
any of its Affiliates which, if adversely determined, would materially adversely affect such Member’s
ability to carry out its obligations under this Agreement;

                                (f)            no consent, approval or
authorization of, or filing, registration or qualification with, any court or governmental authority
on the part of such Member is required for the execution and delivery of this Agreement by such Member
and the performance of its obligations and duties hereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

	

22

	
                                IN WITNESS WHEREOF, the parties have executed, or caused this Agreement to be executed, under seal,
as of the date set forth hereinabove.

	 

	 	MEMBERS:
	 	 
	 	 
	 	 
	 	/s/	David Lichtenstein
	 	 	

	 	David Lichtenstein
	 	 
	 	 
	 	 
	 	PRESIDENTIAL REALTY CORPORATION 
	 	 
	 	 
	 	 
	 	By:	/s/ Jeffrey F. Joseph
	 	 	

	 	 	Jeffrey F. Joseph
	 	 	President

	

	
LIGHTSTONE MEMBER II LLC

Operating Agreement

Exhibit A

  List of Members, Capital, and Membership Interests

	 

	Name		Initial Cash Contribution		Percentages
	
	 	
	 	

	David Lichtenstein 	 	$2,500,000	 	71%
	 	 	 	 	 
	Presidential Realty Corporation 

          

    	 	$0.00	 	29%Exhibit 10.19
	 
	LOAN AGREEMENT

Between

PRESIDENTIAL REALTY CORPORATION, Lender

and

LIGHTSTONE MEMBER III, LLC, Borrower

Macon Mall

  Macon, Georgia

Burlington Mall

  Burlington, North Carolina

 

 

Dated as of June 30, 2005

	

	TABLE OF CONTENT
	 

	ARTICLE ONE
	DEFINITIONS
	 	1.1	Definitions
	 	1.2	Accounting Terms and Determinations
	ARTICLE TWO
	THE LOAN
	 	2.1	The Loan
	 	2.2	Conditions to Advances of the Loan.
	ARTICLE THREE
	INTEREST
	 	3.1	Calculation
	 	3.2	Payments
	ARTICLE FOUR
	TERM; PAYMENT; PREPAYMENT;
	EXIT FEE; PROPERTY SALES
	 	4.1	Term
	 	4.2	Repayment at End of Term
	 	4.3	Prepayment
	 	4.4	Acceleration Upon Invalidity of Interest
	ARTICLE FIVE
	SECURITY
	 	5.1	Loan Documents
	ARTICLE SIX
	REPRESENTATIONS AND WARRANTIES OF BORROWER
	ARTICLE SEVEN
	ADDITIONAL COVENANTS; COVENANT BY LENDER
	 	7.1	Additional Covenants by Borrower
	 	7.2	Covenant by Lender
	 	7.3	Certain Sources and Uses of Funds
	ARTICLE EIGHT
	EXPENSES
	 	8.1	Closing Costs
	ARTICLE EIGHT–A
	BROKERAGE
	 	8–A.1	Mutual Representations
	 	8–A.2	Indemnities
	ARTICLE NINE
	SURVIVAL OF REPRESENTATIONS AND
	WARRANTIES; BINDING EFFECT; INDEMNITY
	 	9.1	Survival of Representations and Warranties; Binding Effect; Indemnity
	ARTICLE TEN
	DEFAULTS
	 	10.1	Event of Default
	 	10.2	Costs; Right to Cure
	 	10.3	Cross-Default
	ARTICLE ELEVEN
	BOOKS; RECORDS; STATEMENTS AND AUDITS
	 	11.1	Books and Records
	 	11.2	Statements
	 	11.3	Lender’s Right to Audit
	ARTICLE TWELVE
	MANAGEMENT OF THE PROPERTIES
	 	12.1	Management
	 	12.2	Service Agreements

	

	 	12.3	Occupancy Leases
	 ARTICLE THIRTEEN
	 TRANSFER OF INTERESTS; NO FURTHER FINANCING
	 	13.1	Transfers
	 	13.2	No Financing
	 ARTICLE FOURTEEN
	 MISCELLANEOUS
	 	14.1	Notices
	 	14.2	Entire Agreement; No Oral Changes
	 	14.3	Captions
	 	14.4	Governing Law
	 	14.5	Further Assurances
	 	14.6	Interest Limitation
	 	14.7	Estoppel Certificates
	 	14.8	Interpretation
	 	14.9	Non-Recourse
	 	14.10	Counterparts
	 	14.11	No Partnership
	 	14.12	Resolution of Drafting Ambiguities
	 	14.13	No Waiver; Cumulative Remedies and Rights
	 	14.14	Certain Consents
	 	14.15	Payment Days
	 	14.16	Severability
	 	14.17	Consent to Jurisdiction
	 	14.18	Waiver of Jury Trial

	 	 
	Exhibit A:	  Lightstone
Properties
	 	 
	Exhibit B:	Lightstone
Property Owners
	 	 
	Exhibit C:	Prepayment
Amounts

	

	
LOAN AGREEMENT

                 THIS LOAN AGREEMENT (this “Loan Agreement” or “Agreement”) dated as of the 30th day of June, 2005, by and between PRESIDENTIAL REALTY CORPORATION, a Delaware
corporation having an address at 180 South Broadway, White Plains, New York 10605 (“Lender”), and LIGHTSTONE MEMBER III, LLC, a Delaware limited liability company having an address c/o
The Lightstone Group LLC, 326 Third Street, Lakewood, New Jersey 08701 (“Borrower’s Address”) (“Borrower”); 

W I T N E S S E T H:

                 WHEREAS The Lightstone Group LLC (hereinafter referred to as “Contract Vendee”), an Affiliate (capitalized terms not defined in these recitals are defined in Article 1) of
David Lichtenstein has entered into an Agreement of Purchase and Sale dated April 22, 2005, as amended,
with Colonial Realty Limited Partnership for the purchase of the two properties described in Exhibit A annexed hereto (the “Lightstone Properties”); and

                 WHEREAS Wachovia Bank, National Association (“Wachovia”) has made a loan in the amount of One Hundred Forty-One Million Two Hundred Thousand and 00/100
Dollars ($141,200,000) to the two Delaware limited liability companies (the “Lightstone Property Owners”) listed at Nos. 1 and 2 on Exhibit B annexed hereto, secured by a first mortgage lien upon the Lightstone Properties; and

                 WHEREAS each of the Lightstone Property Owners have taken fee and/or leasehold title to the Lightstone
Property referred to after its name in Exhibit B; and

	

	
                 WHEREAS David Lichtenstein (“Lichtenstein”) having an address at Borrower’s Address, is the managing member of Borrower, and Borrower
is the sole member Macon Burlington Owner, LLC, a Delaware limited liability company (“Macon Burlington Owner”), which is the sole member of the Lightstone Property Owners; and

                 WHEREAS Borrower has applied to Lender for a loan in the amount of Nine Million Five Hundred Thousand
and 00/100 Dollars ($9,500,000) to be used, along with other funds, to finance the Lightstone Properties;
and

                 WHEREAS Wachovia has made a loan to Macon Burlington Owner in the amount of Seventeen Million Six Hundred
Fifty Thousand and 00/100 Dollars ($17,650,000) to be used, along with other funds, to finance the
Lightstone Properties (the “Macon Burlington Owner Loan”), which Loan is secured by a pledge of and security interest in all of Macon Burlington Owner’s
membership interests in the Lightstone Property Owners; 

                 WHEREAS Lender is willing to lend Borrower up to Nine Million Five Hundred Thousand and 00/100 Dollars
($9,500,000) to be used, along with other funds, to finance the Lightstone Properties, but only upon
the terms and conditions set forth in this Loan Agreement and in the other Loan Documents;

                 NOW, THEREFORE, in consideration of Ten Dollars ($10.00) in hand paid, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which hereby are
mutually acknowledged, and intending to be legally bound hereby, Lender and Borrower hereby agree
as follows: 

	

	
ARTICLE ONE

  DEFINITIONS

                 1.1           Definitions. The following terms, as used in this Loan Agreement, have the following meanings: 

                 Affiliate:  Any Person that controls, is controlled by, or is under common control with any other
Person is an Affiliate of such Person; any Person that is a shareholder of, partner in, member of,
or other beneficial owner (directly or indirectly) of an interest in any other Person is an Affiliate
of such Person; any direct or collateral relative by blood or marriage of any Person is an Affiliate
of such Person; any Person who is a direct or collateral relative by blood or marriage of any Person
who is a shareholder of or partner in, member of, or other beneficial owner (directly or indirectly)
of an interest in any entity that controls, is controlled by, or is under common control with any
other entity is an Affiliate of all such Persons. For purposes of this definition “control” of an entity shall mean an ownership interest of fifty percent (50%) or more, or the right or
power, by contract or otherwise, directly or indirectly, to make, or cause to be made, the decisions
of such entity.

                 Auditor:  As defined in Section 11.3 hereof.

                 Bankruptcy Event:  With respect to any Person, a court having jurisdiction shall have entered a decree or
order for relief in respect of such Person in an involuntary case or cases under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall have appointed one or more receivers,
liquidators, assignees, custodians, trustees, sequestrators or other similar officials (hereinafter
collectively referred to as “receiver or trustee”) of such Person, or for any substantial part of such Person’s property, or shall have ordered
the winding up or liquidation of such Person’s affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive days; or such Person shall have commenced
a voluntary case or cases under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or 

	

	
shall have consented to the entry of an order for relief in any involuntary case or cases under any
such law, or shall have consented to the appointment of or taking possession by one or more receivers
or trustees of such Person or for any substantial part of such Person’s property, or shall have
made a general assignment for the benefit of its creditors, or shall have failed generally to pay
its debts as they become due, or shall have taken any action in furtherance of any of the foregoing. 

                 Borrower’s Address: As defined in the first paragraph of this Loan Agreement.

                 Borrower’s Initial Equity Investment in the Lightstone Properties: The amount of money, in addition to the Loan, the Macon Burlington Owner Loan and the proceeds
of the First Mortgage, required to pay the purchase prices for the Lightstone Properties and all
Transaction Costs incurred or to be incurred in causing title thereto to be acquired by the Lightstone
Property Owners.

                 Borrower’s Property Management Office: 326 Third Street, Lakewood, New Jersey, or such other location in New Jersey or New York as
Borrower shall determine, provided that Borrower timely shall notify Lender of any change in the
location of Borrower’s Property Management Office.

                 Certificate of Occupancy: One or more certificates of use and occupancy, or similar permit or approval, required by law
to be issued in connection with the use, occupancy or operation of a Lightstone Property by its owner
or by any tenant under an Occupancy Lease. 

                 Company Agreement:  That certain Limited Liability Company Agreement of Macon Burlington Owner, dated as of
June 30, 2005, made by Borrower, as the sole equity member and holding a one hundred (100%) percent
interest in Macon Burlington Owner and Beth L. Peoples and Michelle A. Dreyer, as special members
(as in effect on the date hereof, without giving effect 

	

	
to any modifications or supplements after the date hereof, except to the extent approved by Lender).

                 Contract Vendee:  As defined in the first “WHEREAS” clause hereof.

                 Default:  An event or condition which with the passage of time or upon notice, or both, will result
in an Event of Default. 

                 Default Collateral: As defined in Section 14.9 hereof.

                 Environmental Indemnity Agreement: That certain Environmental Indemnity Agreement, dated as of the date hereof, made by Borrower
and Lichtenstein, as indemnitors, in favor of Lender, as indemnitee, and all amendments thereof and
supplements thereto.

                 Environmental Laws: All federal, state and local laws, rules and regulations, whether now existing or hereafter
enacted or promulgated, regulating, relating to or imposing liability or standards of conduct concerning
any hazardous, toxic, petroleum or dangerous waste, substance or material or the protection of health
or the environment, including, without limitation (i) Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq. (known as CERCLA or Superfund) as amended by the Superfund Amendments and Reauthorization Act of
1986 (known as SARA); (ii) Solid Waste Disposal Act, 42 U.S.C. Section 6901 et seq. (known as SWDA) as amended by Resource Conservation and Recovery Act (known as RCRA); (iii) National
Environmental Policy Act, 42 U.S.C. Section 4321 et seq. (known as NEPA); (iv) Toxic Substances Control Act, 15 U.S.C., Section 2601 et seq. (known as TSCA); (v) Safe Drinking Water Act, 42 U.S.C. Section 300(f) et seq., (known as Public Health Service Act, PHSA); (vi) Refuse Act, 33 U.S.C. Section 407 et seq.; (vii) Clean Water Act, 33 U.S.C. Section 1251 et seq. (known as Federal Water Pollution Control Act 

	

	
FWPCA); (viii) Clean Air Act, 42 U.S.C. Section 7401 et seq. (known as CAA); (ix) The Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section
11001 et seq. (known as EPCRTKA); and (x) the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (known as OSHA).

                 Event of Default:  As defined in Section 10.1 hereof. 

                 Exit Fee:  As defined in Section 4.3 hereof.

                 Financial Information: As defined in Section 6.1 hereof.

                 First Mortgage:   See definition of Permitted Exceptions.

                 Fiscal Years:  The fiscal years of Borrower, Macon Burlington Owner and the Lightstone Property Owners,
all of which shall be the calendar year. 

                 Guarantor:  Lichtenstein.

                 Guaranty:  A certain Guaranty of even date herewith made by Lichtenstein, as Guarantor, for the benefit
of Lender.

                 Imposition:  Any real estate tax, sewer rent, water charge, or other municipal or governmental assessment,
rate, charge, imposition or lien upon either of the Lightstone Properties.

                 Improvements:  All buildings, structures and other improvements of every kind and description on either
of the Lightstone Properties.

	

	
                 Indebtedness:  The amount of Principal, Interest and all other sums payable by Borrower to Lender under
this Loan Agreement, the Note and the other Loan Documents.

                 Interest:  As defined in Section 3.1 hereof. 

                 Interest Rate:  As defined in Section 3.1 hereof.

                 Legal Requirements: All laws, statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, variances, consents, approvals, directions and requirements
of, and agreements with, all governments, departments, commissions, boards, courts, authorities,
agencies, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which now or
at any time hereafter may be applicable to either of the Lightstone Properties, or to any of the
adjoining vaults, sidewalks, streets or ways, or to any use or condition of any of the Lightstone
Properties, including, without limitation, Environmental Laws. 

                 Lichtenstein:  As defined in the fourth “WHEREAS” clause hereof.

                 Lightstone Properties: As defined in the first “WHEREAS” clause hereof.

                 Lightstone Property Owners: As defined in the second “WHEREAS” clause hereof.

                 Lightstone Property Sale and similar phrases such as Lightstone Property Sales: Any Transfer of a Lightstone Property or any part thereof other than a Refinancing Event, an
Occupancy Lease, or a Taking.

                 Loan:  The loan to be made by Lender to Borrower as provided in this Loan Agreement and as evidenced
by the Note.

	

	
                 Loan Agreement:  This Loan Agreement between Borrower and Lender, and all amendments and supplements hereto.

                 Loan Closing Date:  June 30, 2005.

                 Loan Documents:  Without limitation, this Loan Agreement, the Note, the Guaranty, the Environmental Indemnity
Agreement, the Security Instruments and any other agreements or instruments executed or to be executed
hereunder or in connection herewith or to evidence or to secure the Indebtedness and all amendments
thereof and thereto. 

                 Macon Burlington Owner: As defined in the fourth “WHEREAS” clause hereof.

                 Maturity Date:  The tenth (10th) anniversary of the Loan Closing Date, or any earlier date to which said date shall be accelerated
pursuant to any right or option of Lender hereunder or under any of the other Loan Documents.

                 Note:  A promissory note in the amount of Nine Million Five Hundred Thousand and 00/100 Dollars
($9,500,000), or so much thereof as may be advanced, of even date herewith made by Borrower to the
order of Lender.

                 Occupancy Lease:  Any written or oral lease, sublease, license, franchise, concession or other occupancy
agreement now or hereafter in effect, whether or not of record, for the use or occupancy of any portion
of the Improvements on either of the Lightstone Properties, together with all amendments thereof
and supplements thereto, including oral lettings and tenancies following attornment. 

	

	
                 Omnibus Agreement:  That certain Omnibus Agreement of even date herewith executed by Macon Burlington Owner
and all amendments thereof and supplements thereto.

                 Permitted Exceptions: The Fee and Leasehold Deed of Trust, Deed to Secure Debt, Assignment of Leases and Rents, Fixture
Filing, Security Agreement and Financing Statement (“First Mortgage”) held by Wachovia or its successors or assigns. In addition, the following shall be Permitted
Encumbrances: (i) liens for unpaid real estate taxes not yet due, (ii) Occupancy Leases, and (iii)
provided that Borrower shall have furnished title reports (and related documents) upon, and surveys
(complying with paragraph (vi) of Section 2.2) of, the Lightstone Properties, to Lender prior to
the Loan Closing Date, then any additional condition of title disclosed by any of such title reports
and surveys as shall be taken as an exception to title (without affirmative insurance or any other
special assurances of any kind) in the title report upon the Lightstone Property in question (or
the title policy to be issued in connection therewith) issued to Wachovia with its informed consent.

                 Person:  An individual, corporation, partnership, association, trust or other entity or organization,
including a governmental or political subdivision or agency or instrumentality thereof. 

                 Pledge Agreement:  That certain Security and Pledge Agreement of even date herewith, executed and delivered
by Borrower to Lender and all amendments thereof and supplements thereto. 

                 Pledged Collateral: All of Borrower’s right, title and interest in and to the following property, whether now
owned by Borrower or hereafter acquired and whether now existing or hereafter coming into existence,
and wherever located:

	

	
                                 (i)
all of Borrower’s membership interests in Macon Burlington Owner, which constitutes one hundred
percent (100%) of the membership interests in Macon Burlington Owner, together with all of Borrower’s
interest as a member of Macon Burlington Owner;

                                (ii)
all right, title and interest of Borrower in Macon Burlington Owner relating to Borrower’s membership
interests in Macon Burlington Owner, including, without limitation, all of Borrower’s rights,
powers and remedies under the Company Agreement with respect to Borrower’s membership interests;

                               (iii)
all present and future payments, distributions, proceeds, profits, income, compensation, property,
capital assets, interests and rights due or to become due and payable to Borrower in connection with
Borrower’s membership interests in Macon Burlington Owner (including, without limitation, all
proceeds of dissolution or liquidation or winding up of the affairs of Macon Burlington Owner), all
repayments of any and all loans made by Borrower to Macon Burlington Owner and all rights of Borrower
to receive any and all of the foregoing, whether or not any or all of the foregoing shall constitute
accounts or general intangibles under the Uniform Commercial Code; and

                               (iv) all proceeds of the foregoing.

                 Principal:  At any time of reference, the aggregate total of all money advanced by Lender to Borrower
pursuant to Article 2 hereof, less any repayment or prepayment of a portion thereof in accordance
with the terms hereof, except as the context otherwise shall require. 

                Recourse Distributions: As defined in Section 14.9 hereof.

	

	
                 Refinancing Event:  The creation, financing, refinancing or restructuring of any debt (but only with Lender’s
prior approval) upon or related to either of the Lightstone Properties, including, without limitation,
any lease and leaseback or other form of financing.

                 Sale of a Lightstone Property and similar phrases such as Sales of the Lightstone Properties: See definition of “Lightstone Property Sale.”

                 Security Instruments: The Pledge Agreement, the Omnibus Agreement, financing statements under the Uniform Commercial
Code, and any other agreements or instruments executed or to be executed pursuant to the terms of
this Loan Agreement and the other Loan Documents to secure and/or assure the repayment of the Principal
and Interest and all other Indebtedness under the Note and all other Loan Documents and all amendments
thereof and supplements thereto. 

                 Taking and similar words such as “Taken”: A taking for any public or quasi-public purpose by any lawful power or authority by the exercise
of the right of condemnation or eminent domain of all or any portion of either of the Lightstone
Properties or the temporary use thereof.

                 Term:  The period of time beginning on the date hereof and ending on the Maturity Date.

                 Transaction Costs:  Actual, necessary and reasonable out-of-pocket costs and expenses incurred by Borrower,
either Lightstone Property Owner, and any of their Affiliates, in connection with the purchase of
a Lightstone Property, a Lightstone Property Sale or a Taking as to either of the Lightstone Properties,
including, without limitation, title insurance and survey costs, brokerage commissions, legal expenses,
transfer taxes, closing adjustments, and other customary closing costs without duplication as Operating
Expenses or otherwise, costs to comply with Legal 

	

	
Requirements or requirements of lenders, mortgage points and fees, and property expenses required in
connection with a Lightstone Property Sale or Taking to be paid or incurred by a Lightstone Property
Owner or Borrower (excluding, however, the purchase prices for the Lightstone Properties, and any
commissions or fees paid to Borrower or either Lightstone Property Owner, or any of their Affiliates).

                 Transfer and similar words such as Transferred: A sale, assignment, gift, mortgage, pledge, hypothecation, encumbrance, lease or any other conveyance
or transfer.

                 Wachovia:  As defined in the second “WHEREAS” clause hereof.

                 1.2           Accounting Terms and Determinations. Unless otherwise specified herein (i) all accounting terms used herein shall be interpreted, (ii)
all accounting determinations hereunder shall be made and (iii) all books, records and financial
statements required to be kept or delivered hereunder shall be prepared in accordance with generally
accepted accounting principles as in effect from time to time, consistently applied, except for changes
reasonably approved in writing by Lender. 

ARTICLE TWO

  THE LOAN

                 2.1          The Loan. Lender hereby agrees to make the Loan to Borrower, and Borrower hereby agrees to take the Loan from
Lender, on the date hereof and on the terms and subject to the conditions set forth herein, each
of which shall be a condition precedent to Lender’s obligation to make the Loan, each of which
Borrower shall use its best efforts to satisfy, and each of which Lender may waive.

	

	
                 2.2          Conditions to Advances of the Loan.  Lender’s obligation to advance the Loan shall be subject to the following conditions:

	 

	  	(i)	            In no event shall the Loan exceed Nine Million Five Hundred Thousand and 00/100 Dollars ($9,500,000);
and
			 
		(ii)	            The Lightstone Property Owners shall have acquired title to the Lightstone Properties; and
			 
		(iii)	            All of Borrower’s representations set forth in this Loan Agreement and the other Loan Documents
shall be true, accurate and complete in all material respects, and there shall not exist any Default
or Event of Default under any of the terms and provisions of this Loan Agreement or any of the other
Loan Documents, and all of Borrower’s representations made in this Loan Agreement and any of
the other Loan Documents shall be true in all material respects; and
			 
		(iv)	            Borrower shall have furnished to Lender a survey of each of the Lightstone Properties, respectively,
in form and substance satisfactory to Lender, acting reasonably, revised and redated to within ten
(10) days of the date of the Loan Closing Date and certified by a registered surveyor or engineer
acceptable to Lender, acting reasonably, showing no state of facts objectionable to Lender; all surveys
shall show (a) the exact location and dimensions by courses and distances of the surveyed property
and the improvements thereon, (b) the exact location of all parcel, lot and street lines, all means
of access to the surveyed property, all utility wires, pipes and other conduits (whether above ground
or underground), and all easements and rights of way affecting the surveyed property, and (c) no
encroachment or potential encroachments of the improvements on the surveyed 

	

		 	property upon any street or adjoining property or any encroachment of any adjoining structure upon
the surveyed property; and
		 	 
		(v)	            Borrower shall have furnished to Lender title reports (and related documents) for the Lightstone Properties,
and the Lightstone Properties shall not be subject to any conditions of title that are not Permitted
Encumbrances unless approved by Lender; and
			 
		(vi)	            Borrower shall have furnished to Lender a certificate stating that the Lightstone Properties (and the
Improvements thereon), are in good condition and repair and comply with all Legal Requirements and
that unconditional Certificates of Occupancy have been issued therefor and are in full force and
effect subject to such qualifications, exceptions and conditions, if any, as shall have been approved
by Wachovia; and
			 
		(vii)	            Borrower shall have furnished to Lender evidence in form satisfactory to Lender that all of the funds
constituting Borrower’s Initial Equity Investment in the Lightstone Properties have been invested;
and
			 
		(viii)	            Borrower shall have furnished to Lender copies of the First Mortgage and of all related documents and,
also, copies of the Macon Burlington Owner Loan Loan Documents, all of which must be satisfactory
to Lender, acting reasonably, in all respects (and, in addition, complete and fully executed copies
of all such documents shall be delivered to Lender not later than August 1, 2005); and
			 
		(ix)	            Borrower shall have furnished to Lender original or certified copies of policies of insurance satisfactory
to Lender insuring the Improvements on the 

	

		 	Lightstone Properties against loss or damage by fire and the other risks insured against by extended
coverage insurance; Lender will accept as to form policies of insurance (and the companies writing
them) which are acceptable to Wachovia provided that the insurance limits set forth in such insurance
policies are not less than the full insurable value of the Improvements on the insured Lightstone
Property or the Lightstone Properties; and
		 	 
		(x)	            The Loan Documents listed in Section 5.1 and such other agreements and instruments as Lender reasonably
shall require shall be executed and/or delivered to Lender; and
			 
		(xi)	            No casualty shall have occurred or Taking have occurred or be threatened as to either of the Lightstone
Properties; provided, however, that this condition (xi) shall be deemed satisfied in the event that
despite a minor casualty partially damaging the Improvements on a Lightstone Property, or the occurrence
or threatened occurrence of a partial Taking of a Lightstone Property, which partial Taking is or
would be of little or no practical significance, Wachovia nevertheless shall fund its loan in the
full originally committed amount thereof.

	 
	
ARTICLE THREE

  INTEREST

                 3.1        Calculation. For each Fiscal Year (or any portion thereof) during the Term, Borrower shall pay Lender interest
(calculated on the basis of actual days elapsed and a year of three hundred and sixty (360) days)
on the Principal of the Loan outstanding from time to time, to 

	

	
the extent and from the date(s) advanced, at the rate of eleven percent (11%) (the “Interest Rate”). Said interest is referred to herein as “Interest.” 

                 3.2           Payments. Borrower shall make payments of Interest with respect to the Loan as follows: 

                 (a)           Interest shall be payable in monthly
installments, in arrears, on the first day of the month following the month for which such Interest
is due. 

                 (b)           All payments of Interest and Principal
pursuant to this Loan Agreement, the Note and the other Loan Documents shall be made in lawful currency
of the United States of America at Lender’s address set forth in the first paragraph of this
Loan Agreement or at such other address as Lender shall from time to time designate. 

                 3.3           Interest Rate after Default; Late Payment Fee. If any payment becoming due to Lender under the Note or this Loan Agreement is not paid when due
and shall continue unpaid for a period of ninety (90) days, then (without prejudice to any other
rights and remedies available to Lender as a result of such nonpayment) beginning on the ninety-first
(91st) day after such payment first was due and continuing until the first anniversary of the date upon
which the Event of Default shall have been cured, the Interest Rate shall be fourteen percent (14%)
per annum. In addition, if any payment of Interest or Principal shall not be made within fifteen
(15) days of the date the same becomes due, Borrower shall pay to Lender a late payment charge in
an amount equal to four (4%) percent of the amount past due upon demand made by Lender
at any time after such fifteen (15) day period. All such late payment charges shall be liquidated
damages for Borrower’s failure to make prompt payment. 

	

	
ARTICLE FOUR

  TERM; PAYMENT; PREPAYMENT

    EXIT FEE; PROPERTY SALES

                 4.1           Term. The Term of the Loan shall continue until the Maturity Date, unless sooner terminated as provided
in the Note or this Loan Agreement or any other Loan Document. 

                 4.2           Repayment at End of Term. On the Maturity Date, or upon the earlier termination of the Term as provided in the Note or this
Loan Agreement or any other Loan Document, Borrower shall pay to Lender, in respect of the Loan,
the sum of: 

                 (a)           any accrued but unpaid Interest; plus

                 (b)           any Indebtedness (other than Principal
and Interest) due and payable from Borrower to Lender pursuant to the terms of the Loan Documents;
plus 

                 (c)           the Principal.

                 4.3           Prepayment. (a) Borrower may not prepay the Loan, in whole or in part, except as provided in Section 4.3(b) and
4.3(c) below and except that (i) upon a Lightstone Property Sale, or (ii) the Taking of a Lightstone
Property in whole or in substantial part, Borrower shall prepay the portion of the Loan set forth
in Exhibit C annexed hereto opposite the name of each of the Lightstone Properties or so much of such portion as
has not been prepaid previously and, in the case of a Lightstone Property Sale, simultaneously shall
pay to Lender an Exit Fee computed as provided in Section 4.3(d) unless payment of said Exit Fee
shall be deemed waived by Lender as provided in Section 4.3(d). A Lightstone Property shall be deemed
to have been Taken in substantial part if the portion thereof remaining after the Taking cannot practically
and 

	

	
economically be restored so as to be suitable for the use to which the Lightstone Property in question
was being put at the time of the Taking. Notwithstanding anything to the contrary contained in this
Section 4.3(a), in no event shall Borrower be obligated to prepay more than the then outstanding
principal balance under the Loan.

                 (b)           Borrower may prepay the Loan,
in whole but not in part, upon or at any time after the repayment of the First Mortgage on its original
or any extended maturity date upon at least forty-five (45) days notice to Lender and the payment
to Lender of the Exit Fee computed as provided in Section 4.3(d) simultaneously with such prepayment.

                (c)           Borrower
may prepay the Loan, in whole but not in part, upon at least forty-five (45) days prior notice to
Lender if (i) none of Steven Baruch, Jeffrey Joseph and Thomas Viertel are then executive officers
of Lender, and (ii) Borrower shall make payment to Lender, simultaneously with prepayment of the
Loan, of all accrued and unpaid Interest and the Exit Fee computed as provided in Section 4.3(d).

                (d)           Whenever
any Principal is repaid by Borrower, for any reason whatsoever, Borrower shall pay in addition to
the Principal so paid, and any accrued and unpaid Interest thereon, an “Exit Fee” in the amount of three percent (3%) of the Principal so paid, provided, however, that if and
to the extent that Principal is paid on the Maturity Date, or a prepayment is required as a result
of a Lightstone Property Sale and there have been no material Events of Default during the Term of
the Loan with respect to payments of Interest, or prepayment is required as a result of the Taking
of a Lightstone Property in whole or in substantial part, then the Exit Fee shall be waived by Lender
and shall not be payable by Borrower.

                (e)           No
prepayment, in whole or in part, however occurring, shall affect in any way the rights or status
of Lender’s Affiliate as a member of Borrower.

                 4.4           Acceleration Upon Allegation of Invalidity of Interest, Etc. In the event that Borrower, either Lightstone Property Owner, or any of their Affiliates, or any
third party claiming through or under any of them, shall at any time assert or shall take any action
the effect of which is 

	

	
to assert that any Interest or Principal is invalid or that the payment of any of the Indebtedness
in accordance herewith is unlawful or can be delayed or abridged for any reason whatsoever, Lender
shall have the right and option immediately to accelerate the Maturity Date. In the event that Lender
shall exercise such right and option to accelerate the Maturity Date, the Principal, all Interest,
and all other Indebtedness or sums due from Borrower to Lender pursuant to the terms of the Note,
this Loan Agreement and the other Loan Documents shall be due and payable in full immediately upon
receipt by Borrower of the notice of acceleration from Lender.

ARTICLE FIVE

  SECURITY

                 5.1           Loan Documents. To evidence and secure the payment to Lender of all sums due or to become due under this Loan Agreement
and the Note and the other Loan Documents and the performance by Borrower of all of its covenants
and agreements hereunder and under the Note and other Loan Documents, Borrower, Macon Burlington
Owner, the Lightstone Property Owners and Lichtenstein (to the extent specifically provided herein)
shall deliver to Lender, and Lender shall receive and have the benefit of the following:

	 

		(a)	the Note;
		 	 
		(b)	this Loan Agreement;
		 	 
		(c)	the Guaranty;
		 	 
		(d)	the Pledge Agreement and all financing statements under the Uniform Commercial Code required to perfect
the security interests of Lender thereunder;
			 
		(e)	the Omnibus Agreement;
		 	 
		(f)	the Environmental Indemnity
Agreement;

	

		(g)	the other Security Instruments; and
		 	 
		(h)	such other agreements and instruments as Lender reasonably shall require to carry out the intention
of this Loan Agreement.

	 
	
                 The Pledge Agreement shall create in favor of Lender first priority perfected security interests in
the Pledged Collateral, subject only to matters expressly permitted herein or therein. 

ARTICLE SIX

  REPRESENTATIONS AND WARRANTIES OF BORROWER

                 6.1           To induce Lender to make the Loan
to Borrower, Borrower hereby makes the following representations and warranties to, and covenants
with, Lender, it being agreed that Borrower’s acceptance of the Loan shall constitute reaffirmation
by Borrower to the best of its knowledge, of the truth and accuracy of all of the representations
and warranties herein contained in all material respects: 

	 

		(a)	(i)            Borrower’s Initial
Equity Investment in the Lightstone Properties shall be at least Four Million Five Hundred Thousand
and 00/100 Dollars ($4,500,000).
			 

	 	(ii)           The execution and delivery of
the Loan Documents by Borrower, Macon Burlington Owner and the Lightstone Property Owners have been
duly authorized by all necessary action on their part, and each Loan Document has been duly executed
and delivered and constitutes the valid and legally binding obligation of the signatories thereto,
enforceable against Lichtenstein, Borrower, Macon Burlington Owner and the Lightstone 

	

	 	Property Owners in accordance with the terms hereof and thereof, as the case may be.
		 
	 	(iii)          Borrower, Macon Burlington Owner and
the Lightstone Property Owners are duly organized, validly existing and in good standing under the
laws of the state of Delaware and each Lightstone Property Owner is duly qualified and authorized
to own property and do business in the state (Georgia or North Carolina) in which the Lightstone
Property to be owned by it is located. Lichtenstein and Lender are the sole members of Borrower,
and Borrower is the sole equity member of Macon Burlington Owner, which is the sole member of the
Lightstone Property Owners. None of Lichtenstein, Macon Burlington Owner or Borrower has pledged,
encumbered, hypothecated or otherwise transferred or agreed to encumber, hypothecate, pledge or otherwise
transfer their foregoing respective interests (except that Macon Burlington Owner has pledged its
membership interests in the Lightstone Property Owners to Wachovia as security for the Macon Burlington
Owner Loan), and Borrower and Macon Burlington Owner covenant not to do so except with Lender’s
prior written approval which Lender agrees not to unreasonably withhold or delay.
		 
	 	(iv)          Borrower, Macon Burlington Owner and
the Lightstone Property Owners have full power and authority to enter into the Loan Documents and
to perform all their obligations hereunder and thereunder, and have taken all action required by
law, any governing instruments or otherwise to authorize the execution, delivery and performance
of the Loan Documents and consummation of the transactions contemplated thereby. 

	

	 	(v)           Borrower, Macon Burlington Owner
and the Lightstone Property Owners do not own, beneficially or of record, any shares of capital stock
of, or any other equity interest in, any corporation or any other entity or any other assets, not
related to or forming a part of the Lightstone Properties;
		 
	 	(vi)          Borrower, Macon Burlington Owner and
the Lightstone Property Owners have made all filings required to be made by them under the laws of
each jurisdiction where the failure to make such filings would have a material adverse effect on
the Loan; and
		 
	 	(vii)         The Lightstone Property Owners have full
power, authority and legal right to acquire, own, and operate the Lightstone Properties, and to execute
and deliver the Loan Agreement and any other documents or instruments contemplated herein or therein
to be executed and delivered by them, Macon Burlington Owner has full power and authority to execute
and deliver the Omnibus Agreement and any other documents or instruments contemplated herein or therein
to be executed and delivered by it and Borrower has full power, authority and legal right to pledge
ownership interests as pledged in the Security Instruments to be executed by it and to execute and
deliver the Loan Documents and any other documents or instruments contemplated herein or therein
to be executed and delivered by it and to observe and perform the provisions hereof and thereof.

	 	 	 
	 	(b)	
Intentionally omitted.

	 	 	 
	  	(c)	It has not, Macon Burlington Owner
has not and no Lightstone Property Owner has, 
	received a notice to the effect that execution and
delivery or performance of the Loan 

	

	
Documents, the consummation of the transactions contemplated hereby or thereby, or compliance with
the provisions hereof and thereof, does or will conflict with or result in a breach of any of the
provisions of any Legal Requirements or applicable license, permit, statute, ordinance, law, judgment,
order, writ, injunction, decree, rule or regulation of any court, administrative agency or other
governmental authority, or of any determination or award of any arbitrator, or of any agreement or
instrument to which Borrower, Macon Burlington Owner or the Lightstone Property Owners is or are
a party or by which they or either of the Lightstone Properties is bound, or constitute a default
under any thereof, or result in the creation or imposition of any lien, charge or encumbrance upon
either of the Lightstone Properties or any of the ownership interests pledged to Lender by the Pledge
Agreement. 

                                 (d)           There are no actions, suits or
proceedings pending or, to the best of its knowledge, threatened against either of the Lightstone
Properties, Borrower, Macon Burlington Owner or either Lightstone Property Owner, by or before any
court, administrative agency or other governmental authority or any arbitrator that would have a
material, adverse effect on the Loan. None of Borrower, Macon Burlington Owner or either Lightstone
Property Owner is a party to, and neither of the Lightstone Properties is bound by, any agreement
or other instrument, other than the Permitted Exceptions, or, to the best of its knowledge, subject
to any license, permit, statute, ordinance, law, judgment, order, writ, injunction, decree, rule
or regulation of any court, administrative agency or other governmental authority, or any determination
or award of any arbitrator, which might materially adversely affect the Loan. To the best of its
knowledge, Borrower, Macon Burlington Owner and the Lightstone Property Owners are not in default
in compliance with any obligation under any Legal Requirements, or applicable license, permit, statute,
ordinance, law, judgment, order, writ, injunction, decree, rule or regulation of any court, administrative
agency or other governmental authority, or any determination or award of any arbitrator, or under
any agreement or instrument to which any of them is a party or by which any 

	

	
of them or either of the Lightstone Properties is bound which would materially adversely affect the
Loan. 

                                 (e)           To the best of its knowledge,
no permit of or by any court, administrative agency or other governmental authority not heretofore
obtained is required in connection with the execution, delivery, performance, or consummation of
the transactions contemplated by the Loan Documents. 

                                 (f)            Borrower, Macon Burlington
Owner and the Lightstone Property Owners have filed all tax returns required to be filed by them
and are not in default in the payment of any taxes levied or assessed against them, any of their
assets or either of the Lightstone Properties. 

                                 (g)           As of the Loan Closing Date, the
Lightstone Property Owners shall have good and marketable fee and/or leasehold title to the Lightstone
Properties and the Improvements thereon, free and clear of all liens and encumbrances, except the
Permitted Exceptions, and neither of the Lightstone Properties or any part thereof shall be subject
to any option or other right to purchase in favor of any third party.

                                 (h)           Lender shall have legal and valid
security interests in and to the Pledged Collateral superior in right to any pledges or liens which
any third party may have or may hereafter purport to acquire against the Pledged Collateral. 

                                 (i)            None of Borrower, Macon
Burlington Owner nor the Lightstone Property Owners have entered into any contract or agreement of
any kind which would give rise to a pledge or lien upon the Pledged Collateral. 

	

	
                                 (j)            To the best of its knowledge,
the Lightstone Properties are zoned for use in the manner in which they are used and conform in all
material respects to all existing zoning, building and other Legal Requirements, and the operation
of the Lightstone Properties is not as to any of them in material violation of any Legal Requirements,
Certificates of Occupancy or other permits, and no notice has been received from any governmental
authority or other Person claiming a material violation of any Legal Requirements, Certificates of
Occupancy or other permits. To the best of its knowledge, neither the zoning of either Lightstone
Property nor any right to use either Lightstone Property is to any material extent dependent upon
or related to any real estate other than such Lightstone Property. 

                                 (k)           No Bankruptcy Event has ever occurred
with respect to Borrower, Macon Burlington Owner or either of the Lightstone Property Owners. 

                                 (l)            Borrower has or may have
heretofore provided to Lender: certain financial statements; copies of appraisals of the Lightstone
Properties; copies of so-called Phase I environmental reports on the Lightstone Properties; property
condition reports for the Lightstone Properties; certain service agreements applicable to the Lightstone
Properties; copies of loan commitments and loan documents for the First Mortgage and the Macon Burlington
Owner Loan, and certain other documents and statements pertaining to the Lightstone Properties (the
materials above referred to in this subparagraph (l) along with rent rolls and other tenant information
provided to Wachovia and/or attached to or otherwise made part of the Wachovia loan documentation
herein being referred to as the “Financial Information”). The information set forth in the Financial Information is, to the best knowledge of Borrower,
true, correct and complete in all material respects. To the best of Borrower’s knowledge, there
are no arrangements for the use or occupancy of any space in any of the Lightstone Properties other
than pursuant to good faith, arm’s length Occupancy Leases. To the best of Borrower’s knowledge,
all of the Occupancy Leases listed in said rent rolls are binding upon the Lightstone Property Owners
and the tenants 

	

	
thereunder and are in full force and effect. None of Borrower, Macon Burlington Owner or either Lightstone
Property Owner has pledged, assigned, hypothecated or otherwise encumbered any of the Occupancy Leases
or any interest therein except as collateral security for the First Mortgage. Based upon appropriate
certifications and estoppel certificates, with exceptions which in the aggregate would not have a
material adverse effect on the Loan, except as otherwise disclosed to Lender in writing or reflected
in the Financial Information, (i) the rent under and as set forth in each of the Occupancy Leases
is being collected on a current basis and in accordance with the terms of such Occupancy Leases,
and there is no default or event of default which exists or is alleged to exist under any of the
Occupancy Leases, (ii) no default or event of default by any tenant thereunder exists, and there
has been no occurrence which upon notice and/or the passage of time or otherwise would result in
the occurrence of an event of default thereunder, (iii) no tenant under any of the Occupancy Leases
is entitled to rental concessions or abatements with respect to rental or additional rental payable
for any period, (iv) no brokerage or other commission is due with respect to any of the Occupancy
Leases which has not been paid, and no brokerage or other commissions shall become due or payable
by Borrower, Macon Burlington Owner or either Lightstone Property Owner with the passage of time
or the exercise by any tenant under any Occupancy Lease of any renewal or expansion option thereunder,
and (v) there are no currently existing disputes between Borrower, Macon Burlington Owner or either
Lightstone Property Owner (or, to the best of its knowledge, any predecessor landlord under any Occupancy
Lease) and any tenant under any of the Occupancy Leases with respect to the computation of any rent,
additional rent, incentive rent, tenant reimbursements or any other amounts payable by any such tenant
under any of the Occupancy Leases.

                                 (m)          There is access for ingress and egress
to and from the Lightstone Properties to public streets or roadways, pursuant to valid easements
or other valid means, the Lightstone Property Owners’ rights to such access are not subject
to any interference or obstruction, and none of Borrower, Macon Burlington Owner or either Lightstone
Property Owner has any knowledge of 

	

	
any fact or condition which would result in the termination of such access as to either of the Lightstone
Properties. None of the Permitted Exceptions materially interferes with or has materially interfered
with the maintenance, use, operation or enjoyment of either of the Lightstone Properties.

ARTICLE SEVEN

  ADDITIONAL COVENANTS;

    COVENANT BY LENDER

                 7.1             Additional Covenants by Borrower. 

                                 (a)  Borrower promptly shall notify Lender of any (i) occurrence, event, or condition (including,
but not limited to, any pending or threatened suit or proceeding by or before any court, administrative
agency or other governmental authority or any arbitrator), (ii) the enactment of any statute, ordinance
or law, of which Borrower shall receive written notice and (iii) the giving of any notice or other
communication by any party pursuant to any other agreement relating to the ownership, use, or operation
of either of the Lightstone Properties which, individually or in the aggregate, would or could have
a material, adverse effect on the Loan.

                                 (b)  Borrower shall allow, and shall cause Macon Burlington Owner and the Lightstone Property
Owners to allow, Lender and Lender’s representatives and agents access to the Lightstone Properties
at all times and Borrower shall provide to Lender, and shall cause Macon Burlington Owner and the
Lightstone Property Owners to provide to Lender, such documents relating to the Lightstone Properties
as may be requested by Lender or Lender’s representatives and agents. 

	

	
                                (c)  Borrower
shall cause, and shall cause Macon Burlington Owner and the Lightstone Property Owners to cause,
the Lightstone Properties at all times to be in full compliance with all Legal Requirements to the
extent and in the manner of prudent owners of similar properties in the general areas, respectively,
of the Lightstone Properties.

                                 (d)  Borrower shall not suffer or permit any event or circumstance to occur or exist, or
fail to take any action, which would result in the lien and security interests of Lender under the
Pledge Agreement ceasing to be at all times fully perfected liens and security interests on the Pledged
Collateral. 

                                 (e)  Borrower will maintain such reserves for future operating expenses, capital improvements
and other cash requirements as Lender reasonably shall request, which reserves may be in addition
to any reserves required by the holder of the First Mortgage, any mortgage resulting from a Refinancing
Event or the Macon Burlington Owner Loan.

                                 (f)  Borrower shall cause the Lightstone Properties to be managed in accordance with the
standards of care for properties of like kind in their respective general areas and in accordance
with Section 12.1. Borrower shall (i) cause the Lightstone Properties to be maintained in good repair,
(ii) cause all principal, interest and other sums coming due under the First Mortgage, any mortgages
resulting from Refinancing Events and in respect of the Macon Burlington Owner Loan to be paid promptly
when due and cause all other covenants, conditions and agreements set forth in the First Mortgage,
any mortgages resulting from Refinancing Events and any documents, instruments, agreements and certificates
evidencing, securing, guarantying or otherwise pertaining to the Macon Burlington Owner Loan (collectively,
the “Macon Burlington Owner Loan Loan Documents”), and all related documents, to be fully and timely performed, and (iii) cause each Lightstone
Property to be kept insured in compliance with the requirements of the 

	

	
First Mortgage, any mortgage resulting from a Refinancing Event or the Macon Burlington Owner Loan
Loan Documents, or if there be none, then by policies satisfactory to Lender and by insurance companies
satisfactory to Lender (acting reasonably in both instances) and in amounts not less than the full
insurable value of the Improvements on the insured Lightstone Property, (iv) cause to be paid all
insurance premiums on policies required hereunder and under the First Mortgage and any mortgages
resulting from Refinancing Events as well as the Macon Burlington Owner Loan Loan Documents and all
taxes, assessments and other charges imposed upon the Lightstone Properties, as and when the same
shall become due. A condition, circumstance, or management practice asserted by Lender to constitute
a failure of compliance with the provisions of the first sentence of this paragraph (f) or the preceding
clause (i) as to a Property subject to the lien of the First Mortgage, or a mortgage resulting from
a Refinancing Event, shall not be a default hereunder unless and until the same condition, circumstance
or management practice has been asserted by the holder of such First Mortgage, or mortgage resulting
from a Refinancing Event, to be a default thereunder. 

                                 (g)  Borrower shall not and shall not permit Macon Burlington Owner to enter into or permit
the consummation of any transaction with respect to either Lightstone Property with an Affiliate
of Borrower, of Lichtenstein, of Macon Burlington Owner or of either Lightstone Property Owner without
the prior written consent of Lender which consent shall not be unreasonably withheld or delayed,
but no such consent shall be needed for transactions which are commercially reasonable and at rates
and terms, including, without limitation, prices that are competitive with terms offered by other
providers of similar goods and services to similar properties in the County in which the Lightstone
Property or Lightstone Properties are located.

                                 (h)  Borrower shall not, and shall not permit Macon Burlington Owner to, without the prior
written consent of Lender which shall not be unreasonably withheld or delayed, cause or permit either
Lightstone Property Owner to (i) sell, lease, exchange or otherwise dispose of or 

	

	
Transfer all or any portion of its Lightstone Property (or any interest therein), except for Occupancy
Leases and otherwise as expressly permitted herein, it being understood that Borrower and Macon Burlington
Owner shall have the right to sell or permit the sale of personal property in the ordinary course
of business to the extent that such personal property is obsolete, worn out or otherwise not required
for the operation or ownership of the Lightstone Property to which it appertains; provided, however,
that any personal property which has been disposed of shall be replaced with new personal property
to the extent necessary for the maintenance and operation of such Lightstone Property in compliance
with the terms of this Loan Agreement and the other Loan Documents, (ii) consummate any Refinancing
Event or otherwise encumber any part of a Lightstone Property, except as otherwise expressly provided
herein or in the Security Instruments, it being further understood that Borrower and Macon Burlington
Owner shall have the right to permit the Lightstone Property Owners to incur unsecured trade account
debts payable in the normal course of business, (iii) enter into any agreement with any power or
authority having the right of condemnation or eminent domain for a Taking of its Lightstone Property,
or any portion of its Lightstone Property, or the temporary use thereof, (iv) knowingly take or permit
a Lightstone Property Owner to take any actions or knowingly fail to take such actions so as materially
and adversely to impair the economic value of a Lightstone Property or the Security Instruments executed
and delivered or to be executed and delivered pursuant to the terms hereof, (v) make or permit either
of the Lightstone Property Owners to make any alterations or renovations or undertake any development,
redevelopment or construction of any Improvements on a Lightstone Property, or any portion thereof,
except for any alterations that will not have an adverse affect on the physical or investment characteristics
of the Lightstone Property, (vi) knowingly take or permit either Lightstone Property Owner to take
any action which would materially, adversely affect the zoning or building classification of its
Lightstone Property, (vii) permit a default or an Event of Default, or an event or condition which
upon notice or the passage of time or otherwise would result in the occurrence of a default or an
Event of Default under any of the Loan Documents.

	

	
                                 (i)  The beneficial owner, member and manager of the Lightstone Property Owners and Macon
Burlington Owner, and Lichtenstein, as a beneficial owner, member and manager of Borrower, shall
not be changed or their ownership interests Transferred, and no new members or managers shall be
admitted to or appointed therein, directly or indirectly, without the prior written consent of Lender
which shall not be unreasonably withheld or delayed; Lender agrees to consent to any such Transfer
of an interest that is less than a fifty percent (50%) interest in the entity in question, both alone
and when added to all other prior and simultaneous Transfers of interests in the same entity, provided
that any such Transfer is to Lichtenstein’s spouse or children or a trust created for any of
them, and provided further, however, that any security interest held by Lender is not adversely affected
thereby or that any such adverse effect is remedied to Lender’s satisfaction at Lichtenstein’s
or Borrower’s expense. Without the prior written consent of Lender, the certificate of formation
and operating agreement of Borrower, Macon Burlington Owner and the Lightstone Property Owners shall
not be amended or supplemented, and no equity interests or voting rights in any of them shall be
changed, except for such technical amendments of any thereof as shall be required for compliance
with applicable law and then only after twenty (20) days prior notice to Lender.

                                 (j)  Borrower, Macon Burlington Owner and the Lightstone Property Owners shall (i) not encumber
or permit the encumbrance of a Lightstone Property or permit any mechanics’, materialmens’
or laborers’ liens to be filed against a Lightstone Property or to remain filed against a Lightstone
Property for more than ninety (90) days, or after foreclosure thereof shall have begun without causing
the same to be discharged by bonding or otherwise, and (ii) continue to maintain policies of insurance
with respect to the Lightstone Properties conforming to the requirements of Section 2.2 hereof. The
Lightstone Property Owners shall not engage in any business or activity not related to the ownership,
management, and operation of its Lightstone Property. 

	

	
                                 (k)  Borrower shall maintain, and shall cause Macon Burlington Owner and the Lightstone Property
Owners to maintain, in full force and effect all licenses and permits required for the operation
of the Lightstone Properties in a manner at least equal to properties of like kind in their respective
general areas in compliance with all Legal Requirements.

                                 (l)  As soon as possible after the closing of the Loan, Borrower shall furnish to Lender
full and complete copies of all documents, surveys and maps, pertaining in any way to acquisition
and financing of the Lightstone Properties and not previously provided to Lender. 

                                 (m)  Promptly after receipt by Borrower, Macon Burlington Owner or a Lightstone Property
Owner of a demand, a default notice, or an inquiry concerning a Lightstone Property from the holder
of the First Mortgage, a mortgage resulting from a Refinancing Event or the Macon Burlington Owner
Loan, Borrower shall, if Borrower is the recipient thereof or, if Macon Burlington Owner or a Lightstone
Property Owner is the recipient thereof, Borrower shall cause the recipient thereof to forward a
copy thereof to Lender.

                 7.2            Covenant by Lender. Lender covenants that as long as no Event of Default shall have occurred under this Agreement or
under any of the other Loan Documents, and be continuing, Lender shall not assign the Note or any
of Lender’s rights under the Note, this Agreement, or any of the other Loan Documents to any
other Person prior to the Maturity Date.

                 7.3           Certain Sources and Uses of Funds. Lender and Borrower, for itself and on behalf of Macon Burlington Owner and the Lightstone Property
Owners acknowledge their collective intention that (except to the extent, if at all, prohibited by
the First Mortgage, or mortgages resulting from Refinancing Events) cash flow from each of the Lightstone
Properties shall be considered fungible for all purposes of this Loan Agreement and the other Loan
Documents so that, for example, if at any time there shall not be cash flow available from one Lightstone

	

	
Property (“Property A”) to pay Impositions with regard thereto, or to keep the required insurance in effect with regard
thereto, or to maintain Property A in good repair, and if at such time, there shall be a surplus
of cash flow from the other Lightstone Property (“Property B”), it is intended that such surplus shall be used to meet the requirements of Property A, provided
that so doing shall not be a default under the First Mortgage, or a mortgage on Property B resulting
from a Refinancing Event.

ARTICLE EIGHT

  EXPENSES

                 8.1           Closing Costs. Borrower shall reimburse Lender for all reasonable out-of-pocket expenses incurred by Lender in connection
with the transactions contemplated by this Loan Agreement, including, but not limited to, the fees,
expenses and disbursements of Lender’s counsel, and a loan commitment fee of Forty-Seven Thousand
Five Hundred and 00/100 Dollars ($47,500) and all other reasonable costs and expenses including,
but not limited to, the costs of surveys, title insurance premiums and fees and stamp, transfer or
other taxes or fees, incurred by or on behalf of Lender in connection with the transactions contemplated
hereby. Borrower shall pay or cause to be paid and save Lender harmless from the non-payment or delayed
payment of any and all stamp, transfer and other taxes, fees and excises, if any, including any interest
and penalties which may be determined to be payable in connection with the Loan, and the enforcement
of any of Lender’s rights or remedies hereunder and the advance of the Loan, including, without
limitation, the fees, expenses and disbursements of Lender’s counsel, architects, engineers
and other consultants.

	

	
ARTICLE EIGHT-A

  BROKERAGE

                 8-A.1      Mutual Representations. Lender and Borrower each represents to the other that it has not dealt with any broker, “finder”
or other intermediary in connection with this Loan Agreement or the transaction of which it is a
part.

                 8-A.2      Indemnities. If the foregoing representation be untrue, the party that shall have made the untrue representation
(the “indemnifying party”) shall indemnify and hold harmless the other party (the “indemnified party”) from and against any and all loss, cost and expense (including, without limitation, reasonable
attorneys’ fees) the indemnified party may pay, suffer or incur as the result of any claim made
by any Person with whom the indemnifying party shall have dealt in connection with this Loan Agreement
and/or the transaction of which it is a part.

ARTICLE NINE

  SURVIVAL OF REPRESENTATIONS AND

    WARRANTIES; BINDING EFFECT; INDEMNITY

                 9.1           Survival of Representations and Warranties; Binding Effect; Indemnity. (a) All covenants, agreements, representations and warranties in the Loan Documents and in the certificates
and other instruments delivered to Lender shall survive the execution and delivery of this Loan Agreement
and except as otherwise provided therein, shall continue in effect so long as this Loan Agreement,
the Loan or any of the instruments described in this Loan Agreement are outstanding. All covenants,
agreements, representations and warranties in the Loan Agreement and in such certificates and other
instruments shall bind the party making the same and its successors and assigns and shall inure to
the benefit of and be enforceable by each party to whom 

	

	
made and its successors and assigns (subject to and in accordance with the non-recourse provisions
set forth in Section 14.9 hereof). 

                                (b)
Borrower agrees to indemnify and hold Lender harmless from and against any expenses, costs, losses
and other damages (including court costs and attorneys’ fees and expenses) suffered or incurred
by or on behalf of Lender as a result of or arising out of (i) the breach of any representation,
warranty or covenant of Borrower, Macon Burlington Owner or either Lightstone Property Owner hereunder
or under any of the other Loan Documents or certificates and other instruments delivered to Lender,
and/or (ii) any action, suit, charge, complaint, proceeding or other similar matter arising out of
or in any way connected to any condition in, on, about or of either of the Lightstone Properties,
or arising out of or in any way connected to any transaction or event relating to the acquisition
or ownership of the Lightstone Properties.

ARTICLE TEN

  DEFAULTS

                 10.1         Event of Default. If during the Term one or more of the following events (each an “Event of Default”) shall occur and be continuing: 

	 

		(i)	Borrower shall default in the payment of any installment of Interest or any other Indebtedness under
the Loan Documents, when and as the same becomes due and payable and such nonpayment continues for
a period of ten (10) business days after notice thereof from Lender; or 
			 

		(ii)	this Agreement, or any of the other Loan Documents, or the transaction of which they are a part, or
the enforcement of any right of Lender or any obligation of 

	

	 	Borrower, Macon Burlington Owner and/or either of the Lightstone Property Owners, creates an event
of default under the First Mortgage, any mortgage resulting from a Refinancing Event or the Macon
Burlington Owner Loan Loan Documents; or
		 

		(iii)	there shall occur an event of default under the First Mortgage, or any mortgage resulting from a Refinancing
Event or the Macon Burlington Owner Loan Loan Documents, except that a default under the First Mortgage,
or any mortgage resulting from a Refinancing Event, shall be an Event of Default under this Agreement
only if (a) such default is a default for sixty (60) days or more in payment when due of principal
and/or interest under the First Mortgage, or mortgage resulting from a Refinancing Event, or (b)
the holder of the First Mortgage, or mortgage resulting from a Refinancing Event, has commenced an
action to foreclose the lien thereof; or
			 
		(iv)	any of the representations and warranties set forth herein, in any other Loan Document or in any certificate
executed and delivered by Borrower or Lichtenstein to Lender shall not be true and correct in all
material respects or shall be knowingly and materially misleading when made, or there shall be any
default in the performance of or compliance with any of the terms, covenants, or conditions hereof,
or in any other Loan Document, other than in the payment of Interest or any payment of the Principal
of the Loan or any other Indebtedness under the Loan Documents, and such default shall continue for
more than twenty (20) business days after Lender shall have given written notice thereof to Borrower,
unless any such default cannot be cured by payment of a sum of money and Borrower shall within such
period commence and continue to prosecute with due diligence and dispatch the curing of such default; or 

	

		(v)	Borrower shall (a) fail to pay or cause all Impositions and any fines, penalties, interest or costs
added thereto, or (b) fails to maintain or cause to be maintained in good standing the insurance
policies required pursuant to the terms hereof for a period of ten (10) days after notice thereof
from Lender; or
			 
		(vi)	a Bankruptcy Event shall have occurred with respect to Borrower, Macon Burlington Owner or either Lightstone
Property Owner; or 
			 
		(vii)	a default under Section 7.1 hereof; or 
			 
		(viii)	a judgment or judgments in excess of Two Hundred Thousand Dollars ($200,000) in the aggregate shall
be entered against Borrower, Macon Burlington Owner and/or any Lightstone Property Owner and shall
remain unpaid, unappealed, undischarged, unbonded, unstayed and undismissed for a period of sixty
(60) days after the date of the entry thereof;

	 
	
then, and in any such Event of Default, Lender at any time thereafter may give Borrower a Notice of
such Event of Default, and if such Event of Default is not cured within twenty (20) business days
after receipt of such Notice, then, at any time thereafter:

	 

		(a)	Lender may declare the Principal, Interest and any other Indebtedness outstanding under the Note and
the other Loan Documents to be immediately due and payable; provided, however that if and as long
as the only uncured Event of Default shall be in the timely payment of an installment of Interest
on the Loan, and if (i) no default or event of default shall have occurred under the First Mortgage,
any other 

	

	 	mortgage resulting from a Refinancing Event or the Macon Burlington Owner Loan Loan Documents whether
or not subject to a grace period and opportunity to cure and whether or not the holder of the First
Mortgage, such other mortgage or the Macon Burlington Owner Loan Loan Documents shall have given
any notice or taken any other action with regard thereto, and (ii) there shall be no other default
under this Loan Agreement or any other Loan Document which, with the passage of a period of time
or the giving of a notice, or both, would become an Event of Default, then Lender shall not take
action to enforce Lender’s rights under the Pledge Agreement against the Pledged Collateral
unless and until such Event of Default has been an Event of Default for a period of one (1) year.
		 

		(b)	Subject to the proviso in the preceding clause (ii) of Section 10.1(viii)(a), Lender may pursue any and all of its remedies
provided for under law and in equity and any or all of the Loan Documents 

	 
	
                 10.2         Costs; Right to Cure. All costs and expenses incurred by or on behalf of Lender (including, without limitation, reasonable
attorneys’ fees and expenses) resulting from any Default by Borrower, Macon Burlington Owner
and/or either Lightstone Property Owner under this Loan Agreement or any other Loan Documents shall
be paid by Borrower. Upon the occurrence of an Event of Default, Lender shall have the right, but
not the obligation, to cure any such Default. Borrower hereby appoints Lender as its true and lawful
attorney-in-fact, to take any such action and to cure any such Defaults in the name and on behalf
of such Person, which power of attorney shall be coupled with an interest and be irrevocable so long
as any of the Indebtedness hereunder or under the Note is outstanding. Any costs or expenses incurred
by Lender in connection with any 

	

	
of the foregoing shall be payable, together with interest at the rate of fifteen (15%) percent per
annum (or such lesser rate as shall be the maximum rate permitted by law) from the date incurred
until paid. 

                 10.3         Cross-Default. For purposes hereof and all of the Loan Documents, an Event of Default under any of the Loan Documents
shall be deemed to be an Event of Default with respect to any and all of the other Loan Documents.

ARTICLE ELEVEN

  BOOKS; RECORDS; STATEMENTS AND AUDITS

                 11.1         Books and Records. Borrower shall keep or shall cause the Lightstone Property Owners and/or Macon Burlington Owner to
keep accurate, full and complete books, records and accounts showing the assets, liabilities, operations,
transactions and financial condition of the Lightstone Properties. All books, records, accounts and
financial statements shall be accurate and complete in all material respects, shall present fairly
the financial position and results of the operations of the Lightstone Properties and shall be prepared
in accordance with generally accepted accounting principles (on a cash basis) consistently applied. 

                 11.2         Statements. 

                                 (a)           Reports to Lender. Borrower shall furnish to Lender the financial reports required to be submitted to Wachovia, as holder
of the First Mortgage on the Lightstone Properties, within the time limits set forth in the First
Mortgage and in any event, annual audited financial statements by March 1 in each year. This requirement
shall continue whether or not the First Mortgage remains outstanding. If the First Mortgage is replaced
by a new mortgage as the result of a Refinancing Event, Lender may, but shall not be required to,
accept the reports to be 

	

	
delivered to the holder of the mortgage resulting from the Refinancing Event in place of the foregoing
requirements. 

                                 (b)           Income Reports. In addition to the requirements of subsection (a) above, Borrower shall furnish, or cause the Lightstone
Property Owners to furnish, to Lender no later than March 31 of each year (i) a statement itemizing
the sources and types of gross revenue for the preceding Fiscal Year paid by tenants to each Lightstone
Property Owner in accordance with Occupancy Leases and reflecting other miscellaneous income, and
(ii) such other year end reports and other information as Lender reasonably may request.

                                 (c)           Other Reports. In addition, Borrower shall furnish or cause the Lightstone Property Owners to furnish to Lender
copies of any and all reports furnished under any management agreement or leasing agreement to the
extent not otherwise provided to Lender hereunder. 

                 11.3         Lender’s Right to Audit. The books, accounts and records of Borrower and the Lightstone Property Owners shall at all times
be maintained at Borrower’s Property Management Office. Upon reasonable notice to Borrower,
Lender may at its option and expense conduct audits of the books, records and accounts of the Lightstone
Properties, on either a continuing or periodic basis or both, by employees of Lender, an Affiliate
of Lender, or by a national firm of independent certified public accountants selected by Lender (“Auditor”). If Lender’s accountants are not the Auditor and disagree with the Auditor’s decision
as to any matter concerning the books, accounts and records of either Lightstone Property, Lender
may notify Borrower of such disagreement, and Borrower and Lender shall cause the Auditor and Lender’s
accountants, respectively, to hold such meetings and discussions as they shall deem necessary concerning
the disagreement and to use all reasonable efforts to reach a mutually acceptable resolution of the
matter in question. If the Auditor and the Lender’s accountants are unable to reach a mutually
acceptable resolution of the 

	

	
matter in question, they shall select a national firm of certified public accountants to act as a third
auditor to review and make a determination as to the matter in question. Such third auditor’s
determination shall be final and binding upon the parties, the Auditor and Lender’s accountants.
Such third auditor shall have full access to the books, records and accounts of the Lightstone Properties.

                 The charges and expenses of such third auditor shall be paid by Borrower as an Operating Expense. 

	

	
ARTICLE TWELVE

  MANAGEMENT OF THE PROPERTIES

                 12.1         Management. Borrower shall be responsible for providing or causing to be provided all services necessary, proper,
desirable or appropriate for the successful leasing, operating, repair and management of the Lightstone
Properties in the manner of similar properties in their respective general areas, and shall cause
such management services to be performed as hereinafter set forth. Any management agreement shall
be in form and substance satisfactory to Lender and shall be terminable upon thirty (30) days’
prior notice. Any management agreement shall also provide that all amounts coming due to the managing
agent thereunder shall be earned, due and payable only if, as, and when, and to the extent that,
all Indebtedness amounts then due and payable have been paid. Any managing agent must be approved
by Lender before being retained to serve as such. Subject to the preceding provisions of this Section,
Lender agrees not to unreasonably withhold Lender’s approval of a manager selected by Borrower,
so long as the aggregate amount of fees and other compensation to be paid to said managing agent,
pursuant to a management agreement between Borrower and said managing agent that is acceptable to
Lender, shall not exceed three and one-half percent (3.5%) of the rent and other direct income from
the operation of the Lightstone Property or Lightstone Properties. Any replacement managing agent
or management agreement shall be subject to Lender’s prior written approval. The managing agent
or managing agents of the Lightstone Properties always shall use their best efforts (and their respective
management agreements expressly shall so require) to manage the Lightstone Properties in such a manner
that the rental income derived therefrom would qualify as “rents from real property” as
that term is defined in Section 856(d)(1) of the Internal Revenue Code if the owner were a real estate investment trust.

	

	
                 12.2         Service Agreements. Copies of all service agreements shall be delivered to Lender, if Lender so requests, and shall be
maintained at Borrower’s Property Management Office available for inspection by Lender at all
reasonable times.

                 12.3         Occupancy Leases. All Occupancy Leases with respect to the Lightstone Properties will be bona fide, good faith, arm’s
length leases in writing with third parties that are not Affiliates of Borrower, Macon Burlington
Owner or either of the Lightstone Property Owners (and Borrower will promptly furnish copies thereof
to Lender, if Lender so requests, and will maintain copies thereof at Borrower’s Property Management
Office available for Lender’s inspection at all reasonable times). 

ARTICLE THIRTEEN

  TRANSFER OF INTERESTS; NO FURTHER FINANCING

                 13.1         Transfers. (a) Except as otherwise expressly set forth herein, no Lightstone Property, or any part thereof,
no Pledged Collateral, and no direct or indirect interest in either Lightstone Property Owner, in
Borrower or in Macon Burlington Owner, or in any entity that has any direct or indirect interest
in any Lightstone Property Owner, in Borrower or in Macon Burlington Owner, shall be Transferred
without the prior written consent of Lender which shall not be unreasonably withheld. Any Transfer
or attempted Transfer not permitted under the terms hereof shall be void ab initio and of no force or effect. Notwithstanding the foregoing or anything hereafter or in any other Loan
Document to the contrary, the pledge (and the foreclosure of a pledge by Wachovia in connection with
the Macon Burlington Owner Loan in accordance with a certain Intercreditor Agreement of even date
herewith among Wachovia, as lender in respect of the loan secured by the First Mortgage, Wachovia,
as lender in respect of the Macon Burlington 

	

	
Owner Loan and Lender, as lender in respect of the Loan) of direct and/or in direct interests in the
Lightstone Property Owner by Macon Burlington Owner, shall not contravene this Section 13.1 or any
other Loan Document.

                 13.2         No Financing. Borrower shall not have the right and shall not permit Macon Burlington Owner or any Lightstone Property
Owner, or any of their Affiliates, to enter into a Refinancing Event without the prior written consent
of Lender which shall not be unreasonably withheld.

ARTICLE FOURTEEN

  MISCELLANEOUS

                 14.1         Notices. All notices, demands, consents, requests, instructions and approvals (“Notice”) herein required or permitted shall be in writing and shall be either telecopied (except that
default Notices shall not be effective if only telecopied), delivered by a reputable overnight courier
that provides a receipt to sender, or mailed by certified mail, return receipt requested, postage
pre-paid, to the recipient at such recipient’s address set forth below (or at such other address
for a party as shall be specified by Notice given pursuant hereto): 

If to Borrower to:

	 

	 	Lightstone Member III, LLC

c/o The Lightstone Group

    326 Third Street

    Lakewood, New Jersey 08701

    Attention: David Lichtenstein

    Telecopy: (732) 363 7183
  

	

	and in any of the foregoing

      cases with a copy to:
	 

		 Carol M. Joseph, Esq.
		
		 Cassin Cassin & Joseph LLP
		
		 711 Third Avenue, 20th Floor
		
		 New York, New York 10017
		
		 Telecopy: (212) 557-2952
	 	 
	And a copy to:	Corporate
    Counsel
		The Lightstone Group
		326 Third Street
		Lakewood, NJ 08701
		Telecopy: (732) 363-7183
	 	 
	and if to Lender to: 	 
		 Presidential Realty Corporation 
		
		 180 South Broadway
		
		 White Plains, New York 10605 
		
		 Attention: Mr. Jeffrey F. Joseph, President
		
		 Telecopy: (914) 948-1327
	 	 
	with a copy to: 	 

		 Cuddy & Feder LLP
		

		90 Maple Avenue
		

		 White Plains, New York 10601 
		
	 	 
		 Attention: Kenneth F. Jurist, Esq. and
		
		 Chauncey L. Walker, Esq.
		
		 Telecopy: (914) 761-5372

	 
	
All Notices shall be effective and deemed received three days after deposit in the mail, postage prepaid,
if mailed, and upon receipt in the case of telecopy or if sent by overnight courier. Each Notice
shall bear the date on which it is delivered or mailed. In the event Notice is sent by telecopy,
the notifying party shall endeavor also to mail a copy of such Notice, but failure to do so shall
not affect the validity of such Notice as so telecopied, except with respect to default Notices. 

                 14.2         Entire Agreement; No Oral Changes. This Loan Agreement, the other Loan Documents, the other documents and instruments referred to herein,
and any other documents executed and delivered contemporaneously herewith, embody the entire agreement
and understanding between Lender and Borrower and their Affiliates relating to the subject matter 

	

	
hereof and supersede all prior agreements and understandings relating thereto. This Loan Agreement
may not be changed orally, but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought. 

                 14.3         Captions. The headings to the Articles and Sections of this Loan Agreement have been inserted solely for convenience
of reference and shall not modify, define or limit the provisions of this Loan Agreement. 

                 14.4         Governing Law. This Loan Agreement and the other Loan Documents have been prepared, negotiated, executed and delivered
wholly in the State of New York and shall be governed by, construed, and enforced in accordance with
the laws of the state of New York applicable to agreements to be performed entirely within New York.

                 14.5         Further Assurances. Borrower agrees to execute and deliver such other instruments as may be reasonably requested from
time to time by Lender to effect and confirm the transactions described and contemplated hereby. 

                 14.6         Interest Limitation. Notwithstanding anything contained to the contrary in this Loan Agreement, or the Note or any other
Loan Document, the obligation of Borrower to pay Interest to Lender shall be subject to the limitation
that such payment of Interest shall not be required to the extent that receipt thereof by Lender
would be contrary to the provisions of law applicable to Lender limiting the maximum rate of interest
which may be charged or collected by Lender. 

                 14.7         Estoppel Certificates. Promptly upon the written request of Lender, Borrower shall execute and deliver to Lender, in such
form as Lender shall reasonably request, a certificate confirming (i) that as of the date of such
certificate the Loan Documents are in full force and 

	

	
effect, (ii) the amount of Principal and Interest outstanding as of the date of such certificate, (iii)
that as of the date of such certificate there is no Default or Event of Default under the Loan Documents,
or if there is any such Default or Event of Default describing the same in reasonable detail, and
(iv) such other matters as Lender may reasonably request. 

                 14.8         Interpretation. In this Agreement, unless otherwise specified, (i) singular words include the plural, and plural
words include the singular; (ii) words that include a number of constituent parts, things or elements
shall be construed as referring separately to each constituent part, thing or element thereof, as
well as to such constituent parts, things or elements as a whole; (iii) all pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural forms thereof,
as the context shall require; (iv) references to any Person include its successors and assigns and,
in the case of an individual, the word “successors” includes such individual’s heirs,
devisees, legatees, executors, administrators, and personal representatives; (v) references to any
statute or other law include all rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law referred to; (vi)
references to any agreement or other document include all subsequent amendments or other modifications
thereof; (vii) the words “include” and “including”, and words of similar import,
shall be deemed to be followed by the words “without limitation”; (viii) the words “hereto”,
“herein”, “hereof” and “hereunder”, and words of similar import, refer
to this Loan Agreement in its entirety; (ix) references to Articles, Sections or paragraphs are to
the Articles, Sections or paragraphs of this Loan Agreement; (x) no reference to a financing, Refinancing
Event, refinancing, or mortgage on either or both of the Lightstone Properties (other than the First
Mortgage) shall be construed as permitting any such financing, Refinancing Event, refinancing, or
mortgage event to occur without Lender’s prior consent, all of which (except as otherwise in
this Loan Agreement expressly provided to the contrary) shall require Lender’s prior consent
(which Lender covenants not unreasonably to withhold) (reference is made to Article 13 hereof); and
(xi) references to mortgages shall include deeds of trust, and references to foreclosure of a mortgage 

	

	
shall include the acts of a trustee under a deed of trust to realize upon the security for the benefit
of the beneficiary by exercising a power of sale, taking possession of the mortgaged property, or
otherwise.

                 14.9         Non-Recourse. Notwithstanding anything herein or in any other Loan Document to the contrary, except as otherwise
set forth in this Section 14.9 to the contrary, Lender shall not enforce the liability and obligation
of Borrower or any of its members to perform and observe the obligations contained in this Agreement
or any of the other Loan Documents by any action or proceeding wherein a money judgment shall be
sought against Borrower or its members, except that Lender may bring a foreclosure action, action
for specific performance, or other appropriate action or proceeding (including, without limitation,
an action to obtain a deficiency judgment) solely for the purpose of enabling Lender to realize upon
(i) Borrower’s interest in the Pledged Collateral, (ii) rents to the extent received by Borrower
(or received by its members) after the occurrence of an Event of Default (the “Recourse Distributions”) and (iii) any other collateral given to Lender under the Loan Documents (the collateral described
in the foregoing clauses (i) - (iii) is hereinafter referred to as the “Default Collateral”); provided, however, that any judgment in any such action or proceeding shall be enforceable against Borrower or its members,
as the case may be, only to the extent of any such Default Collateral. The provisions of this Section
shall not, however, (a) impair the validity of the debt evidenced by the Note or in any way affect
or impair this Agreement or any of the other Loan Documents or the right of Lender to foreclose upon
the Pledged Collateral following the occurrence of an Event of Default; (b) impair the right of Lender
to name Borrower as a party defendant in any action or suit for judicial foreclosure and sale under
this Agreement or any of the other Loan Documents; (c) affect the validity or enforceability of the
Note, this Agreement, or any of the other Loan Documents, or impair the right of Lender to seek a
personal judgment against Guarantor; (d) impair the right of Lender to obtain the appointment of
a receiver; (e) impair the enforcement of the Pledge Agreement; (f) impair the right of Lender to
bring suit for a monetary judgment against Borrower with respect to any losses resulting from 

	

	
fraud or intentional misrepresentation by Borrower, Guarantor or any of their Affiliates in connection
with this Agreement, the Note or the other Loan Documents, and the foregoing provisions shall not
modify, diminish or discharge the liability of Borrower, Guarantor or any of their Affiliates with
respect to same; (g) impair the right of Lender to bring suit for a monetary judgment against Borrower
to obtain the Recourse Distributions received by Borrower, and the foregoing provisions shall not
modify, diminish or discharge the liability of Borrower with respect to same; (h) impair the right
of Lender to bring suit for a monetary judgment to proceed against Guarantor to the extent of Guarantor’s
liability under the Guaranty and/or against Borrower and/or Guarantor to the extent of their respective
liabilities under the Environmental Indemnity Agreement, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower or Guarantor with respect to same; (i) impair the
right of Lender to bring suit for a monetary judgment against Borrower with respect to any losses
resulting from Borrower’s misappropriation of tenant security deposits or other payments, including,
without limitation, rent collected more than one (1) month in advance, and the foregoing provisions
shall not modify, diminish or discharge the liability of Borrower with respect to same; (j) impair
the right of Lender to enforce the provisions of Articles Six and Seven of this Agreement, even after
repayment in full by Borrower of Principal, Interest and any other amount due to Lender or to bring
suit for a monetary judgment against Borrower with respect to any losses resulting from any obligation
set forth in said Articles; (k) prevent or in any way hinder Lender from exercising, or constitute
a defense, or counterclaim, or other basis for relief in respect of the exercise of, any other remedy
against any or all of the collateral securing the Note as provided in the Loan Documents; (l) impair
the right of Lender to bring suit for a monetary judgment against Borrower with respect to any losses
resulting from any misappropriation or conversion of insurance proceeds and condemnation awards,
and the foregoing provisions shall not modify, diminish or discharge the liability of Borrower with
respect to same; (m) impair the right of Lender to sue for, seek or demand a deficiency judgment
against Borrower solely for the purpose of foreclosing the Pledged Collateral or any part thereof; provided, however, that any such deficiency judgment referred to in this clause 

	

	
(m) shall be enforceable against Borrower and Guarantor only to the extent of any of the Pledged Collateral;
(n) impair the ability of Lender to bring suit for a monetary judgment against Borrower with respect
to any losses resulting from arson or physical waste to or of either of the Lightstone Properties
or damage to either Lightstone Property in each case resulting from the intentional acts or intentional
omissions of Borrower, Guarantor or any of their Affiliates; (o) impair the right of Lender to bring
a suit for a monetary judgment against Borrower in the event of the exercise of any right or remedy
under any federal, state or local forfeiture laws resulting in the loss of the security interest
in the Pledged Collateral, or the priority thereof; (p) be deemed a waiver of any right which Lender
may have under any provision of the Bankruptcy Code to file a claim for the full amount of the debt
or to require that all the Pledged Collateral shall continue to secure all of the debt; (q) impair
the right of Lender to bring suit for monetary judgment against Borrower with respect to any losses
resulting from any claims, actions or proceedings initiated by Borrower (or any Affiliate of Borrower)
alleging that the relationship of Borrower and Lender is that of joint venturers, partners, tenants
in common, joint tenants or any relationship other than that of debtor and creditor; or (r) impair
the right of Lender to bring suit for a monetary judgment with respect to any losses resulting from
a Transfer in violation of the provisions hereof. The provisions of this Section shall be inapplicable
to Borrower if (a) any proceeding, action, petition or filing under the Bankruptcy Code, or any similar
state or federal law now or hereafter in effect relating to bankruptcy, reorganization or insolvency,
or the arrangement or adjustment of debts, shall be filed by, consented to or acquiesced in by or
with respect to Borrower, or if Borrower shall institute any proceeding for its dissolution or liquidation,
or shall make an assignment for the benefit of creditors or (b) Borrower or any Affiliate contests
or interferes with Lender’s enforcement of its rights and remedies hereunder or under the Loan
Documents by asserting any defense (x) as to the validity of the obligations under the Loan
Documents or in any way relating to the structure of the Borrower or the enforceability of Lender’s
rights and remedies under the Loan Documents, or (y) for the purpose of delaying, hindering or impairing
Lender’s rights and remedies under the Loan Documents (collectively, a “contest”) (provided that if any such Person obtains a non-appealable 

	

	
order successfully asserting a contest, Borrower shall have no liability under this clause (b)), in
which event Lender shall have recourse against all of the assets of Borrower including, without limitation,
any right, title and interest of Borrower in and to the Pledged Collateral. 

                 14.10       Counterparts. This Agreement may be executed in counterparts, and all counterparts so executed shall for all purposes
constitute but one Agreement, binding on all the parties hereto, notwithstanding that all parties
shall not have executed the same counterpart.

                 14.11       No Partnership  Nothing contained in this Agreement shall be deemed to constitute the parties hereto as partners
or joint venturers in any manner or matter whatsoever. 

                 14.12       Resolution of Drafting Ambiguities. Lender and Borrower acknowledge that they were represented by experienced counsel in connection with
the preparation, execution and delivery of the Loan Documents and that their counsel negotiated all
of the Loan Documents on their behalf and that any rule of construction under any applicable law
to the effect that ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of any of the Loan Documents. 

                 14.13       No Waiver; Cumulative Remedies and Rights  Lender shall not by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by Lender, and
then only to the extent therein set forth. A waiver by Lender of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise
have had on any future occasion. No failure to exercise nor any delay in exercising on the part of
Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude any other or future
exercise thereof or 

	

	
the exercise of any other right, power or privilege. The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently and shall be construed as affording Lender
rights additional to and not exclusive of any rights and remedies conferred under the laws of the
state of New York, any other laws or any other Security Instrument or Loan Document. 

                 14.14       Certain Consents. If Borrower shall seek the approval by or consent of Lender under this Loan Agreement or any of the
other Loan Documents, and Lender shall fail or refuse to give such consent or approval, then Borrower
shall not be entitled to any damages for any withholding or delay of such approval or consent by
Lender, it being intended that Borrower’s sole remedy shall be an action for injunction or specific
performance, which remedy of an injunction or specific performance shall be available only in those
cases in which Lender has expressly agreed under the applicable instrument or agreement not unreasonably
to withhold or delay its consent or approval. 

                 14.15       Payment Days. In the event that any payment of Interest, Principal, or any other payment to be made by Borrower
to Lender hereunder or under any of the other Loan Documents shall fall on a day which is a Saturday,
Sunday or any other day on which commercial banks in New York City are closed for business, any such
payment shall be made on the next succeeding business day. 

                 14.16       Severability. In the event that any provision of this Loan Agreement or the application thereof to Borrower, in
any circumstance, shall, to any extent, be invalid or unenforceable under any applicable statute,
regulation or rule of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith, and shall be deemed modified to conform to such statute, regulation or rule
of law, and the remainder of this Loan Agreement and the application of any such invalid or unenforceable
provision to parties, jurisdictions, or circumstances other than to whom or which it is held invalid
or enforceable, shall not be affected 

	

	
thereby nor shall same affect the validity or enforceability of any other provision of this Loan Agreement.

                 14.17       Consent to Jurisdiction. Any court action brought to interpret or enforce any provision of this Loan Agreement or any other
Loan Document or to prosecute any claim arising hereunder or thereunder must be commenced and maintained
in the state or federal courts in the State of New York. Borrower and its Affiliates hereby irrevocably
submit to the exclusive jurisdiction and venue of the state and federal courts in the State of New
York for such purposes. Borrower hereby appoints Carol M. Joseph, Esq. of Cassin Cassin & Joseph
LLP, 711 Third Avenue, 20th Floor, New York, New York 10017, and any member of Cassin Cassin & Joseph LLP or any successor
firm, as agent for Borrower and its Affiliates for receipt of service of process on their behalf
in connection with any suit, writ, restraint, execution or discovery or supplementary procedures
in connection with the interpretation and/or enforcement of any provision of this Loan Agreement
and the other Loan Documents and any claims arising hereunder or thereunder. Service shall be effected
by any means permitted by the court in which any action is filed, shall be deemed received as therein
provided. 

                 14.18       Waiver of Jury Trial. Borrower hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Loan Agreement or any of the other Loan Documents. 

[Signature page follows.]

	

	
[SIGNATURE PAGE TO LOAN AGREEMENT]

	 

	 	 
	 	LIGHTSTONE MEMBER III, LLC

	 	 	 
	 	By:	 /s/ David Lichtenstein
	 	 	

	 	 	 David Lichtenstein, Managing Member
	 	 	 
	 	 	 
	 	 PRESIDENTIAL REALTY CORPORATION
	 	 	 
	 	 	 
	 	By:	 /s/ Jeffrey F. Joseph
	 	 	

	 	 	 Jeffrey F. Joseph, President

	

	State of New York	
)
	 	 )ss.:
	County of Westchester	)
	 	 

	On the 6th  day of July in the year 2005 before me, the undersigned, personally appeared Jeffrey F. Joseph,
      personally known to me or proved to me on the basis of satisfactory evidence to be the individual
      whose name is subscribed to the within instrument and acknowledged to me that he executed the same
      in his capacity, and that by his signature on the instrument, the individual, or the person upon
      behalf of which the individual acted, executed the instrument.

	 	 
	 	 /s/ Marilyn S. Becker
	 	

	 	 Notary Public

      Marilyn S. Becker

      Notary Public, State of New York

      No. 4694219

      Qualified in Westchester County

      Commission Expirers January 31, 2006
	 	 

	State of New Jersey	 )
	 	 )ss.:
	County of Ocean	)
	 	 

	 
	On the 30th day of June in the year 2005 before me, the undersigned, personally appeared David Lichtenstein, personally
known to me or proved to me on the basis of satisfactory evidence to be the individual whose name
is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity,
and that by his signature on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
	 

	 	 
	 	 /s/ Sara Boxer
	 	

	 	 Notary Public

      Sara Boxer

      Notary Public of New Jersey

    My Commission Expires Feb. 14, 2008

	

	
EXHIBIT A

LIGHTSTONE PROPERTIES

Macon Mall

3661 Eisenhower Parkway

  Macon, Georgia 31212

Burlington Mall

  180 Colonial Mall

    Burlington, North Carolina 27215

	

	
EXHIBIT B

LIGHTSTONE PROPERTY OWNERS

                 The following Delaware limited liability companies, all having an address at 326 Third Street, Lakewood,
New Jersey 08701:

	 

	 	Macon Mall, LLC	Macon Mall 

      Macon, Georgia
	 	 	 
	 	Burlington Mall, LLC	Burlington Mall 

      Burlington, North Carolina
			

	

	
EXHIBIT C

PREPAYMENT AMOUNTS

	 

	 	Macon Mall	 	$	  9,262,500	 
	 	 	 	
	 
	 	 	 	 	 	 
	 	Burlington Mall	 	$	  2,612,500	 
	 	 	 	
	 
	 	 	 	$	11,875,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00101-of-00352.parquet"}]]