Document:

Unassociated Document

    EXHIBIT
10.35

    
 

    PROMISSORY NOTE

     

    
      	
              Date of
      Note: As of June
      26, 2008

            	
              Note
      Amount:
      $49,500,000.00

            

    

    

    THIS
PROMISSORY NOTE (this “Note”), is
made as of June 26, 2008, by AR PRIME HOLDINGS LLC, a Delaware limited liability
company, having an address at 333
Earle Ovington Boulevard, Suite 900, Uniondale, NY 11553 (“Maker”), in
favor of LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC., a Maryland
Corporation, having an address at 326 Third Street, Lakewood, NJ 08701 (together
with its successors and/or assigns, “Payee”).

     

    RECITALS:

     

    FOR VALUE
RECEIVED, Maker does hereby unconditionally covenant and promise to pay to
Payee, without any counterclaim, setoff or deduction whatsoever in immediately
available funds, to the address of Payee as set forth herein, in legal tender of
the United States, FORTY-NINE MILLION FIVE HUNDRED THOUSAND and 00/100 Dollars
($49,500,000.00), which principal amount shall be paid as set forth in this
Note. 

     

    1. DEFINITIONS

     

    Defined
terms in this Note shall include in the singular number the plural and in the
plural number the singular. Additionally, for the purposes hereof, the following
definitions shall have the following meanings:

     

    1.1. “Additional
Loan” shall
mean the additional loan that is required to be made by Payee to Maker on the
Closing Date pursuant to the Contribution Agreement.

     

    1.2. “Bankruptcy
Event” shall
mean, with respect to any Person, any of the following events shall occur with
respect to such Person: 

     

    (i) there
shall be commenced by such Person any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or such Person shall make a general assignment for the benefit of its
creditors; or 

    

    (ii) there
shall be commenced against such Person by another Person any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed for a period of sixty (60) days; or 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (iii)
 there
shall be commenced against it any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief; or 

    

    (iv)
 any
garnishment, levy, writ or warrant of attachment or similar process shall be
issued and served, which garnishment, levy, writ or warrant of attachment or
similar process relates to its property and has not been vacated, discharged or
stayed within 20 days from the issuance and service thereof; or 

    

    (v)
 it shall
take any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), (iii) or (iv)
above; or

     

    (vi)
 it shall
admit in writing its inability to pay its debts as they become due.

    

    1.3. “Business
Day” shall
mean any day other than a Saturday, Sunday or any other day on which commercial
banks in New York, New York are authorized or required by law to close.

     

    1.4. “Closing
Date” shall
mean the date, if any, on which LVP Preferred Units are issued to Maker by LVP
pursuant to the Contribution Agreement.

     

    1.5. “Contribution
Agreement” shall
mean the Contribution and Conveyance Agreement dated the date hereof between
Maker, Payee and LVP.

     

    1.6. “Corresponding Interest
Period” shall
mean, with respect to any Payment Date, the most recent Interest Period that
ended prior to such Payment Date.

     

    1.7. “Default” shall
mean the occurrence or existence of any event that, but for the giving of notice
or the passage of time or both, would constitute an Event of
Default.

     

    1.8. “Default
Rate” shall
mean the Interest Rate plus 2% per annum. 

     

    1.9. “Event of
Default” shall
have the meaning ascribed thereto in Section 4.1 hereof. 

     

    1.10. “Guarantor” shall
mean Arbor Realty SR, Inc., a Maryland corporation. 

     

    1.11. “Guaranty” shall
mean the Guaranty dated the date hereof, made by Guarantor for the benefit of
Payee.

     

    1.12. “Interest
Period” shall
mean each six-month period prior to the Maturity Date beginning on January 1 and
ending on the following June 30 or beginning on July 1 and ending on the
following December 31, provided that the first Interest Period shall commence on
the date of this Note and end on June 30, 2008.

     

    1.13. “Interest Prepayment
Amount” shall
mean an amount equal to the excess, if any, of (x) the principal amount of the
Additional Loan over (y) the amount of interest that would have accrued on a
principal amount of $5,500,000 at the rate of 8% per annum for the period
commencing on the date hereof and ending on the date that the Additional Loan is
advanced, calculated using the same convention described in Section 2.1(A) of
this Note that is used for calculating interest on this Note. 

     

    
      
        
        

      

      
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    1.14. “Interest
Rate” shall
mean the lesser of (a) four percent (4%) per annum and (b) the maximum rate of
interest, if any, which may be collected from Maker under applicable
law.

     

    1.15. “Loan” shall
mean that certain loan in the amount of $49,500,000.00 made by Payee to Maker on
the date hereof. 

     

    1.16. “Loan
Amount” shall
mean the outstanding principal balance of this Note. 

     

    1.17. “Loan
Documents” shall
mean this Note and the Pledge Agreement. 

     

    1.18. “LVP” shall
mean Lightstone Value Plus REIT, L.P., a Delaware limited
partnership.

     

    1.19. “LVP Preferred
Units” shall
mean the Series A Preferred Units of LVP that are actually issued to Maker
pursuant to the Contribution Agreement on account of the “Initial Preferred
Amount” (as defined in the Contribution Agreement).

     

    1.20. “Maturity
Date” shall
mean July 1, 2016. 

     

    1.21. “Maximum
Amount” shall
have the meaning ascribed thereto in Section 5.4(A) hereof.

     

    1.22. “Modification” shall
have the meaning ascribed thereto in Section 5.2 hereof.

     

    1.23. “Note” shall
have the meaning ascribed thereto in the preamble. 

     

    1.24. “Obligations” shall
mean all of the obligations, liabilities and indebtedness of every kind, nature
and description owing by Maker to Payee under this Note and the other Loan
Documents, including, without limitation, payment of the Loan
Amount.

     

    1.25. “Payee” shall
have the meaning ascribed thereto in the preamble. 

     

    1.26. “Payment” shall
have the meaning ascribed thereto in Section 2.2(A) hereof.

     

    1.27. “Payment
Date” shall
mean the first (1st)
Business Day of each February and August.. 

     

    1.28. “Person” shall
mean an individual, corporation, partnership, joint venture, trust,
unincorporated organization, governmental agency or authority, or any other
entity of whatever nature.

     

    1.29. “Pledge
Agreement” shall
mean that certain Pledge Agreement, of even date herewith, made by Maker in
favor of Payee.

     

    1.30. “POAC” shall
mean Prime Outlets Acquisition Company LLC, a Delaware limited liability
company. 

     

    
      
        
        

      

      
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    1.31. “POAC
Interest” shall
mean Maker’s membership interest in POAC that is pledged to Payee pursuant to
the Pledge Agreement.

     

    2. PAYMENTS AND LOAN
TERMS

     

    2.1. Payments.

     

    A. The
principal amount outstanding hereunder shall bear and accrue interest at the
Interest Rate. Except as otherwise provided herein, on each Payment Date Maker
shall pay, in arrears, all interest that accrued during the Corresponding
Interest Period with respect to that Payment Date on the unpaid principal amount
hereof; provided,
however, that
(i) all
interest that accrues prior to the Closing Date shall be
deferred and shall not be payable until the earlier of the Maturity Date or the
prepayment of this Note in full, except as provided in the next sentence of this
Section 2.1(A), (ii) in the event that the LVP Preferred Units are not issued to
Maker pursuant to the Contribution Agreement on or prior to June 26, 2009, then
all interest that accrues on this Note shall be deferred and shall not be
payable until the earlier of the Maturity Date or the prepayment of this Note in
full, and (iii) the amount of interest that Maker shall be required to pay on
any Payment Date shall in no event exceed the lesser of (x) the amount of
interest accrued on this Note during the Corresponding Interest Period with
respect to that Payment Date or (y) the excess, if any, of (A) the aggregate
amount of distributions, if any, actually received by Maker in immediately
available funds from LVP on account of the LVP Preferred Units during the six
month period ending on such Payment Date and beginning after the prior Payment
Date over (B) $220,000, and any excess accrued interest shall be deferred until
the earlier of the Maturity Date or the prepayment of this Note in full.
Upon the
making of the Additional Loan to Maker by Payee on the Closing Date, Maker
hereby authorizes and directs Payee to advance a portion of the proceeds of the
Additional Loan equal to the Interest Prepayment Amount by Payee applying such
amount to pay a portion of the interest that accrued on this Note prior to the
Closing Date in an amount equal to the Interest Prepayment Amount, and the
balance of interest on this Note that accrued prior to the Closing Date shall be
deferred until the Maturity Date. Interest shall be calculated daily and shall
be computed on the actual number of days elapsed over a month of 30 days and a
year of 360 days.
Commencing August 1, 2009, any accrued and unpaid interest hereon as of June 30
of any year shall compound annually on August 1 of that year. All calculations
by Payee of the Interest Rate and the interest payments due under this Note
shall be conclusive absent manifest error. Whenever any payment to be made under
this Note is stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of the payment of
interest.

     

    B. On the
Maturity Date, Maker shall pay (i) the outstanding principal indebtedness
evidenced hereby, (ii) all accrued and unpaid interest, and (iii) and all other
amounts due and payable hereunder.

     

    C. Maker
agrees to make each Payment under this Note directly to Payee on the date when
due at the address of Payee as set forth in the Introductory Paragraph hereto or
at such other location as Payee may designate to Maker in writing. 

     

    
      
        
        

      

      
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    D. Payments
in Federal funds immediately available in the place designated for payment which
are received by Payee prior to 5:00 p.m. (Eastern Standard Time) at said place
of payment shall be credited prior to close of business, while other Payments
may, at the
option of Payee, not be credited until immediately available to Payee in federal
funds in the place designated for payment prior to 5:00 p.m. (Eastern Standard
Time) on a day on which Payee is open for business.

     

    2.2. Application of
Payments.

     

    A. Except as
provided in Section 2.4(A) below, each and every payment (a “Payment”) made
by Maker to Payee in accordance with the terms of this Note and all other
proceeds received by Payee with respect to the Obligations shall be applied as
follows:

     

    (i)  first, to
all interest due on the principal sum and other sums payable hereunder,
calculated at the Default Rate;

     

    (ii) second,
to all interest (other than Default Rate interest) that shall be due and payable
with respect to the Loan Amount pursuant to the terms hereof as of the date the
Payment is received;

     

    (iii) third, to
any remaining Obligations (other than payment of the Loan Amount);
and

     

    (iv) fourth,
to the Loan Amount until the Loan Amount has been repaid.

     

    B. To the
extent that Maker makes a Payment or Payee receives any Payment or proceeds for
Maker’s benefit to be applied to the satisfaction of an obligation hereunder,
which Payment or proceeds are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then Payee shall provide notice
of same to Maker and, to such extent, the obligations of Maker hereunder
intended to be satisfied shall be revived and continue as if such Payment or
proceeds had not been received by Payee.

     

    2.3. Voluntary
Prepayments. Maker
may prepay the Loan Amount in whole or in part at any time, in accordance with
the following provisions: (i) Maker shall pay to Payee all interest which has
accrued and has not been paid on the Loan Amount through and including the date
on which the prepayment is being made, and (ii) this Note may be prepaid in part
only if no Event of Default shall have occurred and be continuing.

     

    2.4. Mandatory
Prepayments.

     

        A. If the
LVP Preferred Units have been issued to Maker pursuant to the Contribution
Agreement and subsequently LVP redeems all of the outstanding LVP Preferred
Units for cash, then (i) immediately upon Maker’s receipt of the redemption
proceeds in immediately available funds, Maker shall be required to prepay the
Loan Amount together with all accrued interest thereon to the extent of the
amount of redemption proceeds received by Maker, or (ii) if such redemption
proceeds are received by Payee pursuant to the Pledge Agreement, then Payee
shall immediately apply such redemption proceeds to prepay the Loan Amount
together with all accrued interest thereon to the extent of the amount of
redemption proceeds received. 

     

    
      
        
        

      

      
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    B. In the
event that after the date hereof and prior to the Closing Date Maker receives
any distributions from POAC on account of the POAC Interest, then within one (1)
Business Day following Maker’s receipt of such distribution proceeds in
immediately available funds, Maker shall be required to prepay the Loan Amount
in part in an amount equal to the distribution proceeds so received, and
notwithstanding anything herein to the contrary, all of such distribution
proceeds shall be applied as follows:

     

    (i)  first, to
the Loan Amount until the Loan Amount has been repaid; 

     

    (ii) second,
to all interest due on the principal sum and other sums payable hereunder,
calculated at the Default Rate;

     

    (iii) third, to
all interest (other than Default Rate interest) that shall be due and payable
with respect to the Loan Amount pursuant to the terms hereof as of the date the
Payment is received; and

     

    (iv) fourth,
to any remaining Obligations. 

     

    2.5. NO PERSONAL LIABILITY OF
MEMBERS, MANAGERS, OFFICERS AND AFFILIATES. EXCEPT FOR THE LIABILITY OF THE
GUARANTOR PURSUANT TO THE GUARANTY, NO PAST, PRESENT OR FUTURE MEMBER, MANAGER,
OFFICER, EMPLOYEE, ORGANIZER, AGENT OR AFFILIATE OF MAKER SHALL HAVE ANY
LIABILITY FOR ANY OBLIGATIONS OF MAKER UNDER THIS NOTE OR ANY OTHER LOAN
DOCUMENT, OR FOR ANY CLAIM BASED ON, IN RESPECT OF, OR BY REASON OF, SUCH
OBLIGATIONS OR THEIR CREATION. PAYEE AND ANY SUBSEQUENT HOLDER OF THIS NOTE, BY
ACCEPTING THIS NOTE, WAIVES AND RELEASES ALL SUCH LIABILITY WHATSOEVER, WHETHER
SUCH LIABILITY ARISES OUT OF AN ACTUAL OR ALLEGED FRAUDULENT TRANSFER,
FRAUDULENT CONVEYANCE, PIERCING THE VEIL, ALTER EGO OR OTHER CLAIM, BASIS OR
THEORY. THE WAIVER AND RELEASE ARE PART OF THE CONSIDERATION FOR ISSUANCE OF
THIS NOTE.

     

    2.6. Financial
Statements.  

     

    A. Maker
will keep and maintain or will cause to be kept and maintained on a fiscal year
basis, in accordance with generally accepted accounting principles (or such
other accounting basis reasonably acceptable to Payee) consistently applied,
proper and accurate books, records and accounts reflecting all of the financial
affairs of Maker. 

     

    B. As long
as the Loan remains unpaid in whole or in part, Maker covenants to furnish to
Payee, if requested by Payee in writing: 

     

    (i) as soon
as available, but in any event within ninety (90) days after the end of each
fiscal year, a copy of the balance sheet of Maker as at the end of such fiscal
year and the related statements of income, cash flows and retained earnings of
Maker for such year, setting forth in each case in comparative form the figures
for the previous fiscal year; and

     

    
      
        
        

      

      
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    (ii) as soon
as available and in any event within forty-five (45) days after the end of each
fiscal quarter of Maker, a company-prepared balance sheet of Maker as at the end
of such period and related statements of income, cash flows and retained
earnings for Maker for such quarterly period and for the portion of the fiscal
year ending with such period, setting forth in comparative form the figures for
the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year.

     

    3. PLEDGE

     

    The
obligations evidenced by this Note are secured by the Pledge Agreement.

     

    4. DEFAULTS

     

    4.1. Events of
Default. The
term “Event of
Default” as used
herein shall mean the occurrence or happening, at any time and from time to
time, of any one or more of the following:

     

    A. The
failure of Maker to pay the final payment of principal and interest on the
Maturity Date.

     

    B. The
failure of Maker to pay (i) any installment of interest that is due hereunder on
any Payment Date, and such failure is not cured within ten (10) Business Days
after written notice of default by Payee to Maker. 

     

    C. The
failure of the Maker to make any mandatory prepayment of the Loan pursuant to
Section 2.4 hereof within one (1) Business Day of the date on which such
prepayment amount becomes due and payable.

     

    D. An Event
of Default, as defined in the Pledge Agreement.

     

    E. If Maker
shall be in default under any of the other terms, covenants or conditions of
this Note, other than as set forth in (A) through (C) above, for ten (10) days
after notice from Payee in the case of any default that can be cured by the
payment of a sum of money, or for thirty (30) days after notice from Payee in
the case of any other default; which notice shall specify in reasonable detail
the provision of this Note claimed to be defaulted and the nature of the
default; provided,
however, that if
the cure of any such default (other than a default that can be cured by the
payment of a sum of money) cannot reasonably be effected within such 30 day
period and Maker shall have promptly and diligently commenced to cure such
default within such 30 day period, then the period to cure shall be deemed
extended for up to an additional 30 days from Payee’s default notice so long as
Maker diligently and continuously proceeds to cure such default to Payee’s
satisfaction.

     

    F. A
Bankruptcy Event occurs with respect to Maker.

     

    
      
        
        

      

      
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    G. The
termination of the Contribution Agreement pursuant to its terms under
circumstances that result in Maker being obligated to pay liquidated damages to
LVP pursuant to the Contribution Agreement.

     

    4.2. Remedies. Upon
the occurrence and during the continuance of an Event of Default, then: (i)
interest on the outstanding principal balance of this Note shall, commencing on
the date of the occurrence of such Event of Default and without notice to Maker,
accrue at the Default Rate until full payment thereof; (ii) Payee may exercise
the remedies under the Pledge Agreement; and (iii) Payee may, in addition to any
other rights or remedies available to it hereunder, under the other Loan
Documents, at law or in equity, take such action, without notice or demand, as
it reasonably deems advisable to protect and enforce its rights against Maker,
including, but not limited to, the following actions, each of which may be
pursued singly, concurrently or otherwise, at such time and in such order as
Payee may determine, in its sole discretion, without impairing or otherwise
affecting any other rights and remedies of Payee hereunder, at law or in
equity:

     

    A. declare
all or any portion of the unpaid Obligations to be immediately due and payable;
or

     

    B. institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein; or

     

    C. recover
judgment on this Note (including, without limitation obtaining summary judgment
under Section 3213 of the New York
Civil Practice Law and Procedure Rules);
or

     

    D. pursue
any or all such other rights or remedies as Payee may have under applicable law
or in equity; provided,
however, that
the provisions of this Section shall not be construed to extend or modify any of
the notice requirements or grace periods expressly provided for hereunder (if
any). 

     

    5. MISCELLANEOUS

     

    5.1. Further
Assurances. Maker
shall execute and acknowledge (or cause to be executed and acknowledged) and
deliver to Payee all reasonable documents, and take all actions, reasonably
required by Payee from time to time to confirm the rights created or now
or
hereafter intended to be created under this Note, to protect and further the
validity, priority and enforceability of this Note, provided,
however, that no
such further actions, assurances and confirmations shall increase Maker’s
obligations under this Note.

     

    5.2. Modification; Waiver in
Writing. No
modification, amendment, extension, discharge, termination or waiver (a
“Modification”) of any
provision of this Note, nor consent to any departure by Maker therefrom, shall
in any event be effective unless the same shall be in a writing signed by the
party against whom enforcement is sought, and then such waiver or consent shall
be effective only in the specific instance, and for the purpose, for which
given. Except as otherwise expressly provided herein, no notice to, or demand
on, Maker shall entitle Maker to any other or future notice or demand in the
same, similar or other circumstances. Payee does not hereby agree to, nor does
Payee hereby commit itself to, enter into any Modification.

     

    
      
        
        

      

      
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    5.3. Costs of
Collection. Maker
agrees to pay all reasonable costs and expenses of collection incurred by Payee,
in addition to principal, interest and late or delinquency charges (including,
without limitation, reasonable attorneys’ fees and disbursements) and including
all reasonable costs and expenses incurred in connection with the pursuit by
Payee of any of its rights or remedies referred to in Section 4 hereof or the
protection of or realization of collateral or in connection with any of Payee’s
collection efforts, whether or not suit on this Note, or any foreclosure
proceeding is filed, and all such reasonable costs and expenses shall be payable
on demand, together with interest at the Default Rate thereon, and also shall be
secured by the Pledge Agreement and all other collateral at any time held by
Payee as security for Maker’s obligations to Payee.

     

    5.4. Maximum
Amount.

     

    A. It is the
intention of Maker and Payee to conform strictly to the usury and similar laws
relating to interest from time to time in force, and all agreements between
Maker and Payee, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to Payee as interest hereunder
or in any other security agreement given to secure the Obligations, or in any
other document evidencing, securing or pertaining to the Obligations, exceed the
maximum amount permissible under applicable usury or such other laws (the
“Maximum
Amount”). If
under any circumstances whatsoever fulfillment of any provision hereof, at the
time performance of such provision shall be due, shall involve transcending the
Maximum Amount, then, ipso
facto, the
obligation to be fulfilled shall be reduced to the Maximum Amount. For the
purposes of calculating the actual amount of interest paid and/or payable
hereunder, in respect of laws pertaining
to usury or such other laws, all sums paid or agreed to be paid to Payee for the
use, forbearance or detention of the Obligations outstanding from time to time
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread from the date of disbursement of the proceeds of this Note
until payment in full of all of the Obligations, so that the actual rate of
interest on account of the Obligations is uniform through the term hereof. The
terms and provisions of this Section 5.4 shall control and supersede every other
provision of all agreements between Maker and Payee.

     

    B. If under
any circumstances Payee shall ever receive an amount that would exceed the
Maximum Amount, such amount shall be deemed a payment in reduction of the Loan
Amount owing hereunder and any other obligation of Maker in favor of Payee, and
shall be so applied in accordance with Section 2.2 hereof, or if such excessive
interest exceeds the Loan Amount and any other obligation of Maker in favor of
Payee, the excess shall be deemed to have been a payment made by mistake and
shall be refunded to Maker.

     

    5.5. Waivers; WAIVER OF RIGHT TO
TRIAL BY JURY, ETC. Maker
hereby expressly and unconditionally waives presentment, demand, protest, notice
of protest or notice of any kind, including, without limitation, any notice of
intention to accelerate and notice of acceleration, except as expressly provided
here-in. IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY PAYEE ON
THIS NOTE, MAKER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES ANY AND EVERY RIGHT
IT MAY HAVE TO A TRIAL BY JURY.

     

    
      
        
        

      

      
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    5.6. Governing
Law. This
Note shall be governed and construed in accordance with the laws of the State of
New York and the applicable laws of the United States of America. In any action
brought under or arising out of this Note or the other Loan Documents, Maker
hereby consents to the jurisdiction of any competent state or federal court
within the County of Nassau, State of New York, and hereby irrevocably consents
to service of process on Maker in any such action or proceeding by the mailing
of copies thereof to Maker by registered or certified mail, postage prepaid, to
Maker at its address for notices specified in Section 5.10. Nothing in this Note
will affect the right of Payee to serve process on Maker in any other manner
permitted by law.

     

    5.7. Headings. The
Section headings in this Note are included herein for convenience of reference
only and shall not constitute a part of this Note for any other
purpose.

     

    5.8. Assignment. Payee
shall not transfer, sell, assign or grant any participation in this Note, or any
of the other Loan Documents, or the obligations hereunder, to any Person other
than an affiliate of Payee that is directly or indirectly controlled by Payee,
unless Payee obtains the prior written consent of Maker to any such transaction,
which consent may be withheld in Maker’s sole and absolute discretion. All
references to “Payee” hereunder shall be deemed to
include the permitted assigns of Payee. In the event that the result of such
permitted transfer, sale, assignment or participation is that Maker shall be
obligated to make the payments required hereunder to an entity other than Payee,
then Payee
shall provide at least five (5) Business Days prior written notice to Maker of
such transfer, sale, assignment or participation. 

     

    5.9. Severability. Wherever
possible, each provision of this Note shall be interpreted in such manner
as
to be
effective and valid under applicable law, but if any provision of this Note
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note.

     

    5.10. Notices. All
notices shall be deemed to have been properly given if hand delivered or if
mailed by United States registered or certified mail, with return receipt
requested, postage prepaid, or by United States Express Mail or other comparable
overnight courier service to the parties at the addresses set forth below (or at
such other addresses as shall be given in writing by any party to the others). A
notice shall be deemed to have been given: in the case of hand delivery, at the
time of delivery; in the case of registered or certified mail, when delivered or
two Business Days after mailing; or in the case of overnight courier service, on
the Business Day after the same was sent. A party receiving a notice which does
not comply with the technical requirements for notice under this section may
elect to waive any deficiencies and treat the notice as having been properly
given. 

     

    
      	
              If
      to Maker:

            	 	
              AR
      PRIME HOLDINGS LLC 

              333
      Earle Ovington Boulevard, Suite 900

              Uniondale,
      NY 11553

              Attention:
      Guy R. Milone, Jr.

            
	 	 	 
	
              With
      a copy to:

            	 	
              Cooley
      Godward Kronish LLP 

              1114
      Avenue of the Americas

              New
      York, New York 10036

              Attention:
      Thomas D. O’Connor, Esq.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              If
      to Payee:

            	 	
              LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT, TRUST INC.

              326
      Third Street

              Lakewood,
      NJ 08701

              Attention:
      Joseph E. Teichman

            
	 	 	 
	
              With
      a copy to:

               

               

               

            	 	
              Herrick,
      Feinstein LLP

              2
      Park Avenue

              New
      York, New York 10016

              Attention:
      Sheldon Chanales, Esq.

            

    

    

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Note has been duly executed by Maker the day and year
first written above.

     

    
      	 	 	 
	 	
              AR
      PRIME HOLDINGS, LLC

              By: 
      Arbor Realty Member LLC, its
      Managing Member

              
                By:
      Arbor Realty SR Inc., its sole member  

              

            
	 
 	 
 	 
 
	
            	
            	
              By:

            
	 	
              
                
      Name: 

            
	 	
              Title:

            

    

    

    
      
        
        

      

      
        12Unassociated Document

    EXHIBIT
10.36

    
 

    EXCHANGE
RIGHTS AGREEMENT 

     

    THIS
EXCHANGE RIGHTS AGREEMENT (this “Agreement”), dated as of June __, 2008, is
entered into by and among Lightstone Value Plus Real Estate Investment Trust,
Inc., a Maryland corporation (the “Company”), Lightstone Value Plus REIT LP, a
Delaware limited partnership (the “Operating Partnership”), and the Persons
whose names are set forth on Exhibit A attached hereto (as it may be amended
from time to time). 

     

    RECITALS:

     

    (a) The
Company, together with certain other limited partners, has formed the Operating
Partnership pursuant to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership dated April 22, 2005 the
(“Original Agreement”), as amended by that certain First Amendment to Amended
and Restated Agreement of Limited Partnership dated June __, 2008 (the
“Amendment”) (as such agreement may be further amended or amended and restated
from time to time, collectively the “Partnership Agreement”). 

     

    (b)
Pursuant to the Partnership Agreement, the Limited Partners (as defined below)
directly or indirectly hold units of limited partnership interest (“Partnership
Units”) in the Operating Partnership. 

     

    (c) The
Operating Partnership has agreed to provide the Limited Partners with certain
direct or indirect rights to exchange their Partnership Units for cash or, at
the election of the Company, for shares of the Company’s common stock, $0.01 par
value per share (the “REIT Stock”). 

     

    Accordingly,
the parties hereto do hereby agree as follows: 

     

    ARTICLE I

     

    DEFINED
TERMS 

     

    The
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

     

    “Assignee”
means a Person to whom one or more Partnership Units have been transferred in a
manner permitted under the Partnership Agreement, but who has not become a
substituted Limited Partner in accordance therewith. 

     

    “Business
Day” means any day except a Saturday, Sunday or other day on which commercial
banks in New York, New York are authorized or required by law to close.

     

    “Cash
Amount” means an amount of cash per Partnership Unit equal to the Value on the
Valuation Date of the REIT Stock Amount. 

     

    “Common
Units” has the meaning set forth in the Amendment. 

     

    “Exchange
Factor” means 1.0, provided, that in the event that the Company (i) declares or
pays a dividend on its outstanding REIT Stock in REIT Stock or makes a
distribution to all holders of its outstanding REIT Stock in REIT Stock; (ii)
subdivides its outstanding REIT Stock; or (iii) combines its outstanding REIT
Stock into a smaller number of shares of REIT Stock, the Exchange Factor shall
be adjusted by multiplying the Exchange Factor by a fraction, the numerator of
which shall be the number of shares of REIT Stock issued and outstanding on the
record date for such dividend, contribution, subdivision or combination
(assuming for such purpose that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of shares of REIT Stock (determined without the above
assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision or combination. Any adjustment to the Exchange Factor
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event. 

     

    “Exchanging
Partner” has the meaning set forth in Section 2.1 hereof. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Exchange
Right” has the meaning set forth in Section 2.1 hereof. 

     

    “Lien”
means any lien, security interest, mortgage, deed of trust, charge, claim,
encumbrance, pledge, option, right of first offer or first refusal and any other
right or interest of others of any kind or nature, actual or contingent, or
other similar encumbrance of any nature whatsoever. 

     

    “Limited
Partner” means any Person, other than the Company, named as a Limited Partner on
Exhibit A, as such Exhibit may be amended from time to time. 

     

    “Notice
of Exchange” means the Notice of Exchange substantially in the form of Exhibit B
to this Agreement. 

     

    “Offering”
means the offering of the Company’s common stock, par value $.01 per share,
pursuant to a registration statement on Form S-11 filed with the Securities and
Exchange Commission (Registration No. 333-117367).

     

    “Person”
shall mean an individual, partnership, corporation, limited liability company,
trust, estate, or unincorporated organization, or other entity, or a government
or agency or political subdivision thereof. 

     

    “REIT
Stock Amount” means that number of shares of REIT Stock equal to the product of
the number of Partnership Units offered for exchange by an Exchanging Partner,
multiplied by the Exchange Factor as of the Valuation Date, provided, that in
the event the Company or the Operating Partnership issues to all holders of REIT
Stock rights, options, warrants or convertible or exchangeable securities
entitling the stockholders to subscribe for or purchase REIT Stock, or any other
securities or property (collectively, the “rights”), then the REIT Stock Amount
shall also include such rights that a holder of that number of shares of REIT
Stock would be entitled to receive. 

     

    “SEC”
means the Securities and Exchange Commission. 

     

    “Series A
Preferred Units” has the meaning set forth in the Amendment. 

     

    “Specified
Exchange Date” means the tenth (10th) Business Day after receipt by the
Operating Partnership and the Company of a Notice of Exchange; provided,
however, that if the Operating Partnership has more than 99 partners, as
determined in accordance with the provisions of Treasury Regulation Section
1.7704-1(h), then the Specified Exchange Date shall mean the thirty-first (31st)
calendar day after receipt by the Operating Partnership and the Company of a
Notice of Exchange. 

     

    “Valuation
Date” means the date of receipt by the Operating Partnership and the Company of
a Notice of Exchange or, if such date is not a Business Day, the first Business
Day thereafter. 

     

    “Value”
means, with respect to shares of REIT Stock, the average of the daily market
price for the five (5) consecutive trading days immediately preceding the
Valuation Date. The market price for each such trading day shall be:

     

    (i) if
the REIT Stock is listed or admitted to trading on the New York Stock Exchange
(the “NYSE”), any other national securities exchange or the Nasdaq Stock Market
(“Nasdaq”), the closing price on such day, or if no such sale takes place on
such day, the average of the closing bid and asked prices on such day; or

     

    (ii) if
the REIT Stock is not listed or admitted to trading on the NYSE, any national
securities exchange or Nasdaq, the last reported sale price on such day; or

     

    (iii) if
no sale takes place on such day, the average of the closing bid and asked prices
on such day, as reported by a reliable quotation source designated by the
Company or if the REIT Stock is not then traded on any market, as determined in
good faith by the Company’s Independent Directors (as defined by the Company’s
charter). 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    In the
event the REIT Stock Amount includes rights that a holder of REIT Stock would be
entitled to receive, then the Value of such rights shall be determined by the
independent directors of the Company acting in good faith on the basis of such
quotations and other information as they consider, in their reasonable judgment,
appropriate. 

     

    ARTICLE
II 

     

    EXCHANGE
RIGHT 

     

    2.1
Exchange Right. (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5 hereof, and
subject to any limitations under applicable law, the Operating Partnership
hereby grants to each Limited Partner and each Limited Partner hereby accepts
the right (the “Exchange Right”), exercisable (i) on or after the date that is
one (1) year after the closing of the Offering or (ii) upon the liquidation of
the Operating Partnership or the sale of all or substantially all of the assets
of the Operating Partnership, to exchange on a Specified Exchange Date all or a
portion of the Partnership Units held by such Limited Partner at an exchange
price equal to and in the form of the Cash Amount. Notwithstanding anything to
the contrary herein, the Exchange Right shall only be applicable to such
Partnership Units that are Common Units and not Series A Preferred Units
prior to conversion of such Series A Preferred Units to Common Units pursuant to
the Partnership Agreement.

     

    (b) The
Exchange Right shall be exercised pursuant to a Notice of Exchange delivered to
the Operating Partnership, with a copy delivered to the Company, by the Limited
Partner who is exercising the Exchange Right (the “Exchanging Partner”);
provided, however, that the Company, on behalf of the Operating Partnership, may
elect, after a Notice of Exchange is delivered, to satisfy the Exchange Right
which is the subject of such notice in accordance with Section 2.2.

     

    (c) A
Limited Partner may exercise the Exchange Right from time to time with respect
to part or all of the Partnership Units that it owns (including Common Units
received upon conversion of Series A Preferred Units), as selected by the
Limited Partner, provided that, except as provided in the Agreement, a Limited
Partner may not exercise the Exchange Right for less than one thousand (1,000)
Partnership Units unless such Limited Partner then holds less than one thousand
(1,000) Partnership Units, in which event the Limited Partner must exercise the
Exchange Right for all of the Partnership Units held by such Limited Partner.

     

    (d) An
Exchanging Partner shall have no right with respect to any Partnership Units so
exchanged to receive any distributions paid after the Specified Exchange Date
with respect to such Partnership Units. 

     

    (e) Any
Assignee of a Limited Partner may exercise the rights of such Limited Partner
pursuant to this Article 2, and such Limited Partner shall be deemed to have
assigned such rights to such Assignee and shall be bound by the exercise of such
rights by such Assignee. 

     

    (f) In
connection with any exercise of such rights by an Assignee on behalf of a
Limited Partner, the Cash Amount or the REIT Stock Amount, as the case may be,
shall be satisfied by the Operating Partnership or the Company, as the case may
be, directly to such Assignee and not to such Limited Partner. 

     

    2.2
Option of Company to Exchange for REIT Stock. (a) Notwithstanding the provisions
of Section 2.1, the Company may, on behalf of the Operating Partnership, in its
sole and absolute discretion (subject to the limitations on ownership and
transfer of REIT Stock set forth in the Company’s charter), elect to assume
directly the Operating Partnership’s obligation with respect to the Exchange
Right and satisfy an Exchanging Partner’s Exchange Right by exchanging REIT
Stock and rights equal to the REIT Stock Amount on the Specified Exchange Date
for the Partnership Units offered for exchange by the Exchanging Partner,
whereupon the Company shall acquire the Partnership Units offered for exchange
by the Exchanging Partner and shall be treated for all purposes of the
Partnership Agreement as the owner of such Partnership Units. Unless the
Company, in its sole and absolute discretion, shall exercise its right to assume
directly the Operating Partnership’s obligation with respect to the Exchange
Right and satisfy the Exchange Right, the Company shall not have any obligation
to the Exchanging Partner or to the Operating Partnership with respect to the
Exchanging Partner’s exercise of the Exchange Right. If the Company shall
exercise its right to satisfy the Exchange Right in the manner described in the
first sentence of this Section 2.2 and shall fully perform its obligations in
connection therewith, the Operating Partnership shall have no right or
obligation to pay any amount to the Exchanging Partner with respect to such
Exchanging Partner’s exercise of the Exchange Right, and each of the Exchanging
Partner, the Operating Partnership and the Company shall, for federal income tax
purposes, treat the transaction between the Company and the Exchanging Partner
as a sale of the Exchanging Partner’s Partnership Units to the Company. Nothing
contained in this Section 2.2 shall imply any right of the Company to require
any Limited Partner to exercise the Exchange Right afforded to such Limited
Partner pursuant to Section 2.1. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b) In
the event the Company shall elect to satisfy, on behalf of the Operating
Partnership, an Exchanging Partner’s Exchange Right by exchanging REIT Stock for
the Partnership Units offered for exchange, 

     

    (i) the
Company hereby agrees so to notify the Exchanging Partner within five (5)
Business Days after the receipt by the Company of such Notice of Exchange,

     

    (ii) each
Exchanging Partner hereby agrees to execute such documents and instruments as
the Company may reasonably require in connection with the issuance of REIT Stock
upon exercise of the Exchange Right, and 

     

    (iii) the
Company hereby agrees to deliver stock certificates representing fully paid and
nonassessable shares of REIT Stock. 

     

    2.3
Prohibition of Exchange for REIT Stock. Notwithstanding anything herein to the
contrary, the Company shall not be entitled to satisfy an Exchanging Partner’s
Exchange Right pursuant to Section 2.2 if the delivery of REIT Stock to such
Limited Partner by the Company pursuant to Section 2.2 (regardless of the
Operating Partnership’s obligations to the Limited Partner under Section 2.1)

     

    (a) would
be prohibited under the Articles of Incorporation of the Company, 

     

    (b) if
the Company has elected REIT status, would otherwise jeopardize the REIT status
of the Company, or 

     

    (c) would
cause the acquisition of the REIT Stock by the Limited Partner to be
“integrated” with any other distribution of REIT Stock by the Company for
purposes of complying with the registration provisions of the Securities Act.

     

    2.4
Payment Date. Any Cash Amount to be paid to an Exchanging Partner shall be paid
on the Specified Exchange Date; provided, however, that the Operating
Partnership may elect to cause the Specified Exchange Date to be delayed for up
to an additional 180 days to the extent required for the Company to cause
additional REIT Shares to be issued to provide financing to be used to make such
payment of the Cash Amount by the Operating Partnership. 

     

    2.5
Expiration of Exchange Right. The Exchange Right shall expire with respect to
any Partnership Units for which an Exchange Notice has not been delivered to the
Operating Partnership and the Company on or before December 31, 2040.

     

    2.6
Effect of Exchange. (a) Any exchange of Partnership Units pursuant to this
Article 2 shall be deemed to have occurred as of the Specified Exchange Date for
all purposes, including without limitation the payment of distributions or
dividends in respect of Partnership Units or REIT Stock, as applicable.

     

    (b) Any
Partnership Units acquired by the Company pursuant to an exercise by any Limited
Partner of an Exchange Right shall be deemed to be acquired by and reallocated
or reissued to the Company. 

     

    (c) The
Company, as general partner of the Operating Partnership, shall amend the
Partnership Agreement to reflect each such exchange and reallocation or
reissuance of Partnership Units and each corresponding recalculation of the
Partnership Units of the Limited Partners. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    ARTICLE
III 

     

    OTHER
PROVISIONS 

     

    3.1
Covenants of the Company. (a) At all times during the pendency of the Exchange
Right, the Company shall reserve for issuance such number of shares of REIT
Stock as may be necessary to enable the Company to issue such shares in full
payment of the REIT Stock Amount in regard to all Partnership Units held by
Limited Partners which are from time to time outstanding. 

     

    (b)
During the pendency of the Exchange Right, the Company shall deliver to Limited
Partners in a timely manner all reports filed by the Company with the SEC to the
extent the Company also transmits such reports to its stockholders and all other
communications transmitted from time to time by the Company to its stockholders
generally. 

     

    (c) The
Company shall notify each Limited Partner, upon request, of the then current
Exchange Factor and such notice will include a reasonable explanation of the
Exchange Factor calculation to be applied at such time. 

     

    3.2
Fractional Shares. (a) No fractional shares of REIT Stock shall be issued upon
exchange of Partnership Units. 

     

    (b) The
number of full shares of REIT Stock which shall be issuable upon exchange of
Partnership Units (or the cash equivalent amount thereof if the Cash Amount is
paid) shall be computed on the basis of the aggregate amount of Partnership
Units so surrendered. 

     

    (c)
Instead of any fractional shares of REIT Stock which would otherwise be issuable
upon exchange of any Partnership Units, the Operating Partnership shall pay a
cash adjustment in respect of such fraction in an amount equal to the Cash
Amount of a Partnership Unit multiplied by such fraction. 

     

    3.3
Investment Representations and Warranties. By delivering to the Company a Notice
of Exchange, each Exchanging Partner will be deemed to represent and warrant to
the Company and the Operating Partnership that such Exchanging Partner is aware
of the Company’s option to exchange such Exchanging Partner’s Partnership Units
for REIT Stock pursuant to Section 2.2 hereof and that: 

     

    (a) (i)
Such Exchanging Partner has received and reviewed 

     

    (A) a
copy of the prospectus contained in the Registration Statement on Form S-11
filed by the Company in connection with the Offering, any prospectus contained
in any Registration Statement subsequently filed by the Company, and any
supplement or amendment thereto (each, a “Prospectus”), and 

     

    (B) if
the Company is filing reports under the Securities Exchange Act of 1934, as
amended, copies of all reports and other filings (the “SEC Reports”), including
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K, made by the Company with the SEC pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, and
understands the risks of, and other considerations relating to, an investment in
REIT Stock. 

     

    (ii) Such
Exchanging Partner, by reason of its business and financial experience, together
with the business and financial experience of those persons, if any, retained by
it to represent or advise it with respect to its investment in REIT Stock,

     

    (A) has
such knowledge, sophistication and experience in financial and business matters
and in making investment decisions of this type that it is capable of evaluating
the merits and risks of and of making an informed investment decision with
respect to an investment in REIT Stock, 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (B) is
capable of protecting its own interest or has engaged representatives or
advisors to assist it in protecting its interests and 

     

    (C) is
capable of bearing the economic risk of such investment. 

     

    (iii) (A)
Such Exchanging Partner is an “accredited investor” as defined in Rule 501 of
the regulations promulgated under the Securities Act. 

     

    (B) If
such Exchanging Partner has retained or retains a person to represent or advise
it with respect to its investment in REIT Stock, such Exchanging Partner will
advise the Company of such retention and, at the Company’s request, such
Exchanging Partner shall, prior to or at delivery of the REIT Stock hereunder,

     

    (I)
acknowledge in writing such representation and 

     

    (II)
cause such representative or advisor to deliver a certificate to the Company
containing such representations as may be reasonably requested by the Company.

     

    (b)    (i)
Such Exchanging Partner understands that an investment in the Company involves
substantial risks. 

     

    (ii) Such
Exchanging Partner has been given the opportunity to make a thorough
investigation of the activities of the Company and has been furnished with
materials relating to the Company and its activities, including, without
limitation, each Prospectus and the SEC Reports. 

     

    (iii)
Such Exchanging Partner has relied and is making its investment decision based
upon the Prospectus and any subsequent Prospectus, the SEC Reports and other
written information provided to the Exchanging Partner by or on behalf of the
Company and, as applicable, such Exchanging Partner’s position as a director or
executive officer of the Company. 

     

    (c)    (i)
The REIT Stock to be issued to such Exchanging Partner hereunder will be
acquired by such Exchanging Partner for its own account, for investment only and
not with a view to, or with any intention of, a distribution or resale thereof,
in whole or in part, or the grant of any participation therein. 

     

    (ii) Such
Exchanging Partner was not formed for the specific purpose of acquiring an
interest in the Company. 

     

    (d)    (i)
Such Exchanging Partner acknowledges that 

     

    (A) the
shares of REIT Stock to be issued to such Exchanging Partner hereunder have not
been registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act and
applicable state securities laws and, the certificates representing such shares
of REIT Stock will bear a legend to such effect, 

     

    (B) the
Company’s and the Operating Partnership’s reliance on such exemptions is
predicated in part on the accuracy and completeness of the representations and
warranties of such Exchanging Partner contained herein, 

     

    (C) the
REIT Stock to be issued to such Exchanging Partner hereunder may not be resold
or otherwise distributed unless registered under the Securities Act and
applicable state securities laws, or unless an exemption from registration is
available, 

     

    (D) there
may be no market for unregistered shares of REIT Stock, and 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (E) the
Company has no obligation or intention to register such REIT Stock under the
Securities Act or any state securities laws or to take any action that would
make available any exemption from the registration requirements of such laws,
except as provided in the Registration Rights Agreement entered into by the
Company and the Exchanging Partner (the “Registration Rights Agreement”).

     

    (ii) Such
Exchanging Partner acknowledges that because of the restrictions on transfer or
assignment of such REIT Stock to be issued hereunder, such Exchanging Partner
may have to bear the economic risk of its investment in REIT Stock issued
hereunder for an indefinite period of time, although the holder of any such REIT
Stock will be afforded certain rights to have such REIT Stock registered under
the Securities Act and applicable state securities laws pursuant to the
Registration Rights Agreement. 

     

    (e) The
address set forth under such Exchanging Partner’s name in the Notice of Exchange
is the address of the Exchanging Partner’s principal place of business or, if a
natural person, the address of the Exchanging Partner’s residence, and such
Exchanging Partner has no present intention of becoming a resident of any
country, state or jurisdiction other than the country and state in which such
principal place of business or residence is situated. 

     

    ARTICLE
IV 

     

    GENERAL
PROVISIONS 

     

    4.1
Addresses and Notice. Any notice, demand, request or report required or
permitted to be given or made to the Operating Partnership, the Company, a
Limited Partner or Assignee, as the case may be, under this Agreement shall be
in writing and shall be deemed given or made when delivered in person or when
sent by first class United States mail or by other similarly reliable means of
written communication to the Operating Partnership, the Company, a Limited
Partner or Assignee, as the case may be, (i) at the address listed on the
records of the Operating Partnership, with respect to a Limited Partner or
Assignee, and (ii) at 326 Third Street, Lakewood, NJ 08701, Attn: President,
with respect to the Operating Partnership or the Company. 

     

    4.2
Titles and Captions. All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to “Articles” and
“Sections” are to Articles and Sections of this Agreement. 

     

    4.3
Pronouns and Plurals. Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa. 

     

    4.4
Further Action and Additional Restrictions. The parties shall execute and
deliver all documents, provide all information and take or refrain from taking
action as may be necessary or appropriate to achieve the purposes of this
Agreement. 

     

    4.5
Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors, legal representatives and permitted assigns. 

     

    4.6
Waiver. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition. 

     

    4.7
Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all of the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    4.8
Applicable Law. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof. 

     

    4.9
Invalidity of Provisions. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby. 

     

    4.10
Entire Agreement. This Agreement contains the entire understanding and agreement
among the Limited Partners, the Operating Partnership and the Company with
respect to the subject matter hereof and supersedes any other prior written or
oral understandings or agreements among them with respect thereto. 

     

    4.11
Amendment. This Agreement may be modified or amended by a written instrument
signed by a duly authorized representative of each of the Company, the Operating
Partnership and the Limited Partners.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	 	 
	 	
              THE
      COMPANY:

               

              
                LIGHTSTONE
      VALUE PLUS REAL ESTATE 

                INVESTMENT
      TRUST, INC.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      	 	 	 
	 	
              OPERATING
      PARTNERSHIP:

               

              
                LIGHTSTONE
      VALUE PLUS REIT LP

              

               

              
                BY:
      LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST, INC., its general
      partner

              

            
	
            	       	
            

    

    
      	 	 	 
	 	
              LIMITED
      PARTNERS:

               

              
                ARBOR
      MILL RUN JRM LLC.

              

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      	 	 	 
	 	
              ARBOR
      NATIONAL CJ LLC

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Exhibit A
- Exchange Rights Agreement 

     

    Name and
Address of Limited Partner 

    

    Arbor
Mill Run JRM LLC

    c/o Arbor
Commercial Mortgage LLC

    333 Earle
Ovington Boulevard

    Uniondale,
New York 11553

    

    Arbor
National CJ LLC 

    c/o Arbor
Commercial Mortgage LLC

    333 Earle
Ovington Boulevard

    Uniondale,
New York 11553

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    Exhibit B
- Exchange Rights Agreement 

     

    Notice of
Exchange 

     

    The
undersigned Limited Partner hereby irrevocably (i) exchanges             
Partnership Units in Lightstone Value Plus REIT LP, in accordance with the terms
of the Exchange Rights Agreement, dated as of             ,
200     (the “Exchange Rights Agreement”), and the Exchange
Right referred to therein; (ii) surrenders such Partnership Units and all right,
title and interest therein; and (iii) directs that the Cash Amount or REIT Stock
Amount (as determined by the Company) deliverable upon exercise of the Exchange
Right be delivered to the address specified below, and if REIT Stock is to be
delivered, such REIT Stock will be registered or placed in the name(s) and at
the address(es) specified below. 

     

    The
undersigned hereby represents, warrants, and certifies that the undersigned (a)
has marketable and unencumbered title to such Partnership Units, free and clear,
other than any encumbrance arising pursuant to the Partnership Agreement, of the
rights or interests of any other person or entity; (b) has the full right,
power, and authority to exchange and surrender such Partnership Units as
provided herein; and (c) has obtained the consent or approval of all persons or
entities, if any, (other than consent or approval that may be required of the
Company or the Operating Partnership) having the right to consent or approve
such exchange and surrender on the part of the undersigned. 

     

    The
undersigned hereby makes the representations and warranties contained in Section
3.3 of the Exchange Rights Agreement as if such representations and warranties
had been set forth in full in this Notice of Exchange. 

     

    
      	 	 	 
	
              Dated:
      

              
                
      

            	
            	
            
	 	
              

              Name
      of Limited Partner (Please Print)

            

    

     

    
      	
              Signature
      guaranteed by:

            	 	 
	 	 	 
	 	
              

              (Signature
      of Limited Partner)

            

    

    
      	 	 	 
	 

              
    	 	 
	 	
              

              (Street
      Address)

            

    

     

    
      	 	 	 
	 	
              

              (City)
      (State)
                              (Zip
      Code)

            
	 	 
	 	
              If
      REIT Stock is to be issued, issue
to:

            

    

     

    
      	 	 	 
	 	
              
                Name:

              

              
                
      

            

    

     

    
      
        
        

      

      
        B-1

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