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

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

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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Lender”), and LIGHTSTONE MEMBER III, LLC, a Delaware limited liability company having an address c/o The Lightstone Group LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (“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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇▇▇▇▇▇”) 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: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, 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 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇▇▇▇▇, 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 ▇▇▇▇); (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:  ▇▇▇▇▇▇▇▇▇▇▇▇.

                 Guaranty:  A certain Guaranty of even date herewith made by ▇▇▇▇▇▇▇▇▇▇▇▇, 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.

                 ▇▇▇▇▇▇▇▇▇▇▇▇:  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 (10^th) 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:

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 (91^st) 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇▇▇▇▇ (to the extent specifically provided herein) shall deliver to Lender, and Lender shall receive and have the benefit of the following:

                 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:

Intentionally omitted.

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 ▇▇▇▇▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇▇▇▇▇’▇ 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 ▇▇▇▇▇▇▇▇▇▇▇▇’▇ 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:

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:

                 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
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇ ▇▇▇▇

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 ▇▇▇ 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇^▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and any member of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ 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]

EXHIBIT A

LIGHTSTONE PROPERTIES

Macon Mall
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇

Burlington Mall
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

EXHIBIT B

LIGHTSTONE PROPERTY OWNERS

                 The following Delaware limited liability companies, all having an address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇:

EXHIBIT C

PREPAYMENT AMOUNTS