AMENDED AND RESTATED LOAN AGREEMENT Dated as of June 6, 2008 between PGRT ESH, INC., as Borrower, and CITICORP USA, INC., as Lender

EXHIBIT 10.2

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of June 6, 2008

between

PGRT ESH, INC.,
as Borrower,

and

CITICORP USA, INC.,
as Lender

TABLE OF CONTENTS

AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT , dated as of June 6, 2008 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “ Agreement ”), between CITICORP USA, INC. , a Delaware corporation having an address at 101 John F. Kennedy Parkway, Short Hills, New Jersey 07078 (“ Lender ”), and PGRT ESH, INC., a Delaware corporation, having its principal place of business at 77 West Wacker Drive, Suite 3900, Chicago, Illinois 60601 (“ Borrower ”).

W I T N E S S E T H:

WHEREAS, pursuant to a Loan Agreement dated as of June 29, 2007 (the “ 2007 Loan Agreement ”) between Borrower and Lender, Borrower borrowed $120,000,000 from Lender, to be repaid in full on June 10, 2008 (the “ Original Maturity Date ”);

WHEREAS, Borrower has requested Lender to extend the Original Maturity Date for approximately one year, which Lender is willing to do, subject to amending certain other terms of the 2007 Loan Agreement; and

WHEREAS, Borrower and Lender have agreed to amend and restate in its entirety the 2007 Loan Agreement.

NOW, THEREFORE, in consideration of Lender’s agreement to extend the Original Maturity Date and the other covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows:

I.  DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1 Definitions .

For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

“ Adjusted Base Rate ” shall mean an interest rate per annum equal to four percent (4.00%) (but during the Deferral Period, six percent (6.00%), which shall be applicable to all the Obligations outstanding during the Deferral Period) above the Base Rate in effect from time to time, but in no event less than eight percent (8.00%) per annum.

“ Affiliate ” shall mean, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.

“ Agreement ” shall have the meaning set forth in the introductory paragraph hereto.

“ Applicable Interest Rate ” shall mean for each Interest Period through and including the date on which the Debt is paid in full, an interest rate per annum equal to (i) the Eurodollar Rate, or (ii) the Adjusted Base Rate, as Borrower may elect from time to time.

“ Applicable Law ” shall mean collectively all existing and future federal, state and local laws, orders, ordinances, governmental rules and regulations and court orders.

“ Appraised Value ” shall mean the value of the applicable Collateral Entity Properties, determined by a member of the Appraisal Institute in accordance with the Financial Institutions Recovery, Reform and Enforcement Act of 1989, as amended, and as it may be further amended from time to time, and any successor statutes thereto.

“ Bankruptcy Code ” shall mean Title 11 U.S.C. § 101 et seq. , and the regulations adopted and promulgated pursuant thereto (as the same may be amended from time to time).

“ Base Rate ” shall mean, on a particular date, a rate per annum equal at all times to the rate of interest announced publicly by Citibank in New York, from time to time, as Citibank’s base rate.

“ BHAC ” shall mean BHAC Capital IV, L.L.C., a Delaware limited liability company.

“ Blocked Account ” shall have the meaning set forth in Section 3.1 hereof.

“ Borrower ” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

“ Borrower Pledge Agreement ” shall mean that certain Amended and Restated Pledge Agreement together with all exhibits attached thereto dated as of the Closing Date, executed and delivered by Borrower to Lender as security for the Loan and for other obligations of Borrower and certain of its Affiliates, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“ Breakage Costs ” shall have the meaning set forth in Section 2.2.3(d) hereof.

“ Business Day ” shall mean any day (i) other than a Saturday, Sunday or any other day on which national banks in New York, New York are not open for business, and (ii) on which banks are open for dealing in foreign currency and exchange in London, England.

“ Cap Rate Value ” shall mean the present value, determined by applying a discount rate of 7.5% (or such other discount rate as Lender may reasonably deem appropriate under prevailing market conditions) per annum, of the Net Operating Income of the Person related to the applicable Collateral Entity Properties.

“ Citibank ” shall mean Citibank, N.A., a national banking association.

“ Closing Date ” shall mean the date of this Agreement.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes thereto, and all applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

“ Collateral ” shall mean (i) the Collateral as defined in the Pledge Agreements, including, without limitation, the Specified Equity Interests pledged thereby, (ii) cash and cash equivalents on deposit in or credited to the Blocked Account or other accounts at Citibank (or as otherwise agreed to by Lender) under the sole dominion and control of Lender and otherwise subject to a valid, perfected first priority security interest in favor of Lender, and (iii) any and all other collateral for the Loan granted under the Loan Documents.

“ Collateral Entity ” or “ Collateral Entities ” shall mean each of Borrower, the Guarantors and their respective Affiliates, individually or collectively, as the context requires, that directly or indirectly owns any legal or beneficial interest in any of Prime Retail Outlets, Prime Office Chicago or Extended Stay of America Hotels.

“ Collateral Entity Properties ” shall have the meaning set forth in Section 2.3.2(b) hereof.

“ Collateral Proceeds ” shall mean all dividends, distributions or other payments or disbursements made or required to be made on account of or under, and all net proceeds of sale, lease, refinancing or other disposition of, the Specified Equity Interests or the Collateral Entity Properties.

“ Collateral Value ” shall mean, at any time, the value at such time of all of the Specified Equity Interests and other Collateral, as determined by Lender (i) in its reasonable discretion, without duplication, based on, (A) in the case of Specified Equity Interests in respect of (I) Prime Retail Outlets or Prime Office Chicago, the lower of the most recent Appraised Value or the Cap Rate Value of such Interests (which shall be determined by reference to the applicable Collateral Entity Properties) and (II) Extended Stay of America Hotels, such multiple of the EBITDA with respect to Extended Stay of America Hotels for the most recent twelve-month period reported by Borrower pursuant to Section 5.1.7(g) as shall be reasonably determined by Lender based upon applicable marketable data, and, in the case of the value of all Specified Equity Interests included in the Collateral, which value shall be reduced (x) by all Indebtedness secured by the Collateral Entity Properties owned indirectly through such Specified Equity Interests, (y) by the value of any equity interests entitled to dividends or other distributions with a payment preference over dividends or distributions payable on account of such Specified Equity Interests and (z) to the percentage of such value equal to the percentage of the applicable Collateral Entity’s indirect ownership interest in the applicable Collateral Entity Properties, provided that, for purposes hereof, (1) the aggregate Collateral Value of all Specified Equity Interests in respect of Extended Stay of America Hotels and its Affiliates shall be deemed to be zero (0) on the Closing Date and, in any event, shall not be deemed to exceed $100,000,000 at any time and (2) no Specified Equity Interest shall have any Collateral Value unless it constitutes, together with all other Specified Equity Interests pledged to Lender, a controlling, majority interest in the applicable issuer, and (B) in the case of any other Collateral, such factors and information as Lender may reasonably consider, and (ii) as of the Closing Date and as of the last day of each calendar quarter thereafter through the Maturity Date, commencing June 30, 2008, based upon valuations and other information proposed by Borrower but subject to adjustment by Lender in its reasonable discretion, taking into consideration quarterly negative assurance by the Valuation Firm received by Lender with respect to the fair market value of any applicable Collateral Entity Properties; provided , however , that (a) in determining the Appraised Value as of any date, Lender shall not be required to use any appraisal conducted more than three months before such date, (b) if Borrower fails to provide any information necessary to Lender’s determination of the Collateral Value, Lender may, in its sole discretion, assign any value or use any information Lender deems appropriate in making such Collateral Value determination and (c) the Collateral Value of all cash and cash equivalents in any Deposit Account covered by a Control Agreement shall be 100% of the face amount thereof.

“ Contingent Liability ” shall mean any direct, indirect, contingent or non-contingent guaranty or other obligation for the Indebtedness of another Person (except endorsements in the ordinary course of business).

“ Control ” (and the correlative terms “controlled by” and “controlling”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of the business and affairs of the entity in question by reason of the ownership of beneficial interests, by contract or otherwise.

“ Control Agreement ” shall mean an agreement, in form and substance satisfactory to Lender, among Citibank, Lender and one or more Collateral Entities governing the deposits to and disbursements from a Deposit Account, which shall provide that (i) so long as no Event of Default has occurred and is continuing, Citibank shall (A) disburse from such Deposit Account all amounts required from time to time to pay Indebtedness secured by first mortgages on Collateral Entity Properties, but only to the extent that such Deposit Account contains Collateral Proceeds relating to such Collateral Entity Properties, (B) establish, and re-establish, on a monthly basis, reserves from such Deposit Account for the payment of such Indebtedness as Lender shall determine in its reasonable discretion (to the extent such reserves are not then held by the holders of such first mortgages), (C) pay from such Deposit Account, first , all amounts of interest due and payable on account of the Obligations from time to time under Section 2.2 hereof and, second , all amounts of principal, fees, costs, expenses and other amounts due and payable hereunder including, without limitation, all prepayments required to be made from time to time under Section 2.3.2, and (D) so long as the aggregate outstanding principal amount of the Loan is equal to or less than $60,000,000, transfer, on a monthly basis, fifty percent (50%) of all surplus amounts to one or more other deposit accounts as such Collateral Entity or Collateral Entities direct, and (ii) at any time that an Event of Default has occurred and is continuing, Lender may apply all amounts in such Deposit Account to such of the Obligations and in such order as Lender may elect in its sole and absolute discretion.

“ Debt ” shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Pledge Agreements or any other Loan Document.

“ Default ” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would constitute an Event of Default.

“ Default Rate ” shall mean, with respect to the Loan, a rate per annum equal to the lesser of (i) the Maximum Legal Rate, or (ii) four percent (4%) above the Applicable Interest Rate.

“ Deferral Period ” shall have the meaning set forth in Section 2.2.4 hereof.

“ Deferred Amount ” shall have the meaning set forth in Section 2.2.4 hereof.

“ Deposit Account ” shall mean, collectively, a deposit account, including, without limitation, the Blocked Account, maintained by Citibank for the benefit of Lender, as secured party of a Collateral Entity, and all sub-accounts and ancillary accounts established and maintained in connection therewith.

“ Dollars ” shall mean U.S. dollars or any other lawful currency of the United States.

“ EBITDA ” means, for any period, with respect to Extended Stay of America Hotels on a consolidated basis (i) net income (as that term is determined in accordance with GAAP) for such period, plus (ii) the amount of depreciation and amortization of fixed and intangible assets deducted in determining such net income for such period, plus (iii) all interest with respect to Indebtedness (including, without limitation, the interest component of any rental obligation which, under GAAP, is or will be required to be capitalized on the books of the lessee) accrued or capitalized during such period (whether or not actually paid during such period) determined in accordance with GAAP and all fees for the use of money or the availability of money, including commitment, facility and like fees and charges upon Indebtedness (including Indebtedness to Lender) paid or payable during such period, without duplication, plus (iv) all tax liabilities paid or accrued during such period, without duplication, less (v) the amount of all gains (or plus the amount of all losses) realized during such period upon the sale or other disposition of property or assets that are sold or otherwise disposed of outside the ordinary course of business that is included in the calculation of net income for such period.

“ Embargoed Person ” shall have the meaning set forth in Section 4.1.24 hereof.

“ Eurodollar Rate ” shall mean with respect to any Interest Period, an interest rate per annum equal to LIBOR plus six percent (6.00%) (but during the Deferral Period, eight percent (8.00%), which shall be applicable to all the Obligations outstanding during the Deferral Period), but in no event less than eight percent (8.00%) per annum.

“ Event of Default ” shall have the meaning set forth in Section 6.1(a) hereof.

“ Executive Order ” shall have the meaning set forth in the definition of “Prohibited Person” in this Section 1.1.

“ Exit Fee ” shall have the meaning set forth in Section 2.2.8 hereof.

“ Extended Stay of America Hotels ” shall mean, collectively, BHAC and Homestead Village L.L.C., a Delaware limited liability company, and their Subsidiaries.

“ Fiscal Year ” shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during the term of the Loan.

“ GAAP ” shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial report.

“ Governmental Authority ” shall mean any court, board, agency, commission, office, central bank or other authority of any nature whatsoever for any governmental unit (federal, State, county, district, municipal, city, country or otherwise) or quasi-governmental unit whether now or hereafter in existence.

“ Guarantors ” shall mean, collectively, Lichtenstein and Lightstone, and “ Guarantor ” shall mean either of them individually.

“ Guaranty ” shall mean, individually, an Amended and Restated Continuing Guaranty dated as of the Closing Date from a Guarantor to Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, and “ Guaranties ” shall mean both such Continuing Guaranties collectively.

“ Immediate Family ” shall have the meaning set forth in the definition of “Qualified Lichtenstein Entity” in this Section 1.1.

“ Indebtedness ” means, with respect to any Person, as of the date of determination thereof (without duplication of the same obligation under any other clause hereof), (i) all obligations of such Person for borrowed money of any kind or nature, whether senior or subordinated, including funded and unfunded debt, whether or not evidenced by a promissory note or other instrument, (ii) all obligations of such Person under or in respect of any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging agreement, (iii) all obligations of such Person to pay the deferred purchase price of property or services (other than current trade accounts payable under normal trade terms and accrued expenses and which are incurred in the ordinary course of business that are not overdue for a period greater than six months or that are contested in good faith by appropriate proceedings), (iv) all obligations of such Person to acquire or for the acquisition or use of any fixed asset, including capitalized lease obligations (other than, in any such case, any portion thereof representing interest or deemed interest or payments in respect of taxes, insurance, maintenance or service), or improvements which are payable over a period longer than one year, regardless of the term thereof or the Person or Persons to whom the same are payable, (v) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right to be secured) a Lien on any asset of such Person whether or not the Indebtedness is assumed by such Person, (vi) all Indebtedness of others to the extent guaranteed by such Person, (vii) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreements in the event of default are limited to repossession or sale of such property), and (viii) all reimbursement or other obligations of such Person in respect of letters of credit, bankers acceptances, surety bonds, performance bonds or similar instruments issued or accepted by banks or other financial institutions for the account of such Person, whether or not matured.

“ Indemnified Liabilities ” shall have the meaning set forth in Section 8.13(b) hereof.

“ Indemnified Party ” shall mean each of Lender and any Affiliate of Lender who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan, any Person in whose name any encumbrance created by any Pledge Agreement is or will have been recorded, Persons who may hold or acquire or will have held a full or partial interest in the Loan (as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, Affiliates, Subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan or the Collateral, whether during the term of the Loan, as a part of or following foreclosure of the Lien on any Collateral or upon an acceleration of the Loan, and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business).

“ Interest Period ” shall mean the period commencing on the Closing Date and ending one or three months thereafter as Borrower may elect, and each subsequent period of one or three months commencing on the last day of the preceding Interest Period, as Borrower may elect; provided , however , that (i) Borrower may not select any Interest Period that ends after the Maturity Date; (ii) whenever the last day of an Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, except that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, then the last day of such Interest Period shall occur on the next preceding Business Day; and (iii) if there is no corresponding date of the month that is one or three months, as the case may be, after the first day of an Interest Period, such Interest Period shall end on the last Business Day of such first or third month, as the case may be.

“ Interest Shortfall ” shall have the meaning set forth in Section 2.3.1(b) hereof.

“ Investor ” shall have the meaning set forth in Section 5.1.7(j) hereof.

“ Legal Requirements ” shall mean all federal, State, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities of the United States of America (or political subdivision thereof) affecting the Collateral or any part thereof, or the zoning, construction, use, alteration, occupancy or operation of any of the Collateral Entity Properties, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting the Collateral or any Collateral Entity Properties or any part thereof.

“ Lender ” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

“ LIBOR ” shall mean the rate per annum calculated as set forth below. With respect to each Interest Period, LIBOR shall mean the rate for deposits in Dollars, for a period equal to such Interest Period, which appears on the Dow Jones Market Service (formerly Telerate) Page 3750 as of 11:00 a.m., London time, on the related LIBOR Determination Date. If such rate does not appear on Dow Jones Market Service Page 3750, LIBOR for that Interest Period shall be determined on the basis of the rates at which deposits in Dollars are offered by any four major reference banks in the London interbank market selected by Lender to provide such bank’s offered quotation of such rates at approximately 11:00 a.m., London time, on the related LIBOR Determination Date to prime banks in the London interbank market for a period equal to such Interest Period, commencing on the first day of such Interest Period and in an amount that is representative for a single such transaction in the relevant market at the relevant time. Lender shall request the principal London office of any four major reference banks in the London interbank market selected by Lender to provide a quotation of such rates, as offered by each such bank.

If at least two such quotations are provided, LIBOR for that Interest Period shall be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, LIBOR for that Interest Period shall be the arithmetic mean of the rates quoted by major banks in New York City selected by Lender, at approximately 11:00 a.m., New York City time, on the LIBOR Determination Date with respect to such Interest Period for loans in Dollars to leading European banks for a period equal to such Interest Period, commencing on the first day of such Interest Period and in an amount that is representative for a single transaction in the relevant market at the relevant time. Lender shall determine LIBOR for each Interest Period and the determination of LIBOR by Lender shall be binding upon Borrower absent manifest error.

“ LIBOR Determination Date ” shall mean two (2) Business Days before the commencement of each Interest Period.

“ Lichtenstein ” shall mean David Lichtenstein, an individual residing at 5 Grand Park Drive, Monsey, New York 10952.

“ Lichtenstein Credit Agreement ” shall have the meaning set forth in Section 6.1(a)(xvi)(A) hereof.

“ Lien ” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, the Collateral, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

“ Lightstone ” shall mean Lightstone Holdings LLC, a Delaware limited liability company.

“ Loan ” shall have the meaning set forth in Section 2.1.1 hereof.

“ Loan Documents ” shall mean, collectively, this Agreement, the Note, the Pledge Agreements, the Control Agreements, the Guaranties and all other documents executed from time to time in connection with the Loan.

“ Loan Party ” shall mean, individually or collectively, as the context requires, Borrower, each Guarantor, each Pledgor and each other Collateral Entity.

“ Market Rate ” shall have the meaning set forth in Section 2.3.1(b) hereof.

“ Material Adverse Effect ” means (i) a material adverse effect on the business, prospects, operations, results of operations, assets, liabilities or condition (financial or otherwise) of a Loan Party, (ii) the impairment of (A) a Loan Party’s ability to perform its obligations under the Loan Documents to which it is a party or (B) the ability of Lender to enforce the Obligations or realize upon the Collateral or (iii) a material adverse effect on the value of the Collateral or the amount that Lender would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of the Collateral.

“ Material Indebtedness ” shall mean Indebtedness in an amount in excess of $250,000, whether or not such amount has been declared immediately due and payable.

“ Maturity Date ” shall mean June 15, 2009 or such other date on which the final payment of the principal of the Note becomes due and payable as in the Note or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

“ Maximum Legal Rate ” shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Indebtedness evidenced by the Note and as provided for herein or in the other Loan Documents, under the laws of such State or States whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

“ Net Cash Proceeds ” means the aggregate cash proceeds received by any Person in respect of (i) any sale of assets of such Person, (ii) any refinancing of Indebtedness of such Person, or (iii) any issuance of Indebtedness or equity securities of such Person, in each case net of (without duplication) (A) the amount required to repay any Indebtedness (other than the Loan) incurred with respect to, or secured by a Permitted Encumbrance on, any assets of a Person that are sold in connection with any such asset sale, (B) the reasonable out-of-pocket fees and expenses incurred in effecting such sale, refinancing or issuance, (C) any taxes reasonably attributable to any such asset sale and reasonably estimated by such Person to be actually payable and (D) reserves to be taken by such Person in accordance with GAAP against any contingent liabilities incurred by such Person in connection with such sale, refinancing or issuance; provided , however , that (I) the calculation and determination of Net Cash Proceeds shall be subject to the approval of Lender in its reasonable discretion, and in connection with any such calculation and determination, Borrower shall furnish Lender within two (2) days after receipt by the applicable Person of such Net Cash Proceeds all accounting and transaction documentation and information necessary to verify the amount of such Net Cash Proceeds, as provided more fully in Section 5.1.7(f), and (II) the amount of any reserve taken under the foregoing clause (D) that is subsequently released from such reserve shall immediately thereupon be deemed Net Cash Proceeds.

“ Net Operating Income ” in respect of any Person related to Collateral Entity Properties shall mean (i) the gross income of such Collateral Entity Properties determined as of the end of any month, for the consecutive twelve-month period then ended, less (ii) (A) all reasonable management fees, (B) all operating expenses and (C) all real estate taxes, in each case paid or payable by the owner of such Collateral Entity Properties during such twelve-month period.

“ Note ” shall mean that certain amended and restated promissory note of even date herewith in the original principal amount of One Hundred Ten Million and 00/100 Dollars ($110,000,000) made by Borrower in favor of Lender, as the same may be amended, restated, replaced, extended, renewed, supplemented, severed, split, or otherwise modified from time to time.

“ Obligations ” means and includes the Loan and all other debts, including, without limitation, the Debt, liabilities, obligations, covenants and duties owing by Borrower and the other Loan Parties to Lender of any kind or nature, present or future, whether or not evidenced by any note, guaranty or other instrument, which may arise under, out of, or in connection with, this Agreement, the Note, the other Loan Documents or any other agreement executed in connection herewith or therewith, whether or not for the payment of money, whether arising by reason of an extension of credit, opening, guaranteeing or confirming of a letter of credit, loan, guaranty or indemnification or in any other manner, whether direct or indirect (including those acquired by assignment, purchase, discount or otherwise), whether absolute or contingent, due or to become due, and however acquired. The term includes, without limitation, all interest (including interest accruing on or after a bankruptcy or other insolvency event, whether or not such interest constitutes an allowed claim), charges, expenses, commitment, facility, closing and collateral management fees, letter of credit fees, attorneys’ fees, and any other sum properly chargeable to any of the Loan Parties under this Agreement, the Note, the other Loan Documents or any other agreement executed in connection herewith or therewith.

“ Original Maturity Date ” shall have the meaning set forth in the preamble hereto.

“ Ownership Interest ” shall have the meaning set forth in the definition of “Qualified Lichtenstein Entity” in this Section 1.1.

“ Payment Date ” shall mean the last day of each month, or if such day is not a Business Day, the immediately preceding Business Day.

“ Permitted Encumbrances ” shall mean, collectively, (i) the Liens and security interests created by the Loan Documents, (ii) all Liens, encumbrances and other matters which would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on Borrower’s ability to perform its obligations under the Loan Documents, (iii) Liens, if any, for taxes not yet delinquent imposed by any Governmental Authority, and (iv) such other Liens or other liabilities of which Lender is aware as of the date hereof or which Lender has approved or may approve in writing in Lender’s sole discretion.

“ Permitted Lichtenstein Owner ” shall have the meaning set forth in the definition of “Qualified Lichtenstein Entity” in this Section 1.1.

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

“ PGRT Entities ” shall mean the REIT, Prime Group Realty, L.P. and their direct and indirect Subsidiaries. For the avoidance of uncertainty, it is agreed that the PGRT Entities shall not include Extended Stay of America Hotels, Prime Retail Outlets or Prime Office Chicago.

“ Pledge Agreements ” shall mean (a) the Borrower Pledge Agreement, (b) the Amended and Restated Pledge Agreement together with all exhibits attached thereto dated as of the Closing Date, executed and delivered by The Lightstone Group, LLC to Lender as security for the Loan and for other obligations of Borrower and certain of its Affiliates, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, (c) the Amended and Restated Pledge Agreement together with all exhibits attached thereto dated as of the Closing Date, executed and delivered by Lichtenstein to Lender pledging, among other things, Lichtenstein’s membership interest in Park Avenue Funding, LLC as security for the Loan and for other obligations of Borrower and certain of its Affiliates, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time,

(d) the Amended and Restated Pledge Agreement together with all exhibits attached thereto dated as of the Closing Date, executed and delivered by Lichtenstein to Lender pledging, among other things, Lichtenstein’s membership interest in Lightstone Prime, LLC as security for the Loan and for other obligations of Borrower and certain of its Affiliates, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, and (e) each other pledge agreement, in substantially the form of Exhibit A and otherwise in form and substance satisfactory to Lender, by a Collateral Entity in favor of Lender, granting to Lender a security interest in any Specified Equity Interest, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“ Pledgor ” shall mean any pledgor under a Pledge Agreement.

“ Prepayment Date ” shall have the meaning set forth in Section 2.3.1(a) hereof.

“ Prime Office Chicago ” shall mean Prime Office Company, LLC, a Delaware limited liability company.

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

“ Prohibited Person ” shall mean any Person:

(a) listed in the Annex to, or otherwise subject to the provisions of, the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “ Executive Order ”);

(b) that is owned or controlled by, or acting for or on behalf of, any Person that is listed to the Annex to, or is otherwise subject to the provisions of, the Executive Order;

(c) with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order;

(d) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

(e) that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list; or

(f) who is an Affiliate of or affiliated with a Person listed above.

“ Qualified Lichtenstein Entity ” shall mean a Person as to which each of the following is true: (1) more than 49% of the Ownership Interest in such Person is held directly or indirectly by one or more Permitted Lichtenstein Owners, and (2) Lichtenstein shall exercise managerial and operational control over such Person. Notwithstanding the foregoing, in the event of the death or incapacity of Lichtenstein, a Person over which one or more of the members of the Immediate Family of Lichtenstein shall exercise managerial and operational control shall be deemed to fulfill the requirements of clause (2) hereof. The term “ Immediate Family ” shall mean and include, with respect to any Person, his spouse, children (including adopted children), grandchildren (including adopted grandchildren) and the spouses of any of the foregoing. The term “ Ownership Interest ” in a Person shall mean such interest (whether or not denominated as an equity interest, and including, without limitation, a beneficial interest in a trust) as shall entitle the owner thereof to a share in the profits, losses and distributions of such Person. The term “ Permitted Lichtenstein Owner ” shall mean Lichtenstein or members of his Immediate Family or trusts for the benefit of Lichtenstein or members of his Immediate Family.

“ REIT ” shall have the meaning set forth in Section 5.2.7 hereof.

“ Restricted Party ” shall mean either Guarantor or any other Qualified Lichtenstein Entity.

“ Restricted Payment Event ” shall have the meaning set forth in Section 5.2.7 hereof.

“ Restructuring Fee ” shall have the meaning set forth in Section 2.2.7 hereof.

“ Sale or Pledge ” shall mean a voluntary or involuntary sale, conveyance, transfer, assignment or pledge of a direct or indirect legal or beneficial interest.

“ Scheduled Property ” shall have the meaning set forth in Section 2.3.2(b) hereof.

“ Servicer ” shall have the meaning set forth in Section 7.2 hereof.

“ Severed Loan Documents ” shall have the meaning set forth in Section 6.2(c) hereof.

“ Specified Equity Interests ” shall mean the shares of capital stock, partnership interests, limited liability company membership interests, investment trust units and all other equity interests that are legally or beneficially owned by Borrower, a Guarantor or any of their respective Affiliates, directly or indirectly, in any of Prime Retail Outlets, Prime Office Chicago or Extended Stay of America Hotels.

“ State ” shall mean a State or Commonwealth in the United States of America.

“ Subsidiary ” shall mean, as to any Person, a corporation or other entity in which that Person directly or indirectly owns or controls the shares of stock or other ownership interests having ordinary voting power to elect a majority of the board of directors or other governing body, or to appoint the majority of the managers of, such corporation or other entity.

“ Transfer ” shall have the meaning set forth in Section 5.2.6(a) hereof.

“ 2007 Loan Agreement ” shall have the meaning set forth in the preamble hereto.

“ UCC ” or “ Uniform Commercial Code ” shall mean the Uniform Commercial Code as in effect in the State of New York or the State in which Borrower or the applicable Collateral is located, as the context may require.

“ UCC Financing Statements ” shall mean the UCC financing statements covering Collateral pledged under the Pledge Agreements or any other Loan Document and filed in the applicable filing offices.

“ Units ” shall mean those certain Series A-2 Units and Common A-2 Units in BHAC.

“ Valuation Firm ” shall mean Duff & Phelps, LLC or another valuation firm satisfactory to Lender.

Section 1.2 Principles of Construction .

All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified. All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

II.  GENERAL TERMS

Section 2.1 Loan .

2.1.1 Loan Amount .

Pursuant to the 2007 Loan Agreement, Lender made a loan (the “ Loan ”) to Borrower in the aggregate principal amount of $120,000,000. Prior to the Closing Date, Borrower prepaid the Loan in the aggregate principal amount of $10,000,000. After giving effect to such prepayment, the aggregate outstanding principal amount of the Loan on the Closing Date is $110,000,000.

2.1.2 The Note, the Pledge Agreements and Other Loan Documents .

The Loan shall be evidenced by the Note, secured by the Pledge Agreements and certain other Loan Documents and entitled to the benefit of all the Loan Documents.

2.1.3 Use of Proceeds .

The proceeds of the Loan were used by Borrower to fund Borrower’s acquisition of certain equity interests in the real estate portfolio known as Extended Stay of America Hotels and to pay fees, costs and expenses incurred in connection with the closing of the Loan as approved by Lender.

Section 2.2 Interest; Payments; Late Payment Charge; Restructuring Fee; Exit Fee .

2.2.1 Interest; Payments .

(a) Interest on the outstanding principal balance of the Loan shall accrue from the Closing Date to the Maturity Date at the Applicable Interest Rate and shall be payable monthly. Not less than three Business Days prior to each Interest Period, Borrower shall elect in writing which Applicable Interest Rate shall apply to the Loan for such Interest Period. If Borrower shall fail to select, prior to the expiration of any Interest Period, which Applicable Interest Rate shall apply during the next succeeding Interest Period, Borrower shall be deemed to have selected the Eurodollar Rate for such succeeding Interest Period. If Borrower shall fail to select, prior to the expiration of any Interest Period, the duration of the next succeeding Interest Period, Borrower shall be deemed to have selected an Interest Period of one month. Interest shall be paid in arrears on each Payment Date commencing on June 30, 2008 and on each subsequent Payment Date thereafter up to and including the Maturity Date.

(b) All payments and other amounts due under the Note, this Agreement and the other Loan Documents shall be made without any setoff, defense or irrespective of, and without deduction for, counterclaims.

2.2.2 Interest Calculation .

Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the actual number of days elapsed in the period for which the calculation is being made, by (b) a daily rate equal to the Applicable Interest Rate divided by 360, by (c) the outstanding principal balance.

2.2.3 Eurodollar Rate Unascertainable; Illegality; Increased Costs .

(a) (i) In the event that Lender shall have determined (which determination shall be conclusive and binding upon Borrower absent manifest error) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such determination to Borrower with a written confirmation of such determination promptly thereafter. If such notice is given, the Loan shall bear interest at the Adjusted Base Rate beginning on the first day of the next succeeding Interest Period.

(ii) If, pursuant to the terms of this Section 2.2.3, the Loan is bearing interest at the Adjusted Base Rate and Lender shall determine (which determination shall be conclusive and binding upon Borrower absent manifest error) that the event(s) or circumstance(s) which resulted in such conversion shall no longer be applicable, Lender shall give notice thereof to Borrower by telephone of such determination, confirmed in writing, to Borrower as soon as reasonably practical, but in no event later than three (3) Business Days prior to the last day of the then current Interest Period. If such notice is given, and Borrower so requests, the Loan may bear interest at the Eurodollar Rate beginning on the first day of the next succeeding Interest Period.

(b) If any requirement of law or any change therein or in the interpretation or application thereof, shall hereafter make it unlawful for Lender in good faith to make or maintain the Loan bearing interest at the Eurodollar Rate, the Loan shall automatically bear interest at the Adjusted Base Rate in the next succeeding Interest Period or within such earlier period as required by Applicable Law. Borrower hereby agrees promptly to pay Lender (within ten (10) days of Lender’s written demand therefor) any additional amounts necessary to compensate Lender for any costs incurred by Lender in making any conversion in accordance with this Agreement, including, without limitation, any interest or fees payable by Lender to lenders of funds obtained by it in order to make or maintain the Loan hereunder. Lender’s written notice of such costs, as certified to Borrower, shall be conclusive absent manifest error.

(c) In the event that any change occurring after the date hereof in any requirement of any Applicable Law or in the interpretation or application thereof, or compliance in good faith by Lender with any request or directive (whether or not having the force of law) hereafter issued from any Governmental Authority which is generally applicable to all lenders subject to such Governmental Authority’s jurisdiction:

(i) shall hereafter impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of Lender which is not otherwise included in the determination of LIBOR hereunder;

(ii) shall, if the Loan is then bearing interest at the Eurodollar Rate, hereafter have the effect of reducing the rate of return on Lender’s capital as a consequence of its obligations hereunder to a level below that which Lender could have achieved but for such adoption, change or compliance (taking into consideration Lender’s policies with respect to capital adequacy) by any amount deemed by Lender to be material; or

(iii) shall, if the Loan is then bearing interest at the Eurodollar Rate, hereafter impose on Lender any other condition, the result of which is to increase the cost to Lender of making, renewing or maintaining the Loans or to reduce any amount receivable hereunder;

then, in any such case, Borrower shall promptly pay Lender (within ten (10) days of Lender’s written demand therefor), any additional amounts necessary to compensate Lender for such additional cost or reduced amount receivable on account of the Loan which Lender deems to be material. If Lender becomes entitled to claim any additional amounts pursuant to this Section 2.2.3(c), Lender shall provide Borrower with written notice specifying in reasonable detail the event or circumstance by reason of which Lender has become so entitled and the additional amount required to fully compensate Lender for such additional cost or reduced amount. A certificate as to any additional costs or amounts payable pursuant to the foregoing sentence submitted by Lender to Borrower shall be conclusive absent manifest error. This provision shall survive payment of the Note and the satisfaction of all other obligations of Borrower under the Note, this Agreement and the other Loan Documents.

(d) Borrower agrees to indemnify Lender and to hold Lender harmless from any loss or expense which Lender sustains or incurs directly as a consequence of (i) any default by Borrower in payment of the principal of or interest on the Loan while bearing interest at the Eurodollar Rate, including, without limitation, any such loss or expense arising from interest or fees payable by Lender to lenders of funds obtained by it in order to maintain the Eurodollar Rate, (ii) any prepayment (whether voluntary or mandatory) of the Loan while bearing interest at the Eurodollar Rate on a day that is not the last day of the Interest Period with respect thereto, and (iii) the conversion (for any reason whatsoever, whether voluntary or involuntary) of the Applicable Interest Rate from the Eurodollar Rate to the Adjusted Base Rate with respect to the Loan while bearing interest at the Eurodollar Rate on a date other than the last day of the Interest Period with respect thereto, including, without limitation, such loss or expenses arising from interest or fees payable by Lender to lenders of funds obtained by Lender in order to maintain the Eurodollar Rate hereunder (the amounts referred to in clauses (i), (ii) and (iii) are herein referred to collectively as the “ Breakage Costs ”). This provision shall survive payment of the Note and the satisfaction of all other obligations of Borrower under this Agreement and the other Loan Documents.

2.2.4 Scheduled Principal Payments .

Borrower shall make the following principal installment payments to Lender on account of the Loan in accordance with the following amortization schedule:

provided , however , that Borrower may, on written notice to Lender received by Lender at least ten (10) days prior to September 30, 2008, elect to defer until not later than December 31, 2008 (the period, if Borrower makes such deferral election, from September 30, 2008 to the earlier of (a) December 31, 2008 and (b) the date on which the Deferred Amount is repaid in full, the “ Deferral Period ”) up to $10,000,000 of the principal installment of the Loan otherwise due and payable on September 30, 2008 (the principal amount which Borrower elects to defer, the “ Deferred Amount ”). Notwithstanding anything to the contrary herein, Borrower shall pay to Lender on the Maturity Date the remaining outstanding principal balance of the Loan, all accrued and unpaid interest thereon, and all other amounts due hereunder and under the Note and the other Loan Documents.

2.2.5 Payments after Default .

Upon the occurrence and during the continuance of an Event of Default, interest on the outstanding principal balance of the Loan and, to the extent permitted by Applicable Law, overdue interest and other amounts due in respect of the Loan, shall accrue at the Default Rate, calculated from the date such payment was due after giving effect to any grace or cure periods contained herein. Interest at the Default Rate shall be computed from the occurrence of the default until the actual receipt and collection of the Debt (or that portion thereof that is then due). To the extent permitted by Applicable Law, interest at the Default Rate shall be added to the Debt, shall itself accrue interest at the same rate as the Loan and shall be secured by the Pledge Agreements. This paragraph shall not be construed as an agreement or privilege to extend the date of the payment of the Debt, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default.

2.2.6 Usury Savings .

This Agreement and the Note are subject to the express condition that at no time shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate, the Applicable Interest Rate or the Default Rate, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

2.2.7 Restructuring Fee .

Borrower shall pay to Lender a fully-earned and non-refundable restructuring fee in the aggregate amount of $3,000,000 (the “ Restructuring Fee ”) in accordance with the following schedule: $1,000,000 at the time of the execution of the Summary of Terms dated April 28, 2008 accepted by Borrower on April 28, 2008 (which amount Lender acknowledges and agrees that Borrower has paid), $1,000,000 on June 30, 2008, and $1,000,000 on September 30, 2008.

2.2.8 Exit Fee .

Borrower shall pay to Lender, upon the earliest of (a) the Maturity Date, (b) the date of the prepayment of the Loan in full, or (c) the date of the occurrence of an Event of Default, whether or not the Loan has been declared immediately due and payable, a fully earned and non-refundable exit fee in the amount of $1,100,000 (the “ Exit Fee ”).

Section 2.3 Prepayments .

2.3.1 Voluntary Prepayments .

Borrower shall have the right to prepay the Loan in whole or in part at any time (so long as any partial payment is not less than $250,000) upon satisfaction of the following conditions:

(a) Borrower shall provide prior written notice to Lender specifying the amount of such prepayment and the date (the “ Prepayment Date ”) upon which the prepayment is to be made, which notice shall be delivered to Lender not less than three days prior to such prepayment; and

(b) Borrower shall pay to Lender, simultaneously with such prepayment, (i) all accrued and unpaid interest calculated at the Applicable Interest Rate on the amount of principal being prepaid through and including the Prepayment Date, together with, if the Loan is then bearing interest by reference to the Eurodollar Rate and the payment is not being made on the last day of the applicable Interest Period, an amount equal to (A) the interest that would have accrued at the Eurodollar Rate on the then outstanding principal balance of the Loan through the end of the Interest Period in which such prepayment occurs less (B) the amount of interest that would accrue on such amount prepaid for the remainder of such Interest Period at the Market Rate (as defined below) (the “ Interest Shortfall ”); (ii) Breakage Costs, if any, without duplication of any sums paid pursuant to the preceding clause (i); and (iii) all other sums then due under this Agreement, the Note or the other Loan Documents, without duplication. The term “ Market Rate ” means the rate of interest per annum at which deposits in United States dollars are offered by Citibank’s principal office in London, England, to prime banks in the London interbank market at 11:00 a.m. (London time) two Business Days before the date of such prepayment in an amount substantially equal to the amount of such prepayment and for a deposit period comparable to the remaining Interest Period, as determined by Lender in its sole discretion, which determination shall be conclusive absent manifest error.

2.3.2 Mandatory Prepayments .

(a) If, as of the end of any calendar quarter, commencing June 30, 2008, the then outstanding principal amount of the Loan exceeds an amount equal to thirty percent (30%) of the Collateral Value most recently determined, Borrower shall, within ten (10) days after Lender’s notice to Borrower that such excess exists, prepay the Loan by an amount equal to or greater than such excess amount.

(b) If any of Borrower, the Guarantors or any of their Affiliates sells all or any portion of the Specified Equity Interests, Borrower shall prepay the Loan by an amount equal to the Net Cash Proceeds of such sale (but after the aggregate outstanding principal amount of the Loan is equal to or less than $60,000,000, if such a sale occurs, Borrower shall prepay the Loan by an amount equal to fifty percent (50%) of the Net Cash Proceeds of such sale). If (i)(A) any of the real estate interests owned directly or indirectly by Prime Retail Outlets, Prime Office Chicago or Extended Stay of America Hotels (the “ Collateral Entity Properties ”) is sold, or (B) any of the real property specified in Schedule 2.3.2(b) (the “ Scheduled Property ”) is sold, or (ii) any of Borrower, the Guarantors or any of their Affiliates refinances any Indebtedness secured by any of the Specified Equity Interests, the Collateral Entity Properties or the Scheduled Property, Borrower shall prepay the Loan by an amount equal to the Net Cash Proceeds of such sale or such refinancing (but after the aggregate outstanding principal amount of the Loan is equal to or less than $60,000,000, if such a sale or refinancing occurs, Borrower shall prepay the Loan by an amount equal to fifty percent (50%) of the Net Cash Proceeds of such sale or such refinancing).

(c) If any of Borrower, Lightstone or any of their Affiliates issues any Indebtedness or equity securities in a private or public offering, Borrower shall prepay the Loan by an amount equal to the Net Cash Proceeds of such issuance received by Borrower or Lightstone, or in the case of any of their Affiliates, equal to the maximum amount of such Net Cash Proceeds that is permitted to be declared and paid to Borrower or Lightstone as dividends or other distributions by Applicable Law (but after the aggregate outstanding principal amount of the Loan is equal to or less than $60,000,000, if such an issuance occurs, Borrower shall prepay the Loan by an amount equal to fifty percent (50%) of the Net Cash Proceeds of such issuance).

(d) If any of Borrower, the Guarantors or any of their Affiliates receives any cash dividends or other distributions on account of the Specified Equity Interests, Borrower shall prepay the Loan by an amount equal to the amount of such dividends or other distributions (but after the aggregate outstanding principal amount of the Loan is equal to or less than $60,000,000, if such dividends or other distributions are received, Borrower shall prepay the Loan by an amount equal to fifty percent (50%) of the amount of such dividends or other distributions).

(e) All Net Cash Proceeds of asset sales, refinancings and Indebtedness and equity offerings and all dividends and other distributions (or, if applicable, 50% thereof) subject to the terms of this Section 2.3.2 shall be deposited in or otherwise credited to the Blocked Account within two (2) days after receipt by the applicable Person of such Net Cash Proceeds or such dividends or other distributions.

(f) If an Affiliate of the Borrower or a Guarantor that is