EXHIBIT 10.19
 
PROMISSORY NOTE
 

 $52,000,000.00
 June 30, 2006

 
 
FOR VALUE RECEIVED, SCOTSDALE MI LLC (“Scotsdale”), CARRIAGE PARK MI LLC
(“Carriage Park”),MACOMB MANOR MI LLC (“Macomb Manor”), and CARRIAGE HILL MI LLC
(“Carriage Hill”), each a Delaware limited liability company, having its
principal place of business c/o Lightstone Holdings LLC, 326 Third Street,
Lakewood, New Jersey 08701 (hereinafter collectively referred to as the
“Borrower”; references herein to the Borrower unless otherwise specifically
stated, shall also mean and refer to each and every one of Scotsdale, Carriage
Park, Macomb Manor and Carriage Hill, jointly and severally), as maker, hereby
unconditionally promises to pay to the order of CITIGROUP GLOBAL MARKETS REALTY
CORP., a New York corporation, as lender, having an address at 388 Greenwich
Street, 19th Floor, New York, New York 10013 (“Lender”), or at such other place
as the holder hereof may from time to time designate in writing, the principal
sum of FIFTY-TWO MILLION AND NO/100 DOLLARS ($52,000,000.00), or so much thereof
as is advanced, in lawful money of the United States of America, with interest
thereon to be computed from the date of this Note at the Interest Rate, and to
be paid in accordance with the terms of this Note and that certain Loan and
Security Agreement dated the date hereof between Borrower and Lender (as
amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”). All capitalized terms not defined herein shall have the
respective meanings set forth in the Loan Agreement.
 
ARTICLE 1: PAYMENT TERMS
 
Borrower agrees to pay the principal sum of this Promissory Note (the “Note”)
and interest on the unpaid principal sum of this Note from time to time
outstanding at the rates and at the times specified in Article II of the Loan
Agreement and the outstanding balance of the principal sum of this Note and all
accrued and unpaid interest thereon shall be due and payable on the Maturity
Date.
 
ARTICLE 2: DEFAULT AND ACCELERATION
 
The Loan shall without notice (except as provided in the Loan Agreement) become
immediately due and payable at the option of Lender (except as otherwise set
forth in Article VIII of the Loan Agreement) if any payment required in this
Note is not paid on or prior to the date when due or if not paid on the Maturity
Date or on the happening of any other Event of Default.
 
ARTICLE 3: LOAN DOCUMENTS
 
This Note is being executed and delivered pursuant to the Loan Agreement and is
secured by, among other things, those certain Mortgages, Assignment of Leases
and Rents, Security Agreement and Fixture Filings, each dated as of the date
hereof (collectively, the “Instrument”) executed by Borrower, encumbering each
Borrower’s fee simple interest in and to certain real properties and
improvements, as more particularly described therein (collectively, the
“Property”), those certain Assignments of Leases and Rents, each dated as of the
date hereof (collectively, the “Assignment of Leases”), executed by each
Borrower and all other Loan Documents. All of the terms, covenants and
conditions contained in the Loan Agreement, the Instrument, the Assignment of
Leases and the other Loan Documents are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth herein. In
the event of a conflict or inconsistency between the terms of this Note and the
Loan Agreement, the Instrument, the Assignment of Leases or the other Loan
Documents, the terms and provisions of the Loan Agreement shall govern.

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ARTICLE 4: SAVINGS CLAUSE
 
Notwithstanding anything to the contrary, (a) all agreements and communications
between Borrower and Lender are hereby and shall automatically be limited so
that, after taking into account all amounts deemed interest, the interest
contracted for, charged or received by Lender shall never exceed the maximum
lawful rate or amount, (b) in calculating whether any interest exceeds the
lawful maximum, all such interest shall be amortized, prorated, allocated and
spread over the full amount and term of all principal indebtedness of Borrower
to Lender, and (c) if through any contingency or event, Lender receives or is
deemed to receive interest in excess of the lawful maximum, any such excess
shall be deemed to have been applied toward payment of the principal of any and
all then outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall promptly be returned to Borrower.
 
ARTICLE 5: NO ORAL CHANGE
 
This Note may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
 
ARTICLE 6: WAIVERS
 
Borrower and all others who may become liable for the payment of all or any part
of the Loan do hereby severally waive presentment and demand for payment, notice
of dishonor, notice of intention to accelerate, notice of acceleration, protest
and notice of protest and non-payment and all other notices of any kind except
those expressly required by a Loan Document. No release of any security for the
Loan or extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of this Note, the Loan
Agreement, the Instrument, the Assignment of Leases or the other Loan Documents
made by agreement between Lender or any other Person shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Borrower or any other Person who may become liable for the payment of all or any
part of the Loan under this Note, the Loan Agreement, the Instrument, the
Assignment of Leases or the other Loan Documents. No notice to or demand on
Borrower shall be deemed to be a waiver of the obligation of Borrower or of the
right of Lender to take further action without further notice or demand as
provided for in this Note, the Loan Agreement, the Instrument, the Assignment of
Leases or the other Loan Documents. If Borrower is a partnership or limited
liability company, the agreements herein contained shall remain in force and be
applicable, notwithstanding any changes in the individuals comprising the
partnership or limited liability company and their partners or members, and the
term “Borrower,” as used herein, shall include any alternate or successor
partnership or limited liability company, but any predecessor partnership or
limited liability company shall not thereby be released from any liability. If
Borrower is a corporation, the agreements contained herein shall remain in full
force and be applicable notwithstanding any changes in the shareholders
comprising, or the officers and directors relating to, the corporation, and the
term “Borrower,” as used herein, shall include any alternative or successor
corporation, but any predecessor corporation shall not be relieved of liability
hereunder. (Nothing in the foregoing sentence shall be construed as a consent
to, or a waiver of, any prohibition or restriction on transfers of interests in
such partnership, limited liability company or corporation, which may be set
forth in the Loan Agreement or any other Loan Document.)

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ARTICLE 7: TRANSFER
 
Upon the transfer of this Note, Lender may deliver all the collateral granted,
pledged or assigned pursuant to the Loan Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights and obligations
herein or under applicable law given to Lender with respect thereto, and Lender
shall thereafter forever be relieved and fully discharged from any liability or
responsibility in the matter; but Lender shall retain all rights and obligations
hereby given to it with respect to any liabilities and the collateral not so
transferred.
 
ARTICLE 8: EXCULPATION
 
The provisions of Article XII of the Loan Agreement are hereby incorporated by
reference into this Note to the same extent and with the same force as if fully
set forth herein.
 
ARTICLE 9: GOVERNING LAW
 
(A)  THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE
FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
NOTE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
 
(B) EACH OF BORROWER AND LENDER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK OR
WITHIN THE COUNTY AND STATE IN WHICH THE PROPERTY IS LOCATED AND IRREVOCABLY
AGREES THAT, SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS NOTE OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS. BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH THE PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS NOTE, SUCH
OTHER LOAN DOCUMENTS OR SUCH OBLIGATION. NOTHING HEREIN SHALL AFFECT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION.

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ARTICLE 10 : NOTICES
 
All notices or other written communications hereunder shall be delivered in
accordance with Section 13.5 of the Loan Agreement.
 
[NO FURTHER TEXT ON THIS PAGE]
 

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IN WITNESS WHEREOF, this Note has been executed as of the date first above
written.
 
 

 
BORROWER: 
       
SCOTSDALE MI LLC, a Delaware limited liability company
 
        By:   LVP Michigan Multifamily Portfolio LLC, a Delaware limited
liability company,     its sole Managing Member

 

   By: /s/ David Lichtenstein    Name: David Lichtenstein    Title: President

 
 

       
CARRIAGE PARK MI LLC, a Delaware limited liability company
 
        By:   LVP Michigan Multifamily Portfolio LLC, a Delaware limited
liability company,     its sole Managing Member

 

   By: /s/ David Lichtenstein    Name: David Lichtenstein    Title: President

 
 

       
MACOMB MANOR MI LLC, a Delaware limited liability company
 
        By:   LVP Michigan Multifamily Portfolio LLC, a Delaware limited
liability company,     its sole Managing Member

 

   By: /s/ David Lichtenstein    Name: David Lichtenstein    Title: President

 
 

       
CARRIAGE HILL MI LLC, a Delaware limited liability company
 
        By:   LVP Michigan Multifamily Portfolio LLC, a Delaware limited
liability company,     its sole Managing Member

 

   By: /s/ David Lichtenstein    Name: David Lichtenstein    Title: President

 

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