Exhibit 10.23


 


EXECUTION VERSION 


 


LOAN INDEMNIFICATION AGREEMENT 


 


Flatbush Gardens


 


This LOAN INDEMNIFICATION AGREEMENT (this “Agreement”)
is made as of August 3, 2015, by Clipper Realty Inc., a Maryland corporation (“Clipper REIT”) and Clipper Realty
L.P., a Delaware limited partnership, (“Clipper OP” and, together with Clipper REIT, the “Clipper Parties”
or the “Indemnitor”), in favor of the Guarantor (as defined below).


 


RECITALS:


WHEREAS, pursuant to that certain Investment Agreement
by and between Clipper OP and Renaissance Equity Holdings LLC (“Renaissance”), that certain Investment Agreement
by and between Clipper OP and Berkshire Equity LLC (“Berkshire”), and that certain Investment Agreement by and
between Clipper OP and Gunki Holdings LLC (“Gunki” and, together with Renaissance and Berkshire, the “LLC
Subsidiaries”), each dated as of August 3, 2015 , Clipper OP shall make a contribution to each of the LLC Subsidiaries
and will become the managing member and holder of Class A LLC Units of each of the LLC Subsidiaries (the “Clipper Investment”);


 


WHEREAS, Renaissance Equity Holdings LLC A (“Renaissance
A”), Renaissance Equity Holdings LLC B (“Renaissance B”), Renaissance Equity Holdings LLC E (“Renaissance
E”), Renaissance Equity Holdings LLC F (“Renaissance F”), and Renaissance Equity Holdings LLC G (“Renaissance
G”) are each a wholly-owned subsidiary of Renaissance; Renaissance Equity Holdings LLC C (“Renaissance C”)
is a wholly-owned subsidiary of Gunki; and Renaissance Equity Holdings LLC D (“Renaissance D”, and, together
with Renaissance A, Renaissance B, Renaissance C, Renaissance E, and Renaissance F, the “Borrower”) is a wholly-owned
subsidiary of Berkshire;


 


WHEREAS, the Borrower entered into that certain
Mortgage, Assignment of Rents, and Security Agreement, dated September 24, 2012, between New York Community Bank (the “Lender”)
and the Borrower (the “2012 Loan Agreement”), pursuant to which the Lender made a loan to the Borrower, as evidenced
by that certain Amended and Restated Mortgage Note, dated September 24, 2012, by the Borrower in the original principal amount
of $150,000,000 (the “2012 Loan”);


 


WHEREAS, the Borrower entered into that certain
Mortgage, Assignment of Leases and Rents and Security Agreement, dated October 31, 2014, between the Lender and the Borrower (the
“2014 Loan Agreement,” and, together with the 2012 Loan Agreement, the “Loan Agreements”),
pursuant to which the Lender made a loan to the Borrower, as evidenced by that certain Mortgage Note, dated October 31, 2014, by
the Borrower in the original principal amount of $20,000,000.00 (the “2014 Loan”, and, together with the 2012
Loan, the “Loans”);


 


WHEREAS, in order to induce the Lender to make
the 2012 Loan, David Bistricer, an individual (the “Guarantor”), entered into that certain Guaranty of Recourse
Obligations, dated September 24, 2012, by the Guarantor in favor of the Lender, attached hereto as Exhibit A (the “2012
Guaranty”); and


 




    	 	 	 



     


    

 


WHEREAS, in order to induce the Lender to make
the 2014 Loan, the Guarantor entered into that certain Guaranty of Recourse Obligations, dated October 31, 2014, by the Guarantor
in favor of Lender, attached hereto as Exhibit B (the “2014 Guaranty”, and, together with the 2012 Guaranty,
the “Guaranties”);


 


WHEREAS, the Lender has consented to the Clipper
Investment and the Loans, Loan Agreements, and Guaranties will remain in place after the Clipper Investment; and


 


WHEREAS, in connection with the Clipper Investment,
the Indemnitor has agreed to indemnify the Guarantor for its obligations under the Guaranties, and the Clipper Parties, the LLC
Subsidiaries, and the Guarantor have agreed to use good faith efforts to replace the Guaranties after the Clipper Investment, all
as more particularly described herein.


 


NOW, THEREFORE, in consideration of the foregoing,
and other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Indemnitor agrees as follows:


 


1.          Indemnification
and Reimbursement of the Guarantor.


 


(a)          The
Indemnitor, jointly and severally, hereby indemnifies and agrees to hold the Guarantor harmless from and against any and all costs,
losses, damages, claims and expenses (including but not limited to reasonable attorneys’ fees and other third-party expenses)
(collectively, “Losses”) incurred by the Guarantor under the Guaranties from and after the date of this Agreement,
including, without limitation, any of the foregoing incurred in connection with enforcing this Agreement.


 


(b)          In
the event any sums are paid by the Guarantor under or on account of the Guaranties, the Guarantor shall be entitled to immediate
reimbursement from the Indemnitor for such sum, and any amount so due the Guarantor, if not paid within five days after demand
therefor, shall bear interest at an annual rate equal to the prime rate as published from time to time by The Wall Street Journal
(or if the Wall Street Journal ceases to publish a prime rate, then the 14-day moving average closing trading price of 90 day Treasury
bills), plus 2% per annum, such interest accruing daily and compounding monthly.


 


(c)          Notwithstanding
the foregoing, the Guarantor shall not be entitled to indemnification or reimbursement under this Agreement for any Losses to the
extent that such Losses are due to the gross negligence, fraud, intentional misrepresentation, willful misconduct, bad faith, misappropriation,
or any criminal act of the Guarantor.


 


2.          In
the event of a claim for indemnity or reimbursement hereunder, the Guarantor shall provide reasonable notice to the Indemnitor
of the existence of any such claim, demand or other matters to which the indemnification obligations hereunder would apply, and
the Guarantor agrees to give the Indemnitor a reasonable opportunity to participate in the defense of the same at the Indemnitor’s
own cost and expense and with counsel of the Indemnitor’s own selection.


 


3.          Separate
and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action
hereunder shall preclude any subsequent action. In no event shall any provisions of this Agreement be deemed to be a waiver of
or to be in lieu of any right or claim, including, without limitation, any right of contribution or other right of recovery, that
any party to this Agreement might otherwise have against any other party to this Agreement.


 




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4.          The
Clipper Parties, the LLC Subsidiaries, and the Guarantor hereby agree to cooperate with each other and to use good faith efforts
to replace the Guaranties with a guarantee by Clipper OP in substantially the same form as the Guaranties (a “Replacement
Guaranty”); provided that the parties acknowledge that the Clipper Parties and the LLC Subsidiaries have requested that
the Lender accept a Replacement Guaranty and the Lender indicated that, at the date of this Agreement, the Lender would not accept
a Replacement Guaranty. If and when a Replacement Guaranty has been delivered to and accepted by the Lender, this Agreement will
terminate automatically solely with respect to matters first arising from and after the date of the Replacement Guaranty.


 


5.          If
any term of this Agreement or any application thereof shall be invalid, illegal or unenforceable, the remainder of this Agreement
and any other application of such term shall not be affected thereby. No delay or omission in exercising any right hereunder shall
operate as a waiver of such right or any other right.


 


6.          The
rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided to the parties
hereto by law or by any other agreement to which the parties hereto are bound.


 


7.          Except
as expressly set forth in Section 1(c) above, the reimbursement and indemnification obligations of the Indemnitor hereunder
are absolute, irrevocable, and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of
the obligations giving rise to the payment of the Losses or any agreement or instrument relating thereto, or any substitution,
release or exchange of any other guarantee of or security for any obligation, and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense
of a surety or guarantor; it being the intent of the parties hereto that such obligations shall be absolute and unconditional under
any and all circumstances. With respect to its obligations hereunder, except with respect to the notices required by this Agreement,
the Indemnitor hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement
that any other party exhaust any right, power or remedy or proceed against any person.


 


8.          The
obligations of the Indemnitor hereunder shall be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Indemnitor in respect of any obligation hereunder is rescinded or must be otherwise restored by the person
receiving such payment, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.


 


9.          This
Agreement shall be binding upon each of the parties and each party’s respective executors, heirs, successors and assigns
(including without limitation any entity or entities that are their respective corporate, partnership or other successors and assigns)
and shall inure to the benefit of the Guarantor and its successors and assigns.


 




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10.         Notices
given hereunder shall be given by postage paid, registered or certified mail, return receipt requested, or by recognized national
overnight courier service, to the address of the Indemnitor as set forth on Schedule 1, or to such other address as the
Indemnitor may designate in a writing given in the manner provided in this paragraph.


 


11.         This Agreement
shall be governed by, and interpreted in accordance with, the laws of the State of New York without regard to its conflicts of
laws principles.


 


12.         This Agreement
may be executed in any number of counterparts, each of which shall be deemed an original for all purposes.


 


[Signatures On Following Pages]


 




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IN WITNESS WHEREOF, the Indemnitor and the
Guarantor have executed this Agreement on the date first written above.


 


	 	INDEMNITOR:
	 	CLIPPER REALTY INC.
	 	 
	 	By	/s/ David Bistricer
	 	 	Name:	David Bistricer
	 	 	Title:	Chief Executive Officer and President


 


	 	CLIPPER REALTY L.P.
	 	By: Clipper Realty Inc., its General Partner
	 	By:	/s/ David Bistricer
	 	 	Name:	David Bistricer
	 	 	Title:	Chief Executive Officer and President


 


	 	GUARANTOR:
	 	 
	 	DAVID BISTRICER
	 	 
	 	/s/ David Bistricer


 




    	 	 	 



     


    

 


SCHEDULE 1


 


Notice Addresses 


 


	Indemnitor:	 	Guarantor:
	 	 	Clipper Realty Inc.	 	 	 	David Bistricer
	 	 	4611 12th Avenue	 	 	 	4611 12th Avenue
	 	 	Brooklyn, NY 11219	 	 	 	Brooklyn, NY 11219
	 	 	Attention: David Bistricer	 	 	 	Fax: (718) 438-1290
	 	 	Fax: (718) 438-1290