Unassociated Document


    EXHIBIT 10.16

     

    ENVIRONMENTAL INDEMNITY
AGREEMENT

     

    This
ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”) is
made as of June 30, 2006, by 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, Cherry
Hill, Macomb Manor and Carriage Hill, jointly and severally),
LIGHTSTONE HOLDINGS
LLC, a
Delaware limited liability company, having an office at 326 Third Street,
Lakewood, New Jersey 08701 (“Principal”; Borrower
and Principal, collectively, are referred to herein as “Indemnitor”), in
favor of CITIGROUP GLOBAL MARKETS REALTY
CORP., a New
York corporation, having an office at 388
Greenwich Street, 19th Floor,
New York, New York 10013
(Citigroup Global Markets Realty Corp., in such capacity, together with its
successors and assigns, “Lender”).


    


    Preliminary
Statement

     

    WHEREAS,
Lender is prepared to make a loan (the “Loan”) to
Borrower in the principal amount of $52,000,000.00 pursuant to a Loan and
Security Agreement executed by Borrower and Lender of even date herewith (the
“Loan
Agreement”) to be
evidenced by that certain Promissory Note, dated of the date herein, made by
Borrower to Lender (the “Note”), and
secured by, among other things, those certain Mortgages dated the same date as
the Note from Borrower to Lender (collectively, the “Instrument”);
and

     

    WHEREAS,
Borrower owns or has rights in all of the real properties and improvements to be
encumbered by each Instrument (individually, each a “Property” and
collectively, the “Properties”);
and

     

    WHEREAS,
as a condition to making the Loan to Borrower, Lender requires Indemnitor to
provide certain indemnities concerning Hazardous Materials (as hereinafter
defined) and Asbestos (as hereinafter defined); and

     

    WHEREAS,
Borrower and Principal will derive substantial benefits from Lender’s making the
Loan to Borrower; and

     

    WHEREAS,
to induce Lender to consummate the above described transaction, Indemnitor has
agreed to enter into this Agreement;

     

    NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Indemnitor
hereby represents, warrants and covenants to Lender as follows: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.            (a)
Indemnitor represents and warrants that there are no claims, liabilities,
investigations, litigation, or administrative proceedings pending or, to the
knowledge of Indemnitor, threatened, or judgments or orders relating to any
Hazardous Materials or Asbestos (collectively, “Environmental
Claims”)
asserted or, to Indemnitor’s knowledge, threatened in writing against Borrower
or relating to any of the Properties. Neither Borrower nor, to the knowledge of
Indemnitor after due inquiry, any other person or entity has caused or permitted
any Hazardous Materials or Asbestos to be used, generated, reclaimed,
transported, released, treated, stored or disposed of in a manner which could
form the basis for an Environmental Claim against Borrower or relating to any of
the Properties. 

     

    (b)
Indemnitor represents and warrants that, except as set forth in the
environmental report prepared for each of the Properties by Lender prior to the
date hereof and except for materials customarily used or stored in connection with the
ordinary course of operation and management of properties similar to any of the
Properties, which materials at any of the Properties exist only in reasonable
quantities and are stored, contained, transported, used, released, and disposed
of reasonably and without violation of any Hazardous Materials Law (as
hereinafter defined), to the knowledge of Indemnitor after due inquiry and
investigation, no Hazardous Materials or Asbestos are or were stored or
otherwise located, and no underground storage tanks or surface impoundments are
or were located, on any of the Properties or any other real property currently
or formerly owned, leased or operated by Borrower, and no part of such real
property, or to the knowledge of Indemnitor, no part of such adjacent parcels of
real property, including the groundwater located therein or thereunder, is
presently contaminated by Hazardous Materials or Asbestos. 

     

    (c)
Indemnitor represents and warrants that to its knowledge no owner or occupant of
any of the Properties, nor to its knowledge any prior owner or occupant of any
of the Properties, has received any notice or advice from any governmental
agency or any source whatsoever with respect to Hazardous Materials or Asbestos
on, from or affecting any of the Properties.

     

    (d)
Indemnitor represents and warrants that Borrower has been and is currently in
compliance in all material respects with all applicable Hazardous Materials Law,
including obtaining and maintaining in effect all permits, licenses or other
authorizations required by applicable Hazardous Materials Law.

     

    2.           
(a) Indemnitor covenants that Indemnitor shall cause Borrower to at all times
comply with all applicable Hazardous Materials Law in all material respects and
shall ensure compliance by all occupants of any of the Properties with all
applicable Hazardous Materials Law in all material respects. Indemnitor shall
conduct and complete all investigations, studies, sampling, testing and all
remedial actions necessary to clean up and remove any Hazardous Materials and
Asbestos from any of the Properties in accordance with all applicable Hazardous
Materials Law. Indemnitor shall not: (i) violate any applicable Hazardous
Materials Law; or (ii) generate, use, transport, handle, store, release or
dispose of any Hazardous Materials or Asbestos in or into, on or onto, or from
any of the Properties (except in accordance with applicable law); or (iii)
permit any lien imposed pursuant to any Hazardous Materials Law to be imposed or
to remain on any of the Properties. 

     

    
      
        
        

      

      
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    (b)
Indemnitor covenants that Indemnitor shall cause Borrower to promptly take and
diligently prosecute any and all reasonably necessary remedial actions upon
obtaining knowledge of the presence, storage, use, disposal, transportation,
active or passive migration, release or discharge of any Hazardous Materials or
Asbestos on, under or about any of the Properties in violation of any Hazardous
Materials Law. In the event Indemnitor undertakes any remedial action with
respect to any Hazardous Materials or Asbestos on, under or about any of the
Properties, Indemnitor shall conduct and complete such remedial action in
compliance with all applicable Hazardous Materials Law, and in accordance with
the applicable policies, orders and directives of all federal, state and local
governmental authorities.

     

    (c)
Indemnitor covenants that if Lender at any time has a reasonable basis to
believe that a material violation of any Hazardous Materials Law related to any
of the Properties has occurred and is continuing or that a reasonable basis for
a material Environmental Claim affecting Borrower or related to any of the
Properties exists, then Indemnitor agrees, promptly after written request from
Lender, to provide Lender with such reports, certificates, engineering studies
or other written material or data as Lender may reasonably require so as to
satisfy Lender that Borrower and each of the Properties are in material
compliance with all applicable Hazardous Materials Law.

     

    3.            
(a) Indemnitor covenants and agrees, at its sole cost and expense, to
protect, defend, indemnify and hold Lender, its directors, officers,
shareholders, employees, agents, successors, assigns and attorneys harmless from
and against any and all losses (including diminution in the value of any of the
Properties), liabilities, obligations, claims, damages, penalties, causes of
action, fines, costs and expenses, including without limitation, litigation
costs (including, without limitation, attorney’s fees, expenses, sums paid in
settlement of claims and any such fees and expenses incurred in enforcing this
Agreement or collecting any sums due hereunder), other than those arising solely
from the willful misconduct or gross negligence of Lender (collectively, the
“Indemnified
Claims”),
directly or indirectly imposed upon or incurred by or asserted against Lender,
its directors, officers, shareholders, employees, agents, successors, assigns
and attorneys, whether as mortgagee, mortgagee in possession, successor in
interest to Indemnitor by foreclosure, exercise of power of sale, acceptance of
a deed in lieu of foreclosure or otherwise, or in any other capacity, arising
out of or in connection with (1) any violation of Hazardous Materials Law
including, without limitation, reasonable attorney’s and consultant’s fees,
investigation and laboratory fees, court costs, and litigation expenses;
(2) any lawsuit brought or threatened in writing, settlement reached, or
government order relating to such Hazardous Materials or Asbestos; (3) the
use, generation, refining, manufacture, transportation, transfer, production,
processing, storage, handling, or treatment of any Hazardous Materials or
Asbestos, on, under, from, or affecting any of the Properties or any other
property; (4) the presence, disposal, dumping, escape, seepage, leakage,
spillage, discharge, emission, pumping, emptying, injecting, leaching, pouring,
release, or threatened release of any Hazardous Materials or Asbestos on, under,
from, or affecting any of the Properties or any other property; (5) any
remedial action, or imposition of standards of conduct, including the clean-up,
encapsulation, treatment, abatement, removal and/or disposal of any Hazardous
Materials or Asbestos on, under, from or affecting any of the Properties or any
other property to the extent required by any Hazardous Materials Law;
(6) any personal injury (including wrongful death) or property damage (real
or personal) arising out of or related to such Hazardous Materials or Asbestos;
or (7) a material misrepresentation or material inaccuracy in any
representation or warranty or a material breach of or failure to perform any
covenant made by Indemnitor in this Agreement, the Loan Agreement or the
Instrument.

     

    
      
        
        

      

      
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    (b) Indemnitor
understands and agrees that its liability to Lender shall arise upon the earlier
to occur of (1) the discovery of, or the threatened or suspected presence of,
any Hazardous Materials or Asbestos on, under or about any of the Properties,
whether or not the Environmental Protection Agency, any other federal agency or
any state or local environmental or other agency or political subdivision or any
court, administrative panel or tribunal has taken or threatened any action in
connection with the presence, or threatened or suspected presence, of any
Hazardous Materials or Asbestos or (2) the institution of any Indemnified
Claims, and not upon the realization of loss or damage. Indemnitor shall also
indemnify and hold harmless Lender from and against all loss, costs, damages, or
expenses (including, without limitation, attorney’s fees) arising out of
the enforcement of this Agreement.

     

    4.           
The term “Hazardous
Materials” as used
in this Agreement shall mean all or any of the following: (i) substances,
materials, compounds, wastes, products, emissions and vapors that are defined or
listed in, regulated by, or otherwise classified pursuant to, any applicable
Hazardous Materials Laws, including any so defined, listed, regulated or
classified as “hazardous substances,” “hazardous materials,” “hazardous wastes,”
“toxic substances,” “pollutants,” “contaminants,” or any other formulation
intended to regulate, define, list or classify substances by reason of
deleterious, harmful or dangerous properties; (ii) waste oil, oil, petroleum or
petroleum-derived substances, natural gas, natural gas liquids or synthetic gas
and drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iii) any flammable substances or explosives or any radioactive
materials; (iv) fungus, mold, mildew or other biological agents the presence of
which may adversely affect the health of individuals or other animals or
materially adversely affect the value or utility of any of the Properties; (v)
electrical or hydraulic equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (vi) radon; or (vii) urea
formaldehyde.

     

    5.            
The term “Asbestos” as used
in this Agreement shall mean any asbestos or material containing
asbestos.

     

    6.           
The term “Hazardous Materials
Law” as used
in this Agreement shall mean any federal, state, or local law, ordinance or
regulation or any court judgment or order of any federal, state or local agency
or regulatory body applicable to Indemnitor or to any of the Properties relating
to industrial hygiene or to environmental or unsafe conditions including, but
not limited to, those relating to the generation, manufacture, storage,
handling, transportation, disposal, release, emission or discharge of Hazardous
Materials and Asbestos, those in connection with the construction, fuel supply,
power generation and transmission, waste disposal or any other operations or
processes relating to any of the Properties, and those relating to the
atmosphere, soil, surface and ground water, wetlands, stream sediments and
vegetation on, under, in or about any of the Properties. “Hazardous Materials
Law” also shall include, but not be limited to, the Comprehensive Environmental
Response, Compensation and Liability Act, the Emergency Planning and Community
Right-to-Know Act of 1986, the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Solid Waste Disposal Act, the Clean
Water Act, the Clean Air Act, the Toxic Substance Control Act, the Safe Drinking
Water Act and the Occupational Safety and Health Act, and all regulations
adopted in respect to the foregoing laws.

     

    
      
        
        

      

      
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    7.           
This Agreement, the payment of all sums due hereunder and the performance and
discharge of each and every obligation, covenant and agreement of Indemnitor
contained herein, are, and shall be deemed to be, secured by the Instrument.


     

    8.           
The liability of Indemnitor under this Agreement shall in no way be limited or
impaired by, and Indemnitor hereby consents to and agrees to be bound by, any
amendment or modification of the provisions of the Note, the Instrument, the
Loan Agreement or any other document which evidences, secures or guarantees all
or any portion of the Loan (the “Other Security
Documents”) to or
with Lender or Indemnitor or any person who succeeds Borrower as owner of any of
the Properties. In addition, the liability of Indemnitor under this Agreement
shall in no way be limited or impaired by (i) any extensions of time for
performance required by the Note, the Loan Agreement, the Instrument or any of
the Other Security Documents, (ii) any sale or transfer of all or part of
any of the Properties, (iii) except as provided herein, any exculpatory
provision in the Note, the Loan Agreement, the Instrument, or any of the Other
Security Documents limiting Lender’s recourse to property encumbered by the
Instrument or to any other security, or limiting Lender’s rights to a deficiency
judgment against Borrower, (iv) the accuracy or inaccuracy of the
representations and warranties made by Borrower or Indemnitor under the Note,
the Loan Agreement, the Instrument or any of the Other Security Documents or
herein, (v) the release of Borrower, any Indemnitor or any other person
from performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Other Security Documents by operation of law,
Lender’s voluntary act, or otherwise, (vi) the release or substitution in
whole or in part of any security for the Note, or (vii) Lender’s failure to
record the Instrument or to file any UCC financing statements (or Lender’s
improper recording or filing of any thereof) or to otherwise perfect, protect,
secure or insure any security interest or lien given as security for the Note;
and, in any such case, whether with or without notice to Indemnitor and with or
without consideration.

     

    9.            
Lender may enforce the obligations of Indemnitor without first resorting to or
exhausting any security or collateral or without first having recourse to the
Note, the Loan Agreement, the Instrument, or any Other Security Documents or any
of the Properties, through foreclosure proceedings or otherwise, provided,
however, that
nothing herein shall inhibit or prevent Lender from suing on the Note,
foreclosing, or exercising any power of sale under the Instrument, or exercising
any other rights and remedies thereunder.

     

    10.          
The obligations and liabilities of Indemnitor under this Agreement shall survive
any termination, satisfaction, assignment, entry of a judgment of foreclosure,
exercise of any power of sale, or delivery of a deed in lieu of foreclosure of
the Instrument.

     

    11.         
Any amounts payable to Lender under this Agreement shall become immediately due
and payable and, if not paid within thirty (30) days of written demand therefor,
shall bear interest at a per annum rate five percent in excess of the rate
applicable to indebtedness under the Note, or the maximum rate permitted by law
from the earlier to occur of (i) the date payment is made or loss or damage
is sustained by Lender or (ii) the date Indemnitor’s liability shall arise
pursuant to Paragraph 3(b) hereof, until paid.

     

    
      
        
        

      

      
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    12.         
Indemnitor hereby waives (i) any right or claim of right to cause a
marshalling of Borrower’s assets or to cause Lender to proceed against any of
the security for the Loan before proceeding under this Agreement against
Indemnitor; (ii) and relinquishes all rights and remedies accorded by
applicable law to indemnitors or guarantors, except any rights of subrogation
which Indemnitor may have, provided that the
indemnity provided for hereunder shall neither be contingent upon the existence
of any such rights of subrogation nor subject to any claims or defenses
whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim
that such subrogation rights were abrogated by any acts of Lender;
(iii) the right to assert a counterclaim, other than a mandatory or
compulsory counterclaim, in any action or proceeding brought against or by
Lender; (iv) trial by jury in any action or proceeding brought by
Indemnitor or Lender or in any counterclaim asserted by Lender against
Indemnitor or in any matter whatsoever arising out of or in any way connected
with this Agreement; (v) notice of acceptance hereof and of any action
taken or omitted in reliance hereon; (vi) presentment for payment, demand
of payment, protest or notice of nonpayment or failure to perform or observe, or
other proof, or notice or demand; and (vii) all homestead exemption rights
against the obligations hereunder and the benefits of any statutes of
limitations or repose. Notwithstanding anything to the contrary contained
herein, Indemnitor hereby agrees to postpone the exercise of any rights of
subrogation with respect to any collateral securing the Loan until the Loan
shall have been indefeasibly paid and satisfied in full, all obligations owed to
Lender under the Loan Documents have been fully performed and there has expired
the maximum possible period thereafter during which any payment made by Borrower
or others to Lender with respect to the Obligations and/or the Indebtedness
could be deemed a preference under the Bankruptcy Code (as hereinafter
defined).

     

    13.   
 
Principal
agrees to the provisions of the Loan Documents (as defined in the Loan
Agreement), and hereby waives notice of (i) any loans or advances made by Lender
to Borrower, (ii) acceptance of this Agreement, (iii) any amendment or extension
of the Note or of any other Loan Documents, (iv) the execution and delivery by
Borrower and Lender of any other loan or credit agreement or of Borrower’s
execution and delivery of any promissory notes or other documents arising under
the Loan Documents or in connection with any of the Properties, (v) the
occurrence of any breach by Borrower or the occurrence of any Event of Default
(as defined in the Loan Agreement), (vi) Lender’s transfer or disposition of any
of the agreements, covenants, conditions, warranties, representations and other
obligations made or undertaken by Borrower or any other person or entity for the
benefit of Lender or others as set forth in the Loan Documents (the
“Obligations”), or
any part thereof, (vii) sale or foreclosure (or posting or advertising for sale
or foreclosure) of any collateral for the Obligations, (viii) protest, proof of
nonpayment or default by Borrower, (ix) the accuracy or inaccuracy of the
representations and warranties made by Borrower under the Note, the Loan
Agreement, the Instrument or any of the other Loan Documents or herein, (x) the
release of Borrower or any other person from performance or observance of any of
the agreements, covenants, terms or conditions contained in any of the other
Loan Documents by operation of law, Lender’s voluntary act, or otherwise, (xi)
the release or substitution in whole or in part of any security or guaranty for
the Note, (xii) Lender’s failure to record the Instrument or file any UCC
financing statements (or Lender’s improper recording or filing of any thereof)
or to otherwise perfect, protect, secure or insure any security interest or lien
given as security for the Note, or (xiii) any other action at any time taken or
omitted by Lender and, generally, all demands and notices of every kind in
connection with this Agreement, the Loan Documents, or any documents or
agreements evidencing, securing or relating to any of the
Obligations.

     

    
      
        
        

      

      
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    14.   
  Principal
shall have no right to assert or exercise, or attempt to assert or exercise, and
hereby waives any right to assert or attempt to assert any claim for,
subrogation, reimbursement, indemnification, and contribution against Borrower
and against any general partner, member or other constituent of Borrower and
against any other person or any collateral or security for the Obligations,
until the Obligations have been indefeasibly paid and satisfied in full, all
obligations owed to Lender under the Loan Documents have been fully performed,
and Lender has released, transferred or disposed of all of its right, title and
interest in such collateral or security, and there has expired the maximum
possible period thereafter during which any payment made by Borrower or others
to Lender with respect to the Obligations and/or the Indebtedness could be
deemed a preference under the Bankruptcy Code (as hereinafter
defined).

     

    15.   
  It is the
intention of the parties that no Principal shall be deemed to be a “creditor” or
“creditors” (as defined in Section 101 of the United States Bankruptcy Code
(the “Bankruptcy
Code”)) of
Borrower by reason of the existence of this Agreement, in the event that
Borrower becomes a debtor in any proceeding under the Bankruptcy Code, and in
connection herewith, such Principal hereby waives any such right as a “creditor”
under the Bankruptcy Code. This waiver is given to induce Lender to make the
Loan evidenced by the Note to Borrower.

     

    16.          
(a) Borrower
shall cooperate with Lender, and provide access to Lender and any professionals
engaged by Lender, upon Lender’s request, to conduct, contract for, evaluate or
interpret any environmental assessments, audits, investigations, testing,
sampling, analysis and similar procedures on any of the Properties.

     

    (b) Borrower
shall take (and Principal shall cause Borrower to take) any and all reasonable
actions, including institution of legal action against third parties, necessary
or appropriate to obtain reimbursement, payment or compensation from such
persons responsible for the presence of any Hazardous Materials or Asbestos at,
in, on, under or near any of the Properties or otherwise obligated by law to
bear the cost thereof. Lender shall be and hereby is subrogated to all of
Borrower’s and/or Principal’s rights now or hereafter in such
claims.

     

    17.          
Each Indemnitor represents and warrants that, with respect to such
Indemnitor:

     

    (a)
Indemnitor has the full corporate, limited partnership, limited liability
company, joint venture or other power and authority, as applicable, to execute
and deliver this Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement by Indemnitor has been
duly and validly authorized; and all requisite corporate, limited partnership,
limited liability company or joint venture action, as applicable, has been taken
by Indemnitor to make this Agreement valid and binding upon Indemnitor and
enforceable in accordance with its terms;

     

    (b)
Indemnitor’s execution of, and compliance with, this Agreement is in the
ordinary course of business of Indemnitor and will not result in the breach of
any term or provision of the articles of organization or operating agreement,
charter or bylaws, limited partnership agreement or joint venture agreement, as
applicable, of Indemnitor or result in the breach of any term or provision of,
or conflict with or constitute a default under or result in the acceleration of
any obligation under, any agreement, indenture or loan or credit agreement or
other instrument to which Indemnitor or any of the Properties are subject, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which Indemnitor or any of the Properties are subject;

     

    
      
         

      

      
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    (c) There
is no action, suit, proceeding or investigation pending or to the best of
Indemnitor’s knowledge threatened against Indemnitor which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of Indemnitor,
or in any material impairment of the right or ability of Indemnitor to carry on
its business substantially as now conducted, or in any material liability on the
part of Indemnitor, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of Indemnitor contemplated herein, or which would be likely to
impair materially the ability of Indemnitor to perform under the terms of this
Agreement;

     

    (d) This
Agreement is, and the Loan Documents, including the Note, when executed and
delivered, will be, the legally valid and binding obligations of each
Indemnitor, as applicable, enforceable against the Indemnitor, as applicable, in
accordance with their respective terms, subject to bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors’ rights
generally, no Indemnitor has any defense or offset to any of its obligations
under the Loan Documents, and no Indemnitor has any claim against Lender or any
Affiliate of Lender; and

     

    (e) Indemnitor
has no defense or offset to the enforcement of this Agreement.

     

    18.          
(a) No delay on Lender’s part in exercising any right, power or privilege under
this Agreement shall operate as a waiver of any such right, power or
privilege.

     

    (b)
Lender shall, at all times, be free to independently establish to its
satisfaction and in its absolute discretion the existence or nonexistence of any
fact or facts the existence or nonexistence of which is a condition of this
Agreement. 

     

    19.          
Each party hereto shall, within five (5) business days of receipt thereof, give
written notice to the other party hereto of (i) any notice or advice from
any governmental agency or any source whatsoever with respect to Hazardous
Materials or Asbestos on, from or affecting any of the Properties, and
(ii) any claim, suit or proceeding, whether administrative or judicial in
nature (“Legal
Action”),
brought against such party or instituted with respect to any of the Properties,
with respect to which Indemnitor may have liability under this Agreement. Such
notice shall comply with the provisions of Paragraph 20 hereof.

     

    20.          
Unless otherwise specifically provided herein, any notice or other communication
required or permitted to be given shall be in writing and addressed to the
respective party as set forth hereinabove. Notices shall be effective
(i) three (3) days after the date such notice is mailed, (ii) on
the next Business Day if sent by a nationally recognized overnight courier
service, (iii) on the date of delivery by personal delivery and
(iv) on the date of transmission
if sent by telefax during business hours on a Business Day (otherwise on the
next Business Day) (with receipt of confirmation). Any
party may change the address at which it is to receive notices to another
address in the United States at which business is conducted (and not a post
office box or other similar receptacle), by giving notice of such change of
address in accordance with the foregoing. This provision shall not invalidate or
impose additional requirements for the delivery or effectiveness of any notice
(i) given in accordance with applicable statutes or rules of court, or (ii) by
service of process in accordance with applicable law. If there is any assignment
or transfer of Lender’s interest in the Loan, then the new Lender may give
notice to the parties in accordance with this Paragraph 20, specifying the
addresses at which the new Lender shall receive notice, and they shall be
entitled to notice at such address in accordance with this Paragraph
20.

     

    
      
         

      

      
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      21.         
EACH INDEMNITOR 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 ANY OF THE PROPERTIES IS LOCATED AND IRREVOCABLY
AGREES THAT, SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH INDEMNITOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ANY OF THE PROPERTIES, 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 AGREEMENT, THE 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 INDEMNITOR IN THE COURTS OF ANY OTHER
JURISDICTION.

    

     

    22.          
The terms of this Agreement are for the sole and exclusive protection and use of
Lender. No party shall be a third-party beneficiary hereunder, and no provision
hereof shall operate or inure to the use and benefit of any such third
party.

     

    23.           Capitalized
terms used herein and not specifically defined herein shall have the respective
meanings ascribed to such terms in the Loan Agreement.

     

    24.          
This Agreement may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together
shall constitute a single Agreement. The failure of any party hereto to execute
this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.

     

    25.          
This Agreement may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
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.

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      26.          
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the person or
persons referred to may require. Without limiting the effect of specific
references in any provision of this Agreement, the terms “Borrower” and
“Indemnitor” shall be deemed to refer to Borrower or Indemnitor, as the case may
be, and each person or entity comprising Borrower or Indemnitor, as the case may
be, from time to time, as the sense of a particular provision may require, and
to include the heirs, executors, administrators, legal representatives,
successors and assigns of Borrower or Indemnitor, as the case may be, all of
whom shall be bound by the provisions of this Agreement. Each reference herein
to Lender shall be deemed to include its successors and assigns, to whose favor
the provisions of this Agreement shall also inure.

    

     

    27.          
If Indemnitor consists of more than one person or entity, the obligations and
liabilities of each such person or entity hereunder shall be joint and
several.

     

    28.          
Any one or more parties liable upon or in respect of this Agreement may be
released without affecting the liability of any party not so
released.

     

    29.         
The rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies which Lender has under the Note, the Loan Agreement, the
Instrument, or the Other Security Documents or would otherwise have at law or in
equity.

     

    30.          
If any term, condition or covenant of this Agreement shall be held to be
invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.

     

    31.          
This Agreement shall be governed and construed in accordance with the laws of
the State of New York and the applicable laws of the United States of America
without regard to conflicts of law provisions.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK;

    SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
        10

        
          

        

      

      
         

      

    


    IN
WITNESS WHEREOF, this Agreement has been executed by Indemnitor and is effective
as of the day and year 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


                    

                     

                     

                    
                      
                         

                      

                      
                         

                        
                          

                        

                      

                      
                         

                      

                    

                  

                

              

            

          

        

      

    

    
       

      
        	 	
                PRINCIPAL:

              
	 	 	 
	 	 
	 	
                LIGHTSTONE HOLDINGS LLC, a Delaware

                limited liability company

              
	 	 
	 	 	 
	 	By:	/s/ David
      Lichtenstein                                     
      
	 	 	
              


      

        

      
        
          	 	LENDER:
	 	 	 
	 	/s/ CITIGROUP GLOBAL MARKETS
      REALTY CORP.,
      a New York corporation