Unassociated Document


    EXHIBIT 10.8

     

    CONTRIBUTION
AGREEMENT

     

    THIS CONTRIBUTION AGREEMENT
(this
“Agreement”) is
entered into as of the 30th day of June, 2006 by and among 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
“Co-Obligors”;
references herein to the “Co-Obligors,” 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), and CITIGROUP GLOBAL MARKETS REALTY
CORP., a New
York corporation, (together with its successors and assigns, “Lender”),
having an address at having an address at 388 Greenwich Street, 19th Floor, New
York, New York 10013. 

     

    WITNESSETH:

     

    WHEREAS,
concurrently herewith, Lender has made a loan to the Co-Obligors the aggregate
initial principal sum of $52,000,000.00 (the “Loan”) in
accordance with that certain Loan and Security Agreement of even date herewith
between the Co-Obligors and Lender (the “Loan
Agreement”; the
Loan and the other obligations and liabilities of the Co-Obligors under the Loan
Agreement and the other Loan Documents [as defined in the Loan Agreement] are
herein collectively referred to herein as the “Indebtedness”);

     

    WHEREAS,
each Co-Obligor is jointly and severally liable for the payment of all the
Indebtedness;

     

    WHEREAS,
each Co-Obligor will receive substantial benefits by reason of the Loan;
and

     

    WHEREAS,
the Co-Obligors are desirous of providing for certain rights of contribution and
subrogation as more particularly provided herein.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Co-Obligors agree as follows:

     

    1.  As used
herein, the “Allocable
Amount” of any
Co-Obligor, as of any date of determination, shall be determined to be an amount
equal to the maximum amount of the Indebtedness which could then be claimed
against such Co-Obligor without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the United States Federal Bankruptcy Code (11
U.S.C. Sec. 101 et seq.) or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.

     

    2.  To the
extent that a payment is made on the Indebtedness by a Co-Obligor (a
“Co-Obligor
Payment”),
which, taking into account all other Co-Obligor Payments then previously or
concurrently made by or attributable to any other Co-Obligor, exceeds the amount
of the Co-Obligor Payment which otherwise would have been made by or
attributable to such Co-Obligor if each such Co-Obligor had paid the aggregate
Indebtedness satisfied by such Co-Obligor Payments in the same proportion as
such Co-Obligor’s Allocable Amount in effect immediately prior to such
Co-Obligor Payment bore to the aggregate Allocable Amounts of all such
Co-Obligors in effect immediately prior to such Co-Obligor Payment, then such
Co-Obligor shall be entitled to contribution and indemnification from, and to be
reimbursed by, the other Co-Obligor for the amount of such excess, pro rata
based upon its respective Allocable Amounts in effect immediately prior to such
Co-Obligor Payment (and such obligations of one Co-Obligor to another are herein
referred to as the “Contribution
Obligations”).


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.  This
Agreement is intended only to define the relative rights of the Co-Obligors, and
nothing set forth in this Agreement is intended to or shall impair the
obligations of any Co-Obligor to pay any amounts as and when the same shall
become due and payable in accordance with the terms of the Loan
Agreement.

     

    4.  The
Co-Obligors acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets in favor of the Co-Obligor to which such
contribution and indemnification is owing.

     

    5.  Each
Co-Obligor hereby postpones and subordinates payment of all the Contribution
Obligations, and makes all the Contribution Obligations subject in right of
satisfaction, payment and performance, to the full and absolute payment of the
Indebtedness.

     

    6.   Until
the date that is one (1) year and one (1) day after the date that all of the
Indebtedness has been paid and satisfied in full none of the Co-Obligors shall
(a) assert, collect, sue upon, or enforce all or any part of the Contribution
Obligations; (b) commence or join with any other creditors of any Co-Obligor in
commencing any bankruptcy, reorganization, receivership or insolvency proceeding
against any other Co-Obligor; (c) take, accept, ask for, sue for, receive, set
off or demand any payments upon the Contribution Obligations; or (d) take,
accept, ask for, sue for, receive, demand or allow to be created liens, security
interests, mortgages, or pledges of or with respect to any of the assets of a
Co-Obligor in favor of or for the benefit of the any other
Co-Obligor.

     

    7.  Each of
the Co-Obligors agrees that in the event of any bankruptcy, insolvency,
arrangement, reorganization or receivership proceeding relating to any other
Co-Obligor, the following shall apply:

     

    (a) In any
such proceeding the Lender may, and is hereby irrevocably authorized and
empowered (in its own name or in the name of the said Co-Obligor) but shall have
no obligation to: demand, sue for, collect and receive every payment or
distribution in respect of the Contribution Obligations and give acquittance
therefor; and file claims and proofs of claims and take such other action
(including, without limitation, voting the Contribution Obligations and
approving or objecting to a plan of reorganization) as the Lender may deem
necessary or advisable for the exercise or enforcement of any of the rights or
interests of the Lender under this Agreement.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (b) In any
such proceeding, each Co-Obligor will duly and promptly take such action as the
Lender may request to (i) collect for the account of the Lender the Contribution
Obligations and to file appropriate claims or proofs of claim with respect
thereto; and (ii) execute and deliver to the Lender such powers of attorney,
assignments or other instruments as the Lender may request in order to enable it
to enforce any and all claims with respect to the Contribution
Obligations.

     

    8.  Each of
the Co-Obligors acknowledges and agrees that (a) the Lender would not make the
Loan unless each Co-Obligor jointly and severally became obligated for the
repayment of the Loan and granted liens on the collateral owned by said
Co-Obligor to secure the payment of all of the Indebtedness, (b) each Co-Obligor
derives benefits from the borrowing of the Loan by the Co-Obligors and the
granting of liens by each Co-Obligor on the collateral owned by it securing the
payment of the Indebtedness, and (c) the Lender and its successors and assigns
are beneficiaries of this Agreement and may bring any action from time to time
to enforce the benefits and rights granted to the Lender hereunder.


     

    9.  This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.

     

    10.  This
Agreement shall be construed and enforced in accordance with the laws of the
State of New York.

     

    11.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
instrument.

     

    12.  Any
notices required to be given under this Agreement shall be given in the manner
provided in the Loan Agreement. All capitalized terms, unless otherwise defined
herein, have the same meanings as defined in the Loan Agreement.

     

    13.  This
Agreement may not be modified, amended or terminated except by a written
agreement executed by all of the parties hereto.

     

    [NO
FURTHER TEXT ON THIS PAGE]


     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Contribution Agreement has been duly executed by the
parties hereto as of the date first written above.

    
      
         

        
          	 	
                  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


                    

                        

                  

                

              

            

          

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

      

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