EXHIBIT
      10.25

     

    EXCEPTIONS
      TO NON-RECOURSE GUARANTY

     

    This
      EXCEPTIONS TO NON-RECOURSE GUARANTY (this “Guaranty”)
      is
      entered into as of June 30, 2006, by LIGHTSTONE HOLDINGS, LLC, a Delaware
      corporation, having an address at 326
      Third
      Street, Lakewood, New Jersey 08701
      (“Guarantor”),
      for
      the benefit of CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation,
      having an address at 388 Greenwich Street, 19th Floor, New York, New York 10013,
      and/or any subsequent holder of the Note (“Lender”).

     

    RECITALS

     

    A.  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),
      has
      requested that Lender make a loan to Borrower in the amount of $52,000,000.00
      (the “Loan”).
      The
      Loan will be evidenced by that certain Promissory Note, dated of the date of
      this Guaranty, made by Borrower to Lender (the “Note”),
      and a
      Loan and Security Agreement by and between Borrower and Lender (the
“Loan
      Agreement”).
      The
      Loan will be evidenced by a Promissory Note from Borrower to Lender dated as
      of
      the date of this Guaranty (the “Note”)
      and a
      Loan and Security Agreement by and between Borrower and Lender (the
“Loan
      Agreement”).
      The
      Note will be secured by, among other things, those certain Mortgages dated
      the
      same date as the Note (collectively, the “Instrument”),
      encumbering certain real properties and improvements described in each
      Instrument (collectively, the “Property”).
      As
      used herein, the term “Loan
      Documents”
shall
      mean the Note, the Loan Agreement, the Instrument, and any other documents
      or
      instruments given by Borrower or others and accepted by Lender for the purposes
      of evidencing, securing, or guaranteeing the Loan. All capitalized terms not
      defined herein shall have the respective meanings set forth in the Loan
      Agreement.

     

    B.  As
      a
      condition to making the Loan to Borrower, Lender requires that Guarantor execute
      this Guaranty.

     

    C.  Guarantor
      will derive substantial benefits from Lender’s making the Loan to
      Borrower.

    
      

NOW,
      THEREFORE, in order to induce Lender to make the Loan to Borrower, and in
      consideration thereof, Guarantor agrees as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.  As
      used
      herein, “Indebtedness”
shall
      mean all obligations evidenced by the Note and secured by the Instrument or
      the
      other Loan Documents.

     

    2.  Guarantor
      hereby absolutely, unconditionally and irrevocably guarantees to Lender the
      full
      and prompt payment when due, whether at maturity or earlier, by reason of
      acceleration or otherwise, and at all times thereafter, and the full and prompt
      performance when due, of all of the following:

     

    (a)  All
      amounts which are stated to be obligations of Guarantor under the terms of
      Article XII of the Loan Agreement; and

     

    (b)  All
      costs
      and expenses, including reasonable fees and out of pocket expenses of attorneys
      and expert witnesses, incurred by Lender in enforcing its rights under this
      Guaranty.

     

    For
      purposes of determining Guarantor’s liability under this Guaranty, all payments
      made by Borrower with respect to the Indebtedness and all amounts received
      by
      Lender from the enforcement of its rights under the Instrument shall be applied
      first to the portion of the Indebtedness for which neither Borrower nor
      Guarantor has personal liability.

     

    Guarantor
      hereby promises to pay and perform, as and when due (whether by acceleration,
      at
      maturity, or otherwise) and at all times thereafter, each and all of the items
      and obligations which are stated to be guaranteed hereunder but which are
      obligations for which Guarantor is primarily liable or are not obligations
      of
      others. Guarantor hereby agrees that any such sums shall accrue interest at
      the
      Default Rate until paid if not paid as and when due and that such sums, together
      with any accrued interest thereon, shall become part of Guarantor’s obligations
      hereunder.

     

    3.  The
      obligations of Guarantor under this Guaranty shall survive any foreclosure
      proceeding, any foreclosure sale, any delivery of any deed in lieu of
      foreclosure, any release of record of the Instrument and any repayment or
      discharge of the Indebtedness and will not be reduced, discharged or released
      because or by reason of any existing or future offset, claim or defense of
      Borrower or any other party against Lender or against payment of the obligations
      of Guarantor under this Guaranty.

     

    4.  Guarantor’s
      obligations under this Guaranty constitute an unconditional guaranty of payment
      and not merely a guaranty of collection. This Guaranty may not be revoked by
      Guarantor and shall continue to be effective after any attempted revocation
      by
      Guarantor. 

     

    5.  The
      obligations of Guarantor under this Guaranty shall be performed without demand
      by Lender and shall be unconditional irrespective of the genuineness, validity,
      regularity or enforceability of any of the Loan Documents, and without regard
      to
      any other circumstance which might otherwise constitute a legal or equitable
      discharge of a surety or a guarantor. Guarantor shall be liable even if Borrower
      had no liability at the time of execution of the Loan Documents, or thereafter
      ceases to be liable. Guarantor hereby agrees that Guarantor’s liability may be
      larger in amount and more burdensome than that of Borrower. Guarantor hereby
      waives the benefit of all principles or provisions of law, statutory or
      otherwise, which are or might be in conflict with the terms of this Guaranty
      and
      agrees that Guarantor’s obligations shall not be affected by any circumstances,
      whether or not referred to in this Guaranty, which might otherwise constitute
      a
      legal or equitable discharge of a surety or a guarantor. Guarantor hereby waives
      the benefits of any right of discharge under any and all statutes or other
      laws
      relating to guarantors or sureties and any other rights of sureties and
      guarantors thereunder. Without limiting the generality of the foregoing,
      Guarantor hereby waives, to the fullest extent permitted by law, diligence
      in
      collecting the Indebtedness, presentment, demand for payment, protest, all
      notices with respect to the Note, the Loan Agreement, this Guaranty, or any
      other Loan Document which may be required by statute, rule of law or otherwise
      to preserve Lender’s rights against Guarantor under this Guaranty, including,
      but not limited to, notice of acceptance, notice of any amendment of the Loan
      Documents, notice of the occurrence of any default, notice of intent to
      accelerate, notice of acceleration, notice of dishonor, notice of foreclosure,
      notice of protest, and notice of the incurring by Borrower of any obligation
      or
      indebtedness. Guarantor also waives, to the fullest extent permitted by law,
      all
      rights to require Lender to (a) proceed against Borrower or any other
      guarantor of Borrower’s payment or performance with respect to the Indebtedness
      (an “Other
      Guarantor”),
      (b) if Borrower or any Other Guarantor is a partnership, proceed against
      any general partner of Borrower or the Other Guarantor, (c) proceed against
      or exhaust any collateral held by Lender to secure the repayment of the
      Indebtedness, (d) pursue any other remedy it may now or hereafter have
      against Borrower (or, if Borrower is a partnership, any general partner of
      Borrower) or (e) resort to any other means of obtaining payment of Guarantor’s
      obligations under this Guaranty. 

     

    
      
        
        

      

      
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    6.  Guarantor
      understands that the exercise by Lender of certain rights and remedies contained
      in the Loan Agreement and the Instrument (such as a nonjudicial foreclosure
      sale) may affect or eliminate Guarantor’s right of subrogation against Borrower
      and that Guarantor may therefore incur a partially or totally nonreimbursable
      liability under this Guaranty. Nevertheless, Guarantor hereby authorizes and
      empowers Lender to exercise, in its sole and absolute discretion, any right
      or
      remedy, or any combination thereof, which may then be available, since it is
      the
      intent and purpose of Guarantor that the obligations under this Guaranty shall
      be absolute, independent and unconditional under any and all circumstances.
      Guarantor expressly waives any defense (which defense, if Guarantor had not
      given this waiver, Guarantor might otherwise have) to a judgment against
      Guarantor by reason of a judicial or nonjudicial foreclosure. Without limiting
      the generality of the foregoing, Guarantor hereby expressly waives any and
      all
      benefits under any applicable law which, if Guarantor had not given this waiver,
      (i) would otherwise limit Guarantor’s liability after a foreclosure sale to
      the difference between the obligations of Guarantor under this Guaranty and
      the
      fair market value of the property or interests sold at such nonjudicial
      foreclosure sale, (ii) would otherwise limit Lender’s right to recover a
      deficiency judgment after a foreclosure sale, and (iii) would otherwise
      require Lender to exhaust all of its security before a personal judgment could
      be obtained for a deficiency. Notwithstanding any foreclosure of the lien of
      the
      Instrument, whether by the exercise of the power of sale contained in the
      Instrument, by an action for judicial foreclosure or by Lender’s acceptance of a
      deed in lieu of foreclosure, Guarantor shall remain bound under this Guaranty.
      Guarantor waives all rights and defenses that Guarantor may have because
      Borrower’s obligations are secured by real property. This means, among other
      things:

     

    
      
        
        

      

      
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    (a)  Lender
      may collect from Guarantor without first foreclosing on any real or personal
      property collateral pledged by Borrower or others; and

     

    (b)  If
      Lender
      forecloses on any real property collateral pledged by Borrower or others:
      (i) the amount of the debt may be reduced only by the price for which that
      collateral is sold at the foreclosure sale, even if the collateral is worth
      more
      than the sale price; and (ii) Lender may collect from Guarantor even if
      Lender, by foreclosing on the real property collateral, has destroyed any right
      Guarantor may have to collect from Borrower.

     

    This
      is
      an unconditional and irrevocable waiver of any rights and defenses that
      Guarantor may have because Borrower’s obligations are secured by real
      property.

     

    7.  Guarantor
      also waives any right or defense based upon an election of remedies by Lender,
      even though such election (e.g.,
      nonjudicial foreclosure with respect to any collateral held by Lender to secure
      repayment of the Indebtedness) destroys or otherwise impairs the subrogation
      rights of Guarantor or the right of Guarantor (after payment of the obligations
      guaranteed by Guarantor under this Guaranty) to proceed against Borrower for
      reimbursement, or both.

     

    8.  Guarantor
      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 Indebtedness,
      until the Indebtedness has 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 Indebtedness could be deemed a preference under
      the United States Bankruptcy Code (the “Code”).

     

    9.  It
      is the
      intention of the parties that Guarantor shall not be deemed a “creditor” or
“creditors” (as defined in Section 101 of the Code) of Borrower, or any Other
      Guarantor, by reason of the existence of this Guaranty, in the event that
      Borrower or any Other Guarantor becomes a debtor in any proceeding under the
      Code, and in connection herewith, Guarantor hereby waives any such right as
      a
“creditor” under the Code. After the Indebtedness has been satisfied in full,
      this waiver shall be deemed terminated.

     

    10.  At
      any
      time or from time to time and any number of times, without notice to Guarantor
      and without affecting the liability of Guarantor hereunder, (a) the time
      for payment of the principal of or interest on the Indebtedness may be extended
      or the Indebtedness may be renewed in whole or in part; (b) the time for
      Borrower’s performance of or compliance with any covenant or agreement contained
      in the Note, the Loan Agreement, the Instrument or any other Loan Document,
      whether presently existing or hereinafter entered into, may be extended or
      such
      performance or compliance may be waived; (c) the maturity of the
      Indebtedness may be accelerated as provided in the Note, the Loan Agreement,
      the
      Instrument, or any other Loan Document; (d) the Note, the Loan Agreement,
      the Instrument, or any other Loan Document may be modified or amended by Lender
      and Borrower in any respect, including, but not limited to, an increase in
      the
      principal amount; and (e) any security or guaranty for the Indebtedness may
      be modified, exchanged, surrendered or otherwise dealt with or additional
      security may be pledged or mortgaged for the Indebtedness.

     

    
      
        
        

      

      
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    11.  If
      more
      than one person executes this Guaranty, the obligations of those persons under
      this Guaranty shall be joint and several. Lender, in its sole and absolute
      discretion, may (a) bring suit against Guarantor, or any one or more of the
      persons constituting Guarantor, and any Other Guarantor, jointly and severally,
      or against any one or more of them; (b) compromise or settle with any one
      or more of the persons constituting Guarantor for such consideration as Lender
      may deem proper; (c) release one or more of the persons constituting
      Guarantor, or any Other Guarantor, from liability; and (d) otherwise deal
      with Guarantor and any Other Guarantor, or any one or more of them, in any
      manner, and no such action shall impair the rights of Lender to collect from
      Guarantor any amount guaranteed by Guarantor under this Guaranty. Nothing
      contained in this paragraph shall in any way affect or impair the rights or
      obligations of Guarantor with respect to any Other Guarantor.

     

    12.  Any
      indebtedness of Borrower held by any Guarantor now or in the future is and
      shall
      be subordinated to the Indebtedness and any such indebtedness of Borrower shall
      be collected, enforced and received by such Guarantor, as trustee for Lender,
      but without reducing or affecting in any manner the liability of Guarantor
      under
      the other provisions of this Guaranty.

     

    13.  If
      any
      payment by Borrower is held to constitute a preference under any applicable
      bankruptcy, insolvency, or similar laws, or if for any other reason Lender
      is
      required to refund any sums to Borrower, such refund shall not constitute a
      release of any liability of Guarantor under this Guaranty. It is the intention
      of Lender and Guarantor that Guarantor’s obligations under this Guaranty shall
      not be discharged except by Guarantor’s performance of such obligations and then
      only to the extent of such performance.

     

    14.  Guarantor
      shall from time to time, upon request by Lender, deliver to Lender such
      financial statements as Lender may reasonably require.

     

    15.  Guarantor
      represents and warrants to Lender as follows:

     

    (a)  Guarantor
      is an affiliate of Borrower, is the owner of a direct or indirect interest
      in
      Borrower, and has received, or will receive, direct or indirect benefit from
      the
      making of this Guaranty.

     

    (b)  Guarantor
      is familiar with, and has independently reviewed books and records regarding,
      the financial condition of Borrower and is familiar with the value of any and
      all collateral intended to be created as security for the payment of the Note;
      however, Guarantor is not relying on such financial condition or the collateral
      as an inducement to enter into this Guaranty.

     

    (c)  Neither
      Lender nor any other party has made any representation, warranty or statement
      to
      Guarantor in order to induce Guarantor to execute this Guaranty.

     

    
      
        
        

      

      
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    (d)  As
      of the
      date hereof, and after giving effect to this Guaranty and the contingent
      obligation evidenced hereby, Guarantor is, and will be, solvent, and has and
      will have assets which, fairly valued, exceed its obligations, liabilities
      (including contingent liabilities) and debts, and has and will have property
      and
      assets sufficient to satisfy and repay its obligations and
      liabilities.

     

    (e)  All
      representations and warranties made by Guarantor herein shall survive the
      execution hereof.

     

    (f)  Guarantor
      has examined all of the Loan Documents.

     

    (g)  Except
      as
      otherwise disclosed to Lender, there are no proceedings pending or, so far
      as
      Guarantor knows, threatened before any court or administrative agency which,
      if
      decided adversely to Guarantor, would materially adversely affect the financial
      condition of Guarantor or the authority of Guarantor to enter into, or the
      validity or enforceability of, this Guaranty.

     

    (h)  Guarantor
      has filed all required federal, state and local tax returns and has paid all
      taxes as shown on such returns as they have become due. No claims have been
      assessed and are unpaid with respect to such taxes.

     

    (i)  This
      Guaranty has been duly authorized, executed and delivered by Guarantor and
      constitutes the valid and binding obligation of Guarantor, and is enforceable
      against Guarantor in accordance with its terms. No approval, consent, order
      or
      authorization of any governmental authority and no designation, registration,
      declaration or filing with any governmental authority is required in connection
      with the execution and delivery of this Guaranty by Guarantor. Guarantor has
      no
      defense or offset to the enforcement of this Guaranty. The execution and
      delivery of this Guaranty will not violate or contravene in any way the articles
      of incorporation or bylaws or partnership agreement, articles of organization
      or
      operating agreement, as the case may be, of Guarantor or any indenture,
      agreement or instrument to which Guarantor is a party or by which it or its
      property may be bound, or be in conflict with, result in a breach of or
      constitute a default under any such indenture, agreement or other instrument,
      result in the creation or imposition of any lien, charge or encumbrance of
      any
      nature whatsoever upon any of the property or assets of Guarantor, except as
      contemplated by the provisions of the Loan Documents, and no action or approval
      with respect thereto by any third person is required.

     

    16.  Lender
      may assign its rights under this Guaranty in whole or in part and, upon any
      such
      assignment, all the terms and provisions of this Guaranty shall inure to the
      benefit of such assignee to the extent so assigned. The terms used to designate
      any of the parties herein shall be deemed to include the heirs, legal
      representatives, successors and assigns of such parties; and the term “Lender”
shall include, in addition to Lender, any lawful owner, holder or pledgee of
      the
      Note.

     

    17.  This
      Guaranty and the other Loan Documents represent the final agreement between
      the
      parties and may not be contradicted by evidence of prior, contemporaneous or
      subsequent oral agreements. There are no unwritten oral agreements between
      the
      parties. All prior or contemporaneous agreements, understandings,
      representations, and statements, oral or written, are merged into this Guaranty
      and the other Loan Documents. Guarantor acknowledges that it has received copies
      of the Note, the Loan Agreement, the Instrument and all other Loan Documents.
      Neither this Guaranty nor any of its provisions may be waived, modified,
      amended, discharged, or terminated except by an agreement in writing signed
      by
      the party against which the enforcement of the waiver, modification, amendment,
      discharge, or termination is sought, and then only to the extent set forth
      in
      that agreement.

     

    
      
        
        

      

      
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    18.  Lender
      may, at any time, sell, transfer or assign the Note, the Loan Agreement, the
      Instrument and the Loan Documents, or any part thereof, and any or all servicing
      rights with respect thereto, or grant participations therein or issue mortgage
      pass-through certificates or other securities evidencing a beneficial interest
      in a rated or unrated public offering or private placement (the “Securities”).
      In
      connection with any of the foregoing, promptly following request from Lender,
      Guarantor shall furnish and certify as true and complete, such information
      concerning Guarantor as Lender may reasonably request. Without limitation,
      Guarantor agrees that it will be reasonable to request (and Guarantor shall
      furnish) resumes, financial statements, tax returns, key principal
      questionnaires, and credit reports. Guarantor authorizes Lender to forward
      the
      same to any purchaser, transferee, assignee, servicer, participant, investor
      in
      such Securities or any rating agency rating such Securities (singularly, an
      “Investor,”
and
      collectively, the “Investors”)
      and
      each prospective Investor.

     

    19.  No
      failure to exercise, and no delay in exercising, on the part of Lender, any
      right hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise thereof preclude any other or further exercise thereof or
      the
      exercise of any other right. The rights of Lender hereunder shall be in addition
      to all other rights provided by law. No modification or waiver of any provision
      of this Guaranty, nor consent to departure therefrom, shall be effective unless
      in writing and no such consent or waiver shall extend beyond the particular
      case
      and purpose involved. No notice or demand given in any case shall constitute
      a
      waiver of the right to take other action in the same, similar or other instances
      without such notice or demand.

     

    20.  Any
      notice, demand, statement, request or consent made hereunder shall be in writing
      and shall be deemed to be received by the addressee on the day such notice
      is
      tendered to a nationally recognized overnight delivery service or on the third
      day following the day such notice is deposited with the United States Postal
      Service first class certified mail, return receipt requested, in either
      instance, addressed to the address, as set forth below, of the party to whom
      such notice is to be given, or to such other address as either party shall
      in
      like manner designate in writing. The addresses of the parties hereto are as
      follows:

     

    Guarantor:

     

    Lightstone
      Holdings LLC

    326
      Third
      Street

    Lakewood,
      New Jersey 08701

    Attention:
      David Lichtenstein

     

    
      
        
        

      

      
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    With
      a
      copy to:

    


    Herrick,
      Feinstein LLP 

    2
      Park
      Avenue 

    New
      York,
      New York 10016

    Attention:
      Sheldon Chanales, Esq.

     

    Lender:

     

    Citigroup
      Global Markets Realty Corp.

    388
      Greenwich Street, 19th Floor

    New
      York,
      New York 10013 

    Attn:
      Mortgage Loan Department


     

    21.  Guarantor
      agrees that this Guaranty and the obligations arising hereunder shall be
      governed by and construed in accordance with the laws of the State of New York
      (“State
      of Jurisdiction”)
      and
      any applicable laws of the United States of America. The state and federal
      courts and authorities with jurisdiction in the State of Jurisdiction shall
      have
      exclusive jurisdiction over all controversies which shall arise under or in
      relation to this Guaranty. Guarantor irrevocably consents to service,
      jurisdiction, and venue of such courts for any litigation and waives any other
      venue to which it might be entitled by virtue of domicile, habitual residence
      or
      otherwise.

     

    22.  GUARANTOR
      AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY
      ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES
      AS
      GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY
      RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH
      RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
      SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY, WITH THE BENEFIT
      OF
      COMPETENT LEGAL COUNSEL.


     

    [SIGNATURE
      PAGE FOLLOWS]


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      Guarantor has executed and delivered this Guaranty as of the date first written
      above.

    
      	 	 	 
	 	
              GUARANTOR:

            
	 	 
	 	
              LIGHTSTONE
                HOLDINGS LLC, a Delaware

              limited
                liability company  

            
	 
 	 
 	 
 
	
            	By:  	 /s/
              David
              Lichtenstein