GUARANTY OF RECOURSE OBLIGATIONS

FOR VALUE RECEIVED , and to induce LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (individually and as lead arranger and administrative agent for itself and certain co-lenders) (“ Lender ”), having an address at 399 Park Avenue, 8th Floor, New York, New York 10022, to enter into that certain Loan Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan   Agreement ”) of even date herewith with 1407 BROADWAY REAL ESTATE LLC, a Delaware limited liability company (“ Borrower ”), having an address at c/o The Lightstone Group, 326 Third Street, Lakewood, New Jersey 08701, for a loan   (the “ Loan ”), evidenced by (i) that certain Promissory Note dated of even date herewith in the stated principal amount of $127,250,000 (as amended, restated, split, severed, consolidated, supplemented or otherwise modified from time to time, the “ Note ”) (except as otherwise indicated herein, each capitalized term used herein that is not specifically defined herein shall have the meaning given to such term in the Loan Agreement), and secured by the Security Instrument and the other Loan Documents, the undersigned and each other Person who executes and delivers a joinder hereto in accordance with Section 11(b) hereof (individually, a “ Guarantor ” and, collectively, the “ Guarantors ”), hereby absolutely, unconditionally and irrevocably, and jointly and severally as a primary obligor with all other obligated Persons, guarantees the full and prompt payment and performance of all of the Guaranteed Obligations (hereinafter defined).

The following additional provisions shall govern and apply to this Guaranty of Recourse Obligations (this “ Guaranty ”):

1.    Guarantors’ Liability .

As used herein, the term “ Guaranteed Obligations ” means the following:

a.   If a Full Recourse Event occurs, the “ Guaranteed Obligations ” shall mean all of the “ Obligations ”, as defined in the Loan Agreement (including the entire principal balance of the Debt, all accrued interest thereon and all other amounts, costs or expenses payable pursuant to the Loan Documents) together with all Enforcement Costs (hereinafter defined).

b.   If a Partial Recourse Event occurs, but a Full Recourse Event has not occurred, the “ Guaranteed Obligations ” shall mean the sum of (i) all Losses (hereinafter defined) plus (ii) all Enforcement Costs.

Unless and until a Full Recourse Event and/or a Partial Recourse Event occurs, Lender shall not pursue any claims under this Guaranty.

As used herein, the term “ Losses ” shall mean any and all claims, suits, liabilities (including strict liabilities), actions, proceedings, obligations, debts, damages, actual and out-of-pocket losses, out-of-pocket costs (including any and all costs and expenses incurred in the preservation, restoration and protection of the Property), expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement, punitive damages, foreseeable consequential damages and damages, actual and out-of-pocket costs and expenses of whatever kind or nature (including reasonable attorneys’ fees and other costs of defense) arising out of, incurred because of or related to the occurrence of any Partial Recourse Event. The term “ Enforcement Costs ” shall mean any and all out-of-pocket costs and expenses, including reasonable legal expenses and attorneys’ fees, (a) described in Section 7.4 of the Loan Agreement, (b) incurred or paid by Lender in protecting Lender’s interest in the Property, or (c) incurred in collecting any amount payable under this Guaranty or the other Loan Documents, or (d) incurred in enforcing Lender’s rights under this Guaranty or with respect to the Property, in each of clauses (a) through (d) whether or not any legal proceeding is commenced hereunder or thereunder and whether or not any Default or Event of Default shall have occurred and is continuing, together with interest thereon at the Default Rate (as defined in each Note) from the date paid or incurred by Lender until the costs and expenses described in this sentence are paid by Borrower or a Guarantor. Enforcement Costs shall include any of the foregoing incurred during or following the (i) exercise of any remedy by Lender under this Guaranty or the other Loan Documents or following the occurrence of an Event of Default, (ii) foreclosure of any mortgage prior to or subsequent to the Security Instrument not permitted under the Loan Documents, whether or not Lender is made a party to, or otherwise becomes involved in, such proceedings, in which proceeding Lender is made a party, (iii) bankruptcy, insolvency, reorganization, rehabilitation, liquidation or other similar proceeding in respect of any Borrower Party or an assignment by any Borrower Party for the benefit of its creditors, (iv) enforcement of the Obligations of or collection of any payments due from any Guarantor under this Guaranty, or from any Borrower Party under any of the other Loan Documents or with respect to the Property, or (v) incurring of any costs or expenses by Lender in connection with any refinancing or restructuring of the credit arrangements provided under this Guaranty or the other Loan Documents in the nature of a “work-out”, modification or restructuring. To the extent Lender receives any payment by any Person (including Guarantor) or pursuant to the exercise of any rights or remedies under the Loan Documents (including as a result of any foreclosure or transfer in lieu of foreclosure on any collateral or security for the Loan), Lender may apply any such payment to Obligations that are not Guaranteed Obligations until all Obligations that are not Guaranteed Obligations are paid in full, unless at the time of any such payment by Guarantor from Guarantor’s own funds (and not from the Property or any collateral or security for the Loan) Guarantor advises Lender that such payment is being made on account of the Guaranteed Obligations.

2.    No Waiver . Nothing contained in this Guaranty shall (i) prevent Lender from exercising any rights or remedies against (a) any Person (including Borrower) who may be liable for the Obligations or the Guaranteed Obligations or (b) any property or collateral encumbered by any of the Loan Documents or from joining each or any Guarantor in any action whereby Lender seeks to preserve any potential liability of such Guarantor under this Guaranty (such as preserving a deficiency judgment after foreclosing on the Property or otherwise pursuing any other collateral), or to pursue Lender’s rights with respect to the Property or any other collateral for the Loan, (ii) be deemed to be a release or impairment of the Obligations or the Guaranteed Obligations or any security interest in favor of Lender encumbering the Property or any other collateral for the Loan, or (iii) affect Lender’s rights under or pursuant to any other guaranty or indemnity. To the extent Guarantors are liable for the Guaranteed Obligations, each Guarantor shall be jointly and severally liable for the Guaranteed Obligations with Borrower and any other Person who may be liable.

3.    No Limitation . Nothing contained in this Guaranty shall limit any Guarantor’s liability arising under or pursuant to any other Loan Document, including the Environmental and Hazardous Substance Indemnification Agreement. The Guaranteed Obligations shall be in addition to and shall not limit or in any way affect the obligations of any Guarantor under any other existing or future guaranties unless said other guaranties are expressly modified or revoked in a writing signed by Lender. This Guaranty is independent of the Obligations of Borrower and/or any other Person under the other Loan Documents. Lender may bring a separate action to enforce the provisions hereof against each or any Guarantor without taking action against Borrower or any other Person or joining Borrower or any other Person as a party to such action.

4.    Consideration . Each Guarantor acknowledges that Lender would not have entered into the transactions contemplated by the Loan Documents without the execution and delivery of this Guaranty by such Guarantor and the execution and delivery of this Guaranty are material inducements to Lender to make the Loan and enter into the Loan Agreement. Each Guarantor further acknowledges that such Guarantor is directly or indirectly, the owner of an ownership interest in Borrower, and accordingly, such Guarantor will receive a direct and material benefit from Lender entering into the Loan Documents and making the Loan to Borrower. Accordingly, each Guarantor hereby acknowledges and agrees that the consideration received by such Guarantor for the execution and delivery of this Guaranty is actual and adequate. Each Guarantor further acknowledges and agrees that such Guarantor has had the benefit of legal counsel in connection with the execution and delivery of this Guaranty and such Guarantor has not executed and delivered this Guaranty under any fraud, duress, undue influence or coercion of any kind. Each Guarantor hereby acknowledges that: (a) the obligations undertaken by such Guarantor in this Guaranty are complex in nature, and (b) numerous possible defenses to the enforceability of the Guaranteed Obligations may presently exist and/or may arise hereafter, and (c) as part of Lender’s consideration for entering into this transaction, Lender has specifically bargained for the waiver and relinquishment by such Guarantor of all such defenses. Given all of the above, each Guarantor does hereby represent and confirm to Lender that such Guarantor is fully informed regarding, and that such Guarantor does thoroughly understand: (i) the nature of all such possible defenses, and (ii) the circumstances under which such defenses may arise, and (iii) the benefits which such defenses might confer upon such Guarantor, and (iv) the legal consequences to such Guarantor of waiving such defenses. Each Guarantor acknowledges that such Guarantor makes this Guaranty with the intent that this Guaranty and all of the informed waivers herein shall each and all be fully enforceable by Lender, and that Lender is induced to enter into this transaction in material reliance upon the presumed full enforceability thereof.

5.    Guaranty . Notwithstanding anything to the contrary contained herein, the maximum liability of each Guarantor hereunder shall not exceed the amount which is one dollar less than the amount which would otherwise make this Guaranty unenforceable pursuant to any fraudulent conveyance, bankruptcy, insolvency or similar law.

6.    Guaranty Absolute . This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by any Guarantor and shall continue to be effective with respect to any Guaranteed Obligations (as applicable) arising or created after any attempted revocation by such Guarantor and, if such Guarantor is a natural person, after such Guarantor’s death (in which event this Guaranty shall be binding upon such Guarantor’s estate and such Guarantor’s legal representatives and heirs). The fact that at any time or from time to time the Obligations or the Guaranteed Obligations may be increased or reduced pursuant to the Loan Documents, amendments to the Loan Documents or otherwise shall not release or discharge the obligation of any Guarantor to Lender with respect to the Guaranteed Obligations. This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the assignment or negotiation of all or part of such Note. The liability of each Guarantor hereunder shall be absolute, unconditional and irrespective of:

(a)    lack of validity, genuineness or enforceability of the Note or any other Loan Document between Lender and Borrower or other Person relating thereto;

(b)    change in the time, manner, place of payment of the indebtedness under, or in any other term of, or any other amendment or waiver of, or any consent to, or departure from, any Loan Document or other agreement between Borrower or any other Person and Lender, including the Note;

(c)    insolvency of, or voluntary or involuntary bankruptcy, assignment for the benefit of creditors, reorganization or other similar proceedings affecting Borrower or any other Person or any of their respective assets;

(d)    other circumstance, other than satisfaction of the Obligations by payment in full, which might otherwise constitute a defense available to, or a discharge of, Borrower or any other Person in respect of the Obligations or the Guaranteed Obligations;

(e)    at any time or from time to time, without notice to any Guarantor, the time for any performance of or compliance with any of the Obligations or the Guaranteed Obligations shall be extended or modified, or such performance or compliance shall be waived;

(f)    any of the acts mentioned in any of the provisions of the Note or any other Loan Documents shall be done or omitted;

(g)    the exercise of any of Lender’s rights or remedies under the Loan Documents;

(h)    the maturity of any of the Obligations or the Guaranteed Obligations shall be accelerated, or any of the Obligations or the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under the Note or any other Loan Documents shall be waived or any other guarantee of any of the Obligations or the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or

(i)    any Lien or security interest granted to, or in favor of, the Lender as security for any of the Obligations or the Guaranteed Obligations shall fail to be perfected.

No payment made by any Guarantor, any other guarantor or any other Person, or received or collected by Lender from any Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or set off or application at any time in reduction of or in payment of the Obligations or the Guaranteed Obligations shall be deemed to modify, release or otherwise affect the liability of any Guarantor under this Guaranty for the balance of the Guaranteed Obligations. Notwithstanding any such payments received or collected by Lender in connection with the Obligations or the Guaranteed Obligations, each Guarantor shall, subject to the limitations herein contained, remain liable for the balance of the Guaranteed Obligations until all the Guaranteed Obligations are paid in full. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations or the Guaranteed Obligations is rescinded or must otherwise be returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower or any other Person otherwise, all as though such payment had not been made.

Lender shall not be required to inquire into the powers of any Borrower Party or any respective member, partner, shareholder, manager, officer, director or any other agent acting or purporting to act on behalf of any Borrower Party, or any other signatory to any of the Loan Documents, and monies, advances, renewals or credits described in this Guaranty in fact borrowed or obtained from Lender in professed exercise of such powers shall be deemed to form part of the debts and liabilities hereby guaranteed, notwithstanding that such borrowing or obtaining of monies, advances, renewals, or credits shall be in excess of the powers of any Borrower Party or any respective partner, member, manager, officer, director or other agent of any Borrower Party aforesaid, or be in any way irregular, defective or informal.

7.    Dealing with the Borrower and Others.

(a)    The Obligations and the Guaranteed Obligations shall not be released, discharged, limited or in any way affected by anything done, suffered or permitted by Lender in connection with any monies or credit advanced by Lender to Borrower or on behalf of Borrower pursuant to the Loan Documents or any security therefor, including any loss of or in respect of any security received by Lender from Borrower or any other Person. It is agreed that Lender, without releasing, discharging, limiting or otherwise affecting in whole or in part the Obligations or the Guaranteed Obligations and each Guarantor’s liabilities under this Guaranty may, without limiting the generality of the foregoing:

(i)    Grant time, renewals, extensions, indulgences, releases, waivers, modifications and discharges to Borrower or any other Person guaranteeing payment of or otherwise liable with respect to the Obligations or the Guaranteed Obligations (each such party, an “ Obligor ”).

(ii)    Take or abstain from taking security or collateral from Borrower or any Obligor or from perfecting security or collateral of Borrower or any Obligor.

(iii)    Take, or delay in taking or refusing to take, any and all action with respect to the Note and the other Loan Documents (regardless of whether same might vary the risk or alter the rights, remedies or recourses of Guarantors), including specifically (but without limitation) the settlement or compromise of any amount allegedly due thereunder, all without notice or consideration to or the consent of any Guarantor.

(iv)    Apply all monies at any time received from Borrower or any Obligor upon such part of the Obligations or the Guaranteed Obligations as Lender may see fit (subject to the requirements of the Loan Documents).

(v)    Otherwise deal with Borrower or any Obligor as Lender may see fit.

(vi)    Declare all sums owing to Lender under the Note and the other Loan Documents due and payable upon the occurrence of an Event Default under the Loan Documents or decline to do so.

(vii)    Otherwise modify the terms of any of the Loan Documents.

(viii)    Release, substitute or add any one or more endorsers of the Note or guarantors of Borrower’s obligations under the Note or the other Loan Documents.

(b)    Lender shall not be bound or obliged to exhaust recourse against Borrower or any other Obligor or any security, guaranty, indemnity, mortgage or collateral Lender may hold or take any other action (other than to make demand pursuant to Section 13 of this Guaranty) before being entitled to payment from Guarantors hereunder. It is the intent of Guarantors and Lender that the Guaranteed Obligations are primary, absolute and unconditional under any and all circumstances and that, until all of Borrower’s obligations under the Loan Documents are fully and finally satisfied, such obligations shall not be discharged or released, in whole or in part, by any act or occurrence which might be deemed a legal or equitable discharge or release of any Guarantor.

8.    Subrogation . No Guarantor shall exercise any right of subrogation with respect to Borrower or any Obligor with respect to payments made to Lender hereunder or otherwise until such time as all Guaranteed Obligations shall have been irrevocably paid in full. In the case of the liquidation, winding-up or bankruptcy of Borrower or any Obligor (whether voluntary or involuntary) or in the event that Borrower or any Obligor shall make an arrangement or composition with its creditors, Lender shall have the right to rank first for its full claim and to receive all payments in respect thereof until its claim has been paid in full and each Guarantor shall, subject to the limitations herein contained, continue to be liable to Lender for any balance of the Guaranteed Obligations. To the extent permitted by law, each Guarantor irrevocably releases and waives any subrogation rights or right of contribution or indemnity (whether arising by operation of law, contract or otherwise) which such Guarantor may have against the Property or any part thereof, any collateral pledged as security for the Loan, Borrower or any Obligor or any Person constituting such Borrower or any Obligor if and to the extent any such right or rights would give rise to a claim under the Bankruptcy Code that payments to Lender with respect to the Obligations constitute a preference in favor of such Guarantor or a claim under the Bankruptcy Code that any such preference is recoverable from Lender. If any Guarantor becomes subrogated by payment or otherwise to any of the rights of Lender pursuant to any of the Loan Documents or applicable law, the rights of Lender to which such Guarantor shall be subrogated shall be accepted by such Guarantor “as is” and without any representation or warranty of any kind by Lender, express or implied, with respect to the legality, value, validity or enforceability of any of such rights, or the existence, availability, value, merchantability or fitness for any particular purpose of any collateral and shall be without recourse to Lender. Unless and until all of the Debt is irrevocably paid in full and all Obligations under the Loan are irrevocably paid and performed in full, each Guarantor further unconditionally and irrevocably waives any right to enforce any remedy which Lender now has or may hereafter have against Borrower or any Obligor, and further waives any benefit of, and any right to participate in, any security now or hereafter held by Lender, and waives any defense based upon an election of remedies by Lender which destroys or otherwise impairs any subrogation rights of such Guarantor or the right of such Guarantor to proceed against Borrower or any Obligor for reimbursement, or both.

9.    Representations and Warranties . Each Guarantor hereby represents and warrants to Lender that:

(a)    Such Guarantor is not insolvent (as such term is defined or determined for purposes of the Bankruptcy Code or any other applicable law), and the execution and delivery of this Guaranty will not make such Guarantor insolvent (as such term is defined or determined for purposes of the Bankruptcy Code or any other applicable law).

(b)    Such Guarantor has all requisite power and authority to carry on its business, to hold title to and own the property it owns, to execute, deliver and perform this Guaranty and each of the other Loan Documents to which it is a party, and to consummate the transactions contemplated hereby and thereby.

(c)    The execution and delivery of this Guaranty and the other Loan Documents to which it is a party and the performance by such Guarantor of the Guaranteed Obligations and any other obligations hereunder or thereunder do not and will not (i) contravene, violate or conflict with in any material respect, or result in a breach of or default under, any contractual obligation of such Guarantor or to which such Guarantor or such Guarantor’s assets is or are subject, or (ii) violate in any material respect any provision of any Legal Requirement, or (iii) result in or require the creation or imposition of any Lien in favor of any Person other than Lender on any of the properties or revenues of such Guarantor pursuant to any Legal Requirement or material contractual obligation of such Guarantor.

(d)    No consent, approval, or authorization of, or registration, declaration, or filing with, any Governmental Authority or any other Person is required and has not been obtained in writing by such Guarantor, in connection with the execution, delivery, and performance by such Guarantor of each of the Loan Documents to which it is a party or any of the transactions contemplated by such Loan Documents.

(e)    This Guaranty, and each of the other Loan Documents to which such Guarantor is a party, has been duly authorized, executed and delivered by it, and this Guaranty, and each te