EXHIBIT 10.16
 
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”).
 

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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.
 
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(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]

 
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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

    

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

 

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