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”).
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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