Common use of PAYMENT OF THE CONVERSION PRICE Clause in Contracts

PAYMENT OF THE CONVERSION PRICE. (a) At Closing, the Reserve Amount shall be delivered to the escrow offices of the Title Company (the "DISBURSING AGENT"), in accordance with the Escrow Agreement. (b) At Closing, the Conversion Price payable to the Partnership as sole member of the Company shall be paid by the issuance of OP Units. The number of OP Units to be issued to the Partnership shall be the Conversion Price divided by the "MARKET VALUE" of an OP Unit. The Market Value of an OP Unit shall be equal to the average closing price of a share of common stock of HME, as listed on the New York Stock Exchange, for twenty (20) consecutive trading days prior to, but not including, the day before the Closing Date; however, if the twenty (20) day average value of an OP Unit is less than Twenty-Six and 00/100 Dollars ($26.00), then the Market Value of an OP Unit shall be deemed to be Twenty-Six and 00/100 Dollars ($26.00), and if the twenty (20) day average value of an OP Unit is greater than Twenty-Eight and 00/100 Dollars ($28.00), then the Market Value of an OP Unit shall be deemed to be Twenty-Eight and 00/100 Dollars ($28.00). (c) Subject to the terms of a Lock-Up Agreement, in the form of EXHIBIT F attached hereto, to be dated the Closing Date, and to the terms of the Operating Partnership Agreement, the OP Units will be convertible into HME Common Shares, on a one-to-one basis, after the elapse of one (1) year from and after the Closing (the "LOCK-UP PERIOD"), during which the Partnership will be restricted from converting, or transferring, any of the OP Units, provided, however, that (i) during the Lock-Up Period the Partnership may transfer OP Units to Accredited Investors (as defined in Regulation D) who are permitted transferees under Section 6.05(c) of the Operating Partnership Agreement and (ii) this restriction shall not be applicable to estates of deceased owners of OP Units. (d) From and after the expiration of the Lock-Up Period, the Partnership shall have all of the transfer, exchange and conversion rights with regard to the OP Units as are set forth in the Operating Partnership Agreement, and the Partnership shall, within the four (4) year period following the expiration of the Lock-Up Period, distribute the OP Units to the partners of the Partnership in proportion to their respective interests. (e) Upon the terms and conditions of a Registration Rights Agreement, in the form of EXHIBIT D attached hereto, to be dated the Closing Date, the Partnership shall have registration rights and a listing commitment with regard to the shares of HME Common Shares into which the OP Units can be converted (the "REGISTRATION RIGHTS"), including demand and piggy back rights. The exercise of Registration Rights shall be without cost to the Partnership. In addition, within ten (10) months after the Closing, HME agrees to file and keep current at its sole cost and expense, a registration statement (the "REGISTRATION STATEMENT") with the SEC registering the resale of the HME Common Shares into which the OP Units may be converted and to use reasonable commercial efforts to have the registration promptly declared effective by the Securities and Exchange Commission ("SEC"). Notwithstanding anything to the contrary contained in this Agreement, in the event that HME has not filed the Registration Statement with the SEC by the date (the "OUTSIDE FILING DATE") which is eleven (11) months after the Closing Date, then for and with respect to each day during the period between the Outside Filing Date and the date on which the Registration Statement is filed with the SEC, Home Properties shall pay to the Partnership, as liquidated damages and not as a penalty, the sum of One Thousand and 00/100 Dollars ($1,000.00).