Exhibit 2.1
AMENDMENT NO. ONE
TO
AGREEMENT
WHEREAS, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(the "Contributing Partners") entered into an agreement, dated
April 8, 1997, (the "Agreement') with Home Properties of New
York, L.P. ("Home Properties') and Home Properties of New York,
Inc. ("REIT") whereby the Contributing Partners, subject to the
terms and conditions of the Agreement, agreed to transfer their
interests in Royal Gardens I to Home Properties; and
WHEREAS, the parties hereto wish to amend certain of the terms of
the Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Any capitalized terms used herein and not defined shall have
the meaning given them in the Agreement.
2. Paragraph 2 of the Agreement shall be amended in its
entirety to read as follows:
"2. Consideration for Contribution. In consideration
of the contribution by Contributing Partners to Home
Properties of the RGI Interests, Home Properties agrees
to transfer to Contributing Partners Units having, in
the aggregate, a Market Value (as hereinafter defined)
as of the Closing Date (hereinafter defined) equal to
$8,721,818 less the principal balance of the mortgage
(the "First Union Mortgage") encumbering the RGI Real
Property on the Closing Date (the "Net Real Property
Value"). Notwithstanding the above, each of the
Contributing Partners may elect, upon written notice to
Home Properties given by the electing Contributing
Partner on or before the end of the Due Diligence
Period (hereinafter defined), to receive cash up to his
or her percentage interest in RGI multiplied by the Net
Real Property Value.
Contributing Partners represent that: (i) attached
hereto as Exhibit B are true and complete copies of the
First Union Mortgage and the promissory note secured
thereby; and (ii) the First Union Mortgage is in good
standing at this time and will not be in default on the
Closing Date.
For the purpose of determining the number of Units to
be issued to Contributing Partners, the "Market Value"
of a Unit shall be equal to $21.50 per Unit."
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The initial distribution payable with respect to the Units shall
be made on the date on which the REIT pays the dividend to the
holders of its common stock that relates to the earnings for the
calendar quarter in which the Units were issued and shall be pro-
rated such that the Contributing Partners receiving Units shall
receive a pro-rata distribution for the period from the date on
which the Units were issued to and including the last day of the
calendar quarter in which the Units were issued.
At the election of any Contributing Partner, to be given by
Contributing Partners to Home Properties on or before the end of
the Due Diligence Period, Home Properties shall execute such
documents and take such actions as are reasonably required by
such Contributing Partner, all such actions to be at no cost or
expense to Home Properties, as shall permit such Contributing
Partner to recast the transaction contemplated under this
agreement as a tax free exchange under Section 1031 of the
Internal Revenue Code of an interest in the RGI Real Property in
whole or in part."
3. The following sentence shall be added at the end of
Paragraph 24 of the Agreement: "For purposes of determining the
number of Units to be placed in escrow, the "Market Value" of a
Unit shall be $21.50."
4. Subparagraph (h) of Paragraph 25, clause (i) which begins on
page 27, and carries over to page 28 is hereby deleted and the
following is substituted therefor:
"(i) their aggregate built-in gain determined in accordance
with the principles set forth in Section 704(c) of the
Internal Revenue Code of 1986 ("Code") is $8,004,190
assuming the RGI Real Property has a fair market value of
$8,721,818 as of the date of the contribution(s) to Home
Properties;"
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment this 28th day of May, 1997.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________________
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HOME PROPERTIES OF NEW YORK, L.P.
By: Home Properties of New York, Inc.
General Partner
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: _______________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
HOME PROPERTIES OF NEW YORK, INC.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: ________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
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AGREEMENT
THIS AGREEMENT, made this 8th day of April, 1997, by
and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, all having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (collectively, the "Contributing Partners"), and
HOME PROPERTIES OF NEW YORK, L.P., a New York limited
partnership, having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Home Properties") and HOME PROPERTIES OF NEW
YORK, INC., a Maryland real estate investment trust, having an
office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("REIT").
W I T N E S S E T H:
WHEREAS, Contributing Partners are the owners of all of
the partnership interests (the "RGI Interests") in Royal Gardens
I, a New Jersey general partnership ("RGI"), each Contributing
Partner owning a one-third RGI Interest; and
WHEREAS, RGI is the fee owner of a certain residential
apartment complex, located in the Town of Piscataway, New Jersey,
consisting of 246 apartment units known as a portion of Royal
Gardens Apartments, as more particularly described on Exhibit A
attached hereto (the "RGI Real Property"); and
WHEREAS, Contributing Partners each desire to
contribute to Home Properties all of their RGI Interests, and to
each receive from Home Properties limited partnership units in
Home Properties (the "Units"); and
WHEREAS, Home Properties desires to receive the RGI
Interests, and to issue to Contributing Partners Units evidencing
ownership by Contributing Partners of limited partnership
interests in Home Properties;
Page 1
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual
covenants hereinafter contained, the parties hereto agree as
follows:
1. Contribution of Interests. Contributing Partners
each agree to contribute to Home Properties all of the right,
title and interest of Contributing Partners in RGI, which
Contributing Partners represent and warrant are all of the
outstanding partnership interests in RGI.
2. Consideration for Contribution. In consideration
of the contribution by Contributing Partners to Home Properties
of the RGI Interests, Home Properties agrees to transfer to
Contributing Partners Units (the "Closing Units") having, in the
aggregate, a Market Value (as hereinafter defined) as of the
Closing Date (hereinafter defined) equal to $9,169,090, less the
principal balance of the mortgage (the "First Union Mortgage")
encumbering the RGI Real Property on the Closing Date (the "Net
Real Property Value"). Notwithstanding the above, each of the
Contributing Partners may elect, upon written notice to Home
Properties given by the electing Contributing Partner on or
before the end of the Due Diligence Period (hereinafter defined),
to receive cash up to his or her percentage interest in RGI
multiplied by the Net Real Property Value.
Contributing Partners represent that (i) attached
hereto as Exhibit B are true and complete copies of the First
Union Mortgage and the promissory note secured thereby, and
(ii) the First Union Mortgage is in good standing at this time
and will not be in default on the Closing Date.
For the purpose of determining the number of Units to
be issued to Contributing Partners, the "Market Value" of a Unit
shall be equal to the average closing price for the five (5)
consecutive trading days prior to (i) the Closing Date or (ii)
other dates on which the Market
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Value is to be determined, of a share of the common stock of Home
Properties of New York, Inc. (the "REIT"), as listed on the New
York Stock Exchange. In the event that the number of Units to be
transferred to Contributing Partners at Closing as determined
above multiplied by the then annual per share dividend of the
REIT shares on the Closing Date and then divided by the Net Real
Property Value is less than .08, Contributing Partners shall be
entitled to additional Units ("Additional Units") from Home
Properties at Closing, determined as follows: (i) the Net Real
Property Value shall be multiplied by .08; (ii) the number of the
Units determined above shall be multiplied by the annual REIT per
share dividend rate on the Closing Date; (iii) the difference
between the products in (i) and (ii) shall be divided by the
Market Value of a Unit on the Closing Date; and (iv) the quotient
thus obtained shall be multiplied by three (3), and the product
thus obtained shall be the Additional Units to be transferred to
Contributing Partners on the Closing Date.
In the event that on the date which is the third
anniversary of the Closing Date, the number of Closing Units
transferred to Contributing Partners at Closing multiplied by the
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annual per share dividend rate of the REIT shares on such
anniversary date and then divided by the Net Real Property Value
is less than .08, Contributing Partners shall be entitled to
additional Units from Home Properties, determined as follows:
(i) the Net Real Property Value shall be multiplied by .08; (ii)
the number of Closing Units received at Closing shall be
multiplied by the then annual REIT per share dividend rate; (iii)
the difference between the products in (i) and (ii) shall be
divided by the then Market Value of a Unit, and the product thus
obtained shall be the Additional Units to be transferred to
Contributing Partners on such anniversary date.
In the event that on the date which is the fourth
anniversary of the Closing Date, the number of Closing Units
transferred to Contributing Partners at Closing multiplied by the
annual per share dividend rate of the REIT shares on such
anniversary date and then divided by the Net Real Property Value
is less than .08, Contributing Partners shall be entitled to
additional Units from Home Properties, determined as follows:
(i) the Net Real Property Value shall be multiplied by .08; (ii)
the number of Closing Units shall be multiplied by the then
annual REIT per share dividend rate; and (iii) the difference
between the products in (i) and (ii) shall be divided by the then
Market Value of a Unit, and the product thus obtained shall be
the Additional Units to be transferred to Contributing Partners
on such anniversary date.
The Additional Units received by Contributing Partners
shall not be included within the definition of Closing Units.
Appropriate adjustments shall be made to the above
calculations if any event occurs with respect to the REIT common
stock as described in Section 1.18 of the Limited Partnership
Agreement of Home Properties of New York, L.P., dated August 4,
1994 ("Limited Partnership Agreement").
Examples of the foregoing calculations are attached
hereto as Exhibit C.
The initial distribution payable with respect to the
Closing Units and Additional Units shall be made on the date on
which the REIT pays the dividend to the holders of its common
stock that relates to the earnings for the calendar quarter in
which the Units were issued and shall be pro-rated such that the
Contributing Partners receiving Units shall receive a pro-rata
distribution for the period from the date on which the Units were
issued to and including the last day of the calendar quarter in
which the Units were issued.
At the election of any Contributing Partner, to be
given by Contributing Partners to Home Properties on or before
the end of the Due Diligence Period, Home Properties shall
execute such documents and take such actions as are reasonably
required by such Contributing
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Partner, all such actions to be at no cost or expense to Home
Properties, as shall permit such Contributing Partner to recast
the transaction contemplated under this agreement as a tax free
exchange under Section 1031 of the Internal Revenue Code of an
interest in the RGI Real Property in whole or in part.
3. Deposit. The sum of One Hundred Thousand
($100,000.00) Dollars shall be paid by Home Properties at the
time of the execution and delivery of this Agreement, by check
accepted subject to collection, which sum shall be held in escrow
by Contributing Partners' attorneys, Lasser ▇▇▇▇▇▇▇ L.L.C. (the
"Escrowee") (such sum is hereinafter referred to as the
"Deposit"). The Deposit shall be returned to Home Properties at
the Closing (hereinafter defined). If this Agreement is
terminated by reason of Home Properties' default, the Deposit
shall be paid over to Contributing Partners. If this Agreement
is terminated for any other cause, the Deposit shall be refunded
to Home Properties.
Escrowee shall place the Deposit in an interest bearing
account. In the event this transaction is consummated, the
interest earned on the Deposit shall be the property of Home
Properties (interest earned on the Deposit shall also be included
within the term "Deposit"). If this transaction does not close,
interest earned on the Deposit shall be paid to the party
entitled to payment of the Deposit. Except in connection with
the Closing, Escrowee shall make no distribution of the Deposit
except upon three (3) days' prior written notice to the parties.
If either party shall protest such distribution, Escrowee shall
continue to hold the Deposit until the dispute is finally
resolved by the parties or by a court of competent jurisdiction.
The function of Escrowee is as an accommodation to the parties
and no liability shall attach to or against Escrowee for any
action taken by it in good faith and believed by it to be
authorized or within the rights or powers conferred upon it by
this agreement. Home Properties agrees that Escrowee
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shall be permitted to represent Contributing Partners in any
litigation concerning the Deposit or this Agreement,
notwithstanding its function as escrow agent hereunder.
4. Due Diligence Period. (a) Home Properties shall
have a period of forty-five (45) days from the date hereof (the
"Due Diligence Period"), to investigate, review and inspect any
and all matters relating to the RGI Real Property which Home
Properties shall deem appropriate. Not by way of limitation,
Home Properties, and its engineers, contractors and other
representatives may inspect the RGI Real Property and the
equipment therein, including the roofs, walls, foundations,
heating ventilation and air-conditioning systems, plumbing
systems and electrical systems thereof. Home Properties shall
also have the right to inspect the financial records of RGI
relating to the RGI Real Property, including lease and mortgage
documentation. All inspections of the RGI Real Property or the
financial records of RGI shall take place during normal business
hours, and on not less than two (2) days' advance notice thereof.
Home Properties shall permit a representative of Contributing
Partners to be present at any such inspection. In the event Home
Properties shall determine that it is not satisfied with the
physical condition of the RGI Real Property, or with the
financial results of the operation of the RGI Real Property, or
with any other matter relating to the RGI Real Property as a
result of its inspection, Home Properties shall have the right to
terminate this agreement by written notice to Contributing
Partners, setting forth the cause for such termination, given
prior to the expiration of the Due Diligence Period in which
event the Deposit shall be returned to Home Properties within
three (3) business days and neither party shall have any further
rights or liabilities hereunder thereafter. In the event that
Home Properties does not terminate this Agreement within the Due
Diligence Period as hereinabove provided, Home Properties shall
be deemed to have waived its right to terminate pursuant to this
Paragraph 4.
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(b) Contributing Partners shall provide access by Home
Properties' representatives to all financial and other
information relating to RGI as is sufficient to enable them to
prepare audited financial statements, at Home Properties'
expense, in conformity with Regulation S-X of the Securities and
Exchange Commission (the "Commission") and any registration
statement, report or disclosure statement required to be filed
with the Commission. Except as provided in a letter
substantially in the form attached hereto as Exhibit D,
Contributing Partners shall not be required to certify the
accuracy of its financial information, and the financial
statements produced by Home Properties shall not constitute
representations or warranties of Contributing Partners to Home
Properties, the Commission or to the public.
5. Title Search. Contributing Partners agree to
provide to Home Properties the most recent title insurance policy
and survey of the RGI Real Property in the possession of
Contributing Partners. Home Properties agrees to promptly obtain
at Home Properties' cost and expense a title report of the RGI
Real Property from a New Jersey licensed title insurance company
selected by Home Properties (the "Title Company") and a survey of
the RGI Real Property by a licensed New Jersey surveyor and to
furnish a copy of such title report and survey to Contributing
Partners promptly after Home Properties receives the same, but in
no event later than forty-five (45) days from the date hereof.
If Home Properties deems anything in such title report or survey
to constitute an objection to title of RGI in the RGI Real
Property, then Home Properties shall give notice thereof to
Contributing Partners, specifying such objection. If
Contributing Partners elect not to cure any such objection, or in
the event Contributing Partners are unable to cure any such
objection within sixty (60) days from Home Properties' notice
thereof, Home Properties' sole right shall be to terminate this
Agreement on written notice to Contributing Partners within five
(5) days after Contributing Partners shall notify Home
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Properties that they do not elect to cure such objection, or that
they are unable to cure same, in which event the Deposit shall be
returned to Home Properties, and no party shall have any further
rights or liabilities hereunder or against each other thereafter;
provided however, that if Home Properties shall not so terminate
this Agreement, Home Properties shall accept the RGI Interests
without reduction or abatement of the consideration set forth
above. It is distinctly understood and agreed that Contributing
Partners and/or RGI shall not be required to bring any action or
proceeding, take any steps, or otherwise incur any expense to
remove or cure such title defect or otherwise render RGI's title
to the RGI Real Property marketable. If Home Properties fails to
give Contributing Partners notice of any matter it deems to be
an objection to title by the date forty five (45) days from the
date hereof (time being of the essence with respect to such
date), such matter shall not be deemed an objection to RGI's
title to the RGI Real Property.
The following shall not be deemed to be title defects
rendering RGI's title to the RGI Real Property unmarketable:
a. Zoning ordinances and other applicable
governmental regulations and requirements, provided none of the
same prevent use of the RGI Real Property as a multiple dwelling
for residential purposes;
b. Rights of the public and adjoining owners in
highways, streets, roads and lanes bounding the Property;
c. Retaining walls and other walls, bushes, trees,
▇▇▇▇▇▇, fences and the like extending from or onto the RGI Real
Property, and any portion of the RGI Real Property lying in the
bed of any public street, provided none of same prevent or
materially restrict use of the RGI Real Property as a multiple
dwelling for residential purposes;
Page 8
d. Rights and easements relating to the construction,
operation, and maintenance of utility lines, wires, cables,
pipes, poles, distribution boxes and other such equipment in, on,
over, or under the RGI Real Property, provided none of same
prevent or materially restrict use of the RGI Real Property as a
multiple dwelling for residential purposes;
e. Liens for unpaid taxes, assessments, water charges
and sewer rents, subject to adjustment as set forth in this
Agreement;
f. Standard conditions and exceptions to title
guaranty contained in the currently effective ALTA Owner's
Standard Form Owner's Title Insurance Policy;
g. Such state of facts which a current and accurate
survey of the RGI Real Property might disclose, provided none of
same prevent or materially restrict the use of the RGI Real
Property as a multiple dwelling for residential purposes;
h. Residential Tenancies as hereinafter provided;
i. The present physical condition of the RGI Real
Property, and all improvements thereon, and any changes that may
result in such condition from reasonable wear and tear and
natural deterioration prior to Closing;
j. Easements of record, provided none of same prevent
or materially restrict use of the RGI Real Property as a multiple
dwelling for residential purposes;
k. Restrictions of record, provided none of same
prevent or materially restrict use of the RGI Real Property as a
multiple dwelling for residential purposes; and
l. Matters set forth on Exhibit E attached hereto.
6. Residential Tenancies. The title of RGI to the
RGI Real Property at Closing shall be subject to the rights of
persons who are currently residential tenants of the RGI Real
Property set forth on Exhibit F attached hereto, and persons who
shall hereafter become
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residential tenants of the RGI Real Property in accordance with
this Paragraph 6 (herein referred to as the "Residential
Tenancies"). Contributing Partners shall furnish to Home
Properties at the Closing an updated rent roll for the RGI Real
Property, which rent roll will include a schedule of security
deposits. It is distinctly understood and agreed that
Contributing Partners do not undertake or guarantee that the
Residential Tenancies existing on the date hereof will be in
force and effect at Closing, and Home Properties agrees that the
removal or vacation of tenants prior to Closing shall not give
rise to any claim on the part of Home Properties or affect this
Agreement in any manner whatsoever. Contributing Partners shall
have the right, but not the obligation, to cause RGI to institute
summary proceedings or take such other legal action as it desires
in the event of any default or failure of a tenant of the RGI
Real Property to perform under its lease prior to Closing. RGI
may not apply the security deposit of any tenant who is in
default under his lease prior to Closing if such tenant is still
in occupancy of his or her apartment unit on the Closing Date.
Contributing Partners may cause RGI to rent any
apartment now vacant or which may become vacant between the date
hereof and the Closing, or modify or renew any existing
Residential Tenancy, providing that the rent charged shall not be
less than the prior rent for such apartment and the term shall
not exceed one year.
Contributing Partners represent the following:
a. Exhibit F attached hereto accurately sets forth
with respect to each Residential Tenancy the name of the tenant,
the monthly rental payable by such tenant as of February 1, 1997,
and the security deposit held by RGI with respect to such tenant.
In the event any rent information on Exhibit F shall be
inaccurate, Contributing Partners' obligation with respect to
this representation shall be to pay to Home Properties any rents
which shall be less
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than represented to the extent of such deficiency to the end of
the lease represented, and Contributing Partners shall not be
liable for consequential damages as a result of the inaccuracy of
this representation.
b. Attached as Exhibit G is the form of lease
generally employed by RGI with respect to the Residential
Tenancies.
c. Contributing Partners shall cause RGI to continue
to operate the RGI Real Property in a commercially reasonable
manner until Closing.
d. To the best of Contributing Partners' knowledge,
there is no litigation, proceeding or investigation pending, or
threatened against or affecting RGI, the RGI Real Property or
Contributing Partners that might adversely affect this Agreement,
RGI or the RGI Real Property, or the operation thereof, except as
described on Exhibit H hereof.
7. Service Contracts. Contributing Partners
represent the following:
a. Set forth on Exhibit I is a description of all of
the service contracts with respect to the RGI Real Property (the
"Service Contracts").
b. The copies of the Service Contracts delivered to
Home Properties are true and complete copies.
Between the date hereof and Closing, Contributing
Partners may cause RGI to modify, extend or terminate any
existing Service Contract or enter into any new Service Contract
or with Home Properties' prior consent except if same is
terminable without cause and without penalty upon not more than
one (1) months' prior notice in which case not such consent shall
be required.
8. Employees. Contributing Partners represent that
the employees of RGI are as set forth on Exhibit J and the
salaries and other employee benefits paid to such employees are
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set forth on Exhibit J. The foregoing representation shall
survive Closing for a period of six (6) months.
9. Personal Property. All personal property and
supplies owned by RGI and used in the operation and maintenance
of the RGI Real Property and at Closing located at the RGI Real
Property (hereinafter referred to as the "Personal Property")
shall remain the property of RGI after the Closing and shall be
in "as is" condition as of the Closing Date. The Personal
Property of RGI includes, but is not limited to, the property
described in the list attached hereto as Exhibit K.
10. Representations Limited. Home Properties affirms
that Contributing Partners have not made nor has Home Properties
relied upon any representation, warranty or promise made by
Contributing Partners or any broker, with respect to the RGI Real
Property or its physical condition, income, expenses, operation
or use, other than as specifically set forth in this Agreement.
As hereinabove provided, Home Properties is being given an
opportunity to investigate the RGI Real Property and Personal
Property owned by RGI, the income and expenses of the RGI Real
Property, and such other matters as it deems necessary or
appropriate. HOME PROPERTIES UNDERSTANDS AND AGREES THAT IF HOME
PROPERTIES ELECTS TO PROCEED WITH THIS TRANSACTION FOLLOWING ITS
INVESTIGATIONS AS AFORESAID, THE RGI REAL PROPERTY AT CLOSING
SHALL BE IN ITS "AS IS" CONDITION ON THE DATE HEREOF, SUBJECT TO
REASONABLE USE, WEAR AND TEAR, AND NORMAL DEPRECIATION BETWEEN
THE DATE HEREOF AND THE CLOSING DATE. It is expressly understood
and agreed that Contributing Partners have no duty to disclose
any condition affecting the RGI Real Property or any equipment,
fixtures or personal property therein, whether such condition is
apparent or latent, or known or unknown
Page 12
to Contributing Partners. Home Properties agrees that any and
all financial information, leasing information or other
information of any kind with respect to the RGI Real Property
which Home Properties has received or may receive from
Contributing Partners, or any of Contributing Partners' employees
or agents, or any broker, was furnished on the express condition
that Home Properties make an independent verification of the
accuracy of any and all such information, and Contributing
Partners shall not be responsible for any errors or omissions in
such information.
11. The Closing. The consummation of the transaction
contemplated by this Agreement (the "Closing") shall take place
at the offices of Lasser ▇▇▇▇▇▇▇, L.L.C., ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, at ten o'clock in the forenoon, on or
before the date which shall be sixty (60) days following the date
hereof (the "Closing Date"). The following shall take place at
the Closing:
a. Contributing Partners shall deliver to Home
Properties an assignment (the "RGI Assignment") of their RGI
Interests free and clear of all liens and encumbrances.
b. Home Properties shall deliver to Contributing
Partners an assignment of the Units (the "HP Assignment")
determined in accordance with paragraph 2 hereof. In the event
any Contributing Partner elects to receive cash in lieu of some
or all Units, Home Properties shall pay same to such Contributing
Partner by good certified check, or official check of a banking
institution, or at the option of such Contributing Partner, by
wire transfer of immediately available federal funds to an
account designated by such Contributing Partner.
c. Contributing Partners shall execute such documents
as shall be required to designate representatives of Home
Properties as the signatories on the security deposit account
maintained by RGI.
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d. Contributing Partners shall deliver to Home
Properties the title to the truck owned by RGI.
e. Any management agreement relating to the RGI Real
Property shall be terminated at Closing.
f. The parties shall execute and deliver to each
other any other instruments required to be delivered under any
provision of this Agreement, or reasonably requested by the Title
Company or the attorney for any party in connection with this
transaction.
g. Contributing Partners shall provide Home
Properties with such information and documentation as Home
Properties may reasonably request in order to establish that each
of the Contributing Partners is an accredited investor as
required under Federal and State Securities Laws.
12. Adjustments at Closing. The following adjustments
are to be made at the Closing as of the close of business on the
date of Closing:
a. The rents of the RGI Real Property actually
collected by RGI at the date of Closing shall be apportioned
between Contributing Partners and RGI for the benefit of Home
Properties based upon the number of days of the month each of
them holds the RGI Interests. Home Properties agrees to use good
faith efforts after Closing to collect any delinquent rentals
owed to RGI for the benefit of Contributing Partners. Rents
collected after Closing shall be applied first to the current
month, then to the most recent arrearage, then to the next recent
arrearage and so forth. Any rents collected after Closing which
are applicable to arrearages which arose during Contributing
Partners' period of ownership of the RGI Interests shall be
forthwith paid by Home Properties to Contributing Partners. If
Home Properties fails to collect any rents due to be paid to
Contributing Partners within sixty (60) days following Closing,
Page 14
Contributing Partners may proceed to collect same from the
tenants in their own names or in the name of the then current
landlord of the RGI Real Property. A credit shall be given to
Home Properties for discounts or other incentives given to
current tenants, except that no adjustment shall be made at
Closing for rent concessions to tenants attributable to the month
in which the Closing occurs.
b. There shall also be adjusted and apportioned
between Contributing Partners and RGI for the benefit of Home
Properties the following: (i) real estate taxes on the basis of
the fiscal year for which assessed; (ii) water charges; (iii)
sewer rents; (iv) gas; (v) electric; (vi) fuel based on a current
written fuel company statement (at cost); (vii) unopened building
supplies (at cost); (viii) payroll and accrued vacation pay; (ix)
social security and unemployment payments; (x) any amounts
prepaid with respect to any Service Contracts retained after
Closing; and (xi) any other items customarily adjusted between
parties in closings of multifamily residential properties in
northern New Jersey. If the Closing shall occur before the
annual tax rate is fixed, the apportionment of real estate taxes
shall be upon the basis of the tax rate for the next preceding
year applied to the latest valuation of the RGI Real Property.
The parties shall further adjust the real estate taxes for the
year of Closing once the annual taxes for such year are finally
determined.
c. Assessments for public improvements, if any, shall
be paid by Contributing Partners if the improvement has been
completed on or before the date hereof, but only to the extent of
any installments due and payable prior to Closing.
d. Any adjustment error (either due to a
miscalculation or a receipt or invoice received after Closing)
shall be corrected subsequent to the Closing Date with
appropriate credits to be given based on corrected adjustments.
Page 15
13. Destruction of the RGI Real Property. In the
event that the RGI Real Property shall be destroyed or damaged by
reason of fire, storm, accident or other casualty, and the cost
of repair thereof shall exceed the sum of One Hundred Thousand
($100,000.00) Dollars in the aggregate, either party shall have
the option to terminate this Agreement on written notice to the
other party given within ten (10) business days after such
casualty, whereupon the Deposit shall be returned to Home
Properties and no party shall have any further rights or
liabilities hereunder thereafter. If neither party terminates
this Agreement, or if the cost of repair of the damage does not
exceed One Hundred Thousand and 00/100 ($100,000.00) Dollars in
the aggregate, Contributing Partners shall cause RGI to repair
such damage, or grant to RGI for the benefit of Home Properties
an appropriate reduction of the consideration paid by Home
Properties at Closing.
14. Violations; Certificate of Occupancy. Home
Properties agrees that on the Closing Date the RGI Real Property
shall be subject to all notes or notices of violation of law or
municipal ordinances, orders or requirements now or prior to
Closing issued by any governmental agency or authority.
Contributing Partners and/or RGI shall not be required to repair
or otherwise comply with any violations affecting the RGI Real
Property, whether now existing or hereafter occurring.
Contributing Partners represent that they have not received any
notes or notices of any such violations.
In the event that a certificate of occupancy or other
like governmental permit is required to transfer the RGI
Interests, Home Properties agrees to apply for same and to pay
any application fee required for same. If any governmental
agency requires the correction of physical conditions of the RGI
Real Property as a condition to issuance of such certificate,
Home Properties shall make such correction and pay the costs of
same.
Page 16
15. Condemnation. In the event that the entire RGI
Real Property or a substantial part thereof shall have been taken
by eminent domain, or shall be in the process of being so taken,
on the Closing Date, either party shall have the option to
terminate this agreement on written notice to the other party,
whereupon the Escrowee shall return the Deposit to Home
Properties and no party shall have any further rights or
liabilities hereunder or against the other party. In the event
any such taking shall not include a substantial part of the RGI
Real Property or in the event that neither party shall terminate
this Agreement in accordance with this Paragraph 15, Home
Properties shall accept the RGI Real Property in the condition in
which it is left following such taking, with an abatement of the
consideration measured by the proceeds of any condemnation award
collected by Contributing Partners. In the event the award has
not been collected by Contributing Partners at the time of
Closing, Contributing Partners shall assign to Home Properties at
Closing all rights of Contributing Partners and RGI in the
collection of such award and Home Properties shall accept the RGI
Real Property without abatement of the consideration.
16. Environmental Laws. Contributing Partners
represent and warrant that RGI has not received notice of any
violation or claimed violation of any law, rule or regulation
relating to hazardous substances with respect to the RGI Real
Property. For the purpose of this Agreement, "hazardous
substances" means, without limitation, any radioactive material,
polychlorinated biphenyl, petroleum or petroleum product,
methane, hazardous materials, hazardous wastes, hazardous or
toxic substances, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. section 9601 et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Appendix Sections 1801,
et seq.), the Resource Conservation and Recovery Act, as amended
(42
Page 17
U.S.C. Sections 6901, et seq.) and the Toxic Substances Control
Act, as amended (15 U.S.C. Sections 2601, et seq.), or any other
state or federal environmental laws and regulations promulgated
thereunder. Contributing Partners shall contemporaneously with
the execution of this Agreement cause RGI to deliver to Home
Properties documentation regarding the removal of oil tanks from
the RGI Property.
17. No Brokerage. Contributing Partners represent to
Home Properties and Home Properties represents to Contributing
Partners that it did not deal with any real estate broker in
connection with this transaction. This representation shall
survive Closing. Contributing Partners and Home Properties agree
to indemnify the other and hold the other harmless from and
against all damages and expenses that the indemnified party may
incur as a result of any claim of any broker who dealt with the
indemnifying party.
18. Home Properties' Default. If Home Properties
shall default in the payment of the balance of purchase price or
shall otherwise default in the performance of any of the other
terms and provisions of this Agreement on the part of Home
Properties to be performed, Contributing Partners shall retain as
liquidated damages the Deposit paid by Home Properties hereunder
and neither party shall have any further liability hereunder to
each other thereafter.
19. Liability of Contributing Partners. The liability
of Contributing Partners hereunder in the event of default in the
performance of any of the terms and provisions of this Agreement
on the part of Contributing Partners to be performed is hereby
limited to the return of the Deposit to Home Properties. The
foregoing shall not limit Home Properties' right to obtain
specific performance of Contributing Partners' obligation to
contribute the RGI Interests pursuant to this Agreement.
Page 18
20. Notices. All notices, requests, consents,
approvals or other communications under this Agreement shall be
in writing and delivered personally or mailed by certified mail,
return receipt requested, postage prepaid, or delivered by
overnight commercial courier (e.g., Federal Express, United
Parcel Service), addressed
a. If to Seller, at:
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Lasser ▇▇▇▇▇▇▇, L.L.C.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
b. If to Purchaser, at:
Home Properties of New York, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Home Properties, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Any party may, by notice given as aforesaid, change its address
for all subsequent notices. All notices hereunder shall be
effective upon receipt of same.
21. Merger. Except as otherwise provided herein, the
acceptance of an assignment of the RGI Interests by Home
Properties shall be deemed to be a full performance by
Contributing Partners of, and shall discharge Contributing
Partners from, all obligations
Page 19
hereunder; and Contributing Partners shall have no liability
hereunder thereafter to Home Properties. In the event that it
shall appear prior to Closing that any representation of
Contributing Partners shall be materially inaccurate or untrue,
the sole right of Home Properties shall be either to waive such
representation and close or terminate this Agreement. In the
event of such termination, the Deposit shall be returned to Home
Properties, and neither party shall have any further rights or
liabilities hereunder. The representations of Contributing
Partners herein shall survive Closing for a period of six (6)
months only.
22. Further Assurances. Each of the parties hereby
agrees to execute, acknowledge, and deliver such other documents
or instruments as the other may reasonably require from time to
time to carry out the purposes of this Agreement.
23. Miscellaneous Provisions. The parties further
agree as follows:
a. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
b. This Agreement contains the entire agreement
between the parties, and may not be modified or changed except by
an agreement in writing executed by the parties hereto.
c. The captions herein are for convenience and
reference only and in no way define, limit or describe the scope
or intent of this Agreement or affect any of the terms or
provisions hereof.
d. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
e. Home Properties agrees that it will not register,
record or file this Agreement or any memorandum thereof.
Page 20
f. This Agreement shall be governed by the laws of
the State of New Jersey.
g. This Agreement shall not be construed for or
against any party by reason of the fact that Contributing
Partners' attorney drafted this Agreement.
24. Pre-Contribution Partnership Liabilities and
Assets. Home Properties agrees to assume only those liabilities
of RGI and the RGI Real Property as are specifically described
herein; provided however, Home Properties specifically does not
assume any liabilities relating to litigation pending or
threatened against RGI or its assets, as of the date hereof or
the Closing. The transaction is being structured as the
contribution of the RGI Interests to Home Properties which will
then own all of the partnership interests in RGI. Home
Properties will therefore have no entity to look to with respect
to any liabilities of RGI that Home Properties has not agreed to
assume or with respect to the breach of any of Contributing
Partners' representations or warranties contained in this
Agreement. To secure those obligations, each of the Contributing
Partners shall place in escrow Units having a Market Value of
$75,000.00 for a period of one hundred twenty (120) days
following the Closing substantially on the terms of the Escrow
Agreement executed and delivered at the Closing.
Home Properties acknowledges and agrees that the assets
of RGI will consist solely of the RGI Real Property, the Personal
Property, security deposits of tenants and Residential Tenancies
on the Closing Date and any other asset of RGI shall be
distributed to the Contributing Partners prior to the
contribution of the RGI Interest to Home Properties.
If the assets and liabilities of RGI are not as
provided herein on the Closing Date, appropriate post-closing
adjustments shall be made by the parties.
25. Tax Matters and Other Agreements. (a) Home
Properties represents that: (i) it is duly formed and in good
standing as a limited partnership of the State of New York, and
Page 21
is or will be at the date of Closing authorized to do business in
the State of New Jersey; (ii) the REIT is the general partner of
Home Properties; (iii) the Limited Partnership Agreement,
delivered to Contributing Partners, is a true and complete copy
thereof, and there have been no amendments thereto, except
numbers one through ten, true copies of which have been delivered
to the Contributing Partners; (iv) the execution, delivery and
performance of all obligations of Home Properties under this
Agreement and all writings related hereto have been duly
authorized by Home Properties and will not conflict with the
Limited Partnership Agreement, as amended, or the certificate of
limited partnership of Home Properties or with any provision of
any agreement to which Home Properties or the REIT is a party or
by which either is bound; (v) no consent or approval of or
notification to any person (including, without limitation, the
limited partners of Home Properties) or governmental authority is
required in connection with the execution, delivery and
performance by Home Properties of this Agreement or any writing
relating hereto or the consummation of the transaction
contemplated hereby or thereby; (vi) this Agreement and all
writings related hereto have been duly executed and delivered by
Home Properties and each constitutes a valid and binding
obligation of Home Properties enforceable against Home Properties
in accordance with their respective terms, except (A) that such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors rights, and (B) that the remedy
of specific performance and injunction and other forms of
injunctive relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may
be brought; (vii) all reports of the REIT required to be filed
pursuant to the Securities Exchange Act of 1934 ("Securities
Act") have been filed and are true and correct in all material
respects and contain no material omission; and (viii) there is no
action, proceeding or investigation
Page 22
pending, or to the best knowledge of Home Properties, threatened
against Home Properties or the REIT before any court or
administrative agency, that might result, either individually or
in the aggregate in any material adverse change in the business,
prospects, condition, affairs, operations, properties or assets
of Home Properties or the REIT or any material liability on the
part of Home Properties or the REIT.
(b) Home Properties represents that the Units to be
issued to Contributing Partners hereunder have been duly
authorized for issuance to Contributing Partners, and upon such
issuance, will be validly issued, fully paid and non-assessable,
free and clear of all liens, encumbrances, restrictions and
claims of every kind.
(c) At any time and from time to time after the
Closing, Home Properties agrees to exchange each Unit at the
request of a Contributing Partner for cash equal to the Market
Value (as defined in the Limited Partnership Agreement) of one
share of common stock of the REIT at the time of such exchange,
provided that Home Properties may elect to exchange any such Unit
presented to Home Properties for one share of common stock of the
REIT. Upon exchange of Units for common stock of the REIT, the
shares of common stock of the REIT issued to a Contributing
Partner shall be validly issued, fully paid and non-assessable,
free and clear of all liens, encumbrances, restrictions and
claims of every kind and the Contributing Partner so exchanging
for REIT common stock shall be deemed, for all purposes, to be a
holder of such common stock on the date sixty (60) business days
following written notice to Home Properties of the Contributing
Partner's desire to exchange for such common stock. Sufficient
shares of common stock of the REIT shall be reserved by
appropriate corporate action in connection with the conversion of
Units into shares hereunder. The issuance of the shares to
Contributing Partners shall not be subject to pre-emptive rights,
rights of first refusal or other
Page 23
preferential contractual rights of the REIT or any stockholder of
the REIT or any other person and will not conflict with any
provision of any agreement to which the REIT is a party or by
which it is bound or the articles of incorporation or bylaws of
the REIT. In the event Home Properties elects to give REIT
common stock in exchange, such stock shall be subject to demand
registration rights as provided in the agreement attached hereto
as Exhibit L.
(d) Home Properties agrees that it shall make cash
distributions to the Contributing Partners for each Unit equal to
the dividend paid by the REIT to its stockholders for each share
of common stock of the REIT (subject to adjustment as provided
below). Such payment shall be made contemporaneously with the
payment of the dividend by the REIT to its stockholders.
(e) (i) If any event any event occurs with respect to
the REIT common stock, as described in Section 1.18 of the
Limited Partnership Agreement, the number of shares of REIT
common stock to be taken into account in determining cash
distributions as provided in subsection (d) above shall be
appropriately adjusted.
(ii) Home Properties represents that as of the
date hereof and the Closing, the Conversion Factor (as defined in
the Limited Partnership Agreement) is and shall be 1.0.
(iii) Upon the occurrence of each adjustment
or readjustment pursuant to this subsection, the REIT at its
expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each Contributing
Partner a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The REIT shall, upon the
written request, at any time, of any Contributing Partner,
furnish or cause to be furnished to such Contributing
Page 24
Partner, a like certificate setting forth; (i) such adjustments
and readjustments; and (ii) the number of shares of REIT common
stock and the amount, if any, of other property that at the time
would be received upon the exchange of the Units and the cash
distribution to be made in accordance with Subsection (d).
(f) Anything herein to the contrary notwithstanding,
at any time following Closing, in the event a Contributing
Partner may determine that he or she desires to exchange some or
all of its Units for real property of Home Properties in
redemption of its Units, Home Properties, in its sole discretion,
may decline to distribute any Home Properties real property
requested by the Contributing Partner, and the Contributing
Partner in his or her sole discretion, may decline to accept any
Home Properties real property offered by Home Properties. In the
event that Contributing Partner and Home Properties are unable to
agree upon existing real property owned by Home Properties to be
distributed to Contributing Partner, the Contributing Partner may
designate other real property for sale by a third party which he
or she desires to acquire as a distribution from Home Properties.
In such event, Home Properties shall acquire such real property
designated by Contributing Partner and convey such real property
to Contributing Partner as a distribution in redemption of some
or all of his or her Units. If Contributing Partner shall desire
that real property designated by him or her to be acquired by
Home Properties and distributed to Contributing Partner be
encumbered by debt of such type and amount so that the
Contributing Partners can minimize or eliminate recognition of
income resulting from such distribution, Home Properties shall
cooperate with the Contributing Partner's reasonable requests to
achieve such objective, provided that any costs or expenses
incurred by Home Properties in extending such cooperation shall
be reimbursed by the Contributing Partner upon Home Properties
making such distribution. The parties mutually agree to treat
such
Page 25
transaction for tax reporting purposes in such a way to reduce
the tax consequences of the transaction and will endeavor to
report the transaction consistently with each other to the extent
allowed by law. In case of property for sale by a third party
and designated by the Contributing Partner, the cash portion of
the purchase price for such real property shall be equal to the
then Market Value of that portion of the Contributing Partner's
Units proposed to be redeemed as of the date such Units are
redeemed, unless the Contributing Partner pays the difference in
the cash portion of the purchase price above the value of the
Units of Contributing Partner proposed to be redeemed. Upon the
request of Home Properties, the Contributing Partner desiring to
exchange Unit for real property shall loan to Home Properties,
provided that Home Properties shall provide adequate security for
said loan reasonably acceptable to said Contributing Partner, the
entire cash portion of the purchase price in connection with a
purchase of real estate from a third party. Such loan shall bear
interest at a rate equal to the dividend yield on the Unit at the
time of the making of such loan and such loan shall be repaid
within 90 days of the making of such loan. In no event shall
Home Properties be required to provide cash for such purchases to
the extent it shall be required to advance more than the total of
$5,000,000 in any calendar year together with the cash
requirement to be advanced under Paragraph 25(f) under the
Related Contribution Agreement (hereinafter defined) on account
of the cash portion of the purchase price, whether such cash is
raised through loans from the Contributing Partners or otherwise.
Any mortgage loan encumbering the real property purchased by Home
Properties shall be non-recourse, and the Contributing Partner
shall indemnify Home Properties against any liability or expenses
resulting from the acquisition and distribution of such real
property.
(g) In furtherance of Contributing Partners'
contributions to the capital of Home Properties or to otherwise
minimize Contributing Partners' tax liabilities, Contributing
Page 26
Partners shall each guaranty indebtedness of Home Properties in
the amount elected by Contributing Partners at Closing or
thereafter. Each Contributing Partner's guaranty shall provide
that (i) it shall be enforced only after due diligence and
reasonable legal means to collect from Home Properties have been
used for the purpose of satisfying Home Properties' indebtedness,
and (ii) shall be released upon exchange of the Units for common
stock of the REIT or sale, redemption or other disposition of the
Units by Contributing Partners, or a distribution of property to
the Contributing Partners set forth in subparagraph (d) above.
In the event that Contributing Partners' obligations under the
guaranty shall terminate under the terms of the Guaranty, Home
Properties shall promptly provide Contributing Partners written
notice of such termination.
(h) As a partner contributing interests in a
partnership in exchange for a limited partnership interest in
Home Properties, Contributing Partners will receive annually from
Home Properties Form 1065, Schedule K-1, Partner's Share of
Income, Credit, Deductions, etc. This form will also be part of
the tax return, Form 1065, filed by Home Properties with the
Internal revenue Service. Home Properties represents that the
Schedule K-1 submitted to Contributing Partners for use in the
preparation of their tax returns will reflect the allocation to
Contributing Partners as partners of a share of non-recourse
liabilities in accordance with Reg. Sec. 1.752-3 under the
Internal Revenue Code, such that the Contributing Partners shall
recognize no income upon the contribution of the RGI Interests to
Home Properties, and for the period of time that Contributing
Partners retain Units except to the extent cash distributions
from Home Properties to a Contributing Partner, as described in
Section 25(d) hereof, exceeds such Contributing Partner's basis
in his or her Home Properties partnership interest. The
Contributing Partners represent that, as of December 31, 1996:
(i) their aggregate built in gain
Page 27
determined in accordance with the principles set forth in Section
704(c) of the Internal Revenue Code of 1986 ("Code") is
$8,451,462 assuming the RGI Real Property has a fair market value
of $9,169,090 as of the date of the contribution(s) to Home
Properties; (ii) the amount of nonrecourse debt encumbering the
RGI Real Property is $5,174,178; (iii) their aggregate capital
accounts with respect to RGI is ($4,456,550).
(i) In the event that any Contributing Partner shall
transfer any of the Units, Home Properties shall arrange for the
delivery of an amendment to the guaranty pursuant to which the
amount of the Contributing Partner's guaranty shall thereafter be
allocated among the Contributing Partners and their transferees
based on the relative number of Units they hold after the
transfer.
(j) Home Properties agrees that for the period that
any of the Contributing Partners own the Units, Home Properties
shall not restructure such Contributing Partner's share of Home
Properties debt in such manner as to cause a reduction in the
amount of Contributing Partners' share of non-recourse debt
allocable to and encumbering the RGI Real Property without
Contributing Partners' prior written consent which may be
arbitrarily withheld. In the event that Home Properties takes
any such action, Home Properties shall indemnify and save
harmless the Contributing Partners from and against any federal
and state income tax liability, including but not limited to (i)
income taxes suffered as a result of all payments made under this
subsection (including this subsection (j)(i)) and (ii) interest,
penalties and the reasonable fees of attorneys and accountants.
(k) Home Properties shall not sell, exchange or
otherwise dispose of the RGI Real Property in a transaction which
results in the recognition of income to Contributing Partners
under Section 704(c) of the Internal Revenue Code of 1986 (the
"Code") or otherwise
Page 28
("Disposition Gain"). In the event that Home Properties shall
dispose of the RGI Real Property in violation of the foregoing
restriction, Home Properties shall indemnify and save harmless
Contributing Partners from any federal and state income tax
liability suffered by it including but not limited to (i) income
taxes suffered as a result of all payments made under this
subsection (including this subsection l(k)) and (ii) interest,
penalties and the reasonable fees of attorneys and accountants.
(l) Home Properties will not make any allocations
curative, remedial or otherwise, pursuant to the Treasury
Regulations under Section 704(c) of the Code with respect to the
RGI Real Property, intended to eliminate distortions caused by
the ceiling rule.
(m) The obligations set forth in this Article shall
survive the Closing.
26. Contingency. The consummation of this transaction
is contingent upon the simultaneous consummation of the
transaction set forth in the agreement of even date between
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and Home Properties with
respect to Royal Gardens II, a New Jersey general partnership
(the "Related Contribution Agreement").
27. Interpretation. If any of the terms and
provisions of this agreement shall conflict with those of the
Limited Partnership Agreement, the terms and provisions of this
agreement shall be controlling.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
HOME PROPERTIES OF NEW YORK, L.P.
By: HOME PROPERTIES OF NEW
YORK, INC., General Partner
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: ------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
VICE PRESIDENT
HOME PROPERTIES OF NEW YORK, INC.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: ------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
VICE PRESIDENT
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