Exhibit 2.2
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 II 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 RGII 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 $10,778,182 less the
principal balance of the mortgage (the "First Union
Mortgage") encumbering the RGII 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 RGII 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."
Page 1
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 RGII 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 $10,066,217
assuming the RGII Real Property has a fair market value of
$10,778,182 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/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Page 2
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
Page 3
AGREEMENT
THIS AGREEMENT, made this 8th day of April, 1997, by
and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, both 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 "RGII Interests") in Royal Gardens
II, a New Jersey general partnership ("RGII"), each Contributing
Partner owning a one-half RGII Interest; and
WHEREAS, RGII is the fee owner of a certain residential
apartment complex, located in the Town of Piscataway, New Jersey,
consisting of 304 apartment units known as a portion of Royal
Gardens Apartments, as more particularly described on Exhibit A
attached hereto (the "RGII Real Property"); and
WHEREAS, Contributing Partners each desire to
contribute to Home Properties all of their RGII Interests, and to
each receive from Home Properties limited partnership units in
Home Properties (the "Units"); and
WHEREAS, Home Properties desires to receive the RGII
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 RGII, which
Contributing Partners represent and warrant are all of the
outstanding partnership interests in RGII.
2. Consideration for Contribution. In consideration
of the contribution by Contributing Partners to Home Properties
of the RGII 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 $11,330,910 less the
principal balance of the mortgage (the "First Union Mortgage")
encumbering the RGII 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 RGII
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
Page 2
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
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
Page 3
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 D.
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
Page 4
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 RGII Real Property in whole or in part.
3. Deposit. The sum of One Hundred Fifty Thousand
($150,000.00) 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
Page 5
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 RGII 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 RGII 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 RGII
relating to the RGII Real Property, including lease and mortgage
documentation. All inspections of the RGII Real Property or the
financial records of RGII 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 RGII Real Property, or with the
financial results of the operation of the RGII Real Property, or
with any other matter relating to the RGII 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.
Page 6
(b) Contributing Partners shall provide access by Home
Properties' representatives to all financial and other
information relating to RGII 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 RGII 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 RGII
Real Property from a New Jersey licensed title insurance company
selected by Home Properties (the "Title Company") and a survey of
the RGII 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 RGII in the RGII 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
Page 7
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 RGII Interests
without reduction or abatement of the consideration set forth
above. It is distinctly understood and agreed that Contributing
Partners and/or RGII 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 RGII's title
to the RGII 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 RGII's
title to the RGII Real Property.
The following shall not be deemed to be title defects
rendering RGII's title to the RGII Real Property unmarketable:
a. Zoning ordinances and other applicable
governmental regulations and requirements, provided none of the
same prevent use of the RGII 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 RGII Real
Property, and any portion of the RGII Real Property lying in the
bed of any public street, provided none of same prevent or
materially restrict use of the RGII 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 RGII Real Property, provided none of same
prevent or materially restrict use of the RGII 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 RGII Real Property might disclose, provided none of
same prevent or materially restrict the use of the RGII Real
Property as a multiple dwelling for residential purposes;
h. Residential Tenancies as hereinafter provided;
i. The present physical condition of the RGII 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 RGII Real Property as a
multiple dwelling for residential purposes;
k. Restrictions of record, provided none of same
prevent or materially restrict use of the RGII 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 RGII to the
RGII Real Property at Closing shall be subject to the rights of
persons who are currently residential tenants of the RGII Real
Property set forth on Exhibit F attached hereto, and persons who
shall hereafter become
Page 9
residential tenants of the RGII 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 RGII 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 RGII 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 RGII Real Property to perform under its lease prior to
Closing. RGII 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 RGII 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 RGII 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
Page 10
less 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 RGII with respect to the Residential
Tenancies.
c. Contributing Partners shall cause RGII to continue
to operate the RGII 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 RGII, the RGII Real Property or
Contributing Partners that might adversely affect this Agreement,
RGII or the RGII 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 RGII 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 RGII 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 RGII are as set forth on Exhibit J and the
salaries and other employee benefits paid to such employees are
set
Page 11
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 RGII and used in the operation and maintenance
of the RGII Real Property and at Closing located at the RGII Real
Property (hereinafter referred to as the "Personal Property")
shall remain the property of RGII after the Closing and shall be
in "as is" condition as of the Closing Date. The Personal
Property of RGII includes, but is not limited to, the property
described in the list is 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 RGII
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 RGII Real Property and
Personal Property owned by RGII, the income and expenses of the
RGII 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 RGII 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 RGII Real Property or any
equipment, fixtures or personal property therein, whether such
condition is apparent or latent,
Page 12
or known or unknown to Contributing Partners. Home Properties
agrees that any and all financial information, leasing
information or other information of any kind with respect to the
RGII 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 "RGII Assignment") of their RGII
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 RGII.
Page 13
d. Any management agreement relating to the RGII Real
Property shall be terminated at Closing.
e. 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.
f. 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 RGII Real Property actually
collected by RGII at the date of Closing shall be apportioned
between Contributing Partners and RGII for the benefit of Home
Properties based upon the number of days of the month each of
them holds the RGII Interests. Home Properties agrees to use
good faith efforts after Closing to collect any delinquent
rentals owed to RGII 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 RGII 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, 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 RGII Real Property. A credit shall be given to
Home
Page 14
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 RGII 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 RGII 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.
13. Destruction of the RGII Real Property. In the
event that the RGII Real Property shall be destroyed or damaged
by reason of fire, storm, accident or other casualty, and
Page 15
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 RGII to repair
such damage, or grant to RGII 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 RGII 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 RGII shall not be required to repair
or otherwise comply with any violations affecting the RGII 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 RGII
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 RGII
Real Property as a condition to issuance of such certificate,
Home Properties shall make such correction and pay the costs of
same.
15. Condemnation. In the event that the entire RGII
Real Property or a substantial part thereof shall have been taken
by eminent domain, or shall be in the process of
Page 16
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 RGII
Real Property or in the event that neither party shall terminate
this Agreement in accordance with this Paragraph 15, Home
Properties shall accept the RGII 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 RGII in the
collection of such award and Home Properties shall accept the
RGII Real Property without abatement of the consideration.
16. Environmental Laws. Contributing Partners
represent and warrant that RGII has not received notice of any
violation or claimed violation of any law, rule or regulation
relating to hazardous substances with respect to the RGII 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 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
Page 17
promulgated thereunder. Contributing Partners shall
contemporaneously with the execution of this Agreement cause RGII
to deliver to Home Properties documentation regarding the removal
of oil tanks from the RGII 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 RGII Interests pursuant to this Agreement.
20. Notices. All notices, requests, consents,
approvals or other communications under this Agreement shall be
in writing and delivered personally or mailed by
Page 18
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 RGII Interests by Home
Properties shall be deemed to be a full performance by
Contributing Partners of, and shall discharge Contributing
Partners from, all obligations 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
Page 19
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.
f. This Agreement shall be governed by the laws of
the State of New Jersey.
Page 20
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 RGII and the RGII Real Property as are specifically described
herein; provided however, Home Properties specifically does not
assume any liabilities relating to litigation pending or
threatened against RGII or its assets, as of the date hereof or
the Closing. The transaction is being structured as the
contribution of the RGII Interests to Home Properties which will
then own all of the partnership interests in RGII. Home
Properties will therefore have no entity to look to with respect
to any liabilities of RGII 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 RGII will consist solely of the RGII Real Property, the
Personal Property, security deposits of tenants and Residential
Tenancies on the Closing Date and any other asset of RGII shall
be distributed to the Contributing Partners prior to the
contribution of the RGII Interest to Home Properties.
If the assets and liabilities of RGII 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
is or will be at the date of Closing authorized to do business in
the State of New Jersey; (ii) the
Page 21
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 pending, or to the best
knowledge of Home Properties, threatened against Home Properties
or
Page 22
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 preferential contractual rights
of the REIT or any stockholder of the REIT or any other person
Page 23
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 K.
(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 Partner, a
like certificate setting forth; (i) such adjustments and
readjustments; and (ii) the
Page 24
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 transaction for tax reporting purposes in such a way to
reduce the tax consequences of the
Page 25
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 required
to be advanced under Paragraph 25(f) under the Related
Contribution Agreement (hereunder 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
Partners shall each guaranty indebtedness of Home Properties in
the amount elected by
Page 26
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 RGII 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 determined in accordance with
the principles set forth in Section 704(c) of the Internal
Revenue
Page 27
Code of 1986 ("Code") is $10,618,945 assuming the RGII Real
Property has a fair market value of $11,330,910 as of the date of
the contribution(s) to Home Properties; (ii) the amount of
nonrecourse debt encumbering the RGII Real Property is
$1,906,062; (iii) their aggregate capital accounts with respect
to RGII is $(1,194,097).
(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 RGII 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 RGII 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 ("Disposition Gain"). In the
event that Home Properties shall dispose of the RGII Real
Page 28
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
RGII 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 I, 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.
[The remainder of this page is intentionally left blank]
[Signature page immediately follows]
Page 29
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/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
Page 30