-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C5r+xSvIWxOtNeKAkVdJhZYxu//6d6qH4yyV2OPCkEwYPXH4CJE4zq1MoP0n9PYN QpKtaJiygBzQeDSTC2AKJw== 0000923118-98-000014.txt : 19980325 0000923118-98-000014.hdr.sgml : 19980325 ACCESSION NUMBER: 0000923118-98-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19971031 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980324 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME PROPERTIES OF NEW YORK INC CENTRAL INDEX KEY: 0000923118 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 161455126 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13136 FILM NUMBER: 98571495 BUSINESS ADDRESS: STREET 1: 850 CLINTON SQ CITY: ROCHESTER STATE: NY ZIP: 14604 BUSINESS PHONE: 7162464105 MAIL ADDRESS: STREET 1: 850 CLINTON SQUARE CITY: ROCHESTER STATE: NY ZIP: 14604 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 31, 1997 HOME PROPERTIES OF NEW YORK, INC. (Exact name of Registrant as specified in its Charter) MARYLAND 1-13136 16-1455126 (State or other jurisdiction (Commission file number) (I.R.S. Employer of incorporation or organization Identification Number) 850 CLINTON SQUARE ROCHESTER, NEW YORK 14604 (Address of principal executive offices) Registrant's telephone number, including area code: (716) 546-4900 Not applicable (Former name or former address, if changed since last report) Consecutive No. Page 1 of Exhibit Index at Page HOME PROPERTIES OF NEW YORK, INC. CURRENT REPORT ON FORM 8-K Item 2. Acquisition of Assets. Home Properties of New York, L.P. (the "Operating Partnership"), a New York limited partnership purchased, in unrelated transactions, four multifamily residential properties and in two separate transactions purchased four additional multifamily residential properties. Collectively, these acquisitions are deemed "significant acquisitions" pursuant to the regulations of the Securities and Exchange Commission governing the reporting of transactions under the Current Report on Form 8-K. Home Properties of New York, Inc. (the "Company") is the sole general partner and holder, directly and indirectly through Home Properties Trust in which the Company holds 100% of the beneficial interests, of approximately 53.6 percent of the limited partnership interests in the Operating Partnership. Hill Court South and Hudson Arms Apartments. On October 31, 1997, the Operating Partnership acquired Hill Court Apartments South and all of the equity interests in Lobozzo and Company for a combined purchase price of $6.6 million, which was paid by the issuance of 269,934 limited partnership units in the Operating Partnership. Hill Court Apartments South is a 95 unit apartment community. Lobozzo and Company was the owner of a 135 unit apartment community known as Hudson Arms Apartments. The communities are located in the Rochester, New York suburb of Irondequoit, are approximately 35 years old and were 87% occupied at the time of closing. Hill Court Apartments South were owned by Hill Court South Apartment Company. The former partners of Lobozzo and Company whose interests were acquired by the Operating Partnership are Michael E. McCusker, Claude S. Fedele, Geraldine B. Lynch, Richard M. Bachelder, Jack P. Schifano and Joseph M. Lobozzo, II. Cloverleaf Apartments. On November 3, 1997, the Operating Partnership acquired the Cloverleaf Apartments, a 148 unit apartment community located in Pittsburgh, Pennsylvania. The purchase price of $3.0 million was financed under the Operating Partnership's line of credit, which bears interest at 125 basis points over the 30 day LIBOR rate or, at the Operating Partnership's option, at a money market rate quoted by the lender and acceptable to the Operating Partnership. The community is approximately 40 years old and was 94% occupied at the time of closing. Cloverleaf Apartments were owned by Hudson Palisades Associates. Scotsdale Apartments. On November 26, 1997, the Operating Partnership acquired the Scotsdale Apartments, a 376 unit apartment community located in the Detroit suburb of Westland. The purchase price of $13.6 million was paid in cash drawn under the Operating Partnership's line of credit, which is described above. The community is approximately 24 years old and was 97% occupied at the time it was acquired. The Scotsdale Apartments were owned by the Trusts of Estelle Kahn, Kopel I. Kahn, Jerome M. Keywell, Rita Keywell, J. Phillip Levant and Ethel Levant. Candlewood Apartments. On February 9, 1998, the Operating Partnership acquired the Candlewood Apartments, a 310 unit apartment community located in Mishawaka, Indiana, a suburb of South Bend. The purchase price of $13,350,000 was paid in cash drawn under the Company's line of credit to pay off the existing mortgage and to fund closing costs and by issuance of 185,778 limited partnership units in the Operating Partnership. The community was built in phases between 1984 and 1989 and was 9 Apartments were previously owned by Donald H. Schefmeyer and Stephen W. Hall.6% occupied at closing. Candlewood Apartments were previously owned by Donald H. Schefmeyer and Stephen W. Hall. Cedar Glen Apartments. On March 2, 1998, the Operating Partnership acquired the Cedar Glen Apartments, a 110-unit apartment community located in Philadelphia, Pennsylvania. The purchase price of $2,600,000 was paid in cash drawn under the Company's line of credit. The community is approximately 32 years old and was 95% occupied at the time of closing. Cedar Glen Apartments was previously owned by Cedar Glen Associates. Park Shirlington Apartments and Braddock Lee Apartments. On March 13, 1998, the Operating Partnership acquired Park Shirlington Apartments, a 294-unit apartment community located in Arlington, Virginia, and Braddock Lee Apartments, a 254-unit apartment community located in Alexandria, Virginia, for a combined purchase price of $26,400,000, which was paid for by the issuance of 994,620 limited partnership units in the Operating Partnership. The communities are approximately 44 years old and were 97% occupied at the time of closing. Park Shirlington Apartments was previously owned by Park Shirlington Apartments Limited Partnership. Braddock Lee Apartments was previously owned by Braddock Lee Apartments Limited Partnership. None of the above sellers were affiliated with the Operating Partnership, the Company, any directors or officers of the Company or any affiliates of any such director or officer. The properties were all previously operated as multifamily apartment properties, and it is the intent of the Company and the Operating Partnership to continue to operate them as multifamily apartment communities. The purchase prices were negotiated with the sellers and based on an internal analysis by the Company of the historical cash flows and fair market values of the properties. Item 5. On March 20, 1998, the Company announced that the Operating Partnership had entered into various agreements to purchase 4,452 apartment units for a combined price of approximately $174 million. A copy of the press release is attached hereto as an exhibit. Item 7. Financial Statements and Exhibits. a. Financial Statements of the business acquired: Audited statement of revenues and certain expenses of Candlewood Apartments for the year ended December 31, 1997. Audited statement of revenues and certain expenses of Park Shirlington Apartments and Braddock Lee Apartments combined for the year ended December 31, 1997. b. Pro Forma Financial Information: Pro forma condensed consolidated balance sheet of the Company as of December 31, 1997 and related notes (unaudited). Pro forma consolidated statement of operations of the Company for the year ended December 31, 1997 (unaudited). Notes to the pro forma consolidated statement of operations of the Company for the year ended December 31, 1997 (unaudited). c. Exhibits: Exhibit 2.1 - Purchase and Sale Agreements dated June 17, 1997 among Home Properties of New York, L.P. and various individuals relating to Hill Court Apartments South and Hudson Arms Apartments, together with a letter amendment dated September 24, 1997. Exhibit 2.2 - Contract of Sale, dated October 10, 1997, between Home Properties of New York, L.P. and Hudson Palisades Associates relating to Cloverleaf Apartments. Exhibit 2.3 - Contribution Agreement, dated November 17, 1997 among Home Properties of New York, L.P. and various trusts relating to Scotsdale Apartments. Exhibit 2.4 - Contribution Agreement, dated November 7, 1997 among Home Properties of New York, L.P. and Donald H. Schefmeyer and Stephen W. Hall relating to Candlewood Apartments, together with Amendment No. One dated December 3, 1997. Exhibit 2.5 - Purchase and Sale Agreement dated November 26, 1997 by and between Home Properties of New York, L.P. and Cedar Glen Associates. Exhibit 2.6 - Contribution Agreement dated March 2, 1998 among Home Properties of New York, L.P., Braddock Lee Limited Partnership and Tower Construction Group, LLC. Exhibit 2.7 - Contribution Agreement dated March 2, 1998 among Home Properties of New York, L.P., Park Shirlington Limited Partnership and Tower Construction Group, LLC. Exhibit 2.8 - Press Release Issued on March 20, 1998 Exhibit 23.0 - Consent of Coopers and Lybrand, L.L.P. Candlewood Apartments _____ Statement of Revenues and Certain Expenses December 31, 1997 Report of Independent Accountants To the Board of Directors and Stockholders of Home Properties of New York, Inc. We have audited the accompanying statement of revenues and certain expenses, as defined in Note 1, of Candlewood Apartments for the year ended December 31, 1997. The statement of revenues and certain expenses is the responsibility of Candlewood Apartments' management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and certain expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 1, and is not intended to be a complete presentation of Candlewood Apartments' revenues and expenses. In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses, as defined in Note 1, of Candlewood Apartments for the year ended December 31, 1997, in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Rochester, New York March 16, 1998 Candlewood Apartments Statement of Revenues and Certain Expenses (In Thousands)
Year Ended December 31, 1997 Revenues: Rental income $2,242 Other income 45 ------ 2,287 ------ Certain expenses: Property operating and maintenace 644 Real estate taxes 247 ------ 891 ------ Revenues in excess of ceratin expenses $1,396 ------
The accompanying note is an integral part of the financial statement. Candlewood Apartments Note to Statement of Revenues and Certain Expenses December 31, 1997 1. Basis of Presentation and Summary of Significant Accounting Policies Business The accompanying statement of revenues and certain expenses includes the operations (see "Basis of Presentation" below) of Candlewood Apartments, a residential property owned by parties not related to Home Properties of New York, Inc. (the "Company"). The Company, through its subsidiary Home Properties of New York, L.P., acquired 100% of the real estate of Candlewood Apartments, a 310 unit apartment community located in Mishawaka, Indiana, on February 9, 1998. Basis of Presentation The accompanying financial statement is not representative of the actual operations of Candlewood Apartments for the period shown. Certain expenses have been excluded which may not be comparable to the proposed future operations of Candlewood Apartments. Expenses excluded relate to property management fees, interest expense, depreciation and amortization expense and other expenses not directly related to the future operations of Candlewood Apartments. The Company is not aware of any material factors relating to Candlewood Apartments that would cause the reported financial information not to be necessarily indicative of future operating results. Revenue Recognition Rental income attributable to residential leases is recorded when due from residents. Leases are generally for terms of one year. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Park Shirlington and Braddock Lee Apartments _____ Statement of Revenues and Certain Expenses December 31, 1997 Report of Independent Accountants To the Board of Directors and Stockholders of Home Properties of New York, Inc. We have audited the accompanying statement of revenues and certain expenses, as defined in Note 1, of the Park Shirlington and Braddock Lee Apartments for the year ended December 31, 1997. The statement of revenues and certain expenses is the responsibility of the Park Shirlington and Braddock Lee Apartments' management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of revenues and certain expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of revenues and certain expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 1, and is not intended to be a complete presentation of the Park Shirlington and Braddock Lee Apartments' revenues and expenses. In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the revenues and certain expenses, as defined in Note 1, of the Park Shirlington and Braddock Lee Apartments for the year ended December 31, 1997, in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Rochester, New York March 18, 1998 Park Shirlington and Braddock Lee Apartments Statement of Revenues and Certain Expenses (In Thousands) Year Ended December 31, 1997 -- Revenues: Rental income $4,642 Other income 128 ------ 4,770 ------ Certain expenses: Property operating and maintenance 1,837 Real estate taxes 241 ----- 2,078 ------ Revenues in excess of certain expenses $2,692 ======
The accompanying note is an integral part of the financial statement. Park Shirlington and Braddock Lee Apartments Note to Statement of Revenues and Certain Expenses December 31, 1997 1. Basis of Presentation and Summary of Significant Accounting Policies Business The accompanying statement of revenues and certain expenses includes the operations (see "Basis of Presentation" below) of the Park Shirlington and Braddock Lee Apartments, 2 residential properties owned by parties not related to Home Properties of New York, Inc. (the "Company"). The Company, through its subsidiary Home Properties of New York, L.P., acquired 100% of the real estate of the Park Shirlington and Braddock Lee Apartments, 548 apartment units located in 2 communities in suburban markets in Northern Virginia, on March 13, 1998. Basis of Presentation The accompanying financial statement is not representative of the actual operations of the Park Shirlington and Braddock Lee Apartments for the period shown. Certain expenses have been excluded which may not be comparable to the proposed future operations of the Park Shirlington and Braddock Lee Apartments. Expenses excluded relate to property management fees, interest expense, depreciation and amortization expense and other expenses not directly related to the future operations of the Park Shirlington and Braddock Lee Apartments. The Company is not aware of any material factors relating to the Park Shirlington and Braddock Lee Apartments that would cause the reported financial information not to be necessarily indicative of future operating results. Revenue Recognition Rental income attributable to residential leases is recorded when due from residents. Leases are generally for terms of one year. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. HOME PROPERTIES OF NEW YORK, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET December 31, 1997 (Unaudited, In Thousands) This unaudited pro forma Condensed Consolidated Balance Sheet is presented as if the Company had purchased the Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments on December 31, 1997. This unaudited pro forma Condensed Consolidated Balance Sheet should be read in conjunction with the Statement of Revenues and Certain Expenses of the Candlewood Apartments and Park Shirlington and Braddock Lee Apartments on December 31, 1997 and note thereto included elsewhere herein. In management's opinion, all adjustments necessary to reflect the purchase of the Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments have been made.
As of December 31, 1997 Home Park Properties Candlewood Cedar Glen Shirlington & of New York Apartments Apartments Braddock Lee Pro Forma Company Inc. (A) (B) (B)Apartments (B) Adjustments (C) Pro Forma ASSETS Real estate, net $478,597 $6,506 $250 $3,758 $31,836 (D) $520,947 Cash and cash equivalents 3,809 3,809 Other assets 61,417 61,417 Total assets $543,823 $6,506 $250 $3,758 $31,836 $586,173 LIABILITIES Mortgage notes payable $210,096 $ $ $ $ $210,096 Line of credit 8,750 11,069 19,819 Other liabilities 16,698 16,698 Total Liabilities 235,544 11,069 246,613 Minority interest 156,847 31,281 (E) 188,128 STOCKHOLDERS EQUITY Common stock $ 93 $ 93 Additional paid-in capital 176,021 176,021 Accumulated deficit ( 19,700) 6,506 250 3,758 (10,514) (F) ( 19,700) Treasury stock, at cost ( 426) ( 426) Officer and Director notes for stock purchases ( 4,556) ( 4,556) Total stockholders' equity 151,432 6,506 250 3,758 (10,514) 151,432 Total liabilities and stockholders' equity $543,823 $6,506 $250 $3,758 $31,836 $586,173
HOME PROPERTIES OF NEW YORK, INC. NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET DECEMBER 31, 1997 (Unaudited, In Thousands) (A) Reflects the Company's historical consolidated balance sheet as of December 31, 1997 as reported on Form 10-K. The Company's historical audited consolidated balance sheet includes the balance sheet of Hill Court South and Hudson Arms Apartments (acquired October 31, 1997), Cloverleaf Apartments (acquired November 3, 1997), and Scotsdale Apartments (acquired November 26, 1997). The acquisitions were recorded as follows:
Appliances & Other Purchase Land Building Equipment Assets Price Hill Court South and Hudson Arms Apartments $ 805 $ 5,565 $230 $64 $ 6,664 (1) Cloverleaf 370 2,482 148 3,000 (2) Scotsdale 1,692 11,532 376 13,600 (2) Total $2,867 $19,579 $754 $64 $23,264
(1) Funded by the issuance of 269,934 units at $24.69 per unit. (2) Funded with Company's line of credit. (B) Reflects the Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments historical balance sheets as of December 31, 1997 for the assets/liabilities acquired by the Company. (C) The pro forma adjustments reflect the purchase of Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments, acquired February 9, 1998, March 2, 1998 and March 13, 1998, respectively. The purchase price was allocated as follows:
Appliances & Purchase Land Building Equipment Price Candlewood Apartments $1,550 $11,490 $310 $13,350 Cedar Glen Apartments 715 1,775 110 2,600 Park Shirlington and Braddock Lee Apartments 8,220 17,632 548 26,400 $10,485 $30,897 $968 $42,350
The appliances and equipment have an estimated useful life of ten years and the building has an estimated useful life of thirty-five years. (D) Reflects the excess of the cash purchase price over the historical seller's cost basis as follows:
Purchase Historical Pro Forma Price Cost Basis Adjustments Candlewood Apartments $13,350 $6,506 $ 6,844 Cedar Glen Apartments 2,600 250 2,350 Park Shirlington and Braddock Lee Apartments 26,400 3,758 22,642 $42,350 $10,514 $31,836
(E) Reflects the 185,778 units issued at $26.27 per unit and 994,620 units issued at $26.54 per unit for the acquisition of Candlewood Apartments and Park Shirlington and Braddock Lee Apartments, respectively. (F) Represents historical seller's capital account zeroed out. HOME PROPERTIES OF NEW YORK, INC. PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (Unaudited, In Thousands, Except Share and Per Share Data) The unaudited pro forma Consolidated Statement of Operations for the year ended December 31, 1997 is presented as if the acquisitions of Hill Court South and Hudson Arms Apartments, Cloverleaf Apartments, Scotsdale Apartments, Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments had occurred on January 1, 1997. The unaudited pro forma Consolidated Statement of Operations should be read in conjunction with the Statements of Revenues and Certain Expenses of Candlewood Apartments and Park Shirlington and Braddock Lee Apartments and notes thereto included elsewhere herein. In management's opinion, all adjustments necessary to reflect the effects of the purchase of Hill Court South and Hudson Arms Apartments, Cloverleaf Apartments, Scotsdale Apartments, Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments. The unaudited pro forma Consolidated Statement of Operations is not necessarily indicative of what the actual results of operations would have been assuming the transactions had occurred as of the beginning of the period presented, nor does it purport to represent the results of operations for future periods.
For the Year Ended December 31, 1997 Hill Court/ Hudson, Park Home Properties Cloverleaf & Shirlington & of New York, Inc. Scotsdale Candlewood Cedar Glen Braddock Lee Pro Forma Company Historical (A) Apts. (B) Apts. (C) Apts. (C) Apts. (C) Adjustment Pro Forma Revenues: Rental income $64,002 $3,949 $2,242 $516 $4,642 $ $75,351 Property other income 2,222 94 45 13 128 2,502 Other income 3,473 16 3,489 Total revenues 69,697 4,059 2,287 529 4,770 81,342 Expenses: Operating and maintenance 31,317 2,103 891 223 2,078 36,612 General and administrative 2,255 100(D) 2,355 Interest 11,967 1,905(E) 13,872 Depreciation and amortization 11,200 1,539(F) 12,739 Total expenses 56,739 2,103 891 223 2,078 3,544 65,578 Income before loss on disposition of property , minority interest and extraordinary item 12,958 1,956 1,396 306 2,692 (3,544) 15,764 Loss on disposition of property 1,283 1,283 Income before minority interest and extraordinary item $11,675 $1,956 $1,396 $ 306 $2,692 ($3,544) 14,481 Minority interest of Unit holders 6,078 Income before extraordinary item 8,403 Extraordinary item, prepayment penalties ( 957) net of $817 allocated to minority interest Net income $ 7,446 Basic earnings per shared data: Income before extraordinary item $ 1.13 Extraordinary item ($ 0.13) Net Income $ 1.00 Diluted earnings per share data: Income before extraordinary item $ 1.11 Extraordinary item ($ 0.13) Net Income $ 0.98 Weighted average number of shares outstanding: Basic 7,415,888 Diluted 7,558,167
HOME PROPERTIES OF NEW YORK, INC. NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (Unaudited, In Thousands) (A) Reflects the historical consolidated statement of operations for the Company for the year ended December 31, 1997. (B) Reflects the combined historical revenues and certain expenses of Hill Court/Hudson, Cloverleaf and Scotsdale Apartments which were not owned by the Company for the period January 1, 1997 through the respective dates of acquisition. (C) Reflects the historical revenues and certain expenses of Candlewood Apartments, Cedar Glen Apartments and Park Shirlington and Braddock Lee Apartments which were not owned by the Company for the year ended December 31, 1997. (D) Reflects additional general and administrative expenses. (E) Reflects the increase related to debt borrowed to finance the acquisitions. The interest is calculated as follows: Principal Balance Interest Line of credit average of 7.32%: Cloverleaf Apartments (for the period 1/1/97-11/3/97) $ 3,000 $183 Scotsdale Apartments (for the period 1/1/97-11/26/97) 13,600 912 Candlewood Apartments (for the period 1/1/97-12/31/97) 8,469 620 Cedar Glen Apartments (for the period 1/1/97 - 12/31/97) 2,600 190 $27,669 $1,905 (F) Reflects depreciation and amortization related to the acquisition. See Notes on page 14 for further information on useful lives of these assets. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HOME PROPERTIES OF NEW YORK, INC. (Registrant) Date: March 23, 1998 By: /s/ David P. Gardner David P. Gardner Vice President Chief Financial Officer and Treasurer Date: March 23, 1998 By: /s/ David P. Gardner David P. Gardner Vice President Chief Financial Officer and Treasurer HOME PROPERTIES OF NEW YORK, INC. EXHIBIT INDEX
Location Exhibit 2.1 Purchase and Sale Agreements dated June 17, 1997 among Home Properties of New York, L.P. and various individuals relating to Hill Court Apartments South and Hudson Arms Previously filed as an Exhibit to Apartments together with a letter amendment dated Form 8-K filed on 2/20/98. September 24, 1997 Exhibit 2.2 Contract of Sale, dated October 10, 1997, between Home Properties of New York, L.P. and Hudson Palisades Associates Previously filed as an Exhibit to relating to Cloverleaf Apartments Form 8-K filed on 2/20/98. Exhibit 2.3 Contribution Agreement, dated November 17, 1997 among Home Properties of New York, L.P. and various trusts relating Previously filed as an Exhibit to to Scotsdale Apartments Form 8-K filed on 2/20/98. Exhibit 2.4 Contribution Agreement, dated November 7, 1997, among Home Properties of New York, L.P. and Donald H. Schefmeyer and Stephen W. Hall relating to Candlewood Apartments, together with Previously filed as an Exhibit to Amendment No. One, dated December 3, 1997 Form 8-K filed on 2/20/98. Exhibit 2.5 Purchase and Sale Agreement, dated November 26, 1997 by and between Home Properties of New York, L.P., and Cedar Glen Associates. Pages _____ to _____ Exhibit 2.6 Contribution Agreement, dated March 2, 1998 among Home Properties of New York, L.P., Braddock Lee Limited Partnership and Tower Construction Group, LLC. Pages _____ to _____ Exhibit 2.7 Contribution Agreement, dated March 2, 1998 among Home Properties of New York, L.P., Park Shirlington Limited Partnership and Tower Construction Group, LLC. Pages _____ to _____ Exhibit 2.8 Press Release Issued on March 20, 1998 Pages _____ to _____ Exhibit 23.0 Consent of Coopers & Lybrand, L.L.P. Pages ____ to _____
Note: Omitted Schedules and Exhibits to the foregoing will be supplied upon request. EX-2 2 Exhibit 2.5 PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement ("Agreement"), made as of the 26th day of November , 1997 by and between HOME PROPERTIES OF NEW YORK, L.P., a New York limited partnership, having its principal office at 850 Clinton Square, Rochester, New York 14604, (herein called "Buyer"), and CEDAR GLEN ASSOCIATES, having an office at 9140 Old Bustleton Avenue, Philadelphia, Pennsylvania (herein called the "Seller"). W I T N E S S E T H: WHEREAS, Seller is the fee owner of a certain residential apartment complex located in the City of Philadelphia, State of Pennsylvania more commonly known as Cedar Glen Apartments, all as more particularly described below; WHEREAS, Seller desires to sell said property to Buyer, and Buyer desires to purchase that property from Seller, upon the happening of certain events; NOW, THEREFORE, in consideration of the property, mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency whereof being hereby acknowledged, the parties hereby agree as follows: 1. REAL PROPERTY DESCRIPTION. The Real Property to be conveyed consists of one or more parcels of land known as Cedar Glen Apartments, which includes 110 apartments (the "Project"), located in the City of Philadelphia and State of Pennsylvania, more particularly described on Exhibit "A", attached hereto, together with and including all buildings and other improvements thereon, including but not limited to, the 110 apartment units, and all rights of Seller in and to any and all streets, roads, highways, alleys, driveways, easements and rights-of-way appurtenant thereto (the foregoing are hereafter collectively referred to as the "Property"). 2. OTHER ITEMS. The following items now in or on the Property, are included in this sale and shall become the property of Buyer at Closing (as hereafter defined): A all heating, plumbing and lighting fixtures, B ranges, refrigerators and garbage disposals (one for each apartment), C water heaters, D any and all bathroom fixtures, wall-to-wall carpeting, exhaust fans, signs, screens, maintenance building, model unit furniture, fences, carpeting and runners, cabinets, mirrors, shelving, any air conditioning units, mail boxes, office furniture, and related equipment, if any, in connection with the Project and which are owned by Seller, Page 1 E other than a computer, a printer, a fax machine and a photo copier, any fixtures appurtenant to the Property and any other furniture or equipment used in connection with the operation and maintenance of the Property (hereinafter with the items listed in A-D above, collectively, the "Other Items") and which are owned by the Seller. Seller's interest in the Other Items will be transferred to Buyer by absolute Bill of Sale. 3. EXCEPTIONS. Buyer agrees to accept title to the Property subject only to the following: A. Restrictive covenants of record common to the tract or subdivision, provided same have not been violated. B. Water line, sanitary sewer, drainage, gas line and main, electrical, telephone easements and other easements of record provided that, no building or other improvements, including Project signage, are located over the area covered by such easement or are adversely affected. 4. PRICE AND MANNER OF PAYMENT. A. The purchase price for the Property shall be a total of Two Million Six Hundred Thousand and NO/100 ($2,600,000) (the "Purchase Price") payable as follows: (i) by payment of $50,000 (the "Deposit") as a deposit; and (ii) the remainder payable at Closing by check or by wire transfer to an account designated by Seller. B The Deposit shall be paid to Mesirov, Gelman, Jaffe, Cramer & Jamieson (the "Escrow Agent"), who shall deposit that amount in an interest bearing account. The Deposit (with interest) shall be applied against the Purchase Price at Closing. The Deposit shall be forfeited to Seller as Seller's sole remedy and as liquidated damages if Buyer fails to complete this transaction for any reason other than a termination of this Agreement as permitted herein. In the event of such a termination, Seller shall promptly instruct the Escrow Agent to refund the Deposit (with interest) to Buyer and upon the return of the Deposit this Agreement shall wholly cease and terminate and neither party shall have any further claim against the other by reason of this Agreement. 5. ADJUSTMENTS AT CLOSING. The following shall be adjusted and prorated between the parties at Closing as if the Buyer was the owner of the Property as of midnight of the night preceding the Closing Date: A current fiscal year real estate taxes, B water charges, C sewer charges, D fuel, E electricity, Page 2 F all rentals and security deposits (including interest thereon) pursuant to the leases, G charges under the Service Contracts, H laundry income; I any other charges incurred with respect to the Property which Seller is obligated to pay; and J Rents. (1) All rent payments collected for the month of Closing shall be deemed prorated as between the parties as of the Closing. (2) All rent collected after Closing, for any period prior to Closing, shall belong to Seller and, if paid to Buyer, Buyer shall promptly send such rent to Seller. (3) All rent collected by Seller, prior to the Closing, for rental periods subsequent to Closing shall be paid to Buyer at Closing. (4) All rent collected by Buyer or Seller for rental periods after the Closing shall belong to Buyer and, if paid to Seller, Seller shall promptly send such rent to Buyer. Any error in the calculation of adjustments shall be corrected subsequent to Closing with appropriate credits to be given based upon corrected adjustments, provided, however, that the adjustments (except if errors are caused by misrepresentations) shall be final upon expiration of the sixtieth day after Closing. 6. COSTS. Buyer shall pay all recording fees, one-half of the transfer tax, Buyer's attorneys' fees, the costs of obtaining a binder or commitment from a title insurance company, the premium for Buyer's title insurance policy, up to $15,000.00 towards the prepayment penalty with respect to the existing mortgage on the Property and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the purchaser of similar property. Seller shall pay one-half of the transfer tax, attorneys' fees, if any, incurred by Seller in connection with this transaction, any prepayment penalty in excess of $15,000.00 and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the seller of similar property. 7. TITLE AND SURVEY. Within ten (10) days after the date of this Agreement Seller shall provide Buyer with a copy of the most recent title policy and instrument survey of the Property in Seller's possession. 8. INSPECTION. Upon and after acceptance of this Agreement by Seller, Seller agrees that Buyer and its authorized representatives shall have the right and privilege to enter upon the Property and Seller's offices, upon reasonable notice, during regular business hours, for the purpose of gathering such information and conducting such environmental and engineering studies or other tests and reviews as Buyer may deem appropriate and necessary. All such inspections, studies, tests and reviews shall be at Buyer's sole Page 3 expense and Buyer or its agents shall supply Seller with proof of insurance as requested by Seller. Seller agrees to cooperate with Buyer by making available to Buyer such records, plans, drawings or other data as may be in Seller's possession or control relating to the Property and its operation; provided, however, that Buyer agrees to indemnify Seller of and from any loss or damage occasioned by such entry, and agrees further to restore to its original condition, at Buyer's own cost and expense, any property disturbed by such entry. 9. TITLE DOCUMENTS. At the time of Closing, Seller shall deliver to Buyer the following: A A warranty deed conveying good and marketable title to the Property. B A Bill of Sale conveying good title, free of all encumbrances to the Other Items. C A current rent roll ("Rent Roll") certified, as of the date of Closing, which shall include a list of all tenants, all rental obligations of each tenant with respect to the Property and all security deposits (with interest). D Complete originals of each lease listed on the Rent Roll. E An assignment, assumption, and indemnity agreement of all of Seller's rights and obligations to all contracts affecting the Property (the "Service Contracts), to all leases encumbering the Property and to all security deposits (including interest thereon) in substantially the form attached hereto as Exhibit B. In lieu of an assignment of the security deposits, the Seller may provide Purchaser with a credit at Closing for all security deposits (with interest thereon) held by Seller with respect to all leases encumbering the Property. In either case, Buyer will indemnify and hold the Seller harmless from any claims from residents with respect to security deposits transferred to Buyer or for which Buyer is provided a credit at Closing as the case may be. F As specified by Buyer, a copy of all data concerning the Property that is stored in the computer that is excluded from the sale. 10. TITLE EXAMINATION; OBJECTIONS TO TITLE. A Within the Due Diligence Period (as hereinafter defined), Buyer agrees to furnish to Seller a specification in writing of any objection to title that Buyer believes it is not required to take title subject to, which shall not include the exceptions permitted in Section 3 of this Agreement. Seller may, but shall not be required to, bring any action or proceedings or take such other action as may be appropriate to render title to the Property marketable. B Seller shall have ten (10) days from receipt of notice, if any, from Buyer of its title objections within which it must notify Buyer in writing if it cannot cure. C In the absence of such notice from Seller, Seller shall be obligated to cure the title objections, if any, made by Buyer. If Seller notifies Buyer that Seller is unable to convey good and marketable title to the property described above, subject to and in accordance with the provisions of this contract, or is not able or unwilling to obtain a commitment for title insurance and thereafter pay the premium for said title insurance to insure the exception(s) on behalf of the Buyer Page 4 then, except as hereinafter provided, Buyer may elect, by written notice to Seller, to either: (1) terminate this Agreement by notice delivered to the Seller within five (5) days of receipt of Seller's notice that Seller cannot cure the title objections, or is unwilling or unable to obtain title insurance in which event this Agreement shall wholly cease and terminate, and neither party shall have any further claim against the other by reason of this Agreement, except Buyer shall have the right to the return of the Deposit; or (2) Notwithstanding anything to the contrary contained herein, Buyer may accept such title as Seller may be able to convey, without reduction of the Purchase Price or any credit or allowance against the same and without any other liability on the part of Seller and if Buyer elects to do so, Seller shall have no right to terminate this Agreement as hereinabove provided. The acceptance of the deed by Buyer shall be deemed to be a full performance and discharge of every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement, except those, if any, which are herein specifically stated to survive the delivery of the deed. (3) If a search of the title discloses judgments, bankruptcies or other returns against other persons having names the same as or similar to that of Seller, Seller will on request deliver to Buyer an affidavit showing that such judgments, bankruptcies or other returns are not against Seller. 11. USE OF PROPERTY. Seller represents that, to the best of Seller's knowledge, the Property and any improvement thereon are in full compliance with restrictive covenants, statutes, ordinances, regulations, and/or other administrative enactments including, but not limited to building codes and zoning ordinances for the present use as a multi- residential dwelling. 12. CLOSING DATE. The Closing shall occur not less than 65 nor more than 80 days after the end of the Due Diligence Period (as hereinafter defined) provided that the Buyer does not terminate this Agreement as permitted herein (the "Closing" or "Closing Date") by mail or at the Seller's office, or at such other time and place as may be mutually agreed upon. 13. POSSESSION. Buyer shall have possession and occupancy of the Property from and after the date of delivery of the deed, subject only to matters herein provided for. 14. BROKER'S COMMISSION. Buyer represents to Seller that it did not employ any broker in connection with this sale other than Guiney and Glatstian Associates, Inc. and that Buyer shall be responsible for the payment of all fees and commissions to that broker. Seller and Buyer each agree to indemnify the other for any and all claims and expenses, including legal fees, if any other fees or commission is determined to be due by reason of the employment of any other broker by the indemnifying party. This representation and indemnity shall survive the Closing. Page 5 15. RISK OF LOSS. The risk of loss or damage to the Property by fire or other casualty or by taking by eminent domain, until Closing, shall be assumed by Seller. Upon the happening of such event, but only if the cost of repair or replacement exceeds $100,000. Buyer shall have the election of terminating this Agreement without further liability hereunder, or of completing this purchase and receiving the Seller's share of insurance monies, collectible for such loss or damage, or the award for such taking by eminent domain. In the event that the cost of repair or replacement is less than $100,000, Buyer shall not have the option of terminating this Agreement, but shall have the right to receive the Seller's share of insurance monies, collectible for such loss or damage, or the award for such taking by eminent domain. 16. CONDITIONS PRECEDENT. A It shall be a condition to Buyer's obligations to close that all of the representations and warranties of the Seller are true and correct as of the Closing; B It shall be a condition to Buyer's obligation to close that there are at Closing 110 apartment units in rentable condition, and to the best of Seller's knowledge which are all in compliance with federal, state, county or local laws, ordinances, rules and regulations; C Buyer shall have [forty-five (45)] days after the date of this Agreement (the "Due Diligence Period") within which to review and inspect the Property and the Other Items (including, but not limited to, performing engineering and Phase I environmental studies), the Seller's books and records pertaining to the Property and the Other Items, matters relating to zoning compliance and compliance by the Property and the Other Items with other applicable governmental regulations, the market in which the Property operates, the tax assessment on the Property as it relates to the purchase price and to the assessment on comparable properties, Service Contracts, executory contracts, and such other matters as Buyer shall deem reasonably necessary or appropriate in connection with the Property and the Other Items. If Buyer determines that it does not wish to purchase the Property and the Other Items as a result of its findings during the Due Diligence Period and notifies Seller of such decision within the Due Diligence Period, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement, except Buyer shall have the right to the return of the Deposit. Buyer's failure to object within the Due Diligence Period shall be deemed a waiver by Buyer of the condition contained in this Section 16(C). It is understood that the contingencies set forth herein are for Buyer's benefit and may be waived by Buyer at any time. If the above contingencies are not satisfied or waived by the Buyer, the Buyer shall have the right to terminate this Agreement by written notice to Seller. In the event of such a termination, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement, except Buyer shall have the right to the return of the Deposit. 17. ENVIRONMENTAL CERTIFICATION. By acceptance of this Agreement, Seller represents, warrants, and certifies to Buyer that Seller has no knowledge of any violation, and has received no notice of any violation of any applicable Environmental Laws (below defined). To the best of Seller's knowledge, Seller has not, nor has any Page 6 other person, used, generated, stored, dumped, released, buried, dispersed or emitted any Hazardous Substance on the Property in violation of Environmental Laws nor are there any underground tanks on the Property, nor is there a violation of any Environmental Laws with respect to the current use of the Property. "Environmental Laws" shall mean all federal, state and local environmental, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of any Hazardous Substance and the rules, regulations, and orders with respect thereto. "Hazardous Substance" means, without limitation, any flammable, explosive or radioactive material, polychlorinated biphenyl, petroleum or petroleum product, methane, hazardous materials, hazardous wastes, hazardous or toxic substances or related materials, as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 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.), the Toxic Substances Control Act, as amended (15 U.S.C. Sections 2601, et seq.), or any other Environmental Law and the regulations promulgated thereunder applicable on the effective date of this Agreement. From the date of acceptance hereof to and including the date of Closing, Seller shall promptly provide Buyer with a copy of any notice, citation, complaint or other directive from any person, entity or governmental authority whereby Seller's compliance with Environmental Laws is called into question, and promptly notify Buyer of any new information or other developments which could tend to supplement or modify the information contained herein. 18. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to Buyer as of the date hereof and as of Closing, that: A To the best of Seller's knowledge, there is no litigation, proceeding or investigation pending, or to the knowledge of Seller threatened, against or affecting Seller that might affect or relate to the validity of this Agreement, any action taken or to be taken pursuant hereto, or the Property, the Other Item or any part or the operation thereof, whether or not fully covered by insurance or any proceeding pending for the increase or decrease of the assessed valuation of all or a portion of the Property. B To the best of Seller's knowledge, Seller has complied with and is not in default under, or in violation of, or received any notice that the Seller, the Property or the Other Items may be in violation of, any law, ordinance, rule, regulation or code or condition in any approval or permit pursuant thereto (including without limitation, any zoning, sign, environmental, labor, safety, health or price or wage control, ordinance, rule, regulation or order applicable to the ownership, development, operation or maintenance of the Property or the Other Items. Page 7 C With the exception of one lease, there are no written leases affecting the Property with a term greater than one (1) year. D To the best of Seller's knowledge, there is no pending condemnation of the Property, or any part thereof, or of any plans for improvements which might result in a special assessment against the Property. E Seller has not received any written notice or request from any insurance company, Board of Fire Underwriters (or organization exercising functions similar thereto) requesting the performance of any work or alteration in respect of the Property or the Other Items with which Seller has not complied. F Security deposits (with interest) held by Seller will be correctly identified by Seller as of Closing with respect to the Property. G Seller and Seller's employees and agents have not let, and will not let any contracts for improvements to the Property which will not be fully completed and fully paid for prior to Closing. H Until Closing, Seller shall continue to fulfill all of its obligations under the terms of the Leases encumbering the Property, and under the Service Contracts, and Seller shall operate, maintain and repair at Seller's expense, all landscaping, buildings, fixtures and facilities and shall continue to operate the Property in the manner in which Seller currently does so. I The Rent Roll to be given by Seller to Buyer at Closing will be true and correct. J The financial information previously provided to Buyer with respect to the Property is substantially accurate. K All of the ranges and refrigerators located within the apartment units are the property of the Seller and not of the tenants. L This Agreement has been duly authorized, executed and delivered and constitutes a legal and binding obligation of Seller, enforceable in accordance with its terms, except as may be limited by bankruptcy and other laws affecting creditors' rights generally. M Neither the entry into this Agreement, nor the carrying out of the transactions contemplated herein has resulted or will result in any violation of, or be in conflict with, or result in the creation of, any mortgage, lien, encumbrance or charge (other than those contemplated hereby) upon any of the properties or assets of Seller pursuant to, or constitute a default under, any certificate of incorporation, by-law, partnership agreement, or mortgage, indenture, contract, agreement, instrument, franchise, permit, judgment, decree, order, statute, rule or regulation applicable to Seller or the Property. N To the best of Seller's knowledge, no consent or approval by, or authorization of, or filing, registration or qualification with, any federal, state or local governmental authority, bureau, department or agency, or any corporation, person or other entity is required as of the Closing either for the execution, delivery or performance of this Agreement by Seller, or in connection with Page 8 the consummation by Seller of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations, filings, registrations or qualifications as have been obtained by Seller as of the date hereof and disclosed and accepted by Buyer. O Seller shall permit Buyer to examine and copy all of the leases encumbering the Property, including all additions, amendments or modifications thereto as provided herein. Seller shall not accept any prepayment in excess of one month of any rent due under any leases with respect to the Property. The representations and warranties of Seller contained in this Agreement, the statements in any Exhibit or Schedules attached to this Agreement, or other instruments furnished to Buyer at or prior to Closing pursuant to this Agreement, or in connection with the transactions contemplated by Seller pursuant to this Agreement, do not contain any untrue statements of a material fact, or fail to state a material fact necessary to make it not misleading. The representations and warranties contained herein shall survive delivery and recording of the deed and shall not merge therein. Seller acknowledges that each of the representations made by it in this paragraph 18 and elsewhere in this Agreement is material to Buyer hereunder. As to any representation or warranty set forth herein, Seller shall indemnify, defend and hold Buyer sale and harmless from and against any and all loss, damage, claim, counterclaim, cause of action, cost or expense, including, without limitation, reasonable attorneys' fees and disbursements at both trial and appellate levels, suffered, paid or incurred by, or asserted against Buyer, directly or indirectly, whether foreseen or unforeseen, and whether for personal injury or death or for property damage or otherwise by reason of Seller's breach of any warranty or obligation under this Agreement or if any representation of Seller in this Agreement is wholly or partially untrue. Irrespective of anything to the contrary contained herein, the representations and warranties of Seller and the indemnity by Seller herein contained shall expire and be of no further effect upon the expiration of 12 months after Closing. This expiration shall not apply to any breach of warranty or representation which arises out of fraud or an intentional material misrepresentation made by Seller. 19. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller as of the date hereof and as of the Closing: (a) Buyer is and will be as of the date of Closing duly organized, validly existing and in good standing under the laws of the State of New York and has all the requisite power and authority to enter into and carry out this Agreement according to its terms. (b) This Agreement has been duly authorized, executed and delivered and constitutes a legal and binding obligation of Buyer, enforceable in accordance with its terms, except as may be limited by bankruptcy and other laws affecting creditors' rights generally. Page 9 (c) To the best of its knowledge after due inquiry, there is no litigation, proceeding or investigation pending, or to the knowledge of Buyer threatened, against or affecting Buyer or the partners of Buyer that might affect or relate to the validity of this Agreement or any action taken or to be taken pursuant hereto, or that might have a material adverse effect on the business or operations of the Buyer. 20. ASSIGNMENT. This Agreement, and all rights of Buyer hereunder, may be assigned by Buyer to any affiliate without Seller's prior consent. Any other assignment by Buyer shall require the Seller's prior written consent, which consent shall not be unreasonably withheld. Any assignment by the Buyer shall not relieve the Buyer of any obligation of the Buyer created by this Agreement. Seller may convey its interest in the Property to an affiliate without the Buyer's prior written consent, provided that the assignee shall agree in writing to be subject to the terms of this Agreement. 21. NOTICE. All notices given pursuant to any provisions of this Agreement shall be in writing and shall be effective only if delivered personally, or sent by registered or certified mail, postage prepaid or sent by a national over-night carrier, to the addresses set forth below: To Seller: Dresner & Litz 9140 Old Bustleton Road Apartment C-111 Philadelphia, PA 19115 Attn: Jack Litz and Arnold Dresner with a copy to: Mesirov, Gelman, Jaffee, Cramer & Jamieson 1735 Market Street Philadelphia, PA 19103 Attn: Harvey Shapiro, Esq. To Buyer: HOME PROPERTIES OF NEW YORK, L.P. Attn: Norman Leenhouts, Chairman 850 Clinton Square Rochester, New York 14604 22. PLANS, WARRANTIES AND GUARANTIES. Seller agree to provide Buyer with all plans and architectural drawings in Seller's possession for the improvements completed at the Property, including, without limitation, all "as-built" plans in Seller's possession and Seller further agrees that it will endeavor to turn over the same to Buyer at Closing. Seller shall assign to Buyer at Closing any and all guaranties and warranties Seller has with respect to the Property, the improvements thereon, and the equipment relating to the Property, if any. Page 10 23. APPLICABLE LAW. This Agreement shall be construed and governed in accordance with the laws of the State of Pennsylvania. 24. ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement between the parties, and any and all prior understandings or agreements, whether written or oral, are hereby merged into this Agreement. This Agreement cannot be modified except by a written instrument signed by the parties hereto. 25. BINDING AGREEMENT. This Agreement shall not be binding or effective until properly executed by Buyer and Seller. 26. CONFIDENTIALITY. By execution of this Agreement and except as otherwise provided herein, prior to the Closing each of Seller and Buyer agree to keep any and all information with respect to the transactions contemplated by this Agreement strictly confidential, and will not disclose any such information, without the other's prior written consent. Buyer may disclose the existence of this Agreement to the extent necessary to conduct its due diligence with respect to the Property. 27. FINANCIAL ACCESS. Seller will provide a signed representation letter in substantially the form attached hereto as Exhibit C to enable an Independent Public Accountant to render an opinion on such financial statements. Seller will provide access by Buyer's representatives, to all financial and other information relating to the Property as is sufficient to enable them to prepare audited financial statements, at Buyer's 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. IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed as of the day and date first above written. HOME PROPERTIES OF NEW YORK, L.P. For purposes of agreeing to act as By: Home Properties of New York, Inc. Escrow Agent hereunder General Partner MESIROV, GELMAN, JAFFE, CRAMER & JAMIESON By: /s/ Norman Leenhouts ---------------------------------- By: /s/ Bernard B. Kolodner Title: Chairman ------------------------- ---------------------------------- Bernard B. Kolodner Title: Partner ------------------------- CEDAR GLEN ASSOCIATES By: /s/ Arnold Dresner ------------------------------- Arnold Dresner, General Partner /s/ Jack Litz ------------------------------- Jack Litz, General Partner Page 11 EX-2 3 Exhibit 2.6 CONTRIBUTION AGREEMENT This Contribution Agreement ("Agreement"), made as of the 2nd day of March, 1997 by and among HOME PROPERTIES OF NEW YORK, L.P., a New York limited partnership, having its principal office at 850 Clinton Square, Rochester, New York 14604, (the "Partnership") BRADDOCK LEE LIMITED PARTNERSHIP, a Virginia limited partnership (the "Contributor"), having its principal office at 11501 Huff Court, North Bethesda, Maryland 20895; and TOWERCONSTRUCTION GROUP, LLC, a Maryland limited liability company ("Tower"), having its principal office at 11501 Huff Court, North Bethesda, Maryland 20895. W I T N E S S E T H: WHEREAS, the Contributor owns a certain apartment complex and adjacent land located in the State of Virginia, all as more particularly described on Exhibit A; WHEREAS, the Contributor wishes to contribute its interest in the Property in exchange for limited partnership interests in the Partnership; WHEREAS, Partnership desires to acquire the Property upon the happening of certain events; WHEREAS, Tower has the right to manage the Property and earn fees therefor pursuant to that certain Management Agreement, dated on or about the date first written above, by and between the Contributor and Tower (the "Management Agreement"); WHEREAS, Tower wishes to contribute its interests in the Management Agreement in exchange for limited partnership interests in the Partnership and the Partnership wishes to acquire Tower's interest in the Management Agreement in order to effect a termination of the Management Agreement; WHEREAS, the parties hereto also desire, subject to the terms and conditions set forth herein and in the agreement noted below, that Park Shirlington Limited Partnership ("Park Shirlington") contributes to the Partnership and the Partnership shall accept from Park Shirlington, the real property described in Schedule 1 attached hereto (the "Park Shirlington Property"), pursuant to a contribution agreement entered into between Park Shirlington, Tower and the Partnership of even date herewith (the "Park Shirlington Contribution Agreement"), and that the transactions contemplated therein close simultaneously with, and as a condition to, the closing of the transactions contemplated hereby; NOW, THEREFORE, in consideration, mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency whereof being hereby acknowledged, the parties hereby agree as follows: Page 1 1. REAL PROPERTY DESCRIPTION. The Real Property to be contributed by the Contributor consists of an apartment complex commonly known as Park Shirlington Apartments, which includes 254 apartments and one apartment converted for use as an office (the " Project"), located in Alexandria, Virginia, on land more particularly described on Exhibit A attached hereto, together and including all buildings and other improvements thereon, including but not limited to, the 254 apartment units and one apartment converted for use as an office, and all rights in and to any and all streets, roads, highways, alleys, driveways, easements and rights-of-way appurtenant thereto (the foregoing are hereafter collectively referred to as the "Property"). 2. OTHER ITEMS. The following items now or at the Closing (hereinafter defined) in or on the Property and owned by the Contributor, are included in this Agreement and shall become the property of Partnership at Closing (as hereafter defined): A all heating, air-conditioning, plumbing and lighting fixtures, B ranges, refrigerators and disposals (one of each for each apartment unit), C water heaters, D any and all bathroom fixtures, exhaust fans, hoods, signs, screens, maintenance building, fences, cabinets, mirrors, shelving, mail boxes, and any and all related equipment in connection with the Property, and E any fixtures appurtenant to the Property and any other furniture or equipment used in connection with the operation and maintenance of the Property (hereinafter with the items listed in A-D above, collectively, the "Other Items"). The Other Items will be acquired by the Partnership free and clear of all liens and encumbrances. 3. CONSIDERATION AND MANNER OF PAYMENT. A In consideration for the contribution of the Property by the Contributor to the Partnership, subject to the terms and conditions herein, the Partnership agrees to issue to the Contributor or to the partners of the Contributor as designated in writing by the Contributor (collectively, the "Designees" and individually, a "Designee") limited partnership interests in the Partnership (collectively, the "Units" and each one of the Units, a "Unit") having a value, determined as described in paragraph C below, of Eleven Million Six Hundred Forty-Six Thousand Three Hundred and Forty-Four and no/100 Dollars ($11,646,344) (the "Contributor's Contribution Value"). Notwithstanding the above, the Contributor may only designate individuals or entities to be Designees who have established to the reasonable satisfaction of the Partnership that they are accredited investors under applicable securities laws. B In consideration for the contribution of the Management Agreement by Tower to the Partnership, subject to the terms and conditions herein, the Partnership agrees to issue Units having a value, determined as described in paragraph C below, of Six Hundred Twelve Thousand Nine Hundred Sixty-Six and no/100 Dollars ($612,966) ("Tower's Contribution Value"). Notwithstanding anything to the contrary herein, the Partnership shall be required to issue the Units to Tower and Tower shall be obligated to contribute the Management Agreement to the Page 2 Partnership only if and when the Closing occurs with respect to the contribution of the Property by the Contributor to the Partnership. C The total number of Units to be issued to the Contributor, the Designees and Tower will be equal to the Contributor's Contribution Value and Tower's Contribution Value, respectively, divided by the "Market Value" of a Unit. The Market Value of a Unit shall be equal to the average closing price for 20 consecutive trading days prior to, but not including, the Closing Date of a share of common stock of Home Properties of New York, Inc., ("HME") as listed on the New York Stock Exchange. Notwithstanding the above, the Market Value shall not exceed $30 per Unit. D The initial distribution payable with respect to Units issued hereunder shall be made on the date on which HME 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 Contributor, Designees and Tower 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. E Upon the expiration of the Due Diligence Period and provided Partnership has not exercised its right to terminate this Agreement, Partnership shall deposit the sum of Two Hundred Thirty Thousand Dollars ($230,000.00) with Tri-State Commercial Settlements, Inc. (the "Title Company") as a good faith deposit hereunder (the "Deposit"). The Deposit shall be deposited in an FDIC or FSLIC institution and shall be held and disbursed as provided in the Escrow Agreement attached hereto as Exhibit B. The Deposit, along with accrued interest shall be refunded to the Partnership at Closing in the event Partnership consummates the transaction contemplated hereby, upon termination of this Agreement by Partnership expressly permitted hereunder, or upon Contributor's default. In the event Partnership fails to acquire the Property other than by reason of a termination by Partnership expressly permitted hereunder or Contributor's default, the Deposit shall, at Contributor's election, be forfeited to the Contributor as liquidated damages. Any and all sums deposited hereunder shall be applied or refunded as provided herein. (All references to "Deposit" shall be deemed to include all accrued interest thereon). 4. ADJUSTMENTS AT CLOSING. The following shall be adjusted and prorated between the Contributor and the Partnership at Closing as if the Partnership was the owner of the Property as of the Closing Date. All such adjustments and pro-rations between Contributor and Partnership shall be settled in cash and shall not increase or decrease the Contributor's Contribution Value, as the case may be. A All ad valorem real estate taxes with respect to the Property for the calendar year or other applicable tax period in which the Closing is consummated. If the amount of such taxes is not known at Closing, proration of such taxes will be made upon the basis of the previous year's or other most recent applicable tax period taxes. In such event, the Contributor and Partnership agree to re-prorate/adjust the taxes between themselves after the Closing, based upon the full amount of the actual taxes for the Property when the amount of the actual taxes is known. B water charges. Page 3 C sewer charges. D fuel, electricity and other utilities. E All tenant security deposits (and interest thereon if required by law or contract to be earned thereon) shall be transferred or credited to Partnership at Closing. At Closing, Partnership shall assume Contributor's obligations related to tenant security deposits to the extent they are properly credited and transferred to Partnership. Partnership agrees that it will indemnify, defend, hold Contributor harmless and will indemnify Contributor against all demands, claims, losses, costs, damages, expenses or liabilities, including, but not limited to, attorneys' fees, arising out of or in connection with the transfer or disposition of such security deposits. F charges under the service contracts assumed by Partnership. G laundry income. H any other charges incurred with respect to the Property which the Partnership or the Contributors are obligated to pay. I Rents. (1) All rent payments collected as of the Closing Date for the month of Closing shall be prorated as between the parties as of the Closing Date. (2) All rent collected after Closing for any period prior to Closing shall belong to Contributor and, if paid to Partnership, Partnership shall promptly send such rent to the Contributor. (3) All rent collected by the Contributor prior to the Closing for rental periods subsequent to Closing shall be paid to Partnership at Closing. (4) All rent collected by Partnership or the Contributor for rental periods after the Closing shall belong to Partnership and, if paid to the Contributor, the Contributor shall promptly send such rent to Partnership. (5) Partnership will make reasonable efforts to collect all rents due for the month of the Closing and any past due rents, but shall not be required to bring suit to collect such rents. Any rent received from any tenant after Closing shall first be applied to pay any rent owing by that tenant for the month of the Closing and then to pay rent owing for the then current month and thereafter in reverse order of delinquency. Any rents due for the month of Closing (and accruing prior to the Closing Date) and past due rents not collected by Partnership within the period of 180 days following the Closing Date shall be assigned to the Contributor without recourse who may pursue such remedies for collection thereof for its own account. Page 4 Any error in the calculation of adjustments shall be corrected subsequent to Closing with appropriate credits to be given based upon corrected adjustments, provided, however, that the adjustments (except if errors are caused by misrepresentations and except for actual taxes) shall be final upon expiration of the sixtieth day after Closing. 5. COSTS. Partnership shall pay all recording fees, Partnership's attorneys' fees, one-half of any applicable transfer and recordation taxes, the costs of obtaining any title commitment and title policy and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the transferee of similar property. The Contributor shall pay one-half of any applicable transfer and recordation taxes, attorneys' fees, if any, incurred by them in connection with this transaction, and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the transferor of similar property. Partnership shall pay all out-of-pocket closing costs payable by the Contributor hereunder (excluding Contributor's attorneys' fees which shall be paid directly by Contributor) and the Contribution Value of the Property shall be reduced at Closing by the amount so paid by Partnership. 6. EVIDENCE OF TITLE. The Contributor shall furnish to the Partnership, at Contributor's expense, and within ten (10) days from the execution hereof, a copy of the most recent title policy relating to the Property along with the most recent instrument survey of the Property, in each case, to the extent in its possession or control. 7. CLOSING DOCUMENTS. A At the time of Closing, the Contributor shall deliver to Partnership the following: (1) A special warranty deed in the form provided for under the laws of the state where the Property is located pursuant to which Contributor shall warrant title only against anyone whomsoever is lawfully claiming the Property, by through or under Contributor, but not otherwise (the "Deed"). Such Deed shall convey the Property to Partnership subject to: (i) all zoning and building laws, ordinances, resolutions and regulations of all governmental authorities having jurisdiction which affect the Property and the use and improvement thereof; (ii) all leases identified in the Rent Roll (hereinafter defined); (iii) ad valorem real estate taxes for the current year and subsequent years which are not yet due and payable; and (iv) easements, covenants, restrictions, agreements and/or reservations of record, so long as they do not interfere with the use of the Property as a rental apartment complex, if any, (v) private, public and utility easements and roads and highways, if any, and (vi) and any other exceptions not objected to or waived by Partnership under Section 9(b)(collectively, the "Permitted Exceptions"). (2) A Bill of Sale in the form attached hereto as Exhibit C; (3) A current rent roll ("Rent Roll") certified, as of the date of Closing, which shall include a correct list of all tenants, all rental obligations of each tenant with respect to the Property and all security deposits along with a copy of all leases shown on the Rent Roll; Page 5 (4) An Assignment of leases, security deposits and contracts in the form attached hereto as Exhibit D (the "Assignment") along with a copy of all contracts so assigned. In lieu of an assignment of the security deposits, the Contributor may provide Partnership with a credit at Closing for all security held by Contributor (including any accrued interest, if required by law or contract to be earned thereon) with respect to all leases encumbering the Property. (5) Reserved; A (6) Contributor's affidavit stating Contributor's federal taxpayer identification number and certifying that Contributor is not a foreign person, corporation, partnership, trust or estate as defined in the Internal Revenue Code and Regulations thereunder pursuant to the Foreign Investment in Real Property Tax Act of 1980. (7) Copies of the personnel files of all employees employed at the Property and remaining in the employment of the Partnership after the Closing. (8) An executed original of the Registration Rights Agreement in the form attached hereto as Exhibit E. (9) An executed original of the Stock Put Agreement in the form attached hereto as Exhibit F (the "Stock Put Agreement"). (10) An executed original of an assignment, assumption and termination of Management Agreement assigning Contributor's interest as owner under the Management Agreement. (11) Any additional funds, documents and or instruments as may be necessary for the proper performance by the Contributor of its obligations contemplated by this Agreement. B At the time of Closing, Partnership shall deliver to Contributor the following: (1) The Assignment; (2) Evidence of organization, existence and authority of Partnership and HME and the authority of each person executing documents on behalf of each, reasonably satisfactory to Contributor; (3) An opinion of a nationally recognized law firm acting as counsel for Partnership and HME reasonably acceptable in form and content to the Contributor to the effect that (1) HME has been organized in conformity with the requirements for qualification as a real estate investment trust under the Code and currently qualifies to be taxed as such, and (2) Partnership is classified as a partnership and not as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes; (4) Such cash as may be required of Partnership to pay closing costs or charges properly allocable to Partnership; Page 6 (5) An Amendment to the Partnership's Partnership Agreement in the form necessary to admit Contributor, Designees, Tower and their respective designees as limited partners of the Partnership and evidencing the issuance of the Units required pursuant to this Agreement; (6) An executed original of the Registration Rights Agreement in the form attached hereto as Exhibit E; (7) An executed original of the Stock Put Agreement in the form attached hereto as Exhibit F; and (8) Any additional funds, documents and or instruments as may be necessary for the proper performance by Partnership of its obligations contemplated by this Agreement. (9) An executed original of an assignment, assumption and termination of the Management Agreement assuming Contributor's interest as owner under the Management Agreement and terminating the Management Agreement. C. At the time of the Closing, Tower shall deliver to the Partnership an executed original of a termination of the Management Agreement. 8. INSPECTION. For a period of Thirty (30) days after the date of this Agreement (the "Due Diligence Period"), the Contributor agrees that Partnership and its authorized representatives shall have the right and privilege to enter upon the Property and the Partnership's offices, upon reasonable notice, during regular business hours, for the purpose of gathering such information and conducting such environmental and engineering studies or other tests and reviews as Partnership may deem appropriate and necessary, including but not limited to a review of the Contributor's books and records pertaining to the Property and the Other Items, matters relating to zoning compliance and compliance by the Property and the Other Items with other applicable governmental regulations, the markets in which the Property operates, any service or other contracts relating to the Property, the tax assessment on the Property and on comparable properties and such other matters as Partnership shall deem reasonably necessary or appropriate in connection with the Property and the Other Items. All such inspections, studies, tests and reviews shall be at Partnership's sole expense. Contributor agrees to cooperate with Partnership by making available to Partnership such records, plans, drawings or other data as may be in Contributor's possession or control relating to the Property and its operation; excluding however, any files containing confidential documents such as personnel documents, tax returns, appraisals, market analyses, projections, internal communications, or correspondence between the property manager and Contributor. Partnership agrees that it will provide Tower and Contributor with a copy of any third party reports received by Partnership with respect to its due diligence activities pursuant to this paragraph. In addition, promptly upon execution of this Agreement by all of the parties, the Partnership will order a commitment (the "Title Commitment") for an ALTA owner's policy in the amount of $11,646,344 from the Title Company. Partnership hereby agrees to indemnify, defend and hold Contributor, Contributor's tenants, agents, employees, partners and the Property harmless from and against all claims, losses, costs, damages, expenses or liabilities, including, but not limited to, mechanic's and materialmen's liens and attorneys' fees arising out of or in connection with Partnership's access to or entry upon the Property. If any inspection or test disturbs the Property, Partnership will restore the Page 7 Property, at Partnership's own cost and expense, to the same condition as existed prior to any inspection or test. The Partnership agrees that prior to any physical inspection or testing at the Property, it or its agents will provide the Contributor with appropriate evidence of insurance reasonably satisfactory to Contributor. The Partnership agrees that its rights under this Section 8 shall be subject to the rights of the residents at the Property and that it will use its reasonable efforts to minimize any disruption to those residents. Partnership shall have the right to terminate this Agreement if it determines that it does not wish to purchase the Property as a result of its findings during the Due Diligence Period and notifies the Contributor in writing of such decision within the Due Diligence Period (the "Termination Notice"). In such event, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement. Partnership's failure to deliver the Termination Notice within the Due Diligence Period shall be deemed to be a waiver by Partnership of its right to terminate the Agreement as provided in this Section 8. 9. TITLE; TITLE EXAMINATION; OBJECTIONS TO TITLE. A Contributor shall convey the Property to Partnership by Deed, subject to the Permitted Exceptions. Title to all Other Items purchased herein, if any, shall be conveyed to Partnership by bill of sale, free and clear of all security interests, liens and encumbrances, but subject to any Permitted Exceptions. B Within ten (10) days after Partnership's receipt of the Title Commitment Partnership shall deliver to Contributor a statement (a "Statement of Title Defects") of defects, encumbrances or objections to title or survey matters ("Title Defects"). If Partnership fails to deliver a Statement of Title Defects within such time period as aforesaid, such failure shall be deemed to be a waiver of any such Title Defects and Contributor shall convey title in accordance with this Agreement and such Title Defects will be additional Permitted Exceptions. Upon receipt of Partnership's Statement of Title Defects, Contributor shall have five (5) business days to determine whether it wishes to attempt to cure any matters shown on such statement. If Contributor is unable or unwilling to cure or attempt to cure any such matters, Contributor shall give notice to Partnership within such five (5) day period, but if no such notice is given, Contributor shall be deemed to be unwilling to cure any such Title Defects. If Contributor does not agree to attempt such cure, Partnership shall have ten (10) days after the expiration of the foregoing five (5) business day period to terminate this Agreement, in which case it shall have the right to the return of the Deposit, or to give Contributor notice that it has elected to take title to the Property subject to the Title Defects without abatement of the Contribution Value and such Title Defects will be additional Permitted Exceptions. If no notice is given by the Partnership within the ten (10) day period, the Partnership shall be deemed to have terminated this Agreement. Partnership agrees that Contributor shall be under no obligation whatsoever to commence any proceedings, suits or actions to clear title or eliminate any Title Defects or expend any funds in connection therewith. 10. CLOSING DATE. Unless this Agreement is terminated as provided herein, the Closing shall occur within 10 days after the end of the Due Diligence Period (as hereinafter defined) (the "Closing" or "Closing Date") at the Contributor's office. Page 8 11. POSSESSION. Partnership shall have possession and occupancy of the Property from and after the date of delivery of the deed subject only to the Permitted Exceptions and to the rights of tenants shown on the Rent Roll delivered to Partnership at Closing pursuant to Section 7A (3). 12. BROKER'S COMMISSION. The Contributor, Tower and Partnership each represent to the other that there are no fees or commissions due as a result of their employment of any Broker other than the fees due to Carey Winston, which fees Partnership agrees to pay. The Contributor, Tower and Partnership each agree to indemnify the other for any and all claims and expenses, including legal fees, if any other fees or commission is determined to be due by reason of the employment of any other broker by the indemnifying party. This representation and indemnity shall survive the Closing. 13. RISK OF LOSS. Risk of loss resulting from any eminent domain proceeding which is commenced prior to Closing, and risk of loss to the Property due to fire or any other casualty prior to Closing shall remain with Contributor. If prior to the Closing the Property or any portion thereof is destroyed or damaged in excess of $250,000, or if the Property or any portion thereof shall is subjected to a bona fide threat of condemnation or becomes the subject of any proceedings, judicial, administrative or otherwise, with respect to the taking by eminent domain or condemnation, Contributor shall notify Partnership thereof within a reasonable time after receipt of actual notice thereof by Contributor, but in any event prior to Closing, and, at its option, Partnership may, within 5 days after receipt of such notice, elect to cancel this Agreement in which event this Agreement shall terminate and the Deposit shall be returned to Partnership. If the Closing Date is within the aforesaid 5-day period, then Closing shall be extended to the next business day following the end of said 5-day period. If no such election is made, and in any event if the destruction or damage is not in excess of $250,000, this Agreement shall remain in full force and effect and the contribution contemplated herein, less any interest taken by eminent domain or condemnation, shall be effected with no further adjustment, and upon the Closing of this contribution, Contributor shall assign, transfer and set over to Partnership all of the right, title and interest of Contributor in and to any awards that have been or that may thereafter be made for such taking, and Contributor shall assign, transfer and set over to Partnership any insurance proceeds that may have been or that may thereafter be made for such damage or destruction giving Partnership a credit at Closing for any deductible under such policies. Contributor hereby agrees that it shall keep all insurance policies presently existing which relate to the Property in effect through the Closing Date. 14. CONDITIONS PRECEDENT TO PARTNERSHIP'S OBLIGATION TO CLOSE. A It shall be a condition to Partnership's obligation to consummate the Closing that there are at Closing 254 apartment units in rentable condition and one apartment unit converted for use as the Property Office and with respect to all of which the Contributor has received no notice from any governmental authority or agency having jurisdiction over the Contributor, the Property and the Other Items stating that the Contributor, the Property or the Other Items are in violation of any federal, state, county or local laws, ordinances, rules and regulations. In the event that the Contributor has received any such notice, then at its election, the Contributor shall have up to sixty (60) days after the receipt of such notice to cure any violation set forth therein and the Closing Date shall be extended to that date which is five days after the violation has been cured, but such extension is not to be for more than 65 days. If the Contributor fails to notify the Partnership that it has elected to cure any such violation within 10 days of the receipt of any Page 9 such notice, then the Contributor shall be deemed unwilling to cure any such violation. B It shall be a condition to Partnership's obligation to consummate the Closing that the Partnership has not exercised its right to terminate this Agreement as provided in Section 8. C It shall be a condition to Partnership's obligation to consummate the Closing that on or before the Closing Date, all management agreements relating to the Property shall have been terminated, other than the Management Agreement, the termination of which shall be effected by the Partnership and Tower immediately after its contribution to the Partnership in accordance with this Agreement. D It shall be a condition to Partnership's obligation to consummate the Closing that on the Closing Date the Title Company is prepared to issue a title policy insuring the Partnership's fee interest in the Property subject only to the Permitted Exceptions. It is understood that the conditions set forth in this Section 14 are for Partnership's benefit and may be waived by Partnership at any time. If the above conditions are not satisfied or waived by the Partnership, the Partnership shall have the right to terminate this Agreement by written notice to the Contributor. In the event of such a termination, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement, except Partnership shall have the right to the return of its Deposit and the obligations set forth in Sections 8 and 12 herein shall survive any such termination. 15. CONDITIONS TO THE PARTIES' OBLIGATIONS TO CLOSE. In addition to all other conditions set forth herein, the obligation of Contributor and Tower, on the one hand, and Partnership, on the other hand, to consummate the Closing contemplated hereunder shall be contingent upon the following: A The other party's representations and warranties contained herein shall be true and correct as of the date of this Agreement and the Closing Date. B As of the Closing Date, the other party shall have performed its obligations hereunder and all deliveries to be made at Closing have been tendered; C There shall exist no pending or threatened actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the other party that would materially and adversely affect the other party's ability to perform its obligations under this Agreement; and D There shall exist no pending or threatened action, suit or proceeding with respect to the other party before or by any court or administrative agency which seeks to restrain or prohibit, or to obtain damages or a discovery order with respect to, this Agreement or the consummation of the transactions contemplated hereby. Page 10 E With respect to Contributor's and Tower's obligations to consummate the Closing, as of the Closing Date, Park Shirlington shall have contributed and the Partnership shall have accepted the Park Shirlington Property pursuant to the Park Shirlington Contribution Agreement and the transactions contemplated therein have closed simultaneously with the transactions contemplated hereby. So long as a party is not in default hereunder, if any condition to such party's obligation to proceed with the Closing hereunder has not been satisfied as of the Closing Date, such party may, in its sole discretion, (i) terminate the Agreement by delivering written notice of termination to the other party on or before the Closing Date specifying the unsatisfied condition entitling the non-defaulting party to terminate this Agreement and provided the other party fails to satisfy the condition specified in the notice within five days after receipt of the notice; (ii) elect to extend the Closing for up to 60 days until such condition is satisfied, and (iii) elect to consummate the transaction, notwithstanding the non-satisfaction of such condition, in which event such party shall be deemed to have waived any such condition. In the event such party elects to close, notwithstanding the nonsatisfaction of such condition, there shall be no liability on the part of any other party hereto for breaches of representations and warranties of which the party electing to close had actual knowledge at the Closing. Notwithstanding the foregoing, the failure of a condition due to the breach of a party shall not relieve such breaching party from any liability it would otherwise have hereunder. So long as the Partnership is not in default hereunder, upon termination of this Agreement as provided above, the Partnership shall have the right to the return of its Deposit. 16. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR. The Contributor makes the following representations and warranties to Partnership as of the date hereof and as of Closing: A To the best of the Contributor's knowledge, the leases (the "Leases") listed on the rent roll attached hereto as Exhibit G and the contracts listed on the attached Exhibit H (the "Contracts") comprise all of the leases and rights to the property and all of the contracts to which Partnership will be subject on the Closing Date B. All of Contributor's obligations under the Leases and Contracts are fully performed and, to the best of such Contributor's knowledge, except as set forth on the attached Exhibits and except for delinquencies in the payment of rent for the current month, there is no default under any of the Leases and Contracts by any party thereto or no event which, with the giving of notice or passage of time, or both, would constitute a default thereunder. There are no other security deposits (the "Security Deposits") except as identified on Exhibit G. C. The Contributor has made no prior assignment or conveyance of the Leases, Security Deposits and Contracts and the Contributor is the valid holder of landlord's interest in the Leases, and has the full power and authority to assign its interest in the Leases, Security Deposits and Contracts to Partnership. D To the best of the Contributor's knowledge, there is no litigation, proceeding or investigation pending, or to the knowledge of the Contributor threatened, against or affecting the Contributor that might affect or relate to the validity of this Agreement, any action taken or to be taken pursuant hereto, or the Property or the Other Items or any part or the operation thereof, whether or not fully covered by insurance. Page 11 E To the best of the Contributor's knowledge, the Contributor has not received any written notices from any governmental authority or agency having jurisdiction over the Contributor or the Property that the Contributor, the Property or the Other Items are in violation of, any law, ordinance, rule, regulation or code or condition in any approval or permit pursuant thereto (including without limitation, any zoning, sign, environmental, labor, safety, health or price or wage control, ordinance, rule, regulation or order of) applicable to the ownership, development, operation or maintenance of the Property or the Other Items. Promptly upon receipt of any such notice, the Contributor shall provide the Partnership with a copy. F All of Tower's obligations under the Management Agreement have been performed and the Partnership has no claim of any nature against Tower or any of its successors and assigns relating to the Management Agreement. The Partnership acknowledges, understands and agrees that, except as provided in this Agreement to the contrary, Partnership's acquisition of the Property and Other Items and any other rights and interests to be contributed, conveyed, transferred and/or assigned is on an "AS IS" "WHERE IS" PHYSICAL BASIS, WITHOUT REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH REGARD TO PHYSICAL CONDITION OR COMPLIANCE WITH ANY LEGAL REQUIREMENTS OR TITLE EXCEPTIONS OF THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY LATENT OR PATENT DEFECTS, CONDITION OF SOILS (INCLUDING SURFACE AND SUBSURFACE CONDITIONS), EXISTENCE OR NON EXISTENCE OF HAZARDOUS SUBSTANCES OR POLLUTANTS, QUALITY OF CONSTRUCTION, STATE OF REPAIR, WORKMANSHIP, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR AS TO THE PHYSICAL MEASUREMENTS OR USABLE SPACE THEREOF, TITLE TO THE PROPERTY, THE ASSIGNABILITY, ASSUMABILITY OR TRANSFERABILITY OR VALIDITY OF ANY LICENSES, PERMITS, GOVERNMENT APPROVALS, WARRANTIES OR GUARANTIES RELATING TO THE PROPERTY OR THE USE OR OPERATION THEREOF, ZONING, BUILDING CODE, ACCESS, ENVIRONMENTAL, FIRE OR LIFE SAFETY, SUBDIVISION OR OTHER ORDINANCES, LAWS, CODES OR REGULATIONS, OF ANY KIND, PRIOR OR CURRENT OPERATIONS CONDUCTED ON THE PROPERTY AND SURROUNDING PROPERTY, OR ANY COVENANTS, CONDITIONS, RESTRICTIONS OR DECLARATIONS OF RECORD AND ALL OTHER MATTERS OR THINGS AFFECTING OR RELATING TO THE PROPERTY. As used in the foregoing representations and warranties, the phrase "to the best of Contributor's knowledge" shall mean the actual, conscious knowledge of Edgar W. Tullar, the Contributor's Director of Operations. The representations and warranties of the Contributor contained in this Agreement, the statements in any Exhibit or Schedules attached to this Agreement, or other instruments furnished to Partnership at or prior to Closing pursuant to this Agreement, or in connection with the transactions contemplated pursuant to this Agreement, do not contain any untrue statements of a material fact, or fail to state a material fact necessary to make it not misleading. Page 12 The representations and warranties contained herein shall not survive delivery of the Deed and shall merge therein. This expiration shall not apply to the representation set forth in paragraphs 16.D. and 16.F. or to any breach of warranty or representation which arises out of an intentional material misrepresentation made by the Contributor. 17. REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP. Partnership represents and warrants to the Contributor, Tower and Designees as of the date hereof and as of the Closing as follows: A Partnership is and will be as of the date of Closing duly organized, validly existing and in good standing under the laws of the State of New York and has all the requisite power and authority to enter into and carry out this Agreement according to its terms. B This Agreement has been duly authorized, executed and delivered and constitutes a legal and binding obligation of Partnership, enforceable in accordance with its terms, except as may be limited by bankruptcy and other laws affecting creditors' rights generally. C To the best of its knowledge after due inquiry, there is no litigation, proceeding or investigation pending, or to the knowledge of Partnership threatened, against or affecting Partnership or the partners of Partnership that might affect or relate to the validity of this Agreement or any action taken or to be taken pursuant hereto, or that might have a material adverse effect on the business or operations of the Partnership. D HME has been organized in conformity with the requirements for qualification as a real estate investment trust under the Internal Revenue Code of 1986 (the "Code") and its method of operation is expected to enable it to continue to satisfy the requirements for taxation as a real estate investment trust under the Code for the fiscal year ending December 31, 1997 and in the future. E The Partnership is classified as a partnership and not as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes. F (i) HME and the Partnership have filed or caused to be filed all federal, state, local, foreign and other tax returns, reports, information returns and statements required to be filed by them; (ii) HME and the Partnership have paid or caused to be paid all taxes (including interest and penalties) that are shown as due and payable on such returns or claimed by any taxing authority to be due and payable with respect to such returns, except those which are being contested by them in good faith by appropriate proceedings and in respect of which adequate reserves are being maintained on their books in accordance with generally accepted accounting principles consistently applied; (iii) HME and the Partnership do not have any material liabilities for taxes other than those incurred in the ordinary course of business and in respect of which adequate reserves are being maintained by them in accordance with generally accepted accounting principles consistently applied; (iv) as of the date of this Agreement, Federal and state income tax returns for HME and the Partnership have not been audited by the Internal Revenue Service or state authorities; (v) as of the date of this Agreement, no deficiency, assessment with respect to, or proposed adjustment of, HME's or the Partnership's federal, state, local, foreign or other Page 13 tax returns is pending or, to the best of the Partnership's knowledge, threatened; and (vi) as of the date of this Agreement, there is no tax lien, whether imposed by any federal, state, local or other tax authority, outstanding against the assets, properties or business of HME or the Partnership G. The Partnership has delivered to Contributor a complete and correct copy of: (i) the Articles of Incorporation and by-laws of HME; and (ii) the Second Amended and Restated Agreement of Limited Partnership of Partnership, in each case, as amended. H. The Partnership has previously made available to the Contributor as requested in writing by the Contributor complete and correct copies of: (i) the annual report on Form 10-K for HME for the period ending December 31, 1996; (ii) all quarterly reports on Form 10-Q for HME for each of the first three quarters in 1997; (iii) definitive proxy statement for HME for the 1997 Shareholders' Meeting; (iv) any current reports on Form 8-K filed by HME since September 30, 1997; and (v) any other form, report, schedule and statement and filed by HME for 1997 with the Securities and Exchange Commission ("SEC") under the Exchange Act, since January 1, 1997 (collectively, the "SEC Documents"). As of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Exchange Act to the extent applicable to such SEC Documents, and none of such SEC Documents (as of their respective dates) contained an untrue statement of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except as the same was corrected or superseded in a subsequent document duly filed with the SEC. HME is not aware of any reports or filings required to be filed under the Exchange Act with the SEC under the rules and regulations of the SEC that have not been filed. The representations and warranties of the Partnership contained in this Agreement, the statements in any Exhibit or Schedules attached to this Agreement, or other instruments furnished to Contributor at or prior to Closing pursuant to this Agreement, or in connection with the transactions contemplated pursuant to this Agreement, do not contain any untrue statements or a material fact, or fail to state a material fact necessary to make it not misleading. The representations and warranties contained herein shall survive delivery of the assignment of the Deed and shall not merge therein. 18. ASSIGNMENT. This Agreement, and all or any portion of the rights of Partnership hereunder, may not be assigned by Partnership without the prior written consent of the Contributor, which may be granted or withheld in its sole discretion. 19. NOTICE. All notices given pursuant to any provisions of this Agreement shall be in writing and shall be effective upon receipt and then only if delivered personally, or sent by registered or certified mail, postage prepaid or sent by a national over-night carrier, or by telecopy with confirmation of receipt to the addresses set forth below: Page 14 To the Contributor and Tower: c/o The Tower Companies Attn: Jeffrey S. Abramson 11501 Huff Court North Bethesda, Maryland 20895 Telecopy No.: (301) 984-6033 To Partnership: HOME PROPERTIES OF NEW YORK, L.P. Attn: Norman Leenhouts, Chairman 850 Clinton Square Rochester, New York 14604 Telecopy No.: (716) 546-5433 20. PLANS. The Contributor agrees to provide Partnership with all plans and architectural drawings in their possession for the improvements completed at the Property, including, without limitation, all "as-built" plansin their possession and the Contributor further agree that they will endeavor to turn over the same to Partnership at the Property during the Due Diligence Period. 21. APPLICABLE LAW. This Agreement shall be construed and governed in accordance with the laws of the State of Virginia. 22. ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement between the parties, and any and all prior understandings or agreements, whether written or oral, are hereby merged into this Agreement. This Agreement cannot be modified except by a written instrument signed by the parties hereto. 23. BINDING AGREEMENT. This Agreement shall not be binding or effective until properly executed by Partnership, Tower and the Contributor. 24. CONFIDENTIALITY. By execution of this Agreement and except as otherwise provided herein, prior to the Closing the Contributor, Tower and Partnership agree to keep any and all information with respect to the transactions contemplated by this Agreement strictly confidential, and will not disclose any such information, without the other's prior written consent, unless such disclosure is required by law or judicial process. The Partnership may disclose the existence of this Agreement to the extent necessary to conduct its due diligence with respect to the Property. The Partnership agrees that it will obtain the consent of the Contributor, which shall not be unreasonably withheld or delayed, with respect to the content of any press releases to be issued on or after the Closing Date by the Partnership relating to the transaction described herein. 25. CONTRIBUTOR COVENANTS. A Upon the request of the Partnership, the Contributor will provide, or cause to be provided, a signed representation letter substantially in the form attached hereto as Exhibit I. The Contributor will provide access by Partnership's representatives, to all financial and other information relating to the Property as is sufficient to enable them to prepare audited financial statements, at Partnership's 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. Page 15 B Prior to the Closing Date, the Contributor shall continue to fulfill all of their obligations under the terms of the leases encumbering the Property and under the service contracts and the Contributor shall operate, maintain and repair all landscaping, buildings, fixtures and facilities in accordance with its current practices. C Contributor covenants that it hereby waives any and all claims it may have against the Partnership as assignee of the Management Agreement relating to any defaults by Tower in the performance of its obligations under the Management Agreement. D The Contributor covenants that it will not assign its Units to any person or entity unless such person or entity shall establish that they are an accredited investor under applicable securities laws, unless prior to that assignment the Contributor or the assignee has properly exercised their rights under the Stock Put Agreement, such exercise to be immediately effective upon receipt of the assigned Units. 26. PARTNERSHIP COVENANTS. A The Partnership hereby covenants to the Contributor, Tower and any Designees as follows: (i) For a period of fifteen (15) years from and after the Closing Date, the Partnership shall not sell, exchange, transfer or otherwise dispose of the Property unless such transaction occurs in a manner as to be tax free to the Contributor and its partners, Tower and any Designees and their respective successors and assigns. After the foregoing 15-year period, Partnership will use commercially reasonable efforts to effect any disposition of all or part of the Property through a I.R.S. Code Section 1031 tax-free exchange or other transaction which does not cause federal income tax gain to be incurred by the Contributor, its partners, Tower, any Designees and their respective successors and assigns. In the event that the Partnership breaches any of its obligations set forth in this Section 26(A)(i), Partnership shall indemnify, defend and hold harmless each of Contributor, its partners, Tower, any Designees and their respective successors and assigns (each an "Indemnified Party" and collectively the "Indemnified Parties") from and against the aggregate federal, state and local income taxes incurred by such Indemnified Party as a result thereof (collectively, "Taxes") plus the Taxes incurred by such Indemnified Party as a result of the receipt of the Indemnity Payment (the "Tax Indemnity Amount"). Any such Taxes shall be deemed to be the amount of gain or income recognized by the relevant Indemnified Party multiplied by the highest actual rate or rates imposed upon such Indemnified Party for such gain or income (assuming it is the last dollar of income or gain) for the year in which such gain or income is recognized. In determining the Tax Indemnity Amount, no effect shall be given to the Indemnified Parties' tax deductions, tax credits, tax carry forwards nor to any other of their tax benefits or tax attributes. The Tax Indemnity Amount shall be payable by the Partnership to each Indemnified Party not later than thirty (30) days following the filing of tax returns for the Indemnified Party for the year in question. Page 16 (ii) The Partnership hereby guaranties to Contributor, Tower, any Designees and their respective successors, assigns, and designees that for the Applicable Period (hereinafter defined): (a) the value of each Unit shall not be less than the initial Market Value; and (b) each Unit shall receive or accrue a return on the initial Market Value of not less than eight percent (8%) compounded quarterly (the "Value Guaranty"). For purposes of the foregoing Value Guaranty, the 8% return shall be deemed to include both (x) cash and non-cash dividends and distributions relating to the Units paid or payable with respect to the Applicable Period, and (y) amounts by which the value of the Units (based on the average closing price for 20 consecutive trading days prior to, but not including, the expiration date of the relevant Applicable Period of a share of common stock of HME as listed on the New York Stock Exchange) at the end of the Applicable Period exceeds the initial Market Value. The Partnership shall pay any obligations accruing under the foregoing Value Guaranty with respect to each Unit upon the expiration of the relevant Applicable Period in the form of additional Units. Two examples of the application of the foregoing Value Guaranty are attached as Exhibit J. For purposes of this Section, the term "Applicable Period" means the shorter of the following three periods of time: (aa) from the Closing Date to the 36th month anniversary of the Closing Date; (bb) from the Closing Date to the date on which the Unit owner exercises its Purchase Right (as defined in the Partnership Agreement); and (cc) from the Closing Date to the date on which the Unit owner exercises its put rights pursuant to the Stock Put Agreement. (iii)The Partnership covenants and agrees that it shall use its reasonable commercial efforts to cause HME to continue to be taxed as a real estate investment trust under the Code unless the Board of Directors of HME determines that it is in the best interests of shareholders of HME to be taxed otherwise. (iv) The Partnership agrees to use the "traditional method" under Section 704(c) of the U.S. Internal Revenue Code to adjust for discrepancies between the agreed-upon value of the various components of the contributed Property (or for any property received in exchange for the contributed Property in a like-kind exchange) and the adjusted tax basis of such components. 27. REPRESENTATIONS AND COVENANTS OF TOWER. A Tower hereby represents and warrants to the Partnership as of the date hereof and as of the Closing Date that it has made no prior assignment of its rights under the Management Agreement and that it has the full power and authority to assign its interest in the Management Agreement to the Partnership. Page 17 B Tower hereby represents and warrants that it is an accredited investor under the applicable securities laws and covenants that it will not assign its Units to any person or entity unless such person or entity shall establish that they are also such an accredited investor. 28. DEFAULT. In the event that Partnership fails to acquire the Property pursuant to this Agreement other than by reason of a termination by Partnership expressly permitted hereunder or Contributor's or Tower's default, Partnership agrees that Contributor's and Tower's sole remedies shall be (i) to have the Title Company deliver the Deposit to Contributor and Tower as liquidated damages to recompense Contributor and Tower for time spent, labor and services performed, and loss of its bargain and to terminate this Agreement; or (ii) to seek specific performance. The Partnership acknowledges that in the event of such a failure by the Partnership, the damages suffered by the Contributor and Tower will be difficult to ascertain with certainty. Therefore, the Partnership, the Contributor and Tower agree that in the event of such a failure by the Partnership, and if the Contributor and Tower do not elect to seek specific performance, then the sum of $230,000 is a good faith estimate of the Contributor's and Tower's damages and at Contributor's election said sum shall be promptly paid to Contributor and Tower in the form of the Deposit. In such event the Contributor and Tower agree to accept the Deposit as Contributor's and Tower's total damages and relief hereunder in the event of Partnership's default hereunder. In the event that Partnership does so default and this Agreement is terminated, Partnership shall have no further right, title, or interest in the Property. In the event Contributor fails to sell the Property to Partnership pursuant to this Agreement or Tower fails to terminate the Management Agreement other than by reason of a termination by Contributor expressly permitted hereunder or Partnership's default, Partnership's sole remedies shall be (i) cancellation of this Agreement in which event Partnership shall be entitled to the return by the Title Company to Partnership of the Deposit, or (ii) to seek specific performance. In no event shall either party be entitled to any remedies or damages for breach of this Agreement, except as set forth hereinabove. And in no event shall any party be entitled to punitive or consequential damages for the breach of this Agreement. 29. RECORDATION. Neither Party may record this Contribution Agreement; and any recordation shall render the contract void. Also, neither party may file a lis pendens against the Property. 30. TOWER'S INABILITY TO PERFORM. Notwithstanding anything set forth herein to the contrary, if Tower is unable or unwilling to contribute the Management Agreement to the Partnership at Closing: (i) this Agreement shall remain in full force and effect; (ii) Tower shall be deleted as a party to this Agreement, shall have no rights or liabilities hereunder and shall be released of any liabilities accruing under this Agreement by the other parties hereto; (iii) the Contributor's Contribution Value shall be increased by the amount of Tower's Contribution Value; (iv) Contributor shall deliver the Property to the Partnership free and clear of the Management Agreement; and (v) Contributor shall indemnify, defend and hold Partnership harmless from any claims made by Tower for any management fees respecting the Property. 31. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach or the validity thereof shall be settled by final and binding arbitration in accordance with the most current Commercial Arbitration Rules (the "Rules") of the American Arbitration Association ("AAA"). The arbitration shall be conducted by a tribunal of three (3) arbitrators (the "Tribunal"). Each party shall appoint an arbitrator within ten (10) days from the filing of the Demand and Submission in accordance with Page 18 Paragraph 7 of the Rules and the two (2) arbitrators shall jointly appoint the third arbitrator, within fifteen (15) days from their appointment, in accordance with Paragraph 7 of the Rules. If the two (2) appointed arbitrators fail to agree upon a third arbitrator within said fifteen (15) days and fail to agree to an extension of such period, the third arbitrator shall be appointed by the AAA in accordance with Paragraph 15 of the Rules. The place of arbitration shall be Arlington, Virginia and the Award shall be issued at the place of arbitration. The Tribunal may, however, call and conduct hearings and meetings at such other places as the parties may agree. The law applicable to the arbitration procedure shall be the Federal Arbitration Act (the "Act") as supplemented by any law of the place of arbitration which is not inconsistent with the Act. The decision of the Tribunal (the "Award") shall be made within ninety (90) days of the appointment of the Tribunal pursuant to the provisions hereof, and the parties hereby agree that any such decision need not be accompanied by a reasoned opinion. The Award may, except as limited by Section 27 of this Agreement, include (i) recovery of actual damages for violation of any obligations under this Agreement or of governing law, including the recovery of attorneys' fees to the prevailing party (ii) injunctive relief against threatened or actual violations of any obligation under the Agreement or of governing law or (iii), if and to the extent permitted under the terms of the Agreement, the remedy of specific performance. The Award shall be final and binding on the parties. Judgment upon the Award may be entered in any court having jurisdiction thereof or having jurisdiction over one or more of the parties or their assets. The parties specifically waive any right they may enjoy to apply to any court for relief from the provisions of this Agreement or from any decision of the Tribunal made prior to the Award. 32. EXECUTION IN COUNTERPARTS. . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected thereon as the signatories. 33. SIGNATURE BY FACSIMILE. The parties may execute and deliver this Agreement by forwarding signed facsimile copies of their signature page to this Agreement and delivering an original of the same by overnight courier. Such facsimile signatures shall have the same binding effect as original signatures, and the parties hereby waive any defense to validity based on any such copies or signatures. 34. ACCREDITED STATUS. The Contributor and Tower hereby represent to the Partnership that they each are as of the date of this Agreement, and will be as of the Closing Date, an accredited investor under applicable securities laws. IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed as of the day and date first above written. HOME PROPERTIES OF NEW YORK, L.P. By: Home Properties of New York, Inc. General Partner By: /s/ Amy L. Tait --------------------------- Amy L. Tait Title: Executive Vice President --------------------------- Page 19 BRADDOCK LEE LIMITED PARTNERSHIP By: /s/ Ronald D. Abramson --------------------------- Print Name: Ronald D. Abramson Title: General Partner Page 20 BRADDOCK LEE LIMITED PARTNERSHIP By: /s/ Lane F. Libby ---------------------------------- Print Name: Lane F. Libby Title: General Partner Page 21 BRADDOCK LEE LIMITED PARTNERSHIP By: /s/ Leona Libby Feldman ------------------------------------------- Print Name: Leona Libby Feldman Title: General Partner Page 22 TOWER CONSTRUCTION GROUP, L.L.C By: /s/ Jeffrey S. Abramson ------------------------------------------- Title: Jeffrey S. Abramson, Manager Page 23 EX-2 4 Exhibit 2.7 CONTRIBUTION AGREEMENT This Contribution Agreement ("Agreement"), made as of the 2nd day of March, 1997 by and among HOME PROPERTIES OF NEW YORK, L.P., a New York limited partnership, having its principal office at 850 Clinton Square, Rochester, New York 14604, (the "Partnership") PARK SHIRLINGTON LIMITED PARTNERSHIP, a Virginia limited partnership (the "Contributor"), having its principal office at 11501 Huff Court, North Bethesda, Maryland 20895; and TOWER CONSTRUCTION GROUP, LLC, a Maryland limited liability company ("Tower"), having its principal office at 11501 Huff Court, North Bethesda, Maryland 20895. W I T N E S S E T H: WHEREAS, the Contributor owns a certain apartment complex and adjacent land located in the State of Virginia, all as more particularly described on Exhibit A; WHEREAS, the Contributor wishes to contribute its interest in the Property in exchange for limited partnership interests in the Partnership; WHEREAS, Partnership desires to acquire the Property upon the happening of certain events; WHEREAS, Tower has the right to manage the Property and earn fees therefor pursuant to that certain Management Agreement, dated on or about the dates first written above, by and between the Contributor and Tower (the "Management Agreement"); WHEREAS, Tower wishes to contribute its interests in the Management Agreement in exchange for limited partnership interests in the Partnership and the Partnership wishes to acquire Tower's interest in the Management Agreement in order to effect a termination of the Management Agreement; WHEREAS, the parties hereto also desire, subject to the terms and conditions set forth herein and in the agreement noted below, that Braddock Lee Limited Partnership ("Braddock Lee") contributes to the Partnership and the Partnership shall accept from Braddock Lee, the real property described in Schedule 1 attached hereto (the "Braddock Lee Property"), pursuant to a contribution agreement entered into between Braddock Lee, Tower and the Partnership of even date herewith (the "Braddock Lee Contribution Agreement"), and that the transactions contemplated therein close simultaneously with, and as a condition to, the closing of the transactions contemplated hereby; NOW, THEREFORE, in consideration, mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency whereof being hereby acknowledged, the parties hereby agree as follows: Page 1 1. REAL PROPERTY DESCRIPTION. The Real Property to be contributed by the Contributor consists of an apartment complex commonly known as Park Shirlington Apartments, which includes 293 apartments and one apartment converted for use as an office (the " Project"), located in Arlington, Virginia, on land more particularly described on Exhibit A attached hereto, together and including all buildings and other improvements thereon, including but not limited to, the 293 apartment units and one apartment converted for use as an office, and all rights in and to any and all streets, roads, highways, alleys, driveways, easements and rights-of-way appurtenant thereto (the foregoing are hereafter collectively referred to as the "Property"). 2. OTHER ITEMS. The following items now or at the Closing (hereinafter defined) in or on the Property and owned by the Contributor, are included in this Agreement and shall become the property of Partnership at Closing (as hereafter defined): A all heating, air-conditioning, plumbing and lighting fixtures, B ranges, refrigerators and disposals (one of each for each apartment unit), C water heaters, D any and all pools and pool equipment, bathroom fixtures, exhaust fans, hoods, signs, screens, maintenance building, fences, cabinets, mirrors, shelving, mail boxes, office furniture and equipment, including but not limited to computers, and any and all related equipment in connection with the Property, and E any fixtures appurtenant to the Property and any other furniture or equipment used in connection with the operation and maintenance of the Property, including a 1995 Ford pickup truck, VIN 1FTDF15YXSNB04957 used in connection with the operation and maintenance of the Property, but excluding a condenser pump not belonging to the Contributor (hereinafter with the items listed in A-D above, collectively, the "Other Items"). The Other Items will be acquired by the Partnership free and clear of all liens and encumbrances. 3. CONSIDERATION AND MANNER OF PAYMENT. A In consideration for the contribution of the Property by the Contributor to the Partnership, subject to the terms and conditions herein, the Partnership agrees to issue to the Contributor or to the partners of the Contributor as designated in writing by the Contributor (collectively, the "Designees" and individually, a "Designee") limited partnership interests in the Partnership (collectively, the "Units" and each one of the Units, a "Unit") having a value, determined as described in paragraph C below, of Thirteen Million Four Hundred Thirty-Four Thousand Five Hundred and Sixty-Three and no/100 Dollars ($13,434,563) (the "Contributor's Contribution Value"). Notwithstanding the above, the Contributor may only designate individuals or entities to be Designees who have established to the reasonable satisfaction of the Partnership that they are accredited investors under applicable securities laws. Page 2 B In consideration for the contribution of the Management Agreement by Tower to the Partnership, subject to the terms and conditions herein, the Partnership agrees to issue Units having a value, determined as described in paragraph C below, of Seven Hundred Seven Thousand Eighty-Two and no/100 Dollars ($707,082) ("Tower's Contribution Value"). Notwithstanding anything to the contrary herein, the Partnership shall be required to issue the Units to Tower and Tower shall be obligated to contribute the Management Agreement to the Partnership only if and when the Closing occurs with respect to the contribution of the Property by the Contributor to the Partnership. C The total number of Units to be issued to the Contributor, the Designees and Tower will be equal to the Contributor's Contribution Value and Tower's Contribution Value, respectively, divided by the "Market Value" of a Unit. The Market Value of a Unit shall be equal to the average closing price for 20 consecutive trading days prior to, but not including, the Closing Date of a share of common stock of Home Properties of New York, Inc., ("HME") as listed on the New York Stock Exchange. Notwithstanding the above, the Market Value shall not exceed $30 per Unit. D The initial distribution payable with respect to Units issued hereunder shall be made on the date on which HME 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 Contributor, Designees and Tower 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. E Upon the expiration of the Due Diligence Period and provided Partnership has not exercised its right to terminate this Agreement, Partnership shall deposit the sum of Two Hundred Seventy Thousand Dollars ($270,000.00) with Tri-State Commercial Settlements, Inc. (the "Title Company") as a good faith deposit hereunder (the "Deposit"). The Deposit shall be deposited in an FDIC or FSLIC institution and shall be held and disbursed as provided in the Escrow Agreement attached hereto as Exhibit B. The Deposit, along with accrued interest shall be refunded to the Partnership at Closing in the event Partnership consummates the transaction contemplated hereby, upon termination of this Agreement by Partnership expressly permitted hereunder, or upon Contributor's default. In the event Partnership fails to acquire the Property other than by reason of a termination by Partnership expressly permitted hereunder or Contributor's default, the Deposit shall, at Contributor's election, be forfeited to the Contributor as liquidated damages. Any and all sums deposited hereunder shall be applied or refunded as provided herein. (All references to "Deposit" shall be deemed to include all accrued interest thereon). 4. ADJUSTMENTS AT CLOSING. The following shall be adjusted and prorated between the Contributor and the Partnership at Closing as if the Partnership was the owner of the Property as of the Closing Date. All such adjustments and pro-rations between Contributor and Partnership shall be settled in cash and shall not increase or decrease the Contributor's Contribution Value, as the case may be. Page 3 A All ad valorem real estate taxes with respect to the Property for the calendar year or other applicable tax period in which the Closing is consummated. If the amount of such taxes is not known at Closing, proration of such taxes will be made upon the basis of the previous year's or other most recent applicable tax period taxes. In such event, the Contributor and Partnership agree to re-prorate/adjust the taxes between themselves after the Closing, based upon the full amount of the actual taxes for the Property when the amount of the actual taxes is known.e full amount of the actual taxes for the Property when the amount of the actual taxes is known.taxes is known.e full amount of the actual taxes for the Property when the amount of the actual taxes is known. B water charges. C sewer charges. D fuel, electricity and other utilities. E All tenant security deposits (and interest thereon if required by law or contract to be earned thereon) shall be transferred or credited to Partnership at Closing. At Closing, Partnership shall assume Contributor's obligations related to tenant security deposits to the extent they are properly credited and transferred to Partnership. Partnership agrees that it will indemnify, defend, hold Contributor harmless and will indemnify Contributor against all demands, claims, losses, costs, damages, expenses or liabilities, including, but not limited to, attorneys' fees, arising out of or in connection with the transfer or disposition of such security deposits. F charges under the service contracts assumed by Partnership. G laundry income. H any other charges incurred with respect to the Property which the Partnership or the Contributors are obligated to pay. I Rents. (1) All rent payments collected as of the Closing Date for the month of Closing shall be prorated as between the parties as of the Closing Date. (2) All rent collected after Closing for any period prior to Closing shall belong to Contributor and, if paid to Partnership, Partnership shall promptly send such rent to the Contributor. (3) All rent collected by the Contributor prior to the Closing for rental periods subsequent to Closing shall be paid to Partnership at Closing. (4) All rent collected by Partnership or the Contributor for rental periods after the Closing shall belong to Partnership and, if paid to the Contributor, the Contributor shall promptly send such rent to Partnership. (5) Partnership will make reasonable efforts to collect all rents due for the month of the Closing and any past due rents, but shall not be required to bring suit to collect such rents. Any rent received from any tenant after Closing shall first be applied to pay any rent Page 4 owing by that tenant for the month of the Closing and then to pay rent owing for the then current month and thereafter in reverse order of delinquency. Any rents due for the month of Closing (and accruing prior to the Closing Date) and past due rents not collected by Partnership within the period of 180 days following the Closing Date shall be assigned to the Contributor without recourse who may pursue such remedies for collection thereof for its own account. Any error in the calculation of adjustments shall be corrected subsequent to Closing with appropriate credits to be given based upon corrected adjustments, provided, however, that the adjustments (except if errors are caused by misrepresentations and except for actual taxes) shall be final upon expiration of the sixtieth day after Closing. 5. COSTS. Partnership shall pay all recording fees, Partnership's attorneys' fees, one-half of any applicable transfer and recordation taxes, the costs of obtaining any title commitment and title policy and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the transferee of similar property. The Contributor shall pay one-half of any applicable transfer and recordation taxes, attorneys' fees, if any, incurred by them in connection with this transaction, and all other costs and expenses incidental to or in connection with closing this transaction customarily paid for by the transferor of similar property. Partnership shall pay all out-of-pocket closing costs payable by the Contributor hereunder (excluding Contributor's attorneys' fees which shall be paid directly by Contributor) and the Contribution Value of the Property shall be reduced at Closing by the amount so paid by Partnership. 6. EVIDENCE OF TITLE. The Contributor shall furnish to the Partnership, at Contributor's expense, and within ten (10) days from the execution hereof, a copy of the most recent title policy relating to the Property along with the most recent instrument survey of the Property, in each case, to the extent in its possession or control. 7. CLOSING DOCUMENTS. A At the time of Closing, the Contributor shall deliver to Partnership the following: (1) A special warranty deed in the form provided for under the laws of the state where the Property is located pursuant to which Contributor shall warrant title only against anyone whomsoever is lawfully claiming the Property, by through or under Contributor, but not otherwise (the "Deed"). Such Deed shall convey the Property to Partnership subject to: (i) all zoning and building laws, ordinances, resolutions and regulations of all governmental authorities having jurisdiction which affect the Property and the use and improvement thereof; (ii) all leases identified in the Rent Roll (hereinafter defined); (iii) ad valorem real estate taxes for the current year and subsequent years which are not yet due and payable; and (iv) easements, covenants, restrictions, agreements and/or reservations of record, so long as they do not interfere with the use of the Property as a rental apartment complex, if any, (v) private, public and utility easements and roads and highways, if any, and (vi) and any other exceptions not objected to or waived Page 5 by Partnership under Section 9(b)(collectively, the "Permitted Exceptions"). (2) A Bill of Sale in the form attached hereto as Exhibit C; (3) A current rent roll ("Rent Roll") certified, as of the date of Closing, which shall include a correct list of all tenants, all rental obligations of each tenant with respect to the Property and all security deposits along with a copy of all leases shown on the Rent Roll; (4) An Assignment of leases, security deposits and contracts in the form attached hereto as Exhibit D (the "Assignment") along with a copy of all contracts so assigned. In lieu of an assignment of the security deposits, the Contributor may provide Partnership with a credit at Closing for all security held by Contributor (including any accrued interest, if required by law or contract to be earned thereon) with respect to all leases encumbering the Property. (5) A certificate of title and any other documentation necessary to transfer title to the Truck. (6) Contributor's affidavit stating Contributor's federal taxpayer identification number and certifying that Contributor is not a foreign person, corporation, partnership, trust or estate as defined in the Internal Revenue Code and Regulations thereunder pursuant to the Foreign Investment in Real Property Tax Act of 1980. (7) Copies of the personnel files of all employees employed at the Property and remaining in the employment of the Partnership after the Closing. (8) An executed original of the Registration Rights Agreement in the form attached hereto as Exhibit E. (9) An executed original of the Stock Put Agreement in the form attached hereto as Exhibit F (the "Stock Put Agreement"). (10) An executed original of an assignment, assumption and termination of Management Agreement assigning Contributor's interest as owner under the Management Agreement. (11) Any additional funds, documents and or instruments as may be necessary for the proper performance by the Contributor of its obligations contemplated by this Agreement. B At the time of Closing, Partnership shall deliver to Contributor the following: (1) The Assignment; Page 6 (2) Evidence of organization, existence and authority of Partnership and HME and the authority of each person executing documents on behalf of each, reasonably satisfactory to Contributor; (3) An opinion of a nationally recognized law firm acting as counsel for Partnership and HME reasonably acceptable in form and content to the Contributor to the effect that (1) HME has been organized in conformity with the requirements for qualification as a real estate investment trust under the Code and currently qualifies to be taxed as such, and (2) Partnership is classified as a partnership and not as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes; (4) Such cash as may be required of Partnership to pay closing costs or charges properly allocable to Partnership; (5) An Amendment to the Partnership's Partnership Agreement in the form necessary to admit Contributor, Designees, Tower and their respective designees as limited partners of the Partnership and evidencing the issuance of the Units required pursuant to this Agreement; (6) An executed original of the Registration Rights Agreement in the form attached hereto as Exhibit E; (7) An executed original of the Stock Put Agreement in the form attached hereto as Exhibit F; and (8) Any additional funds, documents and or instruments as may be necessary for the proper performance by Partnership of its obligations contemplated by this Agreement. (9) An executed original of an assignment, assumption and termination of the Management Agreement assuming Contributor's interest as owner under the Management Agreement and terminating the Management Agreement. C. At the time of the Closing, Tower shall deliver to the Partnership an executed original of a termination of the Management Agreement. 8. INSPECTION. For a period of Thirty (30) days after the date of this Agreement (the "Due Diligence Period"), the Contributor agrees that Partnership and its authorized representatives shall have the right and privilege to enter upon the Property and the Partnership's offices, upon reasonable notice, during regular business hours, for the purpose of gathering such information and conducting such environmental and engineering studies or other tests and reviews as Partnership may deem appropriate and necessary, including but not limited to a review of the Contributor's books and records pertaining to the Property and the Other Items, matters relating to zoning compliance and compliance by the Property and the Other Items with other applicable governmental regulations, the markets in which the Property operates, any service or other contracts relating to the Property, the tax assessment on the Property and on Page 7 comparable properties and such other matters as Partnership shall deem reasonably necessary or appropriate in connection with the Property and the Other Items. All such inspections, studies, tests and reviews shall be at Partnership's sole expense. Contributor agrees to cooperate with Partnership by making available to Partnership such records, plans, drawings or other data as may be in Contributor's possession or control relating to the Property and its operation; excluding however, any files containing confidential documents such as personnel documents, tax returns, appraisals, market analyses, projections, internal communications, or correspondence between the property manager and Contributor. Partnership agrees that it will provide Tower and Contributor with a copy of any third party reports received by Partnership with respect to its due diligence activities pursuant to this paragraph. In addition, promptly upon execution of this Agreement by all of the parties, the Partnership will order a commitment (the "Title Commitment") for an ALTA owner's policy in the amount of $13,434,563 from the Title Company. Partnership hereby agrees to indemnify, defend and hold Contributor, Contributor's tenants, agents, employees, partners and the Property harmless from and against all claims, losses, costs, damages, expenses or liabilities, including, but not limited to, mechanic's and materialmen's liens and attorneys' fees arising out of or in connection with Partnership's access to or entry upon the Property. If any inspection or test disturbs the Property, Partnership will restore the Property, at Partnership's own cost and expense, to the same condition as existed prior to any inspection or test. The Partnership agrees that prior to any physical inspection or testing at the Property, it or its agents will provide the Contributor with appropriate evidence of insurance reasonably satisfactory to Contributor. The Partnership agrees that its rights under this Section 8 shall be subject to the rights of the residents at the Property and that it will use its reasonable efforts to minimize any disruption to those residents. Partnership shall have the right to terminate this Agreement if it determines that it does not wish to purchase the Property as a result of its findings during the Due Diligence Period and notifies the Contributor in writing of such decision within the Due Diligence Period (the "Termination Notice"). In such event, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement. Partnership's failure to deliver the Termination Notice within the Due Diligence Period shall be deemed to be a waiver by Partnership of its right to terminate the Agreement as provided in this Section 8. 9. TITLE; TITLE EXAMINATION; OBJECTIONS TO TITLE. A Contributor shall convey the Property to Partnership by Deed, subject to the Permitted Exceptions. Title to all Other Items purchased herein, if any, shall be conveyed to Partnership by bill of sale, free and clear of all security interests, liens and encumbrances, but subject to any Permitted Exceptions. B Within ten (10) days after Partnership's receipt of the Title Commitment Partnership shall deliver to Contributor a statement (a "Statement of Title Defects") of defects, encumbrances or objections to title or survey matters ("Title Defects"). If Partnership fails to deliver a Statement of Title Defects within such time period as aforesaid, such failure shall be deemed to be a waiver of any such Title Defects and Contributor shall convey title in accordance with this Agreement and such Title Defects will be additional Permitted Exceptions. Upon receipt of Partnership's Statement of Title Defects, Contributor shall have five (5) business days to determine whether it wishes to attempt to cure any matters shown on such statement. If Contributor is unable or unwilling to cure or attempt to Page 8 cure any such matters, Contributor shall give notice to Partnership within such five (5) day period, but if no such notice is given, Contributor shall be deemed to be unwilling to cure any such Title Defects. If Contributor does not agree to attempt such cure, Partnership shall have ten (10) days after the expiration of the foregoing five (5) business day period to terminate this Agreement, in which case it shall have the right to the return of the Deposit, or to give Contributor notice that it has elected to take title to the Property subject to the Title Defects without abatement of the Contribution Value and such Title Defects will be additional Permitted Exceptions. If no notice is given by the Partnership within the ten (10) day period, the Partnership shall be deemed to have terminated this Agreement. Partnership agrees that Contributor shall be under no obligation whatsoever to commence any proceedings, suits or actions to clear title or eliminate any Title Defects or expend any funds in connection therewith. 10. CLOSING DATE. Unless this Agreement is terminated as provided herein, the Closing shall occur within 10 days after the end of the Due Diligence Period (as hereinafter defined) (the "Closing" or "Closing Date") at the Contributor's office. 11. POSSESSION. Partnership shall have possession and occupancy of the Property from and after the date of delivery of the deed subject only to the Permitted Exceptions and to the rights of tenants shown on the Rent Roll delivered to Partnership at Closing pursuant to Section 7A (3). 12. BROKER'S COMMISSION. The Contributor, Tower and Partnership each represent to the other that there are no fees or commissions due as a result of their employment of any Broker other than the fees due to Carey Winston, which fees Partnership agrees to pay. The Contributor, Tower and Partnership each agree to indemnify the other for any and all claims and expenses, including legal fees, if any other fees or commission is determined to be due by reason of the employment of any other broker by the indemnifying party. This representation and indemnity shall survive the Closing. 13. RISK OF LOSS. Risk of loss resulting from any eminent domain proceeding which is commenced prior to Closing, and risk of loss to the Property due to fire or any other casualty prior to Closing shall remain with Contributor. If prior to the Closing the Property or any portion thereof is destroyed or damaged in excess of $250,000, or if the Property or any portion thereof shall is subjected to a bona fide threat of condemnation or becomes the subject of any proceedings, judicial, administrative or otherwise, with respect to the taking by eminent domain or condemnation, Contributor shall notify Partnership thereof within a reasonable time after receipt of actual notice thereof by Contributor, but in any event prior to Closing, and, at its option, Partnership may, within 5 days after receipt of such notice, elect to cancel this Agreement in which event this Agreement shall terminate and the Deposit shall be returned to Partnership. If the Closing Date is within the aforesaid 5-day period, then Closing shall be extended to the next business day following the end of said 5-day period. If no such election is made, and in any event if the destruction or damage is not in excess of $250,000, this Agreement shall remain in full force and effect and the contribution contemplated herein, less any interest taken by eminent domain or condemnation, shall be effected with no further adjustment, and upon the Closing of this contribution, Contributor shall assign, transfer and set over to Partnership all of the right, title and interest of Contributor in and to any awards that have been or that may thereafter be made for such taking, and Contributor shall assign, transfer and set over to Partnership any insurance proceeds Page 9 that may have been or that may thereafter be made for such damage or destruction giving Partnership a credit at Closing for any deductible under such policies. Contributor hereby agrees that it shall keep all insurance policies presently existing which relate to the Property in effect through the Closing Date. 14. CONDITIONS PRECEDENT TO PARTNERSHIP'S OBLIGATION TO CLOSE. A It shall be a condition to Partnership's obligation to consummate the Closing that there are at Closing 293 apartment units in rentable condition and one apartment unit converted for use as the Property Office and with respect to all of which the Contributor has received no notice from any governmental authority or agency having jurisdiction over the Contributor, the Property and the Other Items stating that the Contributor, the Property or the Other Items are in violation of any federal, state, county or local laws, ordinances, rules and regulations. In the event that the Contributor has received any such notice, then at its election, the Contributor shall have up to sixty (60) days after the receipt of such notice to cure any violation set forth therein and the Closing Date shall be extended to that date which is five days after the violation has been cured, but such extension is not to be for more than 65 days. If the Contributor fails to notify the Partnership that it has elected to cure any such violation within 10 days of the receipt of any such notice, then the Contributor shall be deemed unwilling to cure any such violation. B It shall be a condition to Partnership's obligation to consummate the Closing that the Partnership has not exercised its right to terminate this Agreement as provided in Section 8. C It shall be a condition to Partnership's obligation to consummate the Closing that on or before the Closing Date, all management agreements relating to the Property shall have been terminated, other than the Management Agreement, the termination of which shall be effected by the Partnership and Tower immediately after its contribution to the Partnership in accordance with this Agreement. D It shall be a condition to Partnership's obligation to consummate the Closing that on the Closing Date the Title Company is prepared to issue a title policy insuring the Partnership's fee interest in the Property subject only to the Permitted Exceptions. It is understood that the conditions set forth in this Section 14 are for Partnership's benefit and may be waived by Partnership at any time. If the above conditions are not satisfied or waived by the Partnership, the Partnership shall have the right to terminate this Agreement by written notice to the Contributor. In the event of such a termination, this Agreement shall be null and void and neither party shall have any further rights or obligations under this Agreement, except Partnership shall have the right to the return of its Deposit and the obligations set forth in Sections 8 and 12 herein shall survive any such termination. 15. CONDITIONS TO THE PARTIES' OBLIGATIONS TO CLOSE. In addition to all other conditions set forth herein, the obligation of Contributor and Tower, on the one hand, and Partnership, on the other hand, to consummate the Closing contemplated hereunder shall be contingent upon the following: Page 10 A The other party's representations and warranties contained herein shall be true and correct as of the date of this Agreement and the Closing Date. B As of the Closing Date, the other party shall have performed its obligations hereunder and all deliveries to be made at Closing have been tendered; C There shall exist no pending or threatened actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the other party that would materially and adversely affect the other party's ability to perform its obligations under this Agreement; and D There shall exist no pending or threatened action, suit or proceeding with respect to the other party before or by any court or administrative agency which seeks to restrain or prohibit, or to obtain damages or a discovery order with respect to, this Agreement or the consummation of the transactions contemplated hereby. E With respect to Contributor's and Tower's obligations to consummate the Closing, as of the Closing Date, Braddock Lee shall have contributed and the Partnership shall have accepted the Braddock Lee Property pursuant to the Braddock Lee Contribution Agreement and the transactions contemplated therein have closed simultaneously with the transactions contemplated hereby. So long as a party is not in default hereunder, if any condition to such party's obligation to proceed with the Closing hereunder has not been satisfied as of the Closing Date, such party may, in its sole discretion, (i) terminate the Agreement by delivering written notice of termination to the other party on or before the Closing Date specifying the unsatisfied condition entitling the non-defaulting party to terminate this Agreement and provided the other party fails to satisfy the condition specified in the notice within five days after receipt of the notice; (ii) elect to extend the Closing for up to 60 days until such condition is satisfied, and (iii) elect to consummate the transaction, notwithstanding the non-satisfaction of such condition, in which event such party shall be deemed to have waived any such condition. In the event such party elects to close, notwithstanding the nonsatisfaction of such condition, there shall be no liability on the part of any other party hereto for breaches of representations and warranties of which the party electing to close had actual knowledge at the Closing. Notwithstanding the foregoing, the failure of a condition due to the breach of a party shall not relieve such breaching party from any liability it would otherwise have hereunder. So long as the Partnership is not in default hereunder, upon termination of this Agreement as provided above, the Partnership shall have the right to the return of its Deposit. 16. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR. The Contributor makes the following representations and warranties to Partnership as of the date hereof and as of Closing: Page 11 A To the best of the Contributor's knowledge, the leases (the "Leases") listed on the rent roll attached hereto as Exhibit G and the contracts listed on the attached Exhibit H (the "Contracts") comprise all of the leases and rights to the property and all of the contracts to which Partnership will be subject on the Closing Date B. All of Contributor's obligations under the Leases and Contracts are fully performed and, to the best of such Contributor's knowledge, except as set forth on the attached Exhibits and except for delinquencies in the payment of rent for the current month, there is no default under any of the Leases and Contracts by any party thereto or no event which, with the giving of notice or passage of time, or both, would constitute a default thereunder. There are no other security deposits (the "Security Deposits") except as identified on Exhibit G. C. The Contributor has made no prior assignment or conveyance of the Leases, Security Deposits and Contracts and the Contributor is the valid holder of landlord's interest in the Leases, and has the full power and authority to assign its interest in the Leases, Security Deposits and Contracts to Partnership. D To the best of the Contributor's knowledge, there is no litigation, proceeding or investigation pending, or to the knowledge of the Contributor threatened, against or affecting the Contributor that might affect or relate to the validity of this Agreement, any action taken or to be taken pursuant hereto, or the Property or the Other Items or any part or the operation thereof, whether or not fully covered by insurance. E To the best of the Contributor's knowledge, the Contributor has not received any written notices from any governmental authority or agency having jurisdiction over the Contributor or the Property that the Contributor, the Property or the Other Items are in violation of, any law, ordinance, rule, regulation or code or condition in any approval or permit pursuant thereto (including without limitation, any zoning, sign, environmental, labor, safety, health or price or wage control, ordinance, rule, regulation or order of) applicable to the ownership, development, operation or maintenance of the Property or the Other Items. Promptly upon receipt of any such notice, the Contributor shall provide the Partnership with a copy. F All of Tower's obligations under the Management Agreement have been performed and the Partnership has no claim of any nature against Tower or any of its successors and assigns relating to the Management Agreement. The Partnership acknowledges, understands and agrees that, except as provided in this Agreement to the contrary, Partnership's acquisition of the Property and Other Items and any other rights and interests to be contributed, conveyed, transferred and/or assigned is on an "AS IS" "WHERE IS" PHYSICAL BASIS, WITHOUT REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH REGARD TO PHYSICAL CONDITION OR COMPLIANCE WITH ANY LEGAL REQUIREMENTS OR TITLE EXCEPTIONS OF THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY LATENT OR PATENT DEFECTS, CONDITION OF SOILS (INCLUDING SURFACE AND SUBSURFACE CONDITIONS), EXISTENCE OR NON EXISTENCE OF HAZARDOUS SUBSTANCES OR POLLUTANTS, QUALITY OF CONSTRUCTION, STATE OF REPAIR, WORKMANSHIP, MERCHANTABILITY Page 12 OR FITNESS FOR ANY PARTICULAR PURPOSE OR AS TO THE PHYSICAL MEASUREMENTS OR USABLE SPACE THEREOF, TITLE TO THE PROPERTY, THE ASSIGNABILITY, ASSUMABILITY OR TRANSFERABILITY OR VALIDITY OF ANY LICENSES, PERMITS, GOVERNMENT APPROVALS, WARRANTIES OR GUARANTIES RELATING TO THE PROPERTY OR THE USE OR OPERATION THEREOF, ZONING, BUILDING CODE, ACCESS, ENVIRONMENTAL, FIRE OR LIFE SAFETY, SUBDIVISION OR OTHER ORDINANCES, LAWS, CODES OR REGULATIONS, OF ANY KIND, PRIOR OR CURRENT OPERATIONS CONDUCTED ON THE PROPERTY AND SURROUNDING PROPERTY, OR ANY COVENANTS, CONDITIONS, RESTRICTIONS OR DECLARATIONS OF RECORD AND ALL OTHER MATTERS OR THINGS AFFECTING OR RELATING TO THE PROPERTY. As used in the foregoing representations and warranties, the phrase "to the best of Contributor's knowledge" shall mean the actual, conscious knowledge of Edgar W. Tullar, the Contributor's Director of Operations. The representations and warranties of the Contributor contained in this Agreement, the statements in any Exhibit or Schedules attached to this Agreement, or other instruments furnished to Partnership at or prior to Closing pursuant to this Agreement, or in connection with the transactions contemplated pursuant to this Agreement, do not contain any untrue statements of a material fact, or fail to state a material fact necessary to make it not misleading. The representations and warranties contained herein shall not survive delivery of the Deed and shall merge therein. This expiration shall not apply to the representation set forth in paragraphs 16.D. and 16.F. or to any breach of warranty or representation which arises out of an intentional material misrepresentation made by the Contributor. 17. REPRESENTATIONS AND WARRANTIES OF PARTNERSHIP. Partnership represents and warrants to the Contributor, Tower and Designees as of the date hereof and as of the Closing as follows: A Partnership is and will be as of the date of Closing duly organized, validly existing and in good standing under the laws of the State of New York and has all the requisite power and authority to enter into and carry out this Agreement according to its terms. B This Agreement has been duly authorized, executed and delivered and constitutes a legal and binding obligation of Partnership, enforceable in accordance with its terms, except as may be limited by bankruptcy and other laws affecting creditors' rights generally. C To the best of its knowledge after due inquiry, there is no litigation, proceeding or investigation pending, or to the knowledge of Partnership threatened, against or affecting Partnership or the partners of Partnership that might affect or relate to the validity of this Agreement or any action taken or to be taken pursuant hereto, or that might have a material adverse effect on the business or operations of the Partnership. Page 13 D HME has been organized in conformity with the requirements for qualification as a real estate investment trust under the Internal Revenue Code of 1986 (the "Code") and its method of operation is expected to enable it to continue to satisfy the requirements for taxation as a real estate investment trust under the Code for the fiscal year ending December 31, 1997 and in the future. E The Partnership is classified as a partnership and not as an association (or publicly traded partnership) taxable as a corporation for federal income tax purposes. F (i) HME and the Partnership have filed or caused to be filed all federal, state, local, foreign and other tax returns, reports, information returns and statements required to be filed by them; (ii) HME and the Partnership have paid or caused to be paid all taxes (including interest and penalties) that are shown as due and payable on such returns or claimed by any taxing authority to be due and payable with respect to such returns, except those which are being contested by them in good faith by appropriate proceedings and in respect of which adequate reserves are being maintained on their books in accordance with generally accepted accounting principles consistently applied; (iii) HME and the Partnership do not have any material liabilities for taxes other than those incurred in the ordinary course of business and in respect of which adequate reserves are being maintained by them in accordance with generally accepted accounting principles consistently applied; (iv) as of the date of this Agreement, Federal and state income tax returns for HME and the Partnership have not been audited by the Internal Revenue Service or state authorities; (v) as of the date of this Agreement, no deficiency, assessment with respect to, or proposed adjustment of, HME's or the Partnership's federal, state, local, foreign or other tax returns is pending or, to the best of the Partnership's knowledge, threatened; and (vi) as of the date of this Agreement, there is no tax lien, whether imposed by any federal, state, local or other tax authority, outstanding against the assets, properties or business of HME or the Partnership G. The Partnership has delivered to Contributor a complete and correct copy of: (i) the Articles of Incorporation and by-laws of HME; and (ii) the Second Amended and Restated Agreement of Limited Partnership of Partnership, in each case, as amended. H. The Partnership has previously made available to the Contributor as requested in writing by the Contributor complete and correct copies of: (i) the annual report on Form 10-K for HME for the period ending December 31, 1996; (ii) all quarterly reports on Form 10-Q for HME for each of the first three quarters in 1997; (iii) definitive proxy statement for HME for the 1997 Shareholders' Meeting; (iv) any current reports on Form 8-K filed by HME since September 30, 1997; and (v) any other form, report, schedule and statement and filed by HME for 1997 with the Securities and Exchange Commission ("SEC") under the Exchange Act, since January 1, 1997 (collectively, the "SEC Documents"). As of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Exchange Act to the extent applicable to such SEC Documents, and none of such SEC Documents (as of their respective dates) contained an untrue statement of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except as the same was corrected or superseded in a subsequent document duly filed with the SEC. Page 14 HME is not aware of any reports or filings required to be filed under the Exchange Act with the SEC under the rules and regulations of the SEC that have not been filed. The representations and warranties of the Partnership contained in this Agreement, the statements in any Exhibit or Schedules attached to this Agreement, or other instruments furnished to Contributor at or prior to Closing pursuant to this Agreement, or in connection with the transactions contemplated pursuant to this Agreement, do not contain any untrue statements or a material fact, or fail to state a material fact necessary to make it not misleading. The representations and warranties contained herein shall survive delivery of the assignment of the Deed and shall not merge therein. 18. ASSIGNMENT. This Agreement, and all or any portion of the rights of Partnership hereunder, may not be assigned by Partnership without the prior written consent of the Contributor, which may be granted or withheld in its sole discretion. 19. NOTICE. All notices given pursuant to any provisions of this Agreement shall be in writing and shall be effective upon receipt and then only if delivered personally, or sent by registered or certified mail, postage prepaid or sent by a national over-night carrier, or by telecopy with confirmation of receipt to the addresses set forth below: To the Contributor and Tower: c/o The Tower Companies Attn: Jeffrey S. Abramson 11501 Huff Court North Bethesda, Maryland 20895 Telecopy No.: (301) 984-6033 To Partnership: HOME PROPERTIES OF NEW YORK, L.P. Attn: Norman Leenhouts, Chairman 850 Clinton Square Rochester, New York 14604 Telecopy No.: (716) 546-5433 20. PLANS. The Contributor agrees to provide Partnership with all plans and architectural drawings in their possession for the improvements completed at the Property, including, without limitation, all "as-built" plans in their possession and the Contributor further agree that they will endeavor to turn over the same to Partnership at the Property during the Due Diligence Period. 21. APPLICABLE LAW. This Agreement shall be construed and governed in accordance with the laws of the State of Virginia. 22. ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement between the parties, and any and all prior understandings or agreements, whether written or oral, are hereby merged into this Agreement. This Agreement cannot be modified except by a written instrument signed by the parties hereto. 23. BINDING AGREEMENT. This Agreement shall not be binding or effective until properly executed by Partnership, Tower and the Contributor. Page 15 24. CONFIDENTIALITY. By execution of this Agreement and except as otherwise provided herein, prior to the Closing the Contributor, Tower and Partnership agree to keep any and all information with respect to the transactions contemplated by this Agreement strictly confidential, and will not disclose any such information, without the other's prior written consent, unless such disclosure is required by law or judicial process. The Partnership may disclose the existence of this Agreement to the extent necessary to conduct its due diligence with respect to the Property. The Partnership agrees that it will obtain the consent of the Contributor, which shall not be unreasonably withheld or delayed, with respect to the content of any press releases to be issued on or after the Closing Date by the Partnership relating to the transaction described herein. 25. CONTRIBUTOR COVENANTS. A Upon the request of the Partnership, the Contributor will provide, or cause to be provided, a signed representation letter substantially in the form attached hereto as Exhibit I. The Contributor will provide access by Partnership's representatives, to all financial and other information relating to the Property as is sufficient to enable them to prepare audited financial statements, at Partnership's 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. B Prior to the Closing Date, the Contributor shall continue to fulfill all of their obligations under the terms of the leases encumbering the Property and under the service contracts and the Contributor shall operate, maintain and repair all landscaping, buildings, fixtures and facilities in accordance with its current practices. C Contributor covenants that it hereby waives any and all claims it may have against the Partnership as assignee of the Management Agreement relating to any defaults by Tower in the performance of its obligations under the Management Agreement. D The Contributor covenants that it will not assign its Units to any person or entity unless such person or entity shall establish that they are an accredited investor under applicable securities laws, unless prior to that assignment the Contributor or the assignee has properly exercised their rights under the Stock Put Agreement, such exercise to be immediately effective upon receipt of the assigned Units. 26. PARTNERSHIP COVENANTS. A The Partnership hereby covenants to the Contributor, Tower and any Designees as follows: (i) For a period of fifteen (15) years from and after the Closing Date, the Partnership shall not sell, exchange, transfer or otherwise dispose of the Property unless such transaction occurs in a manner as to be tax free to the Contributor and its partners, Tower and any Designees and their respective successors and assigns. After the foregoing 15-year period, Partnership will use commercially reasonable efforts to effect any disposition of all or part of the Property through a I.R.S. Code Section 1031 tax-free exchange or other Page 16 transaction which does not cause federal income tax gain to be incurred by the Contributor, its partners, Tower, any Designees and their respective successors and assigns. In the event that the Partnership breaches any of its obligations set forth in this Section 26(A)(i), Partnership shall indemnify, defend and hold harmless each of Contributor, its partners, Tower, any Designees and their respective successors and assigns (each an "Indemnified Party" and collectively the "Indemnified Parties") from and against the aggregate federal, state and local income taxes incurred by such Indemnified Party as a result thereof (collectively, "Taxes") plus the Taxes incurred by such Indemnified Party as a result of the receipt of the Indemnity Payment (the "Tax Indemnity Amount"). Any such Taxes shall be deemed to be the amount of gain or income recognized by the relevant Indemnified Party multiplied by the highest actual rate or rates imposed upon such Indemnified Party for such gain or income (assuming it is the last dollar of income or gain) for the year in which such gain or income is recognized. In determining the Tax Indemnity Amount, no effect shall be given to the Indemnified Parties' tax deductions, tax credits, tax carry forwards nor to any other of their tax benefits or tax attributes. The Tax Indemnity Amount shall be payable by the Partnership to each Indemnified Party not later than thirty (30) days following the filing of tax returns for the Indemnified Party for the year in question. (ii) The Partnership hereby guaranties to Contributor, Tower, any Designees and their respective successors, assigns, and designees that for the Applicable Period (hereinafter defined): (a) the value of each Unit shall not be less than the initial Market Value; and (b) each Unit shall receive or accrue a return on the initial Market Value of not less than eight percent (8%) compounded quarterly (the "Value Guaranty"). For purposes of the foregoing Value Guaranty, the 8% return shall be deemed to include both (x) cash and non-cash dividends and distributions relating to the Units paid or payable with respect to the Applicable Period, and (y) amounts by which the value of the Units (based on the average closing price for 20 consecutive trading days prior to, but not including, the expiration date of the relevant Applicable Period of a share of common stock of HME as listed on the New York Stock Exchange) at the end of the Applicable Period exceeds the initial Market Value. The Partnership shall pay any obligations accruing under the foregoing Value Guaranty with respect to each Unit upon the expiration of the relevant Applicable Period in the form of additional Units. Two examples of the application of the foregoing Value Guaranty are attached as Exhibit J. For purposes of this Section, the term "Applicable Period" means the shorter of the following three periods of time: (aa) from the Closing Date to the 36th month anniversary of the Closing Date; (bb) from the Closing Date to the date on which the Unit owner exercises its Purchase Right (as defined in the Partnership Agreement); and (cc) from the Closing Page 17 Date to the date on which the Unit owner exercises its put rights pursuant to the Stock Put Agreement. (iii)The Partnership covenants and agrees that it shall use its reasonable commercial efforts to cause HME to continue to be taxed as a real estate investment trust under the Code unless the Board of Directors of HME determines that it is in the best interests of shareholders of HME to be taxed otherwise. (iv) The Partnership agrees to use the "traditional method" under Section 704(c) of the U.S. Internal Revenue Code to adjust for discrepancies between the agreed-upon value of the various components of the contributed Property (or for any property received in exchange for the contributed Property in a like-kind exchange) and the adjusted tax basis of such components. 27. REPRESENTATIONS AND COVENANTS OF TOWER. A Tower hereby represents and warrants to the Partnership as of the date hereof and as of the Closing Date that it has made no prior assignment of its rights under the Management Agreement and that it has the full power and authority to assign its interest in the Management Agreement to the Partnership. B Tower hereby represents and warrants that it is an accredited investor under the applicable securities laws and covenants that it will not assign its Units to any person or entity unless such person or entity shall establish that they are also such an accredited investor. 28. DEFAULT. In the event that Partnership fails to acquire the Property pursuant to this Agreement other than by reason of a termination by Partnership expressly permitted hereunder or Contributor's or Tower's default, Partnership agrees that Contributor's and Tower's sole remedies shall be (i) to have the Title Company deliver the Deposit to Contributor and Tower as liquidated damages to recompense Contributor and Tower for time spent, labor and services performed, and loss of its bargain and to terminate this Agreement; or (ii) to seek specific performance. The Partnership acknowledges that in the event of such a failure by the Partnership, the damages suffered by the Contributor and Tower will be difficult to ascertain with certainty. Therefore, the Partnership, the Contributor and Tower agree that in the event of such a failure by the Partnership, and if the Contributor and Tower do not elect to seek specific performance, then the sum of $270,000 is a good faith estimate of the Contributor's and Tower's damages and at Contributor's election said sum shall be promptly paid to Contributor and Tower in the form of the Deposit. In such event the Contributor and Tower agree to accept the Deposit as Contributor's and Tower's total damages and relief hereunder in the event of Partnership's default hereunder. In the event that Partnership does so default and this Agreement is terminated, Partnership shall have no further right, title, or interest in the Property. In the event Contributor fails to sell the Property to Partnership pursuant to this Agreement or Tower fails to terminate the Management Agreement other than by reason of a termination by Contributor expressly permitted hereunder or Partnership's default, Partnership's sole remedies shall be (i) cancellation of this Agreement in which event Partnership shall be entitled to the return by the Title Company to Partnership of the Deposit, or (ii) to seek specific performance. In no event shall either party be entitled to any remedies or damages for breach of this Agreement, except as set forth Page 18 hereinabove. And in no event shall any party be entitled to punitive or consequential damages for the breach of this Agreement. 29. RECORDATION. Neither Party may record this Contribution Agreement; and any recordation shall render the contract void. Also, neither party may file a lis pendens against the Property. 30. TOWER'S INABILITY TO PERFORM. Notwithstanding anything set forth herein to the contrary, if Tower is unable or unwilling to contribute the Management Agreement to the Partnership at Closing: (i) this Agreement shall remain in full force and effect; (ii) Tower shall be deleted as a party to this Agreement, shall have no rights or liabilities hereunder and shall be released of any liabilities accruing under this Agreement by the other parties hereto; (iii) the Contributor's Contribution Value shall be increased by the amount of Tower's Contribution Value; (iv) Contributor shall deliver the Property to the Partnership free and clear of the Management Agreement; and (v) Contributor shall indemnify, defend and hold Partnership harmless from any claims made by Tower for any management fees respecting the Property. 31. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach or the validity thereof shall be settled by final and binding arbitration in accordance with the most current Commercial Arbitration Rules (the "Rules") of the American Arbitration Association ("AAA"). The arbitration shall be conducted by a tribunal of three (3) arbitrators (the "Tribunal"). Each party shall appoint an arbitrator within ten (10) days from the filing of the Demand and Submission in accordance with Paragraph 7 of the Rules and the two (2) arbitrators shall jointly appoint the third arbitrator, within fifteen (15) days from their appointment, in accordance with Paragraph 7 of the Rules. If the two (2) appointed arbitrators fail to agree upon a third arbitrator within said fifteen (15) days and fail to agree to an extension of such period, the third arbitrator shall be appointed by the AAA in accordance with Paragraph 15 of the Rules. The place of arbitration shall be Arlington, Virginia and the Award shall be issued at the place of arbitration. The Tribunal may, however, call and conduct hearings and meetings at such other places as the parties may agree. The law applicable to the arbitration procedure shall be the Federal Arbitration Act (the "Act") as supplemented by any law of the place of arbitration which is not inconsistent with the Act. The decision of the Tribunal (the "Award") shall be made within ninety (90) days of the appointment of the Tribunal pursuant to the provisions hereof, and the parties hereby agree that any such decision need not be accompanied by a reasoned opinion. The Award may, except as limited by Section 27 of this Agreement, include (i) recovery of actual damages for violation of any obligations under this Agreement or of governing law, including the recovery of attorneys' fees to the prevailing party (ii) injunctive relief against threatened or actual violations of any obligation under the Agreement or of governing law or (iii), if and to the extent permitted under the terms of the Agreement, the remedy of specific performance. The Award shall be final and binding on the parties. Judgment upon the Award may be entered in any court having jurisdiction thereof or having jurisdiction over one or more of the parties or their assets. The parties specifically waive any right they may enjoy to apply to any court for relief from the provisions of this Agreement or from any decision of the Tribunal made prior to the Award. Page 19 32. EXECUTION IN COUNTERPARTS. . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected thereon as the signatories. 33. SIGNATURE BY FACSIMILE. The parties may execute and deliver this Agreement by forwarding signed facsimile copies of their signature page to this Agreement and delivering an original of the same by overnight courier. Such facsimile signatures shall have the same binding effect as original signatures, and the parties hereby waive any defense to validity based on any such copies or signatures. 34. ACCREDITED STATUS. The Contributor and Tower hereby represent to the Partnership that they each are as of the date of this Agreement, and will be as of the Closing Date, an accredited investor under applicable securities laws. IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be executed as of the day and date first above written. HOME PROPERTIES OF NEW YORK, L.P. By: Home Properties of New York, Inc. General Partner By: /s/ Amy L. Tait --------------------------------- Title: Executive Vice President PARK SHIRLINGTON LIMITED PARTNERSHIP By: /s/ Albert Abramson --------------------------------- Print Name: Albert Abramson Title: General Partner Page 20 PARK SHIRLINGTON LIMITED PARTNERSHIP By: /s/ Beverly Bernstein --------------------------------- Print Name: Beverly Bernstein Title: General Partner Page 21 PARK SHIRLINGTON LIMITED PARTNERSHIP By: /s/ Anne S. Reich --------------------------------- Print Name: Anne S. Reich Title: General Partner Page 22 TOWER CONSTRUCTION GROUP, L.L.C By: /s/ Jeffrey S. Abramson --------------------------------- Jeffrey S. Abramson Title: Manager Page 23 EX-2 5 Exhibit 2.8 HOME PROPERTIES DISCLOSES ACQUISITION PIPELINE For Immediate Release: Friday, March 20, 1998 Rochester, New York/ PR Newswire/ -- Home Properties (NYSE:HME), a real estate investment trust ("REIT") specializing in apartment communities in select Northeast, Midwest and Mid-Atlantic markets, today disclosed that is has entered into various agreements to purchase 4,452 apartment units for a combined price of $174 million. The properties are located in Maryland, Connecticut, Illinois, and Pennsylvania. The agreements are subject to certain conditions and approvals. Detailed information on the acquisitions will be released by the Company when the transactions are consummated. On February 5, 1998, Home Properties disclosed that it had $92 million of acquisitions in four unrelated transactions under contract. Since then, the Company has closed on two of these transactions totaling $16 million, completed an additional acquisition for $27 million, and entered into additional agreements totaling $98 million. Two previously announced contracts totaling $76 million are still pending. This press release contains forward-looking statements. Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Home Properties is a self-managed real estate investment trust which now operates 162 communities with 22,364 apartment units. Of these, 15,016 units in 67 communities are owned outright, 4,862 units are managed by the Company as general partner, and 2,486 units are managed for others. The communities are located throughout the Northeastern quadrant of the United States, including New York, Michigan, Pennsylvania, New Jersey, Ohio, Virginia, and Indiana. In addition, Home Properties manages 1.7 million square feet of commercial space. Home Properties' common stock is traded on the New York Stock Exchange under the symbol "HME" and on the Berlin Stock Exchange under the symbol "HMP GR". The Company's web site address is www.homeproperties.com. ***** For further information: Amy L. Tait, Executive Vice President Home Properties of New York, Inc. (716) 246-4108 EX-23 6 Exhibit 23.0 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements on Forms S-3 (Nos. 333-37437, 333-37229, 333-30835, 333-13723, 333-43303, 333-46243, 333-2672, and 333-2674) and on Forms S-8 (Nos. 333-05705 and 333-12551) filed by Home Properties of New York, Inc. of our reports dated March 16, 1998 and March 18, 1998, on our audits of the Candlewood Apartments and Park Shirlington and Braddock Lee Apartments, respectively, for the year ended December 31, 1997, which reports are included in the accompanying Form 8-K. We also consent to the reference to our firm under the caption "Experts". /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Rochester, New York March 23, 1998 -----END PRIVACY-ENHANCED MESSAGE-----