Common use of OBLIGATIONS AND COVENANTS OF HOME PROPERTIES AND HME Clause in Contracts

OBLIGATIONS AND COVENANTS OF HOME PROPERTIES AND HME. Home Properties and HME covenant and agree with the Partnership, both before and after Closing as follows: (a) Distributions with respect to the OP Units will be identical in amount and timing to the dividends on HME Common Shares, except that the initial distribution payable with respect to the OP Units issued to the Unit Partners shall be made on the date on which HME shall pay the dividend to holders of HME Common Shares that relates to the earnings for the calendar quarter in which the OP Units were issued to the Unit Partners, and shall be prorated such that the Unit Partners will receive a pro-rata distribution for the period from the date on which the OP Units were issued to the Unit Partners, which shall be the Closing Date to, and including, the last day of the calendar quarter in which the OP Units were so issued. (b) The General Partner may retain copies of any and all books and records pertaining to the Partnership and the operation of the Property so that the General Partner may wind up the affairs of the previously conducted business. (c) At the Closing, Home Properties shall deliver to each Unit Partner good and marketable title to the OP Units allocated to such Unit Partner, free and clear of all liens, charges, encumbrances and restrictions, except as contained in the Operating Partnership Agreement, the Registration Rights Agreement, and the Lock-Up Agreement, and shall, by execution of the Amendment, admit each Unit Partner as a limited partner in Home Properties. (d) At all times for and during a period of ten (10) years from and after the Closing Date, Home Properties shall allocate to each Unit Partner, for Federal Income tax purposes, pursuant to Section 752 of the Code, qualified nonrecourse debt of Home Properties in an aggregate amount not less than the Capital Account Deficit of such Partner, as adjusted from time to time. Notwithstanding the foregoing, the covenant set forth in this subparagraph (d) shall be limited for the following partners as follows: (i) Gary Shapiro, six (6) years; (ii) Harry Shapiro, seven (7) years; (xxx) Xxxxxd Timmis, three (3) yxxxx. (e) The initial tax xxxxx Xxxxxal Account Deficit of each Unit Partner in the Property, shall be determined by reference to each such Unit Partners Capital Account Deficit in the Partnership as at (just prior to) the contribution of such Partner's interest in the Partnership to Home Properties on the Closing Date, and shall be based upon the estimated information set forth in Schedule 3 attached hereto and shall be updated based upon the information set forth in a schedule to be furnished by the accountant for the General Partner within the time required by Section 34(e) hereof. Thereafter, for a period of ten (10) years from and after the Closing Date or earlier period as provided in Section 8(d), the Capital Account Deficit of each Unit Partner shall be adjusted annually to reflect changes occasioned at the level of Home Properties, including, without limitation, distributions made by Home Properties. During this period Home Properties shall monitor the Capital Account Deficit of the Unit Partners to fulfill the obligations of the immediately preceding paragraph. At the end of such ten (10) year period or earlier period as provided in Section 8(d), Home Properties shall cooperate with each Unit Partner by providing each Unit Partner with the right to execute an agreement obligating such Unit Partner to restore any portion of a deficit balance in such Unit Partner's capital account and/or provide the opportunity to each Unit Partner to enter into a "bottom-tier guaranty" with respect to the debt of the Home Properties. Furthermore, in complying with Section 4.04 of the Operating Partnership Agreement, Home Properties agrees that the methodology chosen under Section 704(c) of the Internal Revenue Code shall be the "traditional" method. (f) For a period of ten (10) years from and after the Closing Date, Home Properties shall not sell, exchange, transfer or otherwise dispose of the Property, or any replacement of the Property (in any event, a "Property Transfer"), unless such Property Transfer occurs in such manner as to be wholly tax free to the Unit Partners. (g) Future transactions involving HME, or Home Properties, including, without limitation, merger(s), sale(s) of assets or similar transactions, shall be structured in such manner as to (i) not result in an amendment to the definition of Conversion Factor as it is currently included in the Operating Partnership Agreement; (ii) prevent, in the context of such a transaction, a different per unit value being assigned to the OP Units issued to the Unit Partners than the value assigned per share to the then outstanding HME Common Shares; and (iii) for a period of ten (10) years from and after the Closing Date, not accelerate or interfere with the tax deferred nature of the transaction contemplated by this Agreement with respect to the OP Units issued to the Unit Partners.

OBLIGATIONS AND COVENANTS OF HOME PROPERTIES AND HME. Home Properties and HME covenant and agree with the PartnershipPartnerships, both before and after Closing as follows: (a) Distributions with respect to the OP Units will be identical in amount and timing to the dividends on HME Common Shares, except that the initial distribution payable with respect to the OP Units issued to the Unit Partners shall be made on the date on which HME shall pay the dividend to holders of HME Common Shares that relates to the earnings for the calendar quarter in which the OP Units were issued to the Unit Partners, and shall be prorated such that the Unit Partners will receive a pro-rata distribution for the period from the date on which the OP Units were issued to the Unit Partners, which shall be the Closing Date to, and including, the last day of the calendar quarter in which the OP Units were so issued. (b) The General Partner may retain copies of any and all books and records pertaining to the Partnership Partnerships and the operation of the Property so that the General Partner may wind up the affairs of the previously conducted business. (c) At the Closing, Home Properties shall deliver to each Unit Partner good and marketable title to the OP Units allocated to such Unit Partner, free and clear of all liens, charges, encumbrances and restrictions, except as contained in the Operating Partnership Agreement, the Registration Rights Agreement, and the Lock-Up Agreement, and shall, by execution of the Amendment, admit each Unit Partner as a limited partner in Home Properties. (d) At all times for and during a period of ten (10) years from and after the Closing Date, Home Properties shall allocate to each Unit Partner, for Federal Income tax purposes, pursuant to Section 752 of the Code, qualified nonrecourse debt (as defined in Section 465(b)(6) of the Code) of Home Properties in an aggregate amount not less than the tax basis Capital Account Deficit of such Partner, as adjusted from time to time. Notwithstanding the foregoing, the covenant set forth in this subparagraph (d) shall be limited for the following partners as follows: (i) Gary Shapiro, six (6) years; (ii) Harry Shapiro, seven (7) years; (xxx) Xxxxxd Timmis, three (3) yxxxx. (e) The initial tax xxxxx Xxxxxal basis Capital Account Deficit of each Unit Partner in the Property, shall be determined by reference to each such Unit Partners Capital Account Deficit in the Partnership Partnerships as at (just prior to) the contribution of such Unit Partner's interest in the Partnership Partnerships to Home Properties on the Closing Date, and shall be based upon the estimated information set forth in Schedule 3 attached hereto and shall be updated based upon the information set forth in a schedule to be furnished by the accountant for the General Partner within the time required by Section 34(e) hereof. Thereafter, for a period of ten (10) years from and after the Closing Date or earlier period as provided in Section 8(d)Date, the tax basis Capital Account Deficit of each Unit Partner shall be adjusted annually to reflect changes occasioned at the level of Home Properties, including, without limitation, distributions made by Home Properties. During this period Home Properties shall monitor the tax basis Capital Account Deficit of the Unit Partners to fulfill the obligations of the immediately preceding paragraph. At the end of such ten (10) year period or earlier period as provided in Section 8(d), Home Properties shall cooperate with each Unit Partner by providing each Unit Partner with the right to execute an agreement obligating such Unit Partner to restore any portion of a tax basis deficit balance in such Unit Partner's capital account and/or provide the opportunity to each Unit Partner to enter into a "bottom-tier guaranty" with respect to the debt of the Home Properties. Furthermore, in complying with Section 4.04 of the Operating Partnership Agreement, Home Properties agrees that the methodology chosen under Section 704(c) of the Internal Revenue Code shall be the "traditional" method. (f) For a period of ten (10) years from and after the Closing Date, Home Properties shall not sell, exchange, transfer or otherwise dispose of the Property, or any replacement of the Property (in any event, a "Property Transfer"), unless such Property Transfer occurs in such manner as to be wholly tax free to the Unit Partners. (g) Future transactions involving HME, or Home Properties, including, without limitation, merger(s), sale(s) of assets or similar transactions, shall be structured in such manner as to (i) not result in an amendment to the definition of Conversion Factor as it is currently included in the Operating Partnership Agreement; (ii) prevent, in the context of such a transaction, a different per unit value being assigned to the OP Units issued to the Unit Partners than the value assigned per share to the then outstanding HME Common Shares; and (iii) for a period of ten (10) years from and after the Closing Date, not accelerate or interfere with the tax deferred nature of the transaction contemplated by this Agreement with respect to the OP Units issued to the Unit Partners. (h) Home Properties hereby agrees to permit a pledge and/or hypothecation of the OP Units held by the Unit Holders to one or more third party lenders, as collateral for financing obtained by such Unit Holders. Home Properties further agrees that it will execute and deliver documentation reasonably requested by such lenders to facilitate such financing.

OBLIGATIONS AND COVENANTS OF HOME PROPERTIES AND HME. Home Properties and HME covenant and agree with the PartnershipContributors, both before and after Closing as followsClosing: (a) Distributions with respect to the OP Units will be identical in amount and timing to the dividends on HME Common Shares, except that the initial distribution payable with respect to the OP Units issued to the Unit Partners shall be made on the date on which HME shall pay the dividend to holders of HME Common Shares that relates to the earnings for the calendar quarter in which the OP Units were issued to the Unit Partners, and shall be prorated such that the Unit Partners will receive a pro-rata distribution for the period from the date on which the OP Units were issued to the Unit Partners, which shall be the Closing Date to, and including, the last day of the calendar quarter in which the OP Units were so issued. (b) The General Partner Contributors may retain copies of any and all books and records pertaining to the Partnership Contributors and the operation of the Property Properties so that the General Partner Contributors may wind up the affairs of the previously conducted business. (cb) At the Closing, Home Properties shall deliver to each Unit Partner Contributor good and marketable title to the OP Units allocated to such Unit PartnerContributor, free and clear of all liens, charges, encumbrances and restrictions, except as contained in the Operating Partnership Agreement, the Registration Rights Agreement, Agreement and the Lock-Up Agreement, and shall, by execution of the Amendment, admit each Unit Partner Contributor as a limited partner in Home Properties. (d) At all times for and during a period of ten (10) years from and after the Closing Date, Home Properties shall allocate to each Unit Partner, for Federal Income tax purposes, pursuant to Section 752 of the Code, qualified nonrecourse debt of Home Properties in an aggregate amount not less than the Capital Account Deficit of such Partner, as adjusted from time to time. Notwithstanding the foregoing, the covenant set forth in this subparagraph (d) shall be limited for the following partners as follows: (i) Gary Shapiro, six (6) years; (ii) Harry Shapiro, seven (7) years; (xxx) Xxxxxd Timmis, three (3) yxxxx. (e) The initial tax xxxxx Xxxxxal Account Deficit of each Unit Partner in the Property, shall be determined by reference to each such Unit Partners Capital Account Deficit in the Partnership as at (just prior to) the contribution of such Partner's interest in the Partnership to Home Properties on the Closing Date, and shall be based upon the estimated information set forth in Schedule 3 attached hereto and shall be updated based upon the information set forth in a schedule to be furnished by the accountant for the General Partner within the time required by Section 34(e) hereof. Thereafter, for a period of ten (10) years from and after the Closing Date or earlier period as provided in Section 8(d), the Capital Account Deficit of each Unit Partner shall be adjusted annually to reflect changes occasioned at the level of Home Properties, including, without limitation, distributions made by Home Properties. During this period Home Properties shall monitor the Capital Account Deficit of the Unit Partners to fulfill the obligations of the immediately preceding paragraph. At the end of such ten (10) year period or earlier period as provided in Section 8(d), Home Properties shall cooperate with each Unit Partner by providing each Unit Partner with the right to execute an agreement obligating such Unit Partner to restore any portion of a deficit balance in such Unit Partner's capital account and/or provide the opportunity to each Unit Partner to enter into a "bottom-tier guaranty" with respect to the debt of the Home Properties. Furthermore, in complying with Section 4.04 of the Operating Partnership Agreement, Home Properties agrees that the methodology chosen under Section 704(c) of the Internal Revenue Code shall be the "traditional" method. (fc) For a period of ten (10) years from and after the Closing Date, Home Properties shall not sell, exchange, transfer or otherwise dispose of the Property, or any replacement of the Property (in any event, a "Property Transfer"), unless such Property Transfer occurs in such manner as to be wholly tax free to the Unit Partnersrelevant Contributor. (gd) Future transactions involving HME, or Home Properties, including, without limitation, merger(s), sale(s) of assets or similar transactions, shall be structured in such manner as to (i) not result in an amendment to the definition of Conversion Factor as it is currently included in the Operating Partnership Agreement; (ii) prevent, in the context of such a transaction, a different per unit value being assigned to the OP Units issued to the Unit Partners Contributors than the value assigned per share to the then outstanding HME Common Shares; and (iii) for a period of ten (10) years from and after the Closing Date, not accelerate or interfere with the tax deferred nature of the transaction contemplated by this Agreement with respect to the OP Units issued to the Unit PartnersContributors. (e) Home Properties shall utilize the "traditional" method" for making allocations under Section 704(c) of the Code with respect to the Properties. The obligations of Home Properties as set forth above in sub-paragraphs (c), (d) and (e) of this Paragraph 5 shall be continuing obligations of Home Properties for the time periods, if any, as specified above and shall survive Closing and shall not be deemed to have merged into any document delivered at Closing.

OBLIGATIONS AND COVENANTS OF HOME PROPERTIES AND HME. Home Properties and HME covenant and agree with the Partnership, both before and after Closing as follows: (a) Distributions with respect to the OP Units will be identical in amount and timing to the dividends on HME Common Shares, except that the initial distribution payable with respect to the OP Units issued to the Unit Partners shall be made on the date on which HME shall pay the dividend to holders of HME Common Shares that relates to the earnings for the calendar quarter in which the OP Units were issued to the Unit Partners, and shall be prorated such that the Unit Partners will receive a pro-rata distribution for the period from the date on which the OP Units were issued to the Unit Partners, which shall be the Closing Date to, and including, the last day of the calendar quarter in which the OP Units were so issued. (b) The General Partner may retain copies of any and all books and records pertaining to the Partnership and the operation of the Property so that the General Partner may wind up the affairs of the previously conducted business. (c) At the Closing, Home Properties shall deliver to each Unit Partner good and marketable title to the OP Units allocated to such Unit Partner, free and clear of all liens, charges, encumbrances and restrictions, except as contained in the Operating Partnership Agreement, the Registration Rights Agreement, and the Lock-Up Agreement, and shall, by execution of the Amendment, admit each Unit Partner as a limited partner in Home Properties. (d) At all times for and during a period of ten (10) years from and after the Closing Date, Home Properties shall allocate to each Unit Partner, for Federal Income tax purposes, pursuant to Section 752 of the Code, qualified nonrecourse debt of Home Properties in an aggregate amount not less than the Capital Account Deficit of such Partner, as adjusted from time to time. Notwithstanding the foregoing, the covenant set forth in this subparagraph (d) shall be limited for the following partners as follows: (i) Gary Shapiro, six (6) years; (ii) Harry Shapiro, seven (7) years; (xxx) Xxxxxd Timmis, three (3) yxxxx. (e) The initial tax xxxxx Xxxxxal basis Capital Account Deficit of each Unit Partner in the Property, shall be determined by reference to each such Unit Partners Capital Account Deficit in the Partnership as at (just prior to) the contribution of such Partner's interest in the Partnership to Home Properties on the Closing Date, and shall be based upon the estimated information set forth in Schedule 3 attached hereto and shall be updated based upon the information set forth in a schedule to be furnished by the accountant for the General Partner within the time required by Section 34(e33(e) hereof. Thereafter, for a period of ten (10) years from and after the Closing Date or earlier period as provided in Section 8(d), the Capital Account Deficit of each Unit Partner shall be adjusted annually to reflect changes occasioned at the level of Home Properties, including, without limitation, distributions made by Home Properties. During this period Home Properties shall monitor the Capital Account Deficit of the Unit Partners to fulfill the obligations of the immediately preceding paragraph. At the end of such ten (10) year period or earlier period as provided in Section 8(d), Home Properties shall cooperate with each Unit Partner by providing each Unit Partner with the right to execute an agreement obligating such Unit Partner to restore any portion of a deficit balance in such Unit Partner's capital account and/or provide the opportunity to each Unit Partner to enter into a "bottom-tier guaranty" with respect to the debt of the Home Properties. Furthermore, in complying with Section 4.04 of the Operating Partnership Agreement, Home Properties agrees that the methodology chosen under Section 704(c) of the Internal Revenue Code shall be the "traditional" method. (f) For a period of ten (10) years from and after the Closing Date, Home Properties shall not sell, exchange, transfer or otherwise dispose of the Property, or any replacement of the Property (in any event, a "Property Transfer"), unless such Property Transfer occurs in such manner as to be wholly tax free to the Unit Partners. (g) Future transactions involving HME, or Home Properties, including, without limitation, merger(s), sale(s) of assets or similar transactions, shall be structured in such manner as to (i) not result in an amendment to the definition of Conversion Factor as it is currently included in the Operating Partnership Agreement; (ii) prevent, in the context of such a transaction, a different per unit value being assigned to the OP Units issued to the Unit Partners than the value assigned per share to the then outstanding HME Common Shares; and (iii) for a period of ten (10) years from and after the Closing Date, not accelerate or interfere with the tax deferred nature of the transaction contemplated by this Agreement with respect to the OP Units issued to the Unit Partners.