**EXHIBIT
        10.13**




**AGREEMENT
      FOR PURCHASE AND SALE OF INTERESTS**


**SOUTHEAST
      MICHIGAN PORTFOLIO**




**THIS
      AGREEMENT FOR PURCHASE AND SALE OF INTERESTS** (this
“ **Agreement** "),
      is
      made as of the 26th day of April, 2006 (the " **Effective
      Date** "),
      by
      and between THE
      LIGHTSTONE GROUP ,
      LLC, a
      New Jersey limited liability company (as “ **Buyer** ”),
      having its principal office at 326 Third Street, Lakewood, New Jersey 08701;
      and
      HOME PROPERTIES, L.P., a New York limited partnership (“ **Home
      Properties** ")
      and
      HOME PROPERTIES WMF I, LLC, a New York limited liability company (“ **Home
      Properties WMF** ”;
      and
      together with Home Properties, as “ **Sellers** ”),
      for
      themselves and on behalf of each of the limited liability companies listed
      on Schedule
      1 attached
      hereto (each a “ **Company** ”
and
      collectively the “ **Companies** ”),
      each
      having their principal office at 850 Clinton Square, Rochester, New York
      14604.





**WITNESSETH** :





This
      Agreement is made with reference to the following facts and
      objectives:





(a)  Each
      Company owns or will own, on or prior to Closing, a 100% fee simple interest
      in
      the corresponding Property listed next to its name on Schedule
      1 attached
      hereto.





(b)  Home
      Properties owns or will own, on or prior to Closing, 100% of the membership
      interest in Canterbury Square, LLC, Carriage Hill Venture, L.L.C., Carriage
      Park
      Associates, L.L.C., Charter Square, LLC, Cherry Hill Village Venture, L.L.C.,
      Deerfield Woods Home Properties LLC, Fordham Green, LLC, Greentrees, LLC, Home
      Properties Hampton Court, LLC, Kingsley, LLC, Macomb Apartments Home Properties
      LLC, Oak Park Manor, LLC, Southpoint Square, LLC, Home Properties Springwells,
      LLC, Stephenson House, LLC, Lakes, LLC and Woodland Gardens, LLC, each a
      Michigan or New York limited liability company (collectively, the “ **HP
      Companies** ”);
      and
      Home Properties WMF owns or will own, on or prior to Closing, 100% of the
      membership interest in Cherry Hill Club, LLC and Scotsdale, LLC, each a Michigan
      limited liability company (collectively, the “ **HP
      WMF Companies** ”);
      Home
      Properties desires to sell 100% of the membership interests in each HP Company
      to Buyer in exchange for cash and Home Properties WMF desires to sell 100%
      of
      the membership interest in each HP WMF Company to Buyer in exchange for
      cash.





(c)  Home
      Properties intends to sell the interests in several of the Companies in tax
      deferred exchanges pursuant to Section 1031 of the Code (defined
      below).





(d)  Buyer
      desires to acquire 100% of the interests in the HP Companies and the HP WMF
      Companies upon the happening of certain events.





(e)  Buyer
      is
      willing to accommodate Home Properties’ need to complete a portion of the
      transaction as tax deferred exchanges, at no cost or expense to
      Buyer.





(f)  As
      used
      in this Agreement with initial capital letters, the following terms, in each
      instance, shall have the meaning ascribed thereto:


1





“ **Closing** ”
and
      “Closing Date” shall have the meanings given to them in Section 13.





“ **Code** ”
shall
      mean and refer to the Internal Revenue Code of 1986, as amended;





“ **Company** ”
shall
      mean and refer to each Company listed on Schedule
      1 individually, and “Companies” shall mean and refer to all of them
      collectively;





“ **Due
      Diligence Period** ”
shall
      have the meaning given to it in Section 11.





“ **Earnest
      Money Deposit** ”
shall
      have the meaning given to it in Section 19.




" **Environmental
      Law** "
      shall
      mean and refer to any federal, state, county or municipal environmental, health,
      chemical use, safety or sanitation law, statute, ordinance or code relating
      to
      the protection of the environment, and/or governing the use, storage, treatment,
      generation, transportation, processing, handling, production or disposal of
      any
      Hazardous Materials, and the rules, regulations and orders promulgated and/or
      issued thereunder;





“ **Escrow
      Agent** ”
shall
      mean and refer to the Title Company.





“ **Escrow
      Agreement** ”
shall
      mean that Escrow Agreement between Escrow Agent and Buyer, a form of which
      is
      attached hereto as Exhibit
      B .





“ **Existing
      Loan** ”
shall
      mean and refer to each loan secured by a Property as identified on Schedule
      4 attached
      hereto and “Existing Loans” shall refer to all of the loans secured by the
      Properties collectively.





" **Hazardous
      Materials** "
      shall
      mean and refer to any hazardous substances described or defined in (i) the
      Comprehensive Environmental Response, Compensation and Liability Act of 1980,
      as
      amended; (ii) the Hazardous Materials Transportation Act, as amended; (iii)
      the
      Resource Conservation and Recovery Act, as amended; (iv) the Toxic Substances
      Control Act, as amended; and (v) any applicable state Environmental Laws, and
      the regulations promulgated thereunder, in each case, as at the date of this
      Agreement;





" **HME** "
      shall
      mean and refer to Home Properties, Inc., a Maryland corporation and general
      partner of Home Properties;





“ **Interests** ”
shall
      have the meaning given to it in Section 1;





“ **Property** "
      shall
      mean and refer individually and “ **Properties** ”
shall
      mean and refer collectively to the: (i) the land owned by each Company
      (collectively, the " **Land** "),
      as
      more particularly described on Exhibit
      A attached
      hereto and made a part hereof, together with (a) all easements, rights-of-way,
      rights, privileges, benefits, tenements, hereditaments and appurtenances
      thereunto belonging or in anywise appertaining, and (b) all right, title and
      interest of the relevant Company in and to any land lying in the bed of any
      street, road, avenue or alley, open or proposed, public or private, in front
      of,
      behind, or otherwise adjoining the Land, or any part of the Land, including,
      without limitation, all right, title and interest of the relevant Company in
      and
      to (1) any award made after the date of this Agreement as a result of
      condemnation, or in lieu thereof, and (2) any unpaid award as of the date of
      this Agreement as a result of condemnation, or in lieu thereof; (ii) all
      buildings, structures, fixtures, facilities, installations and other
      improvements of every kind and description now or hereafter in, on, over and
      under the Land (collectively, the " **Improvements** "),
      including, without limitation, any and all plumbing, air conditioning, heating,
      ventilating, mechanical, electrical and other utility systems, and fixtures,
      parking lots and facilities, landscaping, roadways, fences, mail boxes,
      sidewalks, maintenance buildings, swimming pools and other recreational
      facilities, security devices, signs and light fixtures; and (iii) in each
      apartment unit of each Property, one refrigerator, one stove, one dishwasher
      and
      any other fixture, equipment or personal property required to be provided to
      residential tenants pursuant to applicable law or regulation;


2





“ **Taxes** ”
shall
      mean all taxes, charges, fees, levies or other assessments, including, without
      limitation, income, excise, property, sale, gross receipts, employment and
      franchise taxes imposed by the United States, or any state, county, local or
      foreign government, or subdivision or agency thereof with respect to the assets
      or the business of each Company, and including any interest, penalties or
      additions attributable thereto; and




“ **Title
      Company** ”
shall
      mean and refer to Land America/Lawyers Title Insurance Corporation;





NOW,
      THEREFORE, in consideration of the foregoing, the mutual covenants, agreements
      and undertakings herein contained, and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, Buyer and Home
      Properties agree as follows:





1.
            **TRANSFER**.





(a)  Subject
      to the terms and conditions of this Agreement, Sellers hereby agree that, at
      Closing, they will transfer 100% of the membership interests in the Companies
      (collectively, the “ **Interests** ”)
      to
      Buyer in exchange for cash.





(b)  Each
      Company owns or will own on or prior to Closing all right, title and interest
      in
      and to the following, which shall remain the property of each Company on and
      after the Closing Date:





(i)  all
      furniture, furnishings, equipment, machinery and other tangible personal
      property and fixtures of every kind and description owned by the relevant
      Company, and used in connection with its respective Property (in each instance,
      the " **Personal
      Property** "),
      including, without limitation, all ranges, refrigerators, disposals,
      dishwashers, water heaters, furnaces, air conditioning units and equipment,
      carpeting, traverse rods, drapes and other window treatments, exhaust fans,
      range hoods, screens, model unit furniture, tools, parts, motors, supplies,
      pool
      and other recreational equipment, cabinets, mirrors, shelving, office equipment,
      stationery and other office supplies, normal levels of inventory, vehicles
      (schedule of vehicles included in Schedule
      7 )
      and all
      replacements of, and/or substitutions for, any of the foregoing (including
      any
      computer equipment and peripherals (including but not limited to monitors,
      printers, modems, keyboards, firewall equipment; but excluding computer software
      and certain peripherals to be identified by Home Properties prior to expiration
      of the Due Diligence Period) including without limitation the items described
      on Schedule
      7 attached
      hereto;





(ii)  all
      present and subsequent leases with tenants, and/or other occupancy agreements,
      together with all pending applications for tenancy pursuant to which any person
      or entity has a right to use and/or occupy any portion of any of the Properties
      (in each instance, the “ **Leases** ");


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(iii)  all
      service and maintenance contracts and equipment leases, used or useful in
      connection with the Property, which are not required to be terminated by Seller,
      including, without limitation, natural gas purchase contracts and coin-operated
      laundry concession leases, all of which are listed on Schedule
      3 attached
      hereto (in each instance, the " **Service
      Contracts** ");





(iv)  all
      trademarks, service marks, logos, trade, assumed or business names and telephone
      numbers related to the use and operation of the Property, but excluding the
      name
“ **Home
      Properties** ”
and
      the
      Home Properties’ logo and trademark, whether used alone or in combination with
      other words, (in each instance, the " **Trade
      Names** "),
      except that Home Properties makes no representation or warranty of title or
      usage with respect to such Trade Names;




(v)  all
      other
      contract rights and intangible property of any kind and nature whatsoever
      belonging or pertaining to or used in connection with all or any part of the
      Properties and/or the development, construction, ownership, use or operation
      thereof, excluding the Service Contracts (collectively, “ **Other
      Contract Rights and Intangibles** ”),
      including, without limitation: (1) all guaranties and warranties, (2) all
      designs, plans, specifications, engineering drawings and prints, and surveys,
      (3) all development rights, entitlements, licenses, approvals and agreements
      belonging, benefiting or pertaining to the Land or the Improvements and the
      development, construction, ownership, use and operating thereof, (4) all comfort
      letters, reliance letters, estoppels, certificates, authorizations and other
      approvals pertaining to all or any portion of the Properties by any governmental
      authority and all applications for any of the foregoing; and





(vi)  the
      Properties.





(c)  Notwithstanding
      anything to the contrary contained in this Agreement, Sellers shall take all
      steps necessary to assure that, at each Closing, the applicable Company shall
      not be obligated or liable for the following (each, an “ **Excluded
      Liability** ”):





(i)  all
      Taxes
      arising out of, relating to or in respect of the Properties or the Company
      imposed upon any Company or the Buyer for all taxable periods before the Closing
      Date;





(ii)  the
      Required Exceptions; and





(iii)  any
      undisclosed liabilities not listed on Schedule
      4 which
      have accrued prior to the Closing Date.





2.
            **PURCHASE
                PRICE;****DEPOSIT**.





(a)  The
      aggregate purchase price (“ **Purchase
      Price** ”)
      payable by Buyer for the Interests is Two Hundred Thirty-Eight Million Seven
      Hundred Thirty-Eight Thousand Five Hundred and No/100 Dollars ($238,738,500),
      subject to such apportionments, adjustments and credits as are provided in
      this
      Agreement.





(b)  Buyer
      shall make an earnest money deposit in the amount of Ten Million and 00/100
      Dollars ($10,000,000) (the “ **Earnest
      Money Deposit** ”),
      within one (1) business day after the Effective Date, to Escrow Agent to be
      held
      in escrow in an interest-bearing account in a lending institution acceptable
      to
      Buyer in its sole discretion and otherwise in accordance with the Escrow
      Agreement.


4





(c)  All
      payments hereunder shall be paid by wire transfer of immediately available
      federal funds in accordance with the wiring instructions set forth in Exhibit
      E attached
      hereto and made a part hereof, or in accordance with other or additional
      instructions given to Buyer by written notice not less than one (1) Business
      Day
      (as hereinafter defined) prior to a Closing. As used in this Agreement,
“Business Day” shall refer to any date on which commercial banks are authorized
      to do business and are not required by law or executive order to close in New
      York City.





(d)  Buyer
      acknowledges that a portion of the Purchase Price is being paid to Sellers
      as
      reimbursement for the anticipated prepayment penalties in connection with the
      Existing Loans, which will be paid off at the applicable Closing. The amount
      of
      the prepayment penalties are currently estimated to be $3,550,000; however
      the
      actual amount of the prepayment penalties shall be determined by the payoff
      statements issued by the lenders at the applicable Closing; provided further,
      however, that the Purchase Price shall in no event be increased or decreased
      on
      account of the amount of such prepayment penalties.





3.
            **CLOSING
                COSTS**.





Buyer
      shall pay all recording fees in connection with its financing, its attorneys’
fees, the costs of any non-standard endorsements to owners’ title policies
      (except the cost of a non-imputation endorsement which shall be Sellers’ sole
      cost and expense), all costs related to any new financing including loan title
      policies, the costs for updating surveys and environmental reports (by
      reimbursement to Sellers if Sellers have already paid survey and/or
      environmental costs) and all other costs and expenses incidental to or in
      connection with closing this transaction customarily paid for by the purchaser
      of similar property. Home Properties shall pay the costs of obtaining a binder
      or commitment for owners’ policies of title insurance with respect to the
      Properties from the Title Company, the premium for each such owner’s title
      insurance policy including standard exceptions and standard endorsements
      (including a non-imputation endorsement which shall be Sellers’ sole cost and
      expense), its attorneys’ fees, all transfer taxes, if any, and all other costs
      and expenses incidental to or in connection with closing this transaction
      customarily paid for by the seller of similar property.





4.
            **PERMITTED
                EXCEPTIONS &****REQUIRED
                EXCEPTIONS**.





Each
      Property at Closing shall be subject only to the following (the " **Permitted
      Exceptions** ”):





(a)  the
      lien
      of real estate taxes not yet due and payable;





(b)  the
      Leases;





(c)  the
      Service Contracts; and





(d)  easements,
      rights-of-way, covenants, restrictions and other matters of record (other than
      the Existing Loans which shall be paid off on or prior to the
      Closing).




Notwithstanding
      the foregoing, (a) Buyer shall be entitled to review and object to the Permitted
      Exceptions in accordance with Section 12 below; and (b) Sellers shall be
      obligated to take all actions, bring any proceeding, make any payments or
      otherwise incur any expenses or liability in order to eliminate the following:
      (i) satisfy any mortgages and other liens affecting the Properties that were
      created by instruments of record created by either Seller or any Company, or
      consented by either Seller or any Company, or assumed by either Seller or any
      Company and which can be satisfied by payment of a liquidated amount, including,
      without limitation, the Existing Loans; (ii) remove any encumbrances and
      easements placed of record against the Properties by either Seller or any
      Company subsequent to the effective date of the applicable title commitment
      furnished to the Buyer except those identified on Schedule
      12 ;
      (iii)
      pay, discharge or bond any mechanic’s or materialman’s liens or judgment liens
      asserted against the Properties if same were caused by either Seller or any
      Company; and (iv) any other monetary lien against any Property resulting from
      any act or omission of either Seller or any Company (the items referred to
      in
      clauses (i), (ii), (iii) and (iv) above are hereinafter referred to as the
      “ **Required
      Exceptions** ”).


5





5.
            **OBLIGATIONS
                AND COVENANTS OF****SELLERS****AND THE COMPANIES**.





(a)  From
      the
      Effective Date to the applicable Closing, Sellers shall cause each Company,
      with
      respect to the Property owned by it, to:





(i)  Maintain,
      manage and operate the Property in substantially the same condition and manner
      as such Property is now maintained, managed and operated.





(ii)  Promptly
      provide Buyer with a copy of any notice of violation of any Environmental
      Law.




(iii)  Maintain
      in full force and effect all of the existing insurance policies regarding the
      Properties.





(iv)  Promptly
      deliver written notice to Buyer of, and, defend, at Sellers’ and each of the
      Company's expense, all actions, suits, claims, demands and other proceedings
      affecting any Property, or the use, possession or occupancy
      thereof.





(v)  Promptly
      deliver written notice to Buyer of any notice of condemnation of any Property,
      or any portion thereof received by Sellers.





(vi)  Maintain
      all Service Contracts in full force and effect according to their terms; timely
      make all payments, and observe and perform all obligations to be paid, observed
      or performed by the Company thereunder; and promptly notify Buyer of any receipt
      or delivery of any notice (including any notice of default)
      thereunder.





(vii)  Provide
      all services, repairs and other work required to be provided by the landlord
      under the Leases.





(viii)  Promptly
      deliver to Buyer a copy of any notice of required work from any company insuring
      any Property against casualty.





(ix)  Terminate
      all management agreements pertaining to any Property, effective as of the
      completion of the Closing.





(x)  Promptly
      deliver to Buyer a copy of any notice of any violation (or alleged violation)
      of
      any law, ordinance, order, requirement or regulation of any Federal, state,
      county, municipal or other governmental department, agency or authority relating
      to any Property or portion thereof.


6





(xi)  Promptly
      give written notice to Buyer of the occurrence of any condition or event which
      materially and adversely affects the truth or accuracy of any representation
      or
      warranty made (or to be made) by any Company or either Seller under or pursuant
      to this Agreement.





(xii)  Provide
      weekly to Buyer copies of BRAT reports showing market rents for apartment units
      and concession reports; and, from and after expiration of the Due Diligence
      Period (provided this Agreement has not been terminated by either party) until
      the Closing, Sellers shall accommodate Buyer’s reasonable requests with respect
      to asking rents and concessions and other rent matters.





(b)  From
      the
      expiration of the Due Diligence Period (provided this Agreement has not been
      terminated by either party) until the Closing, Sellers shall cause each Company,
      with respect to the Property owned by it the Company, to not (and shall provide
      written notice of any of the following to Buyer):





(i)  Except
      in
      the ordinary course of business, increase any wage or fringe benefit payable
      to
      any employee at any Property, without the prior written consent of Buyer in
      each
      instance.





(ii)  Without
      Buyer’s prior written consent (i) enter into any new lease for an apartment unit
      with a first-time tenant unless the lease is for a period of no more than one
      year; or (ii) enter into, amend, renew or extend any Lease for an apartment
      unit
      with an existing tenant unless the Lease is for a period of not more than one
      year;





(iii)  Except
      in
      the ordinary course of business, terminate any Lease. Ordinary course of
      business shall be deemed to include, without limitation, non-renewals of problem
      tenants, commencement of summary ejectment proceeding where a tenant is more
      than ten (10) days delinquent in the payment of rent, cases of any Lease where
      the tenant is more than thirty (30) days delinquent in the payment of rent,
      or
      in which there has been a material violation of the obligations of
      tenant.





(iv)  Modify
      or
      amend the present form of lease in use in connection with the leasing of
      apartments units at the Properties without the prior written consent of
      Buyer.





(v)  Except
      in
      the ordinary course of business of a Company, apply any Security Deposits
      against rent delinquencies or other Lease defaults, other than in the case
      of
      tenants who have vacated their apartments or are currently involved in
      litigation with such Company.





(vi)  Enter
      into any new license, franchise, concession or easement agreement affecting
      any
      Property, without the prior written consent of Buyer in each
      instance.





(vii)  Modify,
      amend, renew, extend, terminate or otherwise alter any of the Service Contracts,
      or enter into any new service or maintenance contract, equipment lease or,
      except in the ordinary course of business, any purchase order affecting any
      Property, and extending beyond, or for any work or improvement which will not
      be
      completed and paid for prior to, the Closing, without the prior written consent
      of Buyer, in each instance, which consent shall not be unreasonably withheld,
      conditioned or delayed; notwithstanding the foregoing, Sellers may enter into
      a
      service or maintenance contract, or equipment lease which is terminable without
      penalty upon not more than thirty (30) days’ notice.


7





(viii)  Remove
      from any Property any article of Personal Property, except as may be necessary
      for repairs, or the discarding of worn out or useless items, provided, however,
      that any such article removed for repairs shall be returned to such Property
      promptly upon its repair, and shall remain a part of the Personal Property,
      whether or not such article shall be located on any Property at the time of
      the
      Closing, and any such article so discarded shall be replaced with a new or
      replacement article of similar quality and utility prior to the
      Closing.





(ix)  Undertake
      or commence any material (having the same definition as set forth in Section
      17(f) below) renovations or alterations at any Property, except those necessary
      to comply with any of the provisions of this Agreement, without the prior
      written consent of Buyer, in each instance.





(x)  Initiate,
      consent to, approve or otherwise take any action with respect to the zoning,
      or
      any other governmental rule or regulation, presently applicable to all or any
      part of any Property.





(xi)  Withdraw,
      settle or otherwise compromise any protest or reduction proceeding affecting
      real estate taxes assessed against any Property for any fiscal period in which
      the Closing is to occur or any subsequent fiscal period without the prior
      written consent of Buyer. Real estate tax refunds and credits received after
      the
      Closing for any Property which are attributable (a) to any fiscal period prior
      to the fiscal tax year during which such Closing occurs shall be paid to Sellers
      and (b) to the fiscal tax year during which such Closing occurs shall be
      apportioned between Sellers and Buyer, after deducting the expenses of
      collection thereof, based upon the relative time periods each owns the relevant
      Property, which obligation shall survive the Closing.





(xii)  Market
      the Interests and/or the Properties to any third party, and, in that regard,
      each Company will refrain from soliciting or accepting any offer from any third
      party, or, engaging in any discussions with any third party concerning the
      sale,
      refinance or recapitalization of the Interests and/or the
      Properties.





(c)  From
      the
      Effective Date until the Closing, Sellers shall cause each Company, with respect
      to the Property owned by it the Company, to not sell, mortgage, pledge,
      hypothecate or otherwise transfer or dispose of all or any part of any Property,
      the Interests, the Personal Property, the Leases, the Service Contracts, the
      Trade Names, the Other Contract Rights and Intangibles or any interest therein,
      except in the case of the sale or other disposition of items of Personal
      Property to be replaced hereunder.





6.
            **REPRESENTATIONS
                AND WARRANTIES OF****SELLERS**.





(a)  Each
      Seller represents and warrants that each of the following is true, complete
      and
      accurate in all material respects as of the date of this Agreement (and, except
      as designated in writing by Sellers at or before Closing and approved in writing
      by Buyer, will be true, complete and accurate in all material respects as of
      the
      Closing Date) with regard to each Company and its respective
      Property:





(i)  Each
      Company is or will be prior to Closing a limited liability company duly
      organized, validly existing and in good standing under the laws of the State
      of
      Michigan or New York, as the case may be, has full power and authority to enter
      into, and to fully perform and comply with the terms of this Agreement and
      to
      own, lease and operate the Property and to carry on its business as it is now
      being conducted.


8





(ii)  Each
      Company owns legal and beneficial title to its applicable Property, Personal
      Property and Trade Names, free and clear of all liens, charges and encumbrances,
      except security interests in connection with the Existing Loan, as applicable,
      which will be paid off at Closing.





(iii)  The
      performance by each Company of the obligations hereunder will not conflict
      with,
      or result in the breach of, any contract, agreement, law, rule or regulation
      to
      which any Company is a party, or by which any Company is bound.





(iv)  This
      Agreement is valid and enforceable against each Company in accordance with
      its
      terms, and each instrument to be executed by each Company pursuant to this
      Agreement, or in connection herewith, will, when executed and delivered, be
      valid and enforceable against each Company in accordance with its terms, except
      as such enforcement may be limited by bankruptcy and other laws affecting
      creditors’, rights generally.





(v)  No
      written notice has been received by either Seller or any Company from any
      insurer, or from any Existing Lender, with respect to any defect which
      materially and adversely affects the Property, or the use or operation thereof,
      which remains uncured or uncorrected.





(vi)  Except
      as
      set forth on Schedule
      6 ,
      neither
      any Company nor any Seller has received any notice that any Property, or the
      current use, occupation or condition thereof, violate(s) any applicable laws,
      orders, ordinances, and/or regulations from any governmental authority,
      including without limitation any Environmental Law, or any order of any
      governmental agency relating to any Property and/or the use and/or legal
      occupancy thereof, or any applicable deed restrictions or other covenant,
      easement or agreement pertaining to any Property (including, without limitation,
      any of the Permitted Exceptions).





(vii)  Other
      than the Service Contracts set forth in Schedule
      3 attached
      hereto, there are no other agreements with respect to services or materials
      being provided or to be provided to any of the Properties; and true and complete
      copies of all Service Contracts have been delivered to Buyer prior to the
      Effective Date.





(viii)  Each
      of
      the Service Contracts is in full force and effect; to Seller's knowledge Seller
      is not in default of any of its obligations thereunder; and no event has
      occurred that, with the giving of notice, or the passage of time, or both,
      would
      constitute a default by either Seller thereunder.





(ix)  Except
      as
      set forth on Schedule
      6 ,
      neither
      any Company nor any Seller has received any notice that the current use,
      operation or occupancy of any part, or all, of any Property violates any
      applicable certificate of occupancy, operating permit or licenses required
      by
      any relevant governmental authority for the lawful use, operation and occupancy
      of such Property.





(x)  Except
      as
      set forth on Schedule
      5 ,
      there
      is no action or proceeding pending, or, to the knowledge of each Company and
      each Seller, threatened, against a Company, or a Property, by or before any
      court or governmental department, commission, board, agency or instrumentality;
      and any litigation in connection with the actions, proceeding or investigations
      set forth in Schedule
      5 is
      covered by insurance currently in place by the Sellers.


9





(xi)  All
      financial information about each Property, each Seller and each Company
      heretofore or hereafter furnished by any Company and/or any Seller to Buyer
      is,
      and shall be, true, complete and correct in all material respects as of the
      date
      therein specified.





(xii)  Neither
      any Company nor any Seller has received notice of any Federal, state, county
      or
      municipal plan to change the highway or road system in the vicinity of any
      Property, or to restrict or change access from any such highway or road to
      any
      Property, or notice of any pending condemnation or eminent domain proceedings
      relating to or affecting any Property.





(xiii)  To
      the
      knowledge of each Company and each Seller, there are no trade or assumed names
      affecting or identifying any Property other than the Trade Names.





(xiv)  No
      Company has (1) made a general assignment for the benefit of its creditors;
      (2)
      admitted in writing its inability to pay its debts as they mature; (3) had
      an
      attachment, execution or other judicial seizure of any property interest which
      remains in effect; or (4) become generally unable to meet its financial
      obligations as they mature.





(xv)  There
      is
      not pending any case, proceeding or other action seeking reorganization,
      arrangement, adjustment, liquidation, dissolution or recomposition of any
      Company, or the debts of any Company, under any law relating to bankruptcy,
      insolvency, reorganization or the relief of debtors, or seeking the appointment
      of a receiver, trustee, custodian or other similar official for any Company
      or
      any Property.





(xvi)  The
      rent
      roll delivered to the Buyer (“ **Rent
      Roll** ”)
      for
      each Property is true, correct and complete in all material respects as of
      the
      date set forth thereon.





(xvii)  True
      and
      complete copies of all Leases have been made available to Buyer.




(xviii)  Except
      in
      connection with the Existing Loans and related security interests, if
      applicable, which will be satisfied at the Closings, the Company has not
      assigned, mortgaged, pledged, hypothecated or otherwise encumbered any of its
      rights or interests under any of the Leases.





(xix)  The
      Rent
      Roll accurately includes each tenant's name, a description of the dwelling
      unit
      leased by such tenant, the amount of rent due monthly from such tenant, the
      amount of the security deposit, if any, paid by such tenant (collectively,
      the
      " **Security
      Deposits** ”),
      and
      the expiration date of the term of such Lease.





(xx)  Except
      as
      indicated on the Rent Roll: (1) each Lease is in full force and effect; (2)
      all
      rents are being paid and are current (within 15 days of their due date); and
      (3)
      no tenant has paid any rent for more than one month in advance; (4) no tenant
      is
      entitled to any free rent, abatement of rent or similar concession.





(xxi)  As
      of the
      Effective Date, the Security Deposits under the Leases are as set forth in
      the
      Rent Roll.


10





(xxii)  No
      brokerage commission or other compensation is payable (or will, with the passage
      of time, or occurrence of any event, or both, be payable) with respect to any
      Lease.





(xxiii)  To
      the
      knowledge of each Company, such Company has complied in all material respects
      with all of the requirements of the relevant laws regarding the holding of
      tenant security deposits.





(xxiv)  Except:
      (i) for liabilities and obligations incurred in the normal course of business
      of
      each Company as disclosed in Schedule
      4 attached
      hereto; and (ii) as otherwise disclosed in this Agreement, each Company has
      no
      material liability or obligation of any nature which in any way materially
      affects or is related to any Property or Personal Property whether now due
      or to
      become due, absolute, contingent or otherwise, including liabilities for taxes
      (or any interest or penalties thereto).





(xxv)  Each
      Seller has caused or will cause all notices, reports and returns of Taxes,
      if
      any, of each Seller and each Company with respect to pre-Closing Date periods
      to
      be timely filed, and all income and other tax liability for pre-Closing Date
      periods has been satisfied by the Company or, with respect to pre-Closing Date
      tax returns not yet prepared and/or filed, will be satisfied by each Seller.
      All
      such income and other tax returns were and will be true, correct and complete
      in
      all material respects. No Seller has received written notice of, and has no
      knowledge of, a pending or threatened appeal in connection with any tax returns
      of any Company and to each of Seller’s knowledge there are no pending or
      threatened audits, examinations or other administrative proceedings in
      connection with any tax returns of any Company.





(xxvi)  Except
      as
      set forth on tax bills for each Property, which will be provided to Buyer in
      connection with its due diligence, there are no special or other assessments
      for
      public improvements or otherwise now affecting any Property, nor, to the best
      knowledge of each Seller and each Company, does such Company know of (i) any
      threatened special assessments which would affect any Property, or (ii) any
      contemplated improvements affecting any Property that may result in a special
      assessment against any Property.





(xxvii)  The
      insurance certificates listed in Schedule
      9 attached
      hereto are the full and complete list of the insurance policies regarding each
      Property and such insurance policies are currently in full force and effect
      and
      have not been modified, supplemented, or amended, except as indicated in such Schedule
      9 ;
      and
      Seller shall keep and maintain same in full force and effect until the Closing
      Date.





(xxviii)  The
      insurance loss run history reports on each Property listed in Schedule
      10 attached
      hereto are the full and complete lists of claims made during the past three
      (3)
      years in connection with each Property.





(xxix)  Attached
      hereto as Schedule
      11 is a
      true, complete and accurate copy of the Koppy Lease (as defined in Section
      34
      below).





(b)  Each
      Seller represents and warrants that each of the following is true, complete
      and
      accurate as of the Effective Date, and will be true, complete and accurate
      as of
      the Closing Date:





(i)  Home
      Properties is the legal and beneficial owner of all Interests in the HP
      Companies. Home Properties has not sold, transferred, or encumbered any or
      all
      of the Interests in the HP Companies and there does not currently exist any
      subscription agreement or other rights to obtain, control, or otherwise encumber
      such Interests. Home Properties holds, and has the complete and unrestricted
      power and authority, and the unqualified right and legal capacity, to sell,
      assign, transfer and deliver to Buyer, good and marketable title to the
      Interests in the HP Companies, free and clear of any and all liens, claims,
      encumbrances, voting rights, agreements and restrictions on
      transfer.


11





(ii)  Home
      Properties WMF is the legal and beneficial owner of all Interests in the HP
      WMF
      Companies. Home Properties WMF has not sold, transferred, or encumbered any
      or
      all of the Interests in the HP WMF Companies and there does not currently exist
      any subscription agreement or other rights to obtain, control, or otherwise
      encumber such Interests. Home Properties WMF holds, and has the complete and
      unrestricted power and authority, and the unqualified right and legal capacity,
      to sell, assign, transfer and deliver to Buyer, good and marketable title to
      the
      Interests in the HP WMF Companies, free and clear of any and all liens, claims,
      encumbrances, voting rights, agreements and restrictions on
      transfer.





(iii)  The
      Interests are not represented by a certificate and are not subject to Article
      8
      of the Michigan Uniform Commercial Code. No Seller has received written notice
      of any litigation, arbitration or similar proceeding that is pending or
      threatened with respect to the Interests.





(iv)  Home
      Properties is duly organized, validly existing and in good standing under the
      laws of the State of New York, is qualified and in good standing in the State
      of
      Michigan and has all the requisite power and authority to enter into and carry
      out and perform this Agreement, according to its terms, and to own, lease and
      carry on its business as it is now being conducted.





(v)  Home
      Properties WMF is duly organized, validly existing and in good standing under
      the laws of the State of New York, is qualified and in good standing in the
      State of Michigan and has all the requisite power and authority to enter into
      and carry out and perform this Agreement, according to its terms, and to own,
      lease and carry on its business as it is now being conducted.





(vi)  Neither
      the execution and delivery of this Agreement, nor the performance of this
      Agreement by either Seller will conflict with, or result in any breach of,
      any
      contract, agreement, law, rule or regulation to which either Seller is a party,
      or by which either Seller is bound.





(vii)  This
      Agreement has been duly authorized, executed and delivered, and constitutes
      a
      legal and binding obligation of each Seller, enforceable in accordance with
      its
      terms, except as such enforcement may be limited by bankruptcy and other laws
      affecting creditors rights generally.





(viii)  Each
      instrument to be executed and delivered by either Seller pursuant to this
      Agreement, or in connection herewith, will, when executed and delivered, be
      valid and enforceable against each Seller in accordance with its terms, except
      as such enforcement may be limited by bankruptcy and other laws affecting
      creditors’ rights generally.





(ix)  There
      is
      no litigation, proceeding or investigation pending, or, to the best knowledge
      of
      each Seller, threatened, against or affecting either Seller, that might affect
      the validity of this Agreement, or any action taken, or to be taken, by either
      Seller, pursuant to this Agreement, or that might have a material adverse effect
      on the business of either Seller.


12





(x)  Home
      Properties, and not any Company or Home Properties WMF, is the sole employer
      of
      each of the employees at each Property. Neither Home Properties WMF nor any
      Company employs or has in the past employed any employees.





(xi)  Schedule
      8 of this
      Agreement sets forth the title, base salary and guaranteed bonus of each
      individual (each, an “ **Employee** ”)
      working at the Properties as of the Effective Date; except as set forth on Schedule
      8 of this
      Agreement, neither Seller nor any Company is a party to any written employment
      contract with any of the Employees.





(xii)  There
      are
      no contracts with any labor union or association representing any employees
      of
      any Company or any employees employed in connection with the
      Properties.





(xiii)  Each
      Seller has delivered or will deliver to Buyer, within five (5) days after the
      Effective Date, true, correct and complete copies of the organizational
      documents (operating agreement and articles of organization and all amendments
      thereto) for each Company existing as of the Effective Date, as well as the
      form
      of Articles of Organization and Operating Agreement for each Company not
      existing as of the date hereof, with remaining Company organizational documents
      to be delivered to Buyer within five (5) days after expiration of the Due
      Diligence Period, provided this Agreement has not been terminated.





(xiv)  Each
      Seller will transfer its respective Interests to Buyer at the Closing, free
      and
      clear of any liens, charges, encumbrances or adverse claims of any
      kind.





(xv)  At
      the
      Closing, each Company shall own its respective Property, subject only to the
      Permitted Exceptions.





(xvi)  Other
      than as set forth on the balance sheet to be delivered at the Closing, as of
      the
      Closing Date, each Company will not have any unpaid liabilities (actual or
      contingent, monetary or non-monetary, direct or indirect, matured or unmatured)
      or obligations, whether due or to become due, other than those to be paid at
      the
      time of settlement, and real estate taxes and current trade payables or similar
      operating expenses to be prorated in accordance with the terms of this
      Agreement.





(c)  All
      of
      the representations and warranties of each Seller and each Company set forth
      in
      this Agreement shall be true and correct in all material respects at the
      Effective Date, and (except as disclosed in writing by Sellers at or before
      the
      Closing and approved in writing by Buyer, in Buyer’s sole discretion), all shall
      be deemed to be repeated at, and as of the Closing Date, and shall be true
      and
      correct in all material respects as of the Closing Date. In the event Buyer
      learns of any facts that render any part of any representations or warranties
      of
      either Seller or any Company untrue, and Buyer fails to exercise its rights
      under Section 9 and 21(a) below then Buyer shall be deemed to have waived any
      right to object thereto and Seller shall have no indemnification obligation
      pursuant to Section 7 with respect thereto.





(d)  As
      used
      in this Agreement, the phrase “to the knowledge of the Company or a Seller” or
      phrases of similar import mean and are limited to the actual current knowledge,
      without duty of investigation except for inquiry of the regional property
      managers in charge of each of the Properties, of John Scharlock (Vice President,
      Dispositions) and Don Denny (Regional Vice President) (collectively, the
“ **Representing
      Parties** ”)
      and
      not to any constructive knowledge of any of the foregoing individuals or of
      any
      Company, Home Properties, or any affiliates thereof, or to any officer, agent,
      representative, or employee of Home Properties or HME.


13




(e)  Except
      as
      expressly provided in this Agreement, Home Properties has not made any
      representations and/or warranties regarding the Properties or the Interests,
      and, except as expressly set forth in this Agreement, Buyer shall, at the
      Closing, accept the Properties and the Interests in "AS IS" condition, with
      all
      faults, and without any other representations or warranties of any kind, whether
      as to merchantability, or fitness for a particular purpose, or otherwise. Except
      as expressly set forth in this Agreement, no representations or warranties
      have
      been made or are made and no responsibility has been or is assumed by any
      Company or Home Properties or by any partner, officer, person, firm, agent
      or
      representative acting or purporting to act on behalf of any Company, Home
      Properties as to the condition or repair of any Property or the value, expense
      of operation, or income potential thereof or as to any other fact or condition
      which has or might affect any Property or the condition, repair, value, expense
      of operation or income potential of any Property or any portion thereof. The
      parties agree that all understandings and agreements heretofore made between
      them or their respective agents or representatives are merged in this Agreement
      and the schedules and exhibits hereto annexed, which alone fully and completely
      express their agreement, and neither party is relying upon any statement or
      representation by the other unless such statement or representation is
      specifically embodied in this Agreement or the exhibits annexed hereto. Buyer
      acknowledges that with respect to the condition of the Properties, and except
      as
      expressly set forth in this Agreement, will rely solely upon the results of
      Buyer’s own inspections or other information obtained or otherwise available to
      Buyer, rather than any information that may have been provided by any Company
      or
      Home Properties to Buyer. Buyer acknowledges that it and its representatives
      (including environmental consultants, architects and engineers) are to be
      afforded the right and opportunity to enter upon the Properties and to make
      such
      inspections of the Properties and matters related thereto, including the conduct
      of soil, environmental and engineering tests, as Buyer and its representatives
      desire, subject to the provisions of Section 11 of this Agreement.




Buyer
      represents that it is knowledgeable in real estate matters and that upon
      completion of the inspections contemplated or permitted by this Agreement,
      Buyer
      will have made all of the investigations and inspections Buyer deems necessary
      in connection with its purchase of the Properties, and that, except as expressly
      set forth in this Agreement, approval by Buyer of such inspections or failure
      to
      terminate this Agreement pursuant to the terms hereof will be deemed to be
      approval of Buyer without reservation of all aspects of this transaction,
      including but not limited to the physical condition of the
      Properties.





7.
            **SURVIVAL
                OF REPRESENTATIONS AND INDEMNIFICATION; FUTURE
                LIABILITIES**.





(a)  All
      of
      the representations and warranties of each Seller and each Company set forth
      in
      this Agreement, including, without limitation, the indemnities set forth in
      subparagraph (b) below, shall survive the Closing for a period equal to six
      (6)
      months following the Closing, and shall not be deemed to have merged in any
      document delivered at the Closing. Any Claim (as defined subparagraph (b) below)
      shall be brought, if at all, within six (6) months from the Closing Date or
      thereafter be forever barred. Neither Seller shall have any liability to Buyer
      for any Claim (as defined in subparagraph (b) below) unless the valid Claims
      collectively aggregate more than Twenty-Five Thousand and No/100 Dollars
      ($25,000), in which event the full amount of Buyer’s actual damages shall be
      actionable, up to an aggregate amount not to in any event exceed Two Million
      and
      No/100 Dollars ($2,000,000). In no event shall Buyer be entitled to seek or
      obtain any other damages of any kind, including without limitation
      consequential, indirect or punitive damages.


14





(b)  Subject
      to the limitations set forth in subparagraph (a) above, each Seller, jointly
      and
      severally, indemnify, shall hold harmless and defend the Buyer and the Companies
      and their respective successors and assigns from and against any and all
      demands, obligations, assessments, losses, costs, claims, liabilities,
      judgments, and damages (including, without limitation, reasonable attorneys'
      and
      accountants’ fees and any costs reasonably incurred in investigating, preparing
      or defending against or prosecuting any litigation or claim) (referred to
      hereinafter individually as a “ **Claim** ”
or
      collectively as “ **Claims** ”),
      relating or attributable to:





(i)  a
      material breach of any of the representations and/or warranties of either Seller
      set forth in this Agreement;





(ii)  any
      Excluded Liabilities; and





(iii)  the
      litigation identified on Schedule
      5 ;
      and





(iv)  any
      matter that occurred or any liability or obligation that accrued with respect
      to
      any Property or any Company prior to the Closing Date.





Subject
      to the limitations set forth above, the Sellers shall pay any Claim promptly
      upon demand for payment by Buyer, together with evidence reasonably documenting
      the amount and nature of the Claim and the date of accrual. The
      foregoing indemnification shall terminate and be of no further force and effect
      as of six (6) months following the Closing Date, except to the extent that
      there
      are any pending Claims, in which event this indemnification shall continue
      with
      respect to such pending Claims until the same are fully settled .





(c)  Notwithstanding
      anything to the contrary set forth herein, Buyer shall be responsible for all
      activities, operations, debts, liabilities and claims against each Property
      and
      each Company which arise and result from occurrences from and after the
      Closing.





8.
            **REPRESENTATIONS
                AND WARRANTIES OF BUYER**.





(a)  Buyer
      represents and warrants that each of the following is true, complete and
      accurate in all material respects as of the Effective Date, and shall be true,
      complete and accurate in all material respects as of the Closing:





(i)  Buyer
      has
      all the requisite power and authority to enter into and carry out and perform
      this Agreement, according to its terms, and to acquire and own the Interests,
      and manage each Property after Closing.





(ii)  Neither
      the execution and delivery of this Agreement, nor the performance of this
      Agreement by Buyer, nor the execution, delivery and performance of all other
      agreements contemplated by this Agreement, shall conflict with, or result in
      any
      breach of, any contract, agreement, law, rule or regulation to which Buyer
      is a
      party, or by which Buyer is bound.





(iii)  This
      Agreement, once duly executed and delivered, shall constitute a legal and
      binding obligation of Buyer, enforceable in accordance with its terms, except
      as
      such enforcement may be limited by bankruptcy and other laws affecting creditors
      rights generally.





(iv)  Each
      instrument to be executed and delivered by Buyer pursuant to this Agreement,
      or
      in connection herewith, shall, when executed and delivered, be valid and
      enforceable against Buyer in accordance with its terms, except as such
      enforcement may be limited by bankruptcy and other laws affecting creditors,
      rights generally.


15





(v)  There
      is
      no litigation, proceeding or investigation pending, or, to the best knowledge
      of
      Buyer, threatened, against or affecting Buyer that might affect the validity
      of
      this Agreement, or any action taken, or to be taken, by Buyer pursuant to this
      Agreement, or that might have a material adverse effect on the business of
      Buyer.




(b)  All
      of
      the representations and warranties of Buyer set forth in this Agreement,
      including, without limitation, the following indemnity, shall survive the
      Closing, and shall not be deemed to have merged in any document delivered at
      the
      Closing.





(c)  Buyer
      agrees to indemnify Sellers, and hold harmless and defend them, from and against
      any and all losses, costs, claims, liabilities, taxes (including taxes on any
      indemnification amount), damages and expenses, including, without limitation,
      reasonable attorneys' fees, arising as the result of a breach of any of the
      obligations, covenants, representations and/or warranties of Buyer set forth
      in
      this Agreement. In no event shall any Seller be entitled to seek or obtain
      any
      consequential, indirect or punitive damages.





9.
            **CONDITIONS
                TO THE OBLIGATIONS OF BUYER**.





a.  Without
      limiting any of the rights of Buyer elsewhere set forth in this Agreement,
      it is
      agreed that the obligations of Buyer under this Agreement to purchase and pay
      for the Interests shall be subject to the satisfaction on or prior to the
      Closing of the following conditions (" **Buyer’s
      Conditions** "):





(i)  All
      of
      the representations and warranties of each Seller and each Company set forth
      in
      this Agreement shall be true, accurate and correct in all material respects
      as
      of the Closing Date (as if made on the Closing Date).





(ii)  Each
      Seller shall have delivered all of the documents and other items required to
      be
      delivered by each Seller under the terms of this Agreement.




(iii)  Each
      Seller shall have fulfilled such other conditions to the Closing as are set
      forth in this Agreement.





b.  Each
      of
      the Buyer’s Conditions is for the benefit of Buyer, and, accordingly, any such
      condition may be waived by Buyer at any time.





c.  Buyer
      may
      not rely on the failure of any condition set forth in this Section 9 to be
      satisfied if such failure was caused by Buyer’s failure to act in good faith or
      otherwise in accordance with this Agreement.





10.
            **CONDITIONS
                TO THE OBLIGATIONS OF SELLERS**.





(a)  Without
      limiting any of the rights of Sellers elsewhere set forth in this Agreement,
      it
      is agreed that the obligations of Sellers under this Agreement to sell,
      transfer, assign and deliver the Interests shall be subject to the satisfaction
      on or prior to the Closing of the following conditions (the " **Sellers'
      Conditions** "):


16





(i)  All
      of
      the representations and warranties of Buyer set forth in this Agreement shall
      be
      true, accurate and correct in all material respects as of the Closing Date
      (as
      if made on the Closing Date).





(ii)  Buyer
      shall have delivered all of the documents and other items required to be
      delivered by Buyer under the terms of this Agreement.




(iii)  Buyer
      shall have fulfilled such other conditions to Closing as are set forth in this
      Agreement.





(b)  Each
      of
      Sellers' Conditions is for the benefit of Sellers and, accordingly, any such
      condition may be waived by either Seller at any time.





(c)  Seller
      may not rely on the failure of any condition set forth in this Section 10 to
      be
      satisfied if such failure was caused by Seller’s failure to act in good faith or
      otherwise in accordance with this Agreement .





11.
            **INSPECTION
                PERIOD**.





Subject
      to the rights of existing tenants at the Property, Buyer shall have a period
      commencing on the Effective Date hereof and ending on May 12, 2006 at 3 p.m.
      Eastern Standard Time (the " **Due
      Diligence Period** ")
      within
      which to cause one or more surveyors, attorneys, engineers, auditors,
      architects, and/or other experts of its choice to undertake the following with
      respect to each Property: (i) to inspect any document related to each Property,
      including, without limitation, all Leases and related documents, working
      drawings, plans and specifications, surveys, appraisals, engineer's reports,
      environmental reports, insurance policies, service contracts, real estate tax
      receipts and annual and monthly operating statements, and (ii) to inspect,
      examine, survey, appraise and obtain engineering and inspection reports with
      respect to each Property, and otherwise to do all that, which, in the opinion
      of
      Buyer is necessary to determine the condition and value of each Property for
      the
      uses intended by Buyer; provided, however, that Buyer has received environmental
      reports from Home Properties and Buyer shall not conduct any additional
      environmental study of any Property without the prior written consent of Home
      Properties. Buyer may terminate this Agreement for any reason or no reason
      by
      written notice to Sellers given prior to expiration of the Due Diligence Period,
      in which event the Earnest Money Deposit shall be returned immediately to Buyer,
      and this Agreement shall, thereafter, be deemed null, void and of no further
      force or effect, and neither party shall have any further rights or obligations
      under this Agreement, except for those provisions that expressly survive the
      termination of this Agreement. If not so terminated by Buyer then this Agreement
      shall continue in full force and effect according to its terms and the Earnest
      Money Deposit shall be nonrefundable except as otherwise expressly set forth
      herein. Buyer shall be responsible for payment of all of the costs of its due
      diligence activities, including, without limitation, all engineering and
      environmental reports and surveys, and all financial and Lease audits. Buyer
      shall indemnify and hold Home Properties and the relevant Company harmless
      from
      and against any and all loss, claims, damage and expense arising out of entry
      by
      Buyer and its agents onto any Property and any testing performed thereon. Buyer
      shall repair any damage which it may cause as a result of any such entry and
      testing. Buyer shall cause its entry, inspections and testing (if any) to be
      conducted in a manner so as to minimize disruption to staff and tenants at
      the
      Properties.


17





12.
            **TITLE**.





(a)  At
      the
      Closing each Company shall hold fee simple title to its respective Property
      free
      and clear of all liens, charges and encumbrances, except the Permitted
      Exceptions. Nothing set forth in this subparagraph shall limit Buyer’s right to
      review and object to the Permitted Exceptions as set forth in subsection (e)
      below.





(b)  The
      obligation of Buyer to complete the transaction described in this Agreement
      is
      conditioned upon the delivery to Buyer of an owner’s policy of title insurance
      with respect to each Property insuring that, as of the Closing, title to each
      Property is not subject to any liens or encumbrances, other than the Permitted
      Exceptions.





(c)  Sellers
      have delivered to Buyer the current survey of each Property.





(d)  Sellers
      have delivered to Buyer, at Sellers' sole cost and expense, with respect to
      each
      Property, a copy of its owner’s title insurance policy and a commitment for an
      owner’s policy of title insurance from the Title Company. Sellers shall deliver
      to Buyer, at Sellers' sole cost and expense, all UCC and other customary
      searches of Sellers and the Companies within 15 days after the Effective
      Date.





(e)  If
      any
      title commitment, search or survey discloses exceptions to title other than
      the
      Permitted Exceptions, or any other matter which does not conform to the
      requirements of this Agreement, or if any Permitted Exception, in Buyer’s
      reasonable judgment, renders title to the Property unmarketable or materially
      adversely affects the use and operation of the Property as an apartment complex,
      then Buyer shall so notify Sellers in writing, such notice to be furnished
      to
      Sellers, if at all, not later than the end of the Due Diligence Period
      (“ **Title
      Review Period** ”).





(f)  Sellers
      shall have the right, but not the obligation (except as otherwise set forth
      below), within fifteen (15) days from the date of receipt of such notice from
      Buyer (the " **Correction
      Period** ”),
      to
      have each such unpermitted exception to title removed, or to correct each such
      other matter, in each case to the reasonable satisfaction of the Buyer. Buyer
      shall have no obligation to close within the Correction Period unless Sellers
      shall have caused the unpermitted exception to be removed or corrected to the
      reasonable satisfaction of Buyer. If, within the Correction Period, Sellers
      fail
      to have each such unpermitted exception removed, or to correct each such other
      matter as aforesaid, Buyer may terminate this Agreement with respect to any
      affected Property by notice given to the other within fifteen (15) days after
      the expiration of the Correction Period and the provisions of Section 33 shall
      apply. In the event no such termination notice is given within the
      aforementioned period, then Buyer shall be deemed to have terminated this
      Agreement with respect to the affected Property. Any exception to title (other
      than a Permitted Exception), or any other matter which does not conform to
      the
      requirements of this Agreement, to which the Buyer does not object, as
      aforesaid, shall be deemed approved by Buyer, and shall be deemed to be an
      additional Permitted Exception. Notwithstanding anything to the contrary
      contained herein, Sellers shall be obligated to remove the Required
      Exceptions.


18





13.
            **CLOSING**.





If
      this
      Agreement shall not have been terminated by Sellers or Buyer, for any of the
      reasons set forth in this Agreement, and within the time(s) herein limited,
      the
      closing of the conveyance of the Interests of the Companies (the " **Closing** ")
      shall
      occur on June 14, 2006 (such date being hereinafter referred to as the
“ **Closing
      Date** ”).
      The
      Closing shall be an escrow-type closing, with documents and funds delivered
      to
      the Title Company, at such time, or at such other place, as may be mutually
      agreed upon by the parties.





14.
            **CLOSING
                DOCUMENTS**.





(a)  At
      or
      prior to the Closing, Sellers shall deliver to Escrow Agent the following for
      each Company/Property, each of which shall be in form and substance reasonably
      satisfactory to Buyer:





(i)  an
      owner’s title affidavit, and all other affidavits, certificates or other
      documents reasonably and customarily required by the Title Company in order
      to
      cause it to issue an owner’s title policy for each Property in the form and
      condition required by this Agreement, including, without limitation, a
      non-imputation endorsement;





(ii)  an
      update
      of the Rent Roll pertaining to each Property (including a listing of all
      delinquent and prepaid rents, and all security deposits (including all interest
      due to tenants pursuant to applicable law), dated as of (or as close as
      reasonably practicable to) the Closing Date, and represented and certified
      by
      Sellers to be true, accurate, complete and correct in all material
      respects;





(iii)  to
      the
      extent in the possession of each Company, all of the original Leases and Service
      Contracts, such materials to remain at the rental office and need not be brought
      to closing;





(iv)  all
      keys
      to the Property in the possession of each Company, which shall remain at the
      rental office and need not be brought to closing;





(v)  duly
      executed certificates of title, and other transfer documents, with regard to
      any
      vehicle owned by Sellers;





(vi)  a
      certified copy of the organizational documents of each Company (any Company
      whose name includes “Home Properties” may be renamed prior to Closing to omit
“Home Properties,” and a new name will be selected by Buyer), good standing
      certificate and Certificate of Secretary and Resolutions of HME evidencing
      the
      authority of HME, Home Properties, Home Properties WMF and each Company to
      close
      the transaction as described herein and such other evidence of Sellers'
      authority as the Title Company may reasonably request;





(vii)  a
      letter
      to each of the tenants in each Property advising them of the change of
      beneficial ownership of each Property, and the transfer of the Security
      Deposits, and directing that rentals or other payments thereafter be paid to
      a
      payee designated by Buyer;





(viii)  such
      existing maintenance records in regard to the Property which Buyer may request
      not later than five (5) days prior to the Closing Date (which shall be delivered
      at the Property);


19





(ix)  signed
      notices to each utility service provider, advising of the change in beneficial
      ownership of such Property;





(x)  an
      Assignment and Assumption of the Interests in each Company, duly executed by
      the
      applicable Seller, as the case may be, in the form attached hereto as Exhibit
      D (“ **Assignment
      of Interests** ”);





(xi)  an
      executed Post-Settlement Consultation Agreement in the form attached hereto
      as Exhibit
      C (“ **Consultation
      Agreement** ”);





(xii)  an
      assignment and assumption of all Service Contracts not in the name of the
      Companies, if necessary (“ **Assignment
      of Other Service Contracts** ”);
      and





(xiii)  a
      closing
      statement (the " **Closing
      Statement** ").





(b)  At
      the
      Closing, Buyer shall deliver to Escrow Agent the following, each of which shall
      be in form and substance reasonably satisfactory to Sellers:





(i)  an
      executed counterpart of the Assignment of Interests and the Assignment of Other
      Service Contracts;





(ii)  an
      executed counterpart of the Consultation Agreement, together with the
      consideration specified therein;





(iii)  a
      receipt
      for the Security Deposits acknowledged by the deduction described in Section
      15(d); and





(iv)  an
      executed counterpart of the Closing Statement.





15.
            **ADJUSTMENTS**.





(a)  At
      the
      Closing, the items set forth below with respect to each applicable
      Property/Company shall be adjusted between Buyer and Sellers as of the date
      of
      the Closing Date (it being understood that Buyer shall have the benefit of
      monies received and expenses incurred on the date of Closing) and shall be
      paid
      in cash at Closing:




(i)  Real
      estate and personal property taxes on the usual and customary “due date”
basis;





(ii)  rents
      under the Leases for the relevant month, as and when collected;





(iii)  coin
      operated laundry concession income;





(iv)  charges
      for water, sewer, electricity, fuel, gas, telephone and other utilities, which
      are not metered or otherwise charged directly to tenants under the Leases;
      provided that if the consumption of any such utilities is measured by meters,
      at
      the Closing Sellers shall furnish a current reading of each meter, and provided,
      further, that if there is not a meter, or if the meter(s) cannot be read by
      the
      relevant utility prior to the Closing, the charges therefore shall be adjusted
      at the Closing on the basis of the charges for the prior period for which bills
      were issued, and shall be further adjusted when the bills for the period
      including the Closing Date are issued;


20





(v)  amounts
      paid or payable under the Service Contracts at the Closing;





(vi)  any
      payments or other monetary consideration or inducements received by either
      Seller or any Company for contracts or other agreements, other than Leases,
      entered by either Seller or any Company prior to the Closing with respect to
      any
      Property, if any, which shall be apportioned on the basis of the amortization
      of
      such payments or other monetary consideration or inducements over the term
      of
      such contracts; and





(vii)  such
      other amounts as are customarily adjusted between parties to similar
      transactions in the local jurisdiction.





(b)  Rents
      which are due and payable by any tenant under the Leases but uncollected as
      of
      the Closing Date shall not be adjusted at the Closing. All rents collected
      by
      any Company after the Closing Date shall be applied first to any due but unpaid
      rentals accruing subsequent to the Closing Date, and then to any rents past
      due
      for the calendar month in which the Closing Date occurs (subject to adjustment),
      and then to any rents due and unpaid prior to the Closing Date. Subject to
      the
      preceding sentence, all rent collected after the Closing for any period prior
      to
      the Closing shall belong to Sellers, and if paid to Buyer, Buyer shall promptly
      send such rent to Sellers, less all reasonable expenses incurred by Buyer,
      if
      any, in regard to the collection thereof. At the Closing, Sellers shall deliver
      to Buyer a schedule of all such past due, but uncollected rents owed by tenants.
      All rents collected by any Seller or any Company, prior to the Closing, for
      rental period(s) subsequent to the Closing shall be paid by Sellers or such
      Company to Buyer at the Closing or deducted as an adjustment at the Closing.
      All
      rents collected by Buyer or Sellers for rental periods after the Closing shall
      belong to Buyer, and if paid to any Seller or any Company, Sellers shall
      promptly send such rent to Buyer.





(c)  Sellers
      shall provide Buyer, no later than five (5) Business Days prior to the Closing,
      with all adjustments applicable for the Closing. Any adjustment estimated at
      the
      Closing shall be finally adjusted as soon as practicable after the Closing.
      Any
      error in the calculation of apportionments shall be corrected subsequent to
      the
      Closing with appropriate credits to be given based upon corrected adjustments;
      provided, however, that all adjustments (except as to errors caused by
      misrepresentation) shall be deemed final upon the expiration of ninety (90)
      days
      after the Closing Date.





(d)  Buyer
      shall receive a credit at Closing in an amount equal to the aggregate amount
      of
      the Security Deposits (with interest as required by applicable law) shown on
      the
      updated Rent Roll provided by Sellers.




(e)  Sellers
      shall be responsible for, and shall make arrangements for payment of, all
      amounts due up to the Closing Date for employees’ salaries, accrued vacation
      pay, withholding and payroll taxes, and other benefits, and any management
      fee
      affecting any Property or any Company (Sellers may utilize one or more payroll
      periods after the Closing to finalize these payments). Buyer shall be
      responsible for all such expenses for all employees hired by Buyer or its
      management company commencing upon the Closing Date.





(f)  In
      the
      event any reserves or escrows held in connection with any Existing Loan are
      refunded after the Closing, such funds shall belong to Sellers, and, if received
      by Buyer or any Company, such funds shall be immediately delivered to
      Sellers.


21





16.
            **POSSESSION**.





Upon
      completion of the Closing, each Company shall remain in full and complete
      possession of its applicable Property, subject only to the Permitted
      Exceptions.





17.
            **CONDEMNATION
                AND DESTRUCTION**.





(a)  If,
      prior
      to the Closing Date, any Property or any major part of any Property, is taken
      by
      eminent domain (or is the subject of a pending or contemplated taking which
      has
      not been consummated), then Sellers shall notify Buyer of such fact
      (“ **Taking
      Notice** ”).
      Buyer
      may terminate this Agreement with respect to any affected Property by written
      notice to the other given not later than fifteen (15) business days after
      receipt of the Taking Notice and the provisions of Section 33 shall apply.
      In
      the event that no such termination notice is given within the aforementioned
      period, then Buyer shall be deemed to have agreed to accept title to any
      affected Property (other than the portion so taken), without abatement of the
      Purchase Price, in which event the Company shall be entitled to receive and
      keep, and Sellers shall waive all rights to, all amounts awarded, or to be
      awarded, as the result of the taking.





(b)  In
      the
      event any minor part of any Property is taken by eminent domain (or is the
      subject of a pending or contemplated taking which has not been consummated),
      then Sellers shall send a Taking Notice and Buyer shall accept title to any
      such
      affected Property without abatement of the Purchase Price and the Company shall
      be entitled to receive and keep, and Sellers shall waive all rights to, all
      amounts awarded, or to be awarded, as the result of the taking.





(c)  If,
      prior
      to the Closing Date, all or any material part of any Property is damaged or
      destroyed by fire or other casualty, then Sellers shall notify Buyer of such
      fact (“ **Damage
      Notice** ”).
      Buyer
      may terminate this Agreement with respect to any affected Property by notice
      given not later than fifteen (15) business days after receipt of the Damage
      Notice and the provisions of Section 33 shall apply. In the event no such
      termination notice is given within the aforementioned period, then Buyer shall
      be deemed to have agreed to accept title to any affected Property without
      abatement of the Purchase Price, in which event the Company shall receive and
      keep, and Sellers shall assign any and all rights to, the insurance proceeds
      awarded or to be awarded to Sellers as the result of such damage or destruction,
      giving Buyer a credit at the Closing for any deductible under the insurance
      policy, less any amounts paid for restoration.





(d)  In
      the
      event there is damage to or destruction of an immaterial part of any Property
      by
      fire or other casualty, such damage or destruction shall, subject to receipt
      of
      insurance proceeds, be repaired promptly by the affected Company, and in the
      event such damage or destruction cannot be fully repaired by the Closing Date,
      then Sellers shall have the right to extend the Closing Date until such repairs
      shall have been completed, not in excess of sixty (60) days. Notwithstanding
      Sellers’ election to delay the Closing, Buyer shall have the right to close on
      the original Closing Date provided Buyer accepts title to the affected
      Property(ies) without abatement of the Purchase Price, in which event the
      Company shall receive and keep, and Sellers shall assign any and all rights
      to,
      the insurance proceeds awarded or to be awarded to Sellers as the result of
      such
      damage or destruction, giving Buyer a credit at Closing for any deductible
      under
      the insurance policy, less any amounts paid for restoration. In the event
      Sellers does not elect to delay Closing, or if the Closing is delayed and
      Sellers is unable to repair the damage or destruction by the extended Closing
      Date, then Buyer or Home Properties may terminate this Agreement with respect
      to
      any affected Property and the provisions of Section 33 shall apply.
      Notwithstanding the foregoing, Buyer waives any right to terminate this
      Agreement with respect to Oak Park Manor, which has a fire damaged unit, as
      described in Section 32 below.


22





(e)  A
      “ **major** ”
part
      of
      any Property shall be deemed to have been taken by eminent domain (or is the
      subject of a pending or contemplated taking which has not been consummated)
      if
      such taking shall result in the loss of any apartment units or shall materially
      interfere with the use of the Property as an apartment complex, and a
“ **minor** ”
part
      of
      any Property shall be deemed to have been taken if such taking shall not result
      in the loss of any apartment units and shall not materially interfere with
      the
      use of the Property as an apartment complex (such as a road
      widening).





(f)  An
      " **immaterial** "
      part of
      any Property shall be deemed to have been damaged or destroyed if the cost
      of
      repair or replacement thereof shall be $1,000,000, or less, and a " **material** "
      part
      thereof shall be deemed to have been damaged or destroyed if the cost of repair
      or replacement thereof shall be greater than $1,000,000.





18.
            **BROKER'S
                COMMISSION**.





Buyer
      and
      Sellers each represent to the other that the transaction described in this
      Agreement was not brought about or assisted in any way by any broker, firm
      or
      salesman, or other person or persons acting or functioning as, or in a role
      similar to a broker except for CB Richard Ellis (" **Broker** ").
      At
      Closing, Sellers shall pay Broker a commission pursuant to a separate agreement.
      Buyer agrees that should any claim be made for a commission or other
      compensation with regard to this transaction by any broker claiming through
      Buyer, other than a broker engaged in writing by Sellers, Buyer shall have
      the
      sole responsibility for paying any such claim, and shall indemnify and hold
      harmless Sellers from and against any such claim of any such broker, and all
      liabilities and expenses in connection therewith, including court costs and
      attorneys, fees and expenses. Sellers agree that should any claim be made for
      a
      commission or other compensation with regard to this transaction by any broker
      claiming through Sellers, other than Broker or a broker engaged in writing
      by
      Buyer, Sellers shall have the sole responsibility for paying any such claim,
      and
      shall indemnify and hold harmless Buyer from and against any such claim of
      any
      broker, and all liabilities and expenses in connection therewith, including
      court costs and attorneys, fees and expenses. The provisions of this Section
      shall survive Closing and any termination of this Agreement.





19.
            **EARNEST
                MONEY DEPOSIT**.





At
      the
      Closing, the Earnest Money Deposit shall, at Buyer’s option, be returned to
      Buyer or applied to the Purchase Price payable for the Interests. As used
      anywhere in this Agreement, the term “Earnest Money Deposit” shall include any
      interest or earnings thereon.





20.
            **COOPERATION**.





At
      all
      times during the term and pendency of this Agreement, Sellers shall cooperate
      fully with Buyer (but with no obligation to incur cost or expense in connection
      therewith) in all reasonable manner in providing books, records and other
      documentation for review, including, without limitation, all Leases and related
      documents, working drawings, plans and specifications, surveys, appraisals,
      engineer's reports, environmental reports, insurance policies, service
      contracts, real estate tax receipts, and annual and monthly operating statements
      relating to each Property, and in the possession of, or reasonably available
      to
      Sellers. Subject to existing tenant leases, each Company shall provide access
      to
      its Property for all physical inspections required by Buyer. Buyer shall conduct
      itself and its examinations in a manner to minimize disruption to the staff
      and
      tenants of each Property.


23





21.
            **DEFAULTS
                AND REMEDIES**.





(a)  If
      Sellers fail or refuse to perform in accordance with the terms of this
      Agreement, including, without limitation, the failure to satisfy any of Buyer’s
      Conditions set forth in Section 9, other than due to a default by Buyer under
      this Agreement or termination of this Agreement by Buyer or Seller pursuant
      to a
      right to do so in accordance with the provisions of this Agreement, then Buyer
      shall have the right to either: (i) sue Sellers and the Companies and seek
      enforcement of this Agreement by decree of specific performance, in which event
      Sellers shall reimburse Buyer for its costs and expenses (including without
      limitation reasonable attorneys’ fees and disbursements); or (ii) terminate this
      Agreement, in which event the Earnest Money Deposit shall be returned to Buyer,
      and Buyer shall, in addition, be entitled to reimbursement by Sellers of all
      actual out-of-pocket due diligence and financing costs (including, without
      limitation, attorney's fees and disbursements) incurred by Buyer in connection
      with the proposed acquisition and financing of the Interests up to an aggregate
      amount not to in any event exceed One Million and No/100 Dollars ($1,000,000),
      after the payment of which this Agreement shall be deemed null, void, and of
      no
      further force or effect between the parties, except
      for such provisions that, pursuant to the terms of this Agreement, are expressly
      made to survive the termination of this Agreement .





(b)  If
      Buyer
      fails or refuses to perform in accordance with the terms of this Agreement,
      including, without limitation, the failure to satisfy one or more of Sellers’
Conditions set forth in Section 10, other than due to a default by either Seller
      under this Agreement or termination of this Agreement by Buyer or Seller
      pursuant to a right to do so in accordance with the provisions of this
      Agreement, then Sellers shall have the right to terminate this Agreement, in
      which event the Earnest Money Deposit shall be forfeited to Sellers and this
      Agreement shall be deemed null, void, and of no further force or effect between
      the parties, except for such provisions that, pursuant to the terms of this
      Agreement, are expressly made to survive the termination of this Agreement.
      In
      that regard, Buyer acknowledges and agrees that (i) the Earnest Money Deposit
      is
      a reasonable estimate of, and bears a reasonable relationship to, the damages
      suffered and costs incurred by Sellers as a result of having subjected the
      Interests to the terms of this Agreement; (ii) the actual damages suffered
      and
      costs incurred by Sellers as a result of such failure of Buyer to close under
      this Agreement would be extremely difficult and impractical to determine; (iii)
      Buyer seeks to limit its liability under this Agreement to the amount of the
      Earnest Money Deposit in the event this Agreement is terminated and the
      transaction contemplated by this Agreement does not close due to Buyer’s failure
      to close under this Agreement; and (iv) the Earnest Money Deposit shall be
      and
      constitute valid liquidated damages.





22.
            **CONFIDENTIALITY**.





Prior
      to
      Closing, both Sellers and the Buyer agree to keep this Agreement confidential,
      and not to disclose its contents to anyone except their respective lenders,
      legal counsel and accountants, except that Sellers may make such public
      announcement regarding the transaction contemplated by this Agreement as may,
      in
      its judgment, be required by or appropriate under securities laws and
      regulations. Buyer understands that this Agreement may be filed as an exhibit
      to
      such announcement but only if such action is required by applicable securities
      laws and regulations, and then only to the extent that it is required by such
      laws and regulations. From and after expiration of the Due Diligence Period
      (provided this Agreement has not been terminated by either party) until the
      Closing, Sellers shall use reasonable efforts to provide draft press releases
      relating to the transaction described herein to Buyer prior to issuance,
      provided that Seller shall have no obligation to change the press release or
      alter the timing of issuance based on any comments received from Buyer.


24





23.
            **RISK
                OF LOSS**.





Until
      the
      Closing, the risk of loss or damage to all or any part of any Property, from
      fire or other casualty, or from condemnation, shall be borne by each Company
      and
      Sellers, subject to the terms of this Agreement.





24.
            **NOTICES**.





(a)  All
      notices, demands, or requests made and/or given pursuant to, under, or by virtue
      of this Agreement must be in writing and sent to the party to which the notice,
      demand or request is being made and/or given, by postage prepaid, certified
      or
      registered mail, return receipt requested, by nationally recognized courier
      service, by telecopy with confirmation of receipt or by personal delivery,
      as
      follows:





(i)  if
      to the
      Buyer:




THE
      LIGHTSTONE GROUP, LLC


326
      Third
      Street


Lakewood,
      NJ 08701


Attention:
      Mr. Martin J. Sumner


Telecopy:
      (732) 942-2401





With
      copy
      to:




Herrick,
      Feinstein LLP


2
      Park
      Avenue


New
      York,
      NY 10016


Attention:
      Sheldon Chanales, Esq.


Telecopy:
      (212) 592-1500




(ii)  if
      to
      Sellers or any Company:





c/o
      Home
      Properties


850
      Clinton Square


Rochester,
      New York 14604


Attention:
      John Scharlock, Vice President


Telecopy:
      (585) 546-5433


25


With
      copy
      to:





Kathleen
      K. Suher, Esq.


c/o
      Home
      Properties


850
      Clinton Square


Rochester,
      New York 14604


Telecopy:
      (585) 340-5949





(b)  Any
      such
      notice, demand or request shall be deemed to have been rendered or given on
      the
      date of receipt, in the case of delivery by courier service, telecopy or
      personal delivery, or three (3) business days after mailing.





25.
            **ASSIGNMENT**.





Neither
      this Agreement nor any interest hereunder shall be assigned or transferred
      by
      Buyer or Sellers, except: (a) as provided in Section 26 below; and (b) Buyer
      may
      assign its rights hereunder to an affiliate which is owned or controlled by
      the
      original Buyer or Buyer’s principals, provided Buyer notifies Sellers of such
      assignment not less than ten (10) days prior to the Closing. In no event may
      Buyer assign any of its rights hereunder to an unrelated party.





26.
            **TAX
                DEFERRED EXCHANGE**.





(a)  Seller
      has advised Buyer of its intention to effect tax deferred exchanges pursuant
      to
      Section 1031 of the Internal Revenue Code in connection with the sale of the
      Interests in one or more of the Companies. Seller may assign all or part of
      its
      rights under this Agreement to a Qualified Intermediary of Seller’s choice for
      the purpose of completing such exchanges. Buyer agrees to cooperate with Seller
      and Qualified Intermediary with respect to such exchange and agrees to execute
      all documentation required to effectuate such exchange; provided, however,
      that:
      (a) Buyer shall not incur additional liability or costs as a consequence of
      Seller’s exchange activities; (b) Buyer shall not be obligated to delay, or
      agree to the delay of, the Closing as a result of Seller’s contemplated exchange
      activities; and (c) Seller shall indemnify and hold Buyer harmless from any
      and
      all liability, claims, losses or actions which Buyer incurs or to which Buyer
      may be exposed as a result of Buyer’s participation in the contemplated
      exchange. Buyer makes no warranty whatsoever with respect to the qualification
      of the transaction for tax deferred exchange treatment under Section 1031 and
      Buyer shall have no responsibility, obligation or liability with respect to
      the
      tax consequences to Seller. This Agreement is not subject to or contingent
      upon
      Seller’s ability to effectuate a contemplated exchange. In the event any
      exchange contemplated by Seller should fail to occur, for whatever reason,
      the
      sale of the Interests shall nonetheless be consummated as otherwise provided
      in
      this Agreement.





(b)  In
      the
      event that Buyer wishes to enter into a Section 1031 tax deferred exchange
      in
      connection with the Interests in one or more of the Companies, Sellers agree
      to
      cooperate with Buyer in connection with such exchange, including the execution
      of such documents as may be reasonably necessary to effectuate the same provided
      that: (a) Sellers shall not incur any additional liability or cost as a
      consequence of Buyer's exchange activities; (b) Sellers shall not be obligated
      to delay, or agree to the delay of, the Closing as a result of Buyer's
      contemplated exchange; and (c) Buyer shall indemnify and hold Sellers harmless
      from any and all liabilities claims, losses or actions which Sellers incur
      or to
      which Sellers may be exposed as a result of Sellers’ participation in the
      contemplated exchange. Sellers makes no warranty whatsoever with respect to
      the
      qualification of the transaction for tax deferred exchange treatment under
      Section 1031 and Sellers shall have no responsibility, obligation or liability
      with respect to the tax consequences to Buyer. This Agreement is not subject
      to
      or contingent upon Buyer's ability to effectuate a contemplated exchange. In
      the
      event any exchange contemplated by Buyer should fail to occur, for whatever
      reason, the sale of the Interests shall nonetheless be consummated as otherwise
      provided herein this Agreement.


26





27.
            **GOVERNING
                LAW**.





This
      Agreement shall be governed, construed and interpreted in accordance with the
      laws of the State of Michigan applicable to contracts made and to be performed
      wholly within the State of Michigan without giving effect to the
      conflicts-of-laws principles thereof.





28.
            **ENTIRE
                AGREEMENT; AMENDMENT**.





This
      Agreement and the various documents referred to herein contains, or
      incorporates, all of the terms agreed upon between the parties with respect
      to
      the subject matter, and supersedes any and all prior written or oral
      understandings. This Agreement may not be modified or amended except in, and
      by,
      a written instrument executed by the parties hereto.








29.
            **WAIVER**.





No
      waiver
      by either party of any failure or refusal of the other party to comply with
      any
      of the obligations of such party hereunder shall be deemed a waiver of any
      other
      or subsequent failure or refusal so to comply.





30.
            **ARTICLE
                HEADINGS**.





The
      headings of the various sections of this Agreement have been inserted only
      for
      purposes of convenience, and are not part of this Agreement, and shall not
      be
      deemed in any manner to modify, explain, qualify or restrict any of the
      provisions of this Agreement.





31.
            **MISCELLANEOUS**.





(a)  This
      Agreement may be executed in several counterparts, each of which, when taken
      together, shall be deemed an original and constitute one and the same
      document.





(b)  This
      Agreement may be executed by facsimile signature, and delivery by a party hereto
      of the facsimile signature of such party shall have the same force and effect
      as
      the delivery of an original signature of such party.





(c)  Sellers
      will use commercially reasonable efforts, in accordance with their existing
      business practices, to ensure that at the time of the Closing the vast majority
      of apartment units are in rentable condition. The parties recognize that tenants
      move out at various times and that it may not be possible for all units to
      be
      fully prepared at the time of Closing. Accordingly, Sellers shall be fully
      responsible for insuring that all units that have been vacated 30 or more days
      prior to Closing shall be in full rentable condition. In the event that any
      apartment unit vacant 30 or more days prior to Closing is not in retable
      condition, Buyer shall receive a closing credit equal to $1,000. For units
      vacated within 30 days prior to Closing, Sellers continue to use commercially
      reasonable efforts, in accordance with existing business practice, to prepare
      such units for subsequent tenancy, however, if any such units are not in full
      rentable condition at the time
      of
      Closing there shall be no credit given to Buyer.


27





32.
            **CERTIFICATE
                OF OCCUPANCY/PERMITS**.





Sellers
      have applied for certificates of occupancy for the following Properties
      (Carriage Hill, Carriage Park, Cherry Hill Village, Cherry Hill Club, Hampton
      Court, Scotsdale, Springwells Park) (collectively, the “ **Permit
      Properties** ”).
      Notwithstanding anything to the contrary set forth in this subparagraph, in
      the
      event the relevant municipality(ies) will issue a conditional certificate of
      occupancy which provides that repairs are to be completed after Closing, then
      Buyer agrees to accept a conditional certificate of occupancy and will complete
      such repairs after Closing at its cost and sign any documentation requested
      or
      required by the municipality(ies) in connection therewith. Without limiting
      the
      foregoing, the letter requested by the City of Westland regarding Hampton Court
      post-closing repairs is attached as Schedule
      13 and
      Buyer hereby agrees to sign and deliver the same. Sellers shall use their best
      efforts to obtain any required certificates of occupancy for each of the Permit
      Properties on or before Closing at their cost. In the event a certificate of
      occupancy has not been issued by Closing for any of the Permit Properties,
      then
      Sellers shall have the right to extend the Closing Date by up to thirty (30)
      days. In the event a certificate of occupancy has not been issued by the
      extended Closing Date for any of the Permit Properties, then Buyer shall have
      the right to terminate this Agreement with respect to any Permit Property for
      which certificates of occupancy are lacking and the provisions of Section 33
      shall apply. Notwithstanding anything to the contrary set forth herein, Buyer
      agrees that in the event a certificate of occupancy has not been issued by
      the
      extended Closing Date for the Property known as Springwells Park, then Buyer
      shall accept the Springwells Park Property without a certificate of occupancy.





Notwithstanding
      anything to the contrary set forth herein, Buyer acknowledges and agrees that
      the fire unit at Oak Park Manor may not be repaired before Closing and agrees
      to
      accept such fire unit without a certificate of occupancy.





33.
            **TERMINATION
                WITH RESPECT TO****INDIVIDUAL
                PROPERTIES**.





In
      the
      event that this Agreement is terminated with respect to individual affected
      Properties, pursuant to Sections 12, 17 or 32, then Buyer shall be entitled
      to
      receive the portion of the Earnest Money Deposit allocated to any such
      terminated Property, as agreed by Buyer and Sellers, and the Purchase Price
      shall be reduced by the amount allocated to any such terminated Property, as
      agreed by Buyer and Sellers.





34.
            **ASSUMPTION
                OF EXISTING OFFICE LEASE**.





At
      Closing, Buyer shall assume Home Properties’ obligations as tenant under the
      Lease, dated April 12, 1999, between Koppy-Nemer/Forbes Cohen Associates, L.L.C.
      and Home Properties, L.P., as amended by First Amendment to Lease, dated
      December 8, 2003, for premises known as Suite 120, 26899 Northwestern Highway,
      Southfield, Michigan (the “ **Koppy**  **Lease** ”);
      provided, however, that Sellers (a) shall obtain any consent from landlord
      or
      any other party required under such lease; and (b) execute an indemnification
      agreement, in form and substance reasonably acceptable to Buyer, where Sellers
      indemnify, hold harmless and defend Buyer and the Companies and their respective
      successors and assigns from and against any and all demands, obligations,
      assessments, losses, costs, claims, liabilities, judgments, and damages
      (including, without limitation, reasonable attorneys' and accountants’ fees and
      any costs reasonably incurred in investigating, preparing or defending against
      or prosecuting any litigation or claim), relating or attributable to the Koppy
      Lease which occurred prior to the Closing.





**[SIGNATURE
      PAGES FOLLOW]**


28


IN
      WITNESS WHEREOF, the parties have executed this Agreement as at the day and
      year
      first above written.




**BUYER**:**THE
              LIGHTSTONE GROUP, LLC**By:
            /s/ David LichtensteinDavid
              Lichtenstein, Chief Executive Officer


**SELLER**:**HOME
                PROPERTIES, L.P.**By:
              Home Properties, Inc
                General PartnerBy:
              /s/ John E. SmithJohn
                E. Smith, Senior Vice President
 **HOME
                  PROPERTIES WMF I, LLC**By:
                Home Properties, Inc
                  Sole MemberBy:
                Home Properties, Inc
                  General PartnerBy:
                /s/ John E. SmithJohn
                  E. Smith, Senior Vice President
 29


**LIST**


**OF**


**SCHEDULES
      AND EXHIBITS**




SCHEDULES





Schedule
                1
            -
            Properties
                and CompaniesSchedule
                2
            -
            Intentionally
                DeletedSchedule
                3
            -
            Service
                ContractsSchedule
                4
            -
            LiabilitiesSchedule
                5
            -
            LitigationSchedule
                6
            -
            Notices
                of ViolationSchedule
                7
            -
            Personal
                PropertySchedule
                8
            -
            EmployeesSchedule
                9
            -
            Insurance
                CertificatesSchedule
                10
            -
            Insurance
                Loss Run History ReportsSchedule
                11
            -
            Koppy
                LeaseSchedule
                12
            -
            EasementsSchedule
                13
            -
            Certificates
                of OccupancyEXHIBITSExhibit
                A
            -
            Description
                of the LandExhibit
                B
            -
            Form
                of Deposit Escrow AgreementExhibit
                C
            -
            Form
                of Post-Settlement Consultation AgreementExhibit
                D
            -
            Form
                of Assignment and Assumption of InterestsExhibit
                E
            -
            Wire
                Transfer Instructions




30