Exhibit 10.46

 

September 25, 2007

Home Properties, L.P.
850 Clinton Square
Rochester, New York 14604

Attention: Gerald B. Korn, Vice President

Re: Amendment No. 5 of Credit Agreement (as defined below)

Dear Jerry:

Home Properties, L.P. (the “Borrower”) has requested a further amendment to the
Credit Agreement, dated as of August 23, 1999 (“1999 Credit Agreement”), among
Home Properties, L.P. (the “Borrower”), the Lenders party thereto, Manufacturers
and Traders Trust Company, as Administrative Agent (in such capacity, the
“Administrative Agent”) for each of the lenders (the “Lenders”), as amended by
Amendment No. 1 to Credit Agreement, dated as of September 6, 2000, (“Amendment
No. 1”), Amendment No. 2 to Credit Agreement, dated as of September 1, 2002
(“Amendment No. 2”), Amendment No. 3 to Credit Agreement, dated as of April 1,
2004 (“Amendment No. 3”), and Amendment No. 4 to Credit Agreement, dated
September 8, 2005 (“Amendment No. 4”).  The 1999 Credit Agreement as amended by
Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and as hereby
amended (“Amendment No. 5”) and as from time to time further amended,
supplemented, modified, replaced or restated is hereinafter referred to as the
“Credit Agreement.”  Amendments made by Amendment No. 1, Amendment No. 2,
Amendment No. 3 and Amendment No. 4 are hereinafter restated with any further
modification or amendments made by this Amendment No. 5.

In consideration of any prior extension of credit by the Lenders to Borrower,
and/or in consideration of the Lenders having entered into the Credit Agreement
with Borrower, and in consideration of the mutual promises set forth below,
Borrower, Administrative Agent and the Lenders hereby agree this Amendment No. 5
shall be effective on the later of September 25, 2007 or the first date that the
following conditions have been satisfied (the "Effective Date"):

                a.           The Administrative Agent shall have received a
fully executed counterpart of this Amendment No. 5 from the Lenders, the
Borrower and Home Properties, Inc. (the “Company”); and

b.           The Administrative Agent shall have received payment in immediately
available funds of any and all fees agreed to between the Borrower and the
Administrative Agent and all out-of-pocket expenses incurred by the
Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment No. 5 and related documents.

           Borrower, Administrative Agent and the Lenders hereby further agree,
subject to the terms and conditions set forth herein, that the Credit Agreement
is hereby amended as set forth below:

                a.           Section 1.01 of the Credit Agreement is hereby
amended to amend and restate the definition of "Total Property Value" to read as
follows:

"Total Property Value" means, as of any date, the sum of (i) with respect to all
Eligible Projects which have been owned by the Borrower for not less than four
full consecutive calendar quarters, as of the first day of each fiscal quarter
for the immediately preceding consecutive four calendar quarters, an amount
equal to Adjusted NOI relating to such Eligible Project for such period divided
by an annual interest rate equal to 7.25% and (ii) with respect to all Eligible
Projects which have been owned by the Borrower for less than four full
consecutive calendar quarters, an amount equal to the cost of acquiring such
Eligible Projects less reasonable and customary transaction costs incurred in
connection with such acquisition.

                                 b.           Section 1.01 of the Credit
Agreement is further amended to insert the following new definition:

"Total Unencumbered Value" means, as of any measurement date, the sum of (i)
with respect to all Unencumbered Eligible Projects which have been owned by the
Borrower, as of the measurement date, for not less than four (4) full
consecutive calendar quarters, an amount equal to Adjusted NOI for such
Unencumbered Eligible Project for the immediately preceding four (4) consecutive
calendar quarters as of the measurement date, divided by 7.25%; (ii) with
respect to all Unencumbered Eligible Projects which have been owned by the
Borrower for less than four (4) full consecutive calendar quarters as of the
measurement date, an amount equal to the cost of acquiring such Unencumbered
Eligible Projects less reasonable and customary transaction costs incurred in
connection with such acquisition and (iii) an amount equal to 75% of Book Value
of undeveloped land and Projects on which construction is in progress, up to a
maximum of 10% of Total Unencumbered Value before including the amount of Total
Unencumbered Value derived from this clause (iii).  The sum of (i) and (ii)
shall never fall below $100,000,000.

           Except as hereby specifically amended, modified, waived or
supplemented, the Credit Agreement and all other Loan Documents are hereby
confirmed and ratified in all respects and shall remain in full force and effect
according to their respective terms.

           This Amendment No. 5 may be executed in any number of counterparts,
each of which shall be deemed an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument.

The Company, by its execution and delivery hereof (a) consents and agrees to the
amendments to the Credit Agreement set forth herein and (b) reaffirms its
obligations set forth in the Guaranty.

           The Borrower, the Lenders, the Administrative Agent and the Company
are in agreement with this extension, and have indicated that agreement by
signing below.  Please return a copy of this letter with an original signature
to the undersigned.

Very truly yours,

/s/ Lisa A. Plescia
Lisa A. Plescia
Vice President
 

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The parties to the Credit Agreement agree to the
above amendment upon the Effective Date.

Dated:  As of September 25, 2007

HOME PROPERTIES, L.P.
By:  Home Properties, Inc.,
        its General Partner

By:           /s/ Gerald B. Korn
Name:      Gerald B. Korn
Title:        Vice President

MANUFACTURERS AND TRADERS
  TRUST COMPANY, as Lender and as
   Administrative Agent

By:           /s/ Lisa A. Plescia
Name:      Lisa A. Plescia
Title:        Vice President

[Signature page of other Lenders on next page.]

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CITIZENS BANK OF RHODE ISLAND

By:           /s/ Michael Kauffman
Name:      Michael Kauffman
Title:        Vice President

CHEVY CHASE BANK, FSB

By:           /s/ Sadhvi K. Subramanian
Name:      Sadhvi K. Subramanian
Title:        Vice President

COMERICA BANK

By:           /s/ James G. Graycheck
Name:      James G. Graycheck
Title:        Vice President
 

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The undersigned by its execution and delivery hereof (a) consents and agrees to
the Amendment No. 5 herein and (ii) ratifies and reaffirms its obligations set
forth in the Guaranty, (iii) acknowledges and agrees that the Guaranty is, and
shall continue to be, in full force and (iv), except that, on and after the
Amendment Effective Date, each reference in the Guaranty to "the Credit
Agreement", "thereunder", "thereof", "therein" or words of like import referring
to the Credit Agreement shall mean and be a reference to the Credit Agreement,
as amended and otherwise modified by Amendment No. 5.  This Consent shall be
governed by, and construed in accordance with, the laws of the State of New
York.

Home Properties, Inc.

By:          /s/ Gerald
B. Korn                                                                 
Name:     Gerald B. Korn
Title:       Vice President
 
 

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