Document:

ex106to8ka208066_11042011.htm

Exhibit 10.6

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into as of the 7th day of November 2011, by and among SG Blocks, Inc., with an address at 400 Madison Avenue Suite 16C, New York, New York 10017 (the “Company”), BAW Holdings Corp., a New York corporation, with an address at 100 Quentin Roosevelt Blvd, Garden City, NY 11530 (the “BAW”) and Brian A. Wasserman (“Wasserman” together with BAW “Consultant”).

 

WITNESSETH:

 

In consideration of the agreements, provisions, promises and covenants contained herein, and for other consideration as hereinafter described, the parties hereto agree as follows:

 

1.            Retention. The Company hereby retains the Consultant, and the Consultant hereby accepts such retention by the Company, for the Term (as hereinafter defined), in accordance with the terms and conditions hereinafter set forth.

 

2.            Term of Retention. Unless earlier terminated as hereinafter provided, the term of the Consultant's retention under this Agreement (the “Term”) shall be for a period of three (3) years, commencing November 7, 2011, and ending November 7, 2014. In the event that the Consultant continues in the retention of the Company after the end of the Term, then unless otherwise agreed to by the Consultant and the Company in writing, the Consultant's continued retention by the Company shall, notwithstanding anything to the contrary expressed or implied herein, be terminable by either party at will. It is expressly understood and agreed that the Company does not now have, nor hereafter shall have, any obligation to continue the Consultant in its retention after the Term ends, and that the Consultant does not now have, nor hereafter shall have, any obligation to continue its retention by the Company after the Terms ends.

 

3.            Duties.

 

(a)            The Consultant shall be retained to provide services inclusive of the services listed on Exhibit A attached hereto (collectively the “Services”).

 

(b)            The BAW shall arrange for Wasserman to perform the Services provided for this Agreement. No one else other than Wasserman shall perform Services without the Company's prior written consent.

 

(c)            Consultant shall devote such time to the affairs of the Company as is necessary to render the Services contemplated by this Agreement in a professional and workmanlike manner and to fulfill the statutory and fiduciary duties of the Chief Financial Officer of the Company. Consultant agrees to make itself available to the officers and the board of directors (the “Board”) of the Company, subject to reasonable advance notice and mutually convenient scheduling, for the purpose of participating in telephone conferences with the officers  and Board of the Company and advising the Company in the preparation of any reports, products or licenses, and/or other material and documentation (“Documentation”) as shall be necessary, in the reasonable opinion of the Company's management and Board.

 

(d)            In the performance of Services, Consultant will (i) assist and support the Company’s compliance with the requirements of the Securities Exchange Act of 1934, as amended, Securities Act of 1933, as amended, the Sarbanes Oxley Act of 2002 (the “SOA”) and the rules and regulations of the Securities and Exchange Commission promulgated thereunder (including Section 404 of the SOA related to internal controls and Sections 302 and 906 of the SOA related to certifications) and any other applicable Federal or state securities law, and act in a manner consistent with regards thereto, and (ii) not cause the Company to violate, any statue or regulation or any order, writ, judgment, or decree of any court, arbitrator or governmental authority applicable to the Company and its subsidiaries and affiliates.

 

  

  

  

 

(e)            The Company and Consultant understand and agree that Consultant is currently actively engaged with other ventures and that Consultant's efforts in connection with these other ventures hereunder shall not interfere with its obligations to the Company.

 

4.            Independent Contractor Status.

 

(a)            The Consultant's engagement hereunder shall be as an independent contractor, rather than as an employee of the Company, and the Consultant shall not be entitled to any benefits available to employees of the Company. Nothing contained herein shall be interpreted or construed as creating or establishing the relationship of employer-employee between the Company and the Consultant. The Consultant acknowledges that it will be solely responsible for any federal, state or local income or self employment taxes arising with respect to its fees hereunder, and the Company shall not be obligated to withhold or pay any payroll taxes of any kind with regard to Consultant. The Consultant also acknowledges that it has no state law workers' compensation rights with respect to its services under this Agreement.

 

(b)            The Consultant shall have no power to enter into any agreement on behalf of, or otherwise bind the Company. Without limiting the foregoing, Consultant shall not enter into any contract or commitment on behalf of the Company without the Company's prior written consent.

 

5.            Compensation. In consideration for the Services to be performed by Consultant for the Company, the Company agrees that the Consultant shall be entitled to compensation as follows:

 

(a)            Cash Compensation for Services. Consultant shall receive the sum of Ten Thousand Dollars ($10,000) per month (the “Cash Compensation”) payable within five (5) business days of the beginning of each month, provided, however, that no Cash Compensation shall be payable if the Agreement is terminated pursuant to Section 7.

 

(b)            In the event Wasserman resigns from BAW or if either BAW or Wasserman resign from this engagement with the Company, cease to provide the Services to the Company, or otherwise terminate this Agreement, the Company shall pay Consultant all Cash Compensation lawfully due to Consultant through such date, and the Company shall have no further obligation to pay Cash Compensation to Consultant after such date.

 

(c)             Option Compensation for Services.

 

(i)            Upon execution of this Agreement, the Company will issue to Wasserman an option (the “Option”), in the form of Exhibit B to this Agreement, to purchase one million (1,000,000) shares of the outstanding shares of the Company's common stock (the “Option Shares”) at an exercise price of $.20 per share, exercisable in whole or in part for ten (10) years from the grant date. The option shall vest as follows:

 

-    1/3 on November 7, 2011

-    1/3 on November 7, 2012

-    1/3 on November 7, 2013

 

  

  

  

 

6.            Expenses of Consultant. It is expressly understood that each party shall be responsible for its own nominal and reasonable out-of-pocket expenses. Upon the Company's receipt of appropriate documentation, Consultant shall be reimbursed for all reasonable out-of-pocket expenses that have been pre-approved in writing by the Company.

 

7.           Termination for Cause.

 

(a)            In addition to any other rights or remedies available to the Company pursuant to this Agreement, the Company may terminate this Agreement for “Cause”, which shall be defined as: (i) willful misconduct in the performance of Consultant's duties, (ii) fraud, embezzlement, dishonesty or theft by Consultant in connection with the performance of the Services, (iii) Consultant's conviction of, or plea of nolo contendere to, a felony or an act of moral turpitude, (iv) breach by Consultant of any material term(s) of this Agreement, or any representation or warranty of this Agreement if not cured after Notification, as provided in Section 7(b) below, (v) Consultant's insolvency or filing of a petition under the federal bankruptcy laws, or (vi) any assignment by Consultant of this Agreement to a third party. Any termination of this Agreement shall act as notice of non-renewal.

 

(b)            The Company will, upon breach by Consultant of any terms or provisions of this Agreement, notify Consultant in writing of such breach (the “Notification”). If the Consultant fails to cure the breach within ten (10) days of Notification, this Agreement will be deemed terminated as of the Notification date.

 

8.           Termination Upon Death of Wasserman. In the event of the death of Wasserman during the Term, this Agreement shall terminate effective immediately, provided however, that the Company shall pay to Consultant the Cash Compensation payable pursuant to Section 5(a), pro rated through the effective date of termination.

 

9.            Termination for Disability. If as a result of incapacity due to physical or mental illness or injury, Wasserman shall have been absent from his duties preventing him from performing the Services hereunder for ninety (90) consecutive days, the Company shall be entitled to terminate this Agreement. Thirty (30) days after giving written notice (which may occur before or after the end of such ninety (90) day period, but which shall not be effective earlier than the last day of such ninety (90) day period), the Company may terminate this Agreement, provided Wasserman is unable to resume his performance of the Services at the conclusion of such notice period. In the event this Agreement is terminated as a result of Wasserman's disability, Consultant shall receive from the Company the Cash Compensation payable pursuant to Section 5(a), pro rated through the effective date of termination.

 

10.          Representations, Warranties and Covenants; SEC and Legal Compliance.

 

(a)            Safeguard Information and Materials. Consultant acknowledges that by the very nature of its relationship with the Company, it will, from time to time, have knowledge of or access to material non-public information. “Non-public information” is information marked as “confidential” or otherwise denoted as such, or which is information any person using reasonable judgment would conclude as being “non-public” or confidential information. Consultant hereby agrees and covenants that it will utilize its commercially reasonable efforts to safeguard and prevent the dissemination of such information to third parties unless authorized in writing by the Company to do so as may be necessary in the performance of its Services under this Agreement.

 

(b)          Conflict With Other Agreements. Both parties acknowledge that the execution, delivery and performance of this Agreement, in the time and manner herein specified, and specifically with regard to the acknowledgment described in Section 3(d), will not conflict with, result in a breach of, or constitute a default under any existing agreement, indenture, or other instrument to which the Consultant is a party or by which either entity may be bound.

 

  

  

  

 

(c)          Compliance. Consultant is, and during the term hereof, will be, in compliance with all applicable laws and regulations.

 

(d)          Authorization. The individuals whose signatures appear below are authorized to sign this Agreement on behalf of their respective corporations.

 

(e)          Qualifications. Consultant represents and warrants to the Company that (i) it has the experience and ability as may be necessary to perform all the required Services with a high standard of qualify, and (ii) all Services will be performed in a workmanlike and professional manner.

 

(f)          Consultant represents that it is engaged in the financial consulting business. Consultant further represents that it is not in the business of raising money. Consultant represents that it intends to remain in the financial consulting business for the foreseeable future.

 

(g)           Consultant represents to the Company that it has not in the past two (2) years and is not presently in the business of raising money and that there has been no broker or finder involved in any manner in connection with the introduction of the investors to the Company, other than the Consultant, and agrees to indemnify the Company against, and hold the Company harmless from, any claim made by any other party for a broker's or finder's fee or other similar payment based upon any agreements, arrangements, or understanding made by Consultant.

 

(h)           Neither Wasserman nor any entity controlled by Wasserman has been involved in any legal proceeding listed in Item 401(f) of Regulation SK.

 

11.          Confidentiality. Consultant and Wasserman agree to regard and preserve as confidential at all times during Consultant's retention by the Company and thereafter all Confidential Information (as defined below) pertaining to the Company's business that has been or may be obtained by Consultant or Wasserman in the course of this retention by the Company whether Consultant or Wasserman has such information in memory or in writing or other physical form. Neither Consultant nor Wasserman will, without written authority from the Company to do so, use for its or his benefit or purposes or disclose to others for any reason, either during the Term or thereafter, except as required by the Services hereunder, any Confidential Information connected with the business of the Company. This provision shall not apply to Confidential Information known to Consultant or Wasserman prior to Consultant's retention hereunder, or after the Confidential Information has been voluntarily disclosed to the public, independently developed and disclosed by others, or otherwise enters the public domain through lawful means.

 

For purposes of this Agreement, “Confidential Information” shall mean any information relating to the business of the Company or any of its affiliates that has not previously been publicly released by duly authorized representatives of the Company and shall include (but shall not be limited to) Company information encompassed in all plans, proposals, computer programs, business, marketing and sales plans and strategies, financial information, costs, research information, pricing information, customer and vendor identity, records, files and information, and all methods, concepts, information, knowledge and ideas reasonably related to the business of the Company.

 

12.      Competition; Nonsolicitation; Nondisparagement.

 

(a)            During the Term of this Agreement (as extended by the parties pursuant to Section 2) and for a period of one (1) year following the termination of this Agreement, the Consultant will not, without the prior written consent of the Company, engage in “Competition” with the Company. For purposes of this Agreement, “Competition” shall be defined as engaging in or carrying on any enterprise or business activity (directly or indirectly, whether as an advisor, principal, agent, partner, officer, director, employee, stockholder, associate or consultant to any person, partnership, corporation or other business entity) relating to or that is competitive with the business of the Company.

 

  

  

  

 

(b)            The Consultant hereby covenants and agrees that, during the Term (as extended pursuant to Section 2) and for a period of two (2) years following the termination of this Agreement, the Consultant will not solicit or induce .any customer or client of the Company to terminate or otherwise to cease, reduce, or diminish in any way its relationship with the Company.

 

(c)            The Consultant hereby covenants and agrees that, during the Term (as extended pursuant to Section 2) and for a period of two (2) years following the termination of this Agreement, it will not attempt to influence, persuade or induce, or assist any other person in so persuading or inducing, any employee of the Company or any recruit, candidate, or applicant for employment with the Company to give up, or to not commence, employment or a material or exclusive business relationship with the Company.

 

(d)            The Consultant agrees that, during the Term (as extended pursuant to Section 2) and for a period of two (2) years following the termination of this Agreement, it will not engage in any conduct that is injurious to the reputation(s) and interest(s) of the Company and/or the Company's past or present directors, officers, agents, fiduciaries, trustees, administrators, employees or assigns, including but not limited to disparaging (or inducing or encouraging others to disparage) the Company and/or any of the foregoing individuals. For purposes of this Agreement, the term “disparage” includes without limitation, making any statement that would adversely affect in any manner the conduct of the Company's business(es), the business reputation of the Company and/or any of the foregoing individuals, and/or the personal reputation of any of the foregoing individuals.

 

(e)            If any of the foregoing provisions of this Section 12 is found by any court, agency or arbitrator of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

 

(f)            The Consultant acknowledges and agrees that any violation of any of the covenants of this Section 12 shall constitute a material breach of this Agreement and further acknowledges and agrees the remedy at law available to the Company for any such breach would be inadequate and that damages flowing from such breach may not readily be susceptible to being measured in monetary terms. Accordingly, the Consultant acknowledges, consents and agrees that, in addition to any other rights or remedies which the Company may have at law, in equity or under this Agreement, upon adequate proof of its violation of such covenants and demonstration of a reasonable likelihood of actual damage, the Company will be entitled to immediate injunctive relief and may obtain a temporary order restraining any threatened or further breach.

 

13.          Indemnification. The Company agrees to indemnify, defend and hold Consultant and its employees, agents and affiliates harmless from and against any and all loss, claim, damage, liability and expense (including, without limitation, all reasonable costs of investigation, legal and other fees and expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which Consultant may become subject under the United States or foreign securities laws, any applicable statute or regulation of any jurisdiction at common law (whether tort, contract or any other basis), or which may result from any claim or allegation that the Company has infringed the intellectual property rights of any third party, or which may otherwise result from the Company's willful misconduct or gross negligence as per the attached separate Indemnification Agreement included as Exhibit C.

 

  

  

  

 

14.          Assignment. This Agreement may not be assigned or delegated by Consultant without the prior written consent of the Company.

 

15.          Waiver. The waiver by either party of a breach of any provision of this Agreement shall not constitute or be construed as a waiver of any future breach of any provision(s) in this Agreement.

 

16.          Severability. The provisions of this Agreement shall be severable and the invalidity of any provision, or portion thereof, shall not affect the enforceability of the remaining provisions of this Agreement.

 

17.          Complete Agreement; Modification. This Agreement sets forth the entire agreement between the parties relative to the subject matter herein. Modification or amendment of any of the provisions of this Agreement shall not be valid unless in writing and signed by the parties hereto.

 

18.          Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

19.           Notices. All notices pertaining to this Agreement shall be in writing and transmitted either by (a) personal hand delivery, (b) certified or registered mail, return receipt requested, or (c) reputable overnight courier service. All notices shall be sent to the following addresses unless either party gives written notice of a change of address:

	
If to the Company:

	  
	  	
SG Blocks, Inc.

	  	
400 Madison Avenue

	  	
Suite 16C

	  	
New York, New York 10017

	  	
Attn: Paul Galvin, CEO

	  	  
	
If to Consultant:

	
BAW Holdings Corp.

	  	
100 Quentin Roosevelt Blvd

	  	
Garden City, New York 11530

	  	
Attn: Brian A. Wasserman

 

20.          Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

 

21.          Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

22.          Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of each of the parties and their respective successors and assigns.

 

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

 

  

  

  

	
THE COMPANY:

SG Blocks, Inc.

	
By:

	

/s/ Paul M. Galvin

	  	
Paul M. Galvin, CEO

	  	  
	
THE COMPANY:

BAW Holdings Corp.

	
By:

	

/s/ Brian A. Wasserman

	  	
Brian A. Wasserman

	  
	

/s/ Brian A. Wasserman

	
Brian A. Wasserman, individually

 

 

  

  

  

 

Exhibit A

List of Services

 

	
  

	
1.

	
Review of historical and current financial statements — including help in review and preparation of monthly, quarterly and annual financial statements (including full GAAP audited financials footnotes)

 

	
  

	
a.

	
Work with the independent auditors for the preparation and completion of the audited statements

 

	
  

	
b.

	
Consultant will cause Wasserman to prepare and execute as Chief Financial Officer all SEC documents required to be filed by the Company, to the extent the filing requires such execution by the Company's Chief Financial Officer

 

	
  

	
2.

	
Mr. Wasserman, in his capacity as Chief Financial Officer, will perform all duties normally associated with that of a Chief Financial Officer, including without limitation:

 

	
  

	
a.

	
Responsibility for any and all financing matters for the Company and its subsidiaries including but not limited to debt, equity or other financings, whether through the public markets or in private transactions, or otherwise, including the negotiation and consummation of all of the foregoing.

 

	
  

	
b.

	
Review of annual and quarterly budgets and related matters.

 

	
  

	
c.

	
Supervise and administer, as appropriate, all accounting/financial duties and related functions on behalf of the Company for its operations and business matters (including control of the Company's cash, checking accounts, revenue receipts, disbursements, bookkeeping, accounts, ledgers, billings, payroll and related matters).

 

	
  

	
d.

	
Supervise and manage, as appropriate, all SEC filing obligations.

 

	
  

	
e.

	
Other similar items.

 

	
  

	
3.

	
Review, recommendations and monitoring of the Company's accounting and internal control system

 

	
  

	
4.

	
Review of the Company's debt and equity capitalization

 

	
  

	
5.

	
Preparation and review of 3 year P&L and Cash Flow forecast

 

a.           Preparation of a sales forecasting model

 

b.          Preparation of an expense structure model

 

	
  

	
6.

	
Preparation and review of 3 year Balance Sheet forecast

 

	
  

	
7.

	
Review of Company treasury function including insurance coverage, banking relationships, cash management and bill paying

 

	
  

	
8.

	
Introductions to strategic partners and investment banking firms

 

	
  

	
9.

	
Recruiting and building the Company's management team

 

  

  

  

 

Exhibit B

 

SG BLOCKS, INC.

400 Madison Avenue, Suite 16C

New York, NY 110017

 

 

November __, 2011

 

 

To: ______________

 

 

We are pleased to inform you that on November 7, 2011 the Stock Option Committee (the “Committee”) of the Board of Directors of SG Blocks, Inc. (the “Company”) granted you an nonqualified stock option (the “Option”) to purchase _______ shares of the Company’s common stock, par value $0.01 per share at a price of $0.20 per share and otherwise in accordance with the Company’s 2011 Incentive Stock Plan (the “Plan”). The shares of Common Stock issuable upon exercise of the Options are referred to hereinafter as the “Stock.”

 

The Options will become exercisable as follows: (a) as to _______ shares of Stock, immediately on November 7, 2011; (b) as to a further _______ shares of Stock, on November 7, 2012; and (c) as to the remaining _______ shares of Stock, on November 7, 2013; and that each such Option will expire on November 6, 2021.

 

These Options are issued in accordance with and are subject to and conditioned upon all of the terms and conditions of the Plan (a copy of which in its present form is attached hereto), as from time to time amended, provided, however, that no future amendment or termination of the Plan shall, without your consent, alter or impair any of your rights or obligations under the Options. Reference is made to the terms and conditions of the Plan, all of which are incorporated by reference in this option agreement as if fully set forth herein.

 

Notwithstanding any other provision in this option agreement or the Plan, no Option may be exercised unless and until the Stock to be issued upon the exercise of the Option has been registered under the Securities Act of 1933 (the “Securities Act”) and applicable state securities laws, or are, in the opinion of counsel to the Company, exempt from such registration in the United States. The Company shall not be under any obligation to register the Stock, although the Company may in its sole discretion register the Stock at such time as the Company shall determine. If the Company chooses to comply with an exemption from registration, the Stock may, at the direction of the Committee, bear an appropriate restrictive legend restricting the transfer or pledge of the Stock, and the Committee may also give appropriate stop transfer instructions with respect to the Stock to the Company’s transfer agent.

 

You understand and acknowledge that, under existing law, unless at the time of the exercise of these Options a registration statement under the Securities Act is in effect as to the Stock (i) any Stock purchased by you upon exercise of these Options may be required to be held indefinitely unless the Stock is subsequently registered under the Securities Act or an exemption from such registration is available; (ii) any sales of the Stock made in reliance upon Rule 144 promulgated under the Securities Act may be made only in accordance with the terms and conditions of that rule (which, under certain circumstances, restricts the number of shares which may be sold and the manner in which shares may be sold); (iii) in the case of securities to which Rule 144 is not applicable, some other exemption will be required; (iv) certificates for Stock to be issued to you hereunder shall bear a legend to the effect that the Stock has not been registered under the Securities Act and that the Stock may not be sold, hypothecated or otherwise transferred in the absence of an effective registration statement under the Securities Act relating thereto or an opinion of counsel satisfactory to the Company that such registration is not required; (v) the Company may place an appropriate “stop transfer” order with its transfer agent with respect to the Stock; and (vi) the Company has undertaken no obligation to register the Stock or to include the Stock in any registration statement which may be filed by it subsequent to the issuance of the Stock to you. In addition, you understand and acknowledge that the Company has no obligation to you to furnish information necessary to enable you to make sales under Rule 144.

 

  

  

  

 

These Options (or installment thereof) are to be exercised by delivering to the Company a written notice of exercise in the form attached hereto as Exhibit A, specifying the number of shares of Stock to be purchased, together with payment of the purchase price of the Stock to be purchased. The purchase price is to be paid in cash or, at the discretion of the Committee, by one of the other means provided in the Plan and referenced on Exhibit A.

 

Kindly evidence your acceptance of these Options and your agreement to comply with the provisions hereof and of the Plan by executing this option agreement under the words “Agreed To and Accepted.”

 

	  	
Very truly yours,

	  	  
	  	
SG BLOCKS, INC.

	  	  
	  	
By:

	  
	  	  	
Name:

	  
	  	  	
Title:

	  
	  	  	  	  
	
AGREED TO AND ACCEPTED:

	  	  	  
	  	  	  	  
	  	  	  	  	  

 

  

  

  

 

Exhibit A

 

 

SG BLOCKS, INC.

400 Madison Avenue, Suite 16C

New York, NY 110017

 

Gentlemen:

 

Notice is hereby given of my election to purchase _____ shares of Common Stock, $0.01 par value (the “Stock”), of SG Blocks, Inc. (the “Company”), at a price of $0.20 per share, pursuant to the provisions of the stock option granted to me on November 7, 2011 under the Company’s 2011 Incentive Stock Plan. Enclosed in payment for the Stock is:

 

	  	
 ̈

	  	
my check in the amount of $ __________.

	
*

	
 ̈

	  	
__________ shares of Stock having a total value of $ __________, such value based on the Fair Market Value (as defined in the Plan) of the Stock.

	
*

	
 ̈

	  	
the cancellation of __________ shares of Stock pursuant to the cashless exercise provision of the Plan having a total value of $ __________, such value based on the Fair Market Value (as defined in the Plan) of the Stock.

	
*

	
 ̈

	  	
a combination of the foregoing, as indicated above.

 

The following information is supplied for use in issuing and registering the Stock purchased hereby:

 

	
Number of Certificates

and Denominations

	  
	  	  
	
Name

	  
	  	  
	
Address

	  
	  	  
	  	  
	  	  
	
Social Security Number

	  

 

 

	
Dated:

	  	  	  
	  	  
	  	
Very truly yours,

	  	  
	  	  

 

 

 

__________________

* Subject to the approval of the Committee.

 

  

  

  

 

Exhibit C

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement, dated as of November 7, 2011 (this “Agreement”), is by and between SG Blocks, Inc., a Delaware corporation (the “Corporation,” which capitalized term shall include any one or more of its subsidiaries where appropriate), and Brian A. Wasserman (“Indemnitee”):

 

RECITALS

 

WHEREAS, the Corporation and Indemnitee have entered into that certain Consulting Agreement, dated the date hereof (the “Consulting Agreement”), pursuant to which Indemnitee will provide certain services to the Corporation, including acting as the Corporation's Chief Financial Officer; and

 

WHEREAS, highly competent persons are becoming more reluctant to serve publicly-held corporations as directors or executive officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to, and activities on behalf of, such corporations; and

 

WHEREAS, the statutes and judicial duties regarding the duties of officers and directors and officers are often difficult to apply, ambiguous or conflicting and therefore fail to provide such directors and executive officers with adequate and reliable knowledge of legal risks to which they are exposed or information regarding the proper cause of action to take; and

 

WHEREAS, the current impracticability and costs of obtaining adequate insurance and the uncertainties relating to indemnification have increased the difficulty of attracting and competitive directors and executive officers retaining competent directors and executive officers; and

 

WHEREAS, the Board of Directors of the Corporation (the “Board of Directors”) has determined that the difficulty in attracting and retaining competitive directors and executive officers is detrimental to the best interests of the Corporation's stockholders and that the Corporation should act to assure such persons that there will be increased certainty of such protection in the future; and

 

WHEREAS, the Corporation believes it is unfair directors and executive officers to assume the risk of huge judgments and other expenses which may occur in cases in which the director or executive officer acted in good faith; and

 

WHEREAS, Section 145 of the General Corporation Law of Delaware (“Section 145”), under which the Corporation is organized, empowers the Corporation to indemnify its officers and directors by agreement and expressly provides that the indemnification provided by Section 145 is not exclusive; and

 

  

  

  

WHEREAS, the Board of Directors believes it is reasonable, prudent and necessary for the Corporation contractually to obligate itself to indemnify Indemnitee to the fullest extent permitted by applicable law so that Indemnitee will continue to serve the Corporation free from undue concern that Indemnitee will not be so indemnified; and

 

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take on additional service for or on behalf of the Corporation on the condition that Indemnitee is so indemnified.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which is acknowledged by both Indemnitor and Indemnity, the Corporation and Indemnitee do hereby covenant and agree as follows:

 

1.             Definitions.

 

(a)           “Affiliate” includes any corporation, partnership, joint venture, employee benefit plan, trust or other enterprise directly or indirectly owned by the Corporation.

 

(b)           “Change in Control” means a change in control of the Corporation of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A (or in response to any similar item or similar schedule or form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or not the Corporation is then subject to such reporting requirement; provided, however, that, without limitation, a Change in Control shall be deemed to have occurred if:

 

(i)           any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Corporation representing 25% or more of the combined voting power of the Corporation's then outstanding securities without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest;

 

(ii)          the Corporation is a party to a merger, consolidation, sale of assets or other reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than two-thirds of the Board of Directors immediately thereafter;

 

(iii)         during any period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Corporation's stockholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least two-thirds of the Board of Directors; or

 

(iv)         the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation (in one transaction or a series of transactions) of all or substantially all of the Corporation's assets.

 

(c)            “Potential Change in Control” shall be deemed to have occurred if:

 

(i)           the Corporation enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; or

 

  

2

  

 

(ii)           the Board of Directors adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.

 

(d)           “Corporate Status” describes the status of a person who is or was or has agreed to become a director, officer, employee or agent of the Corporation, or served at the request of the Corporation as a director, officer, employee, trustee or agent of another corporation, partnership, joint, venture, trust or other enterprise.

 

(e)           “Disinterested Director” means a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(0           “Proceeding” includes any threatened, pending or completed inquiry, action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee pursuant to paragraph 12(a) to enforce the Indemnitec's rights under this Agreement.

 

(g)           “Expenses” includes all reasonable direct and indirect costs of any type or nature whatsoever (including, without limitation, attorneys' fees and related disbursements, out-of-pocket costs and reasonable compensation for time spent by the Indemnitee for which Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the rate of such compensation and estimated time- involved is approved in advance by the Board of Directors), actually and reasonably incurred by the Indemnitee in connection with either the investigation, defense or appeal of a Proceeding (including amounts paid in settlement by or on behalf of Indemnitee, provided the Corporation agrees to such settlement (an “Approved Settlement”)), or the prosecution of an action or proceeding, including appeals, to establish or enforce a right to indemnification under this Agreement, Section 145 or otherwise. Expenses as defined in this Agreement shall not include any judgments, fines or penalties actually levied against the Indemnitee.

 

(h)           “Independent Counsel” means any law firm or member of a law firm which the Board of Directors may designate from time to time, provided that such law firm or member of the law firm so designated is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (x) the Corporation or Indemnitee in any matter material to either such party, or (y) any other party to the Proceeding giving rise to a claim for indemnification under this Agreement. Indemnitee has the sole right, exercisable in Indemnitee's sole discretion, to waive the proviso contained in clause (x) of the immediately preceding sentence. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee's rights under this Agreement arising on or after the date of this Agreement, regardless of when the Indemnitee's act or failure to act occurred.

 

2.              Services By Indemnitee.  Indemnitee shall serve or continue to serve as chief financial officer of the Corporation so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the By-Laws of the Corporation or until such time as he tenders his resignation in writing the Consulting Agreement is terminated or Indemnitee's services to the Corporation are otherwise terminated by the Board of Directors. This Agreement shall not impose any obligation on the Indemnitee or the Corporation to continue the Indemnitee's position with the Corporation beyond any period otherwise applicable, nor to create any right to continued employment of the Indemnitee in any capacity.

 

  

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3.             General Indemnification Right. The Corporation shall indemnify and shall advance Expenses to Indemnitee as provided in this Agreement to the fullest extent permitted by law.

 

4.             Proceedings Other than Proceedings by or in the Right of the Corporation. Indemnitee shall be entitled to the rights of indemnification provided in this section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to any Proceeding, other than a Proceeding by or in the right of the Corporation. Pursuant to this section 4, Indemnitee shall be indemnified against Expenses, including, without limitation, amounts paid in an Approved Settlement, as well as any judgments, fines and penalties levied or awarded against Indemnitce in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in; or not opposed to, the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee's conduct was unlawful. Without limiting the generality of the foregoing, for purposes of this section 4, and in addition to other circumstances for which Indemnitee shall be deemed to have acted in good faith, Indemnitee shall conclusively be deemed to have acted in good faith if Indemnitee's action is based on information supplied to the Indemnitec by legal-counsel for the Corporation or an Affiliate or by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or an Affiliate.

 

5.             Proceedings by or in the Right of the Corporation. Indemnitee shall be entitled to the rights of indemnification provided in this section 5, if, by reason of his Corporate Status, Indemnitee is, or is threatened in writing to be made, a party to any threatened, pending or completed Proceeding brought by or in the right of the Corporation to procure a judgment in the Corporation's favor. Pursuant to this section 5, Indemnitee shall be indemnified against Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with such Proceeding if Indemnitce acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation. Notwithstanding the foregoing, no indemnification against such Expenses shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation if applicable law expressly prohibits such indemnification unless and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that indemnification against Expenses may nevertheless be made by the Corporation. Without limiting the generality of the foregoing, for purposes of this section 5, and in addition to other circumstances for which Indemnitee shall be deemed to have acted in good faith, Indemnitee shall conclusively be deemed to have acted in good faith if Indemnitee's action is based on information supplied to the Indemnitee by legal counsel for the Corporation or an Affiliate or by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or an Affiliate.

 

  

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6.             Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee's Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with each successfully resolved claim, issue or matter. For purposes of this section 6, but without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal or withdrawal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

7.             Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

8.             Advance of Expenses. The Corporation shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within twenty days after the receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall evidence or reflect the Expenses incurred by Indemnitee and shall include or he preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it is determined ultimately that Indemnitee is not entitled to be indemnified against such Expenses.

 

9.              Procedure for Determination of Entitlement to Indemnification.

 

(a)           To obtain indemnification under this Agreement, Indemnitee shall submit to the secretary of the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. Promptly upon receipt of such a request for indemnification, the secretary of the Corporation shall advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b)           Upon written request by Indemnitee for indemnification pursuant to paragraph 9(a), a determination, if required by applicable law, with respect to Indemnitee's entitlement thereto shall be made in the specific case as follows:

 

(i)           if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall he delivered to Indemnitee (unless Indemnitee shall request that such determination be made by the Board of Directors, in which case the determination shall he made in the manner provided below in clauses (ii) or (iii));

 

  

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(ii)          if a Change of Control shall not have occurred, (x) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors, or (y) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, if such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or

 

(iii)         as provided in paragraph 10(b) of this Agreement;

 

and, if it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating shall be borne by the Corporation (regardless of the determination as to Indemnitee's entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(c)           In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to paragraph 9(b), and no counsel shall have been designated previously by the Board of Directors or the Independent Counsel so designated is unwilling or unable to serve, then,

 

(i)           if no Change of Control shall have occurred, the Independent Counsel shall be selected by the Board of Directors and the Corporation shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected; or

 

(ii)           if a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the. Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Corporation advising the Corporation of the identity of three potential independent counsels, of which the Board of Directors may select one counsel to act as Independent Counsel. The Board of Directors shall make such selection within seven days of the giving of such list of three potential independent counsels, and if not selected by the Board of Directors during said seven-day period, Indemnitee shall select the counsel among the three potential independent counsels to serve as the Independent Counsel.

 

In either event, Indemnitee or the Corporation, as the case may be, may, within seven days after such written notice of selection shall have been given, deliver to the Corporation or to Indemnitee, as the case may be, a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirement of “Independent Counsel” as defined in this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, within twenty days after submission by Indemnitee of a written request for indemnification pursuant to paragraph 9(a), no Independent Counsel shall have been selected or, if selected, shall have been objected to in accordance with this paragraph 9(c), either the Corporation or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Corporation or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom an objection is favorably resolved or the person so appointed shall act as Independent Counsel under paragraph 9(b). The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with the performance of the Independent Counsel's responsibilities pursuant to paragraph 9(b), and the Corporation shall pay all reasonable fees and Expenses incident to the implementation of the procedures of this paragraph 9(c), regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to section 12, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

  

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10.           Presumptions and Effect of Certain Proceedings.

 

(a)           If a Change of Control shall have occurred, in making a determination with respect to entitlement to indemnification under this Agreement, the person, persons or entity making such determination shall presume that the Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a request for indemnification in accordance with paragraph 9(a), and the Corporation shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption by any person, persons or entity.

 

(b)           If, within 30 days after receipt by the Corporation of the request for indemnification, the Board of Directors shall not have made a determination under clauses (i) or (ii)(x) of paragraph 9(b) with regard to such indemnification request, the requisite determination of entitlement to indemnification shall be deemed to have been made in favor of the Indemnitee who then shall be entitled to such indemnification, absent (i) a misstatement by the Indemnitee of a material fact, or an omission of a material fact necessary to make the Indemnitee's statement not materially misleading, in connection with the request for indemnification, or (ii) prohibition of such indemnification under applicable law. The foregoing provisions of this paragraph 10(b) shall not apply if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to clauses (i) or (ii)(y) of paragraph 9(b).

 

(c)           The termination of any Proceeding or of any claim, issue or matter therein by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a presumption that the Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful.

 

11.           Assumption of Defense.

 

(a)           In the event the Corporation shall be obligated to pay the Expenses of any Proceeding against the Indemnitee, the Corporation may assume the defense of such Proceeding, with counsel of the Corporation's reasonable choice, upon the delivery to the Indemnitee of written notice of the Corporation's reasonable election to do so. After the giving of such notice, the Corporation will not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred by the Indemnitee with respect to the same Proceeding, provided that (i) the Indemnitee shall have the right to employ Indemnity's counsel in such Proceeding at the Indemnitee's expense; and (ii) the fees and Expenses of the Indemnitee's counsel shall be at the expense of the Corporation if (A) the employment of counsel by the Indemnitee has been previously authorized and approved in writing by the Corporation, (B) the Corporation shall have reasonably concluded that there may be a conflict of interest between the Corporation and the Indemnitee in the conduct of any such defense, or (C) the Corporation shall not, in fact, have employed counsel to assume the defense of such Proceeding.

 

  

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(b)           Whether or not such defense is assumed by the Corporation, the Corporation will not be subject to any liability for any settlement made without its written consent. If the Corporation is not entitled to, or does not elect to, assume the defense of a claim, the Corporation will not be obligated to pay the fees and expenses of more than one counsel for Indemnitee.

 

12.           Remedies of Indemnitee.

 

(a)           In the event that any one or more of the following events shall have occurred:

 

(i)           a determination is made pursuant to section 9 that Indemnitee is not entitled to indemnification under this Agreement,

 

(ii)          expenses are not advanced timely in accordance with section 8,

 

(iii)         the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to paragraph 9(b) and such determination shall not have been made and delivered in a written opinion within 90 days after receipt by the Corporation of the request for indemnification,

 

(iv)        payment of indemnification is not made pursuant to section 6 within ten days after receipt by the Corporation of a written request therefor, and/or

 

(v)         payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to paragraph 10(b),

 

then, the Indemnitee shall be entitled to an adjudication of Indemnitee's entitlement to such indemnification or advancement of Expenses in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction. Alternatively, Indemnitee, at Indemnitee's sole option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first obtained the right to commence such proceeding pursuant to this section 12. The Corporation shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration.

 

(b)           Whenever a determination is made pursuant to section 8 of this Agreement that Indemnitee is not entitled to indemnification, the judicial proceeding or arbitration commenced pursuant to this section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a Change of Control shall have occurred, the Corporation shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be, in any judicial proceeding or arbitration commenced pursuant to this section 12.

 

  

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(c)           If a determination shall have been made or deemed to have been made pursuant to section 9 that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this section 12 absent

 

(i)           a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification, or

 

(ii)           a prohibition of such indemnification under applicable law.

 

(d)           The Corporation shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement.

 

(e)           In the event that Indemnitee, pursuant to this section 12, seeks a judicial adjudication or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Corporation, and shall be indemnified by the Corporation against, any and all expenses (of the types described in the definition of Expenses in this Agreement) actually and reasonably incurred by Indemnitee in connection with obtaining such judicial adjudication or arbitration, but only if Indemnitee prevails therein. if it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.

 

13.            Non-Exclusivity; Duration of Agreement; Insurance: and Subrogation.

 

(a)           The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Corporation's certificate of incorporation or by-laws, any other agreement, a vote of stockholders, a resolution of directors, or otherwise.

 

(b)           This Agreement shall continue until and terminate upon the later of:

 

(i)           five years after the date that Indemnitee shall have ceased to serve as an officer or director of the Corporation, or

 

(ii)          the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses under this Agreement and of any proceeding commenced by Indemnitee pursuant to section 12 relating thereto.

 

(c)           This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators.

 

(d)           (i) To the extent that the Corporation maintains an insurance policy or policies providing liability insurance for directors and officers of the Corporation, Indemnitee shall be covered by such policy or policies in accordance with the terms thereof to the maximum extent of the coverage available for Indemnitee under such policy or policies.  The Corporation shall take all necessary or appropriate action to cause such insurers to pay on behalf of the Indemnitee all amounts payable as a result of the commencement of a proceeding in accordance with the terms of such policy.

 

  

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(ii) For a period of three years after the date the Indemnitee shall have ceased to serve as an officer or director of the Corporation, the Corporation will provide officers and directors liability insurance for Indemnitee on terms no less favorable than the terms of the liability insurance which the Corporation then provides to the current officers and directors of the Corporation as of the date such services shall totally lease; provided, that the Corporation provides officers and directors liability insurance to its current officers and directors as of such cessation date; and provided, further, that the annual premiums for the liability insurance to be provided to the Indemnitee do not exceed by more than 50% the premium charged for the coverage available for any of the Corporation's then current officers and directors.

 

(e)           In the event of any payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including, without limitation, execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights.

 

(f)            The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee otherwise actually has received such payment under any insurance policy, contract, agreement or otherwise.

 

14.           Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

 

(a)           the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and

 

(b)           to the fullest extent possible the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

15.           Exception to Right of Indemnification or Advancement of Expenses.

 

(a)           Except as otherwise provided specifically in this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to:

 

(i)           any Proceeding, or any claim herein, brought or made by Indemnitee against the Corporation;

 

(ii)          amounts payable by Indemnitee to the Corporation or any Affiliate in satisfaction of any judgment or settlement in the Corporation's or such Affiliate's favor (except amounts for which you shall be entitled to indemnification pursuant to section 5);

 

(iii)         amounts payable on account of profits realized by you in the purchase or sale of securities of the Corporation or any Affiliate within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended;

 

  

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(iv)        Expenses in connection with which Indemnitee is not entitled to indemnification as a matter of law or public policy; or

 

(v)         Expenses to the extent you are indemnified by the Corporation otherwise than pursuant to this Agreement, including any Expenses for which payment is made to you under an insurance policy or as otherwise provided pursuant to paragraph 13(c).

 

(b)           Anything in this Agreement to the contrary notwithstanding, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement in connection with any claim initiated by Indemnitee, unless:

 

(i)           the Corporation has joined in or the Board has authorized or consented to any such claim or

 

(ii)          the claim is one to enforce Indemnitee's rights under this Agreement.

 

16.           Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Except as otherwise specifically provided, references in this Agreement to specific section, paragraph and clause numbers and letters shall refer to the sections, paragraphs and clauses in this Agreement having such numbers and letters.

 

17.           Modification and Waiver. This Agreement may be amended from time to time to reflect changes in Delaware law or for other reasons. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the parties to this Agreement. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

18.           Notice by Indemnitee. Indemnitee shall promptly to notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder; provided, however, that the failure to give any such notice shall not disqualify the Indemnitee from indemnification hereunder unless such failure has a material adverse effect on the Corporation or on the possibility of a favorable outcome to a Proceeding.

 

19.           Notices. Notices or other communications required or permitted to be given hereunder shall be in writing and shall be deemed duly given if (x) personally delivered, against written receipt therefor, (y) forwarded by pre-paid certified or registered mail, return receipt requested, or (z) forwarded via a nationally recognized overnight courier service (e.g., Federal Express, USPS Express Mail, UPS, DHL, etc.) to the parties to which such notice or other communication is required by this Agreement to be given, at the address of such parties as follows:

 

	
If to the Corporation, to:

	
Paul M. Galvin, Chief Executive Officer

	 	
SG Blocks, Inc.

	 	
350 Madison Avenue

	 	
New York, New York 10017

 

	
  

	
with a copy to:

	
 

 

  

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If to Indemnitee, to:

	
Brian Wasserman

	
 

	
BAW Holding, Inc.

	
 

	
100 Quentin Roosevelt Boulevard - Suite 516

	
 

	
Garden City, New York 11530

 

	
  

	
with a copy to:

	
Randy S. Zelin, Esq.

	
  

	 	
Moritt Hock & Hamroff LLP

	
  

	 	
400 Garden City Plaza - Suite 202

	
  

	 	
Garden City, New York 11530.

 

or, in the case of any of the parties to this Agreement, at such other address as such party shall furnish to each of the other parties in accordance with this section 19. Notices and other communications delivered personally shall be deemed given as of the date of actual receipt; mailed notices and other communications shall be deemed given as of the date three business days following such mailing; and notices and other communications sent via overnight courier service shall be deemed given as of the date one business day after delivery to such courier service.

 

20.           Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. Any legal action resulting from, arising under, out of or in connection with, directly or indirectly, this Agreement shall be commenced exclusively in the Supreme Court, State of New York, County of Nassau, or the U.S. District Court for the Eastern District of New York. All parties to this Agreement hereby submit themselves to the jurisdiction of any such court, and agree that service of process on them in any such action, suit or proceeding may be affected by the means by which notices are to be given under this Agreement.

 

21.           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

22.           Specific Enforcement. The parties hereby agree that any remedy at law for a violation of any of the provisions of this Agreement is not, in itself, adequate to protect the parties hereto, and each party therefore shall be entitled to specific performance or any other mode of injunctive and/or other equitable relief to enforce such party's rights hereunder or any other relief a court may award.

 

  

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23.           Invalidity of Provision. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. In addition, to the extent that any term or provision hereof is deemed invalid, void or otherwise unenforceable, but may be made enforceable by amendment thereto, the parties agree that such amendment may be made so that the same shall, nevertheless, be enforceable to the fullest extent permissible under the laws and public policies applied in any such jurisdiction in which enforcement is sought.

 

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

 

	  	
THE CORPORATION:

	  	
SG Blocks, Inc.

	  	  
	  	  
	  	
By:

	

/s/ Paul M. Gavin

	  	  	
Paul M. Gavin, Chief Executive officer

	  	
INDEMNITEE:

	  	  
	  	/s/ Brian A. Wasserman
	  	
Brian A. Wassermanhme8knotepurchaseagr.htm

  

  

  

 

EXHIBIT 4.1

 

 

Home Properties, L.P.

 

$90,000,000 4.46% Senior Guaranteed Notes, Series A, due December 19, 2018

 

and

 

$60,000,000 5.00% Senior Guaranteed Notes, Series B, due December 19, 2021

 

______________

 

Note Purchase Agreement

 

______________

 

Dated December 19, 2011

 

 

 

  

  

  

 

 

Table of Contents

 

	
Section

	
Heading

	
Page

	  	  	 
	
SECTION 1.

	
AUTHORIZATION OF NOTES; AFFILIATE GUARANTY

	
1

	  	  	  
	
  Section 1.1.

	
 Authorization of Notes

	
1

	
  Section 1.2.

	
Affiliate Guaranty

	
1

	  	  	 
	
SECTION 2.

	
SALE AND PURCHASE OF NOTES

	
2

	  	  	 
	
SECTION 3.

	
CLOSING

	
2

	  	  	 
	
SECTION 4.

	
CONDITIONS TO CLOSING

	
2

	  	  	 
	
  Section 4.1.

	
Representations and Warranties

	
2

	
  Section 4.2.

	
Performance; No Default

	
2

	
  Section 4.3.

	
Compliance Certificates

	
3

	
  Section 4.4.

	
Opinions of Counsel

	
3

	
  Section 4.5.

	
Purchase Permitted By Applicable Law, Etc

	
4

	
  Section 4.6.

	
Sale of Other Notes

	
4

	
  Section 4.7.

	
Payment of Special Counsel Fees

	
4

	
  Section 4.8.

	
Private Placement Number

	
4

	
  Section 4.9.

	
Changes in Corporate Structure

	
4

	
  Section 4.10.

	
Affiliate Guaranty

	
4

	
  Section 4.11.

	
Funding Instructions

	
4

	
  Section 4.12.

	
Proceedings and Documents

	
4

	  	  	  
	
SECTION 5.

	
REPRESENTATIONS AND WARRANTIES OF THE ISSUER

	
5

	  	  	  
	
  Section 5.1.

	
Organization; Power and Authority

	
5

	
  Section 5.2.

	
Authorization, Etc

	
5

	
  Section 5.3.

	
Disclosure

	
5

	
  Section 5.4.

	
Organization and Ownership of Shares of Subsidiaries; 

  Affiliates

	
6

	
  Section 5.5.

	
Financial Statements; Material Liabilities

	
7

	
  Section 5.6.

	
Compliance with Laws, Other Instruments, Etc

	
7

	
  Section 5.7.

	
Governmental Authorizations, Etc

	
7

	
  Section 5.8.

	
Litigation; Observance of Agreements, Statutes and Orders

	
7

	
  Section 5.9.

	
Taxes

	
8

	
  Section 5.10.

	
Title to Property; Leases

	
8

	
  Section 5.11.

	
Licenses, Permits, Etc

	
8

	
  Section 5.12.

	
Compliance with ERISA

	
9

	
  Section 5.13.

	
Private Offering by the Issuer

	
9

	
  Section 5.14.

	
Use of Proceeds; Margin Regulations

	
9

	
  Section 5.15.

	
Existing Indebtedness; Future Liens

	
10

	
  Section 5.16.

	
Foreign Assets Control Regulations, Etc

	
10

	
  Section 5.17.

	
Status under Certain Statutes

	
11

	
  Section 5.18.

	
Environmental Matters

	
11

	
  Section 5.19.

	
REIT Status

	
12

	
  Section 5.20.

	
Senior Debt Status

	
12

	  	  	  
	
SECTION 6.

	
REPRESENTATIONS OF THE PURCHASERS

	
12

	  	  	  
	
  Section 6.1.

	
Purchase for Investment

	
12

	
  Section 6.2.

	
Source of Funds

	
12

	  	  	  
	
SECTION 7.

	
INFORMATION AS TO ISSUER

	
14

	  	  	  
	
  Section 7.1.

	
Financial and Business Information

	
14

	
  Section 7.2.

	
Officer’s Certificate

	
17

	
  Section 7.3.

	
Visitation

	
17

	  	  	  
	
SECTION 8.

	
PAYMENT AND PREPAYMENT OF THE NOTES

	
18

	  	  	  
	
  Section 8.1.

	
Maturity

	
18

	
  Section 8.2.

	
Optional Prepayments with Make-Whole Amount

	
18

	
  Section 8.3.

	
Allocation of Partial Prepayments

	
18

	
  Section 8.4.

	
Maturity; Surrender, Etc

	
18

	
  Section 8.5.

	
Purchase of Notes

	
18

	
  Section 8.6.

	
Make-Whole Amount

	
19

	
  Section 8.7.

	
Change in Control

	
20

	  	  	  
	
SECTION 9.

	
AFFIRMATIVE COVENANTS

	
21

	  	  	  
	
  Section 9.1.

	
Compliance with Law

	
21

	
  Section 9.2.

	
Insurance

	
21

	
  Section 9.3.

	
Maintenance of Properties

	
22

	
  Section 9.4.

	
Payment of Taxes and Claims

	
22

	
  Section 9.5.

	
Corporate Existence, Etc

	
22

	
  Section 9.6.

	
Books and Records

	
22

	
  Section 9.7.

	
Additional Guarantors

	
22

	
  Section 9.8.

	
Priority of Obligations

	
23

	
  Section 9.9.

	
Rating

	
23

	  	  	  
	
SECTION 10.

	
NEGATIVE COVENANTS

	
24

	  	  	  
	
  Section 10.1.

	
Transactions with Affiliates

	
24

	
  Section 10.2.

	
Merger, Consolidation, Etc

	
24

	
  Section 10.3.

	
Line of Business

	
25

	
  Section 10.4.

	
Terrorism Sanctions Regulations

	
25

	
  Section 10.5.

	
Liens

	
25

	
  Section 10.6.

	
Financial Covenants

	
25

	
  Section 10.7.

	
Negative Covenants of the Parent and the QRS Subsidiary

	
26

	  	  	  
	
SECTION 11.

	
EVENTS OF DEFAULT

	
26

	  	  	  
	
SECTION 12.

	
REMEDIES ON DEFAULT, ETC

	
29

	  	  	  
	
  Section 12.1.

	
Acceleration

	
29

	
  Section 12.2.

	
Other Remedies

	
29

	
  Section 12.3.

	
Rescission

	
29

	
  Section 12.4.

	
No Waivers or Election of Remedies, Expenses, Etc

	
30

	  	  	  
	
SECTION 13.

	
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

	
30

	  	  	  
	
  Section 13.1.

	
Registration of Notes

	
30

	
  Section 13.2.

	
Transfer and Exchange of Notes

	
30

	
  Section 13.3.

	
Replacement of Notes

	
31

	  	  	  
	
SECTION 14.

	
PAYMENTS ON NOTES

	
31

	  	  	  
	
  Section 14.1.

	
Place of Payment

	
31

	
  Section 14.2.

	
Home Office Payment

	
31

	  	  	  
	
SECTION 15.

	
EXPENSES, ETC

	
32

	  	  	  
	
  Section 15.1.

	
Transaction Expenses

	
32

	
  Section 15.2.

	
Survival

	
32

	  	  	  
	
SECTION 16.

	
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;

 ENTIRE AGREEMENT

	
32

	  	  	  
	
SECTION 17.

	
AMENDMENT AND WAIVER

	
33

	  	  	  
	
  Section 17.1.

	
Requirements

	
33

	
  Section 17.2.

	
Solicitation of Holders of Notes

	
33

	
  Section 17.3.

	
Binding Effect, Etc

	
34

	
  Section 17.4.

	
Notes Held by Issuer, Etc

	
34

	  	  	  
	
SECTION 18.

	
NOTICES

	
34

	  	  	  
	
SECTION 19.

	
REPRODUCTION OF DOCUMENTS

	
34

	  	  	  
	
SECTION 20.

	
CONFIDENTIAL INFORMATION

	
35

	  	  	  
	
SECTION 21.

	
SUBSTITUTION OF PURCHASER

	
36

	  	  	  
	
SECTION 22.

	
MISCELLANEOUS

	
36

	  	  	  
	
  Section 22.1.

	
Successors and Assigns

	
36

	
  Section 22.2.

	
Payments Due on Non-Business Days

	
36

	
  Section 22.3.

	
Accounting Terms

	
37

	
  Section 22.4.

	
Severability

	
37

	
  Section 22.5.

	
Construction, Etc

	
37

	
  Section 22.6.

	
Counterparts

	
37

	
  Section 22.7.

	
Governing Law

	
37

	
  Section 22.8.

	
Jurisdiction and Process; Waiver of Jury Trial

	
37

	
Schedule A

	
Information Relating to Purchasers

	  	  
	
Schedule B

	
Defined Terms

	  	  
	
Schedule 5.3 

	
Disclosure Materials

	  	  
	
Schedule 5.4 

	
Subsidiaries of the Issuer and Ownership of Subsidiary Stock

	  	  
	
Schedule 5.5 

	
Financial Statements

	  	  
	
Schedule 5.15

	
Existing Indebtedness

	  	  
	
Exhibit 1-A

	
Form of 4.46% Senior Guaranteed Note, Series A, due December 19, 2018

	  	  
	
Exhibit 1-B

	
Form of 5.00% Senior Guaranteed Note, Series B, due December 19, 2021

	  	  
	
Exhibit 2

	
Form of Affiliate Guaranty

	  	  
	
Exhibit 4.4(a)

	
Form of Opinion of Special Counsel for the Parent, the Issuer and the other 

  Guarantors

	  	  
	
Exhibit 4.4(b) 

	
Form of Opinion of Special Counsel for the Purchasers

	  	  

 

--

  

  

  

 

Home Properties, L.P.

c/o Home Properties, Inc.

850 Clinton Square

Rochester, New York  14604

4.46% Senior Guaranteed Notes, Series A, due December 19, 2018

and

5.00% Senior Guaranteed Notes, Series B, due December 19, 2021

Dated as of December 19, 2011

To Each of the Purchasers Listed in

Schedule A Hereto:

 

Ladies and Gentlemen:

 

Home Properties, L.P., a New York Limited Partnership (the “Issuer”) and Home Properties, Inc., a Maryland corporation (the “Parent”), agree with each of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the “Purchasers”) as follows:

 

 

	
  

	
Section 1.   Authorization of Notes; Affiliate Guaranty.

 

Section 1.1. Authorization of Notes.  The Issuer will authorize the issue and sale of (a) $90,000,000 aggregate principal amount of its 4.46% Senior Guaranteed Notes, Series A, due December 19, 2018 (the “Series A Notes”) and (b) $60,000,000 aggregate principal amount of its 5.00% Senior Guaranteed Notes, Series B, due December 19, 2021 (the
“Series B Notes” and together with the Series A Notes, the “Notes”, such term to include any such notes issued in substitution therefor pursuant to Section 13).  Each series of Notes issued hereunder is sometimes referred to as Notes of a “Series.”  The Notes shall be substantially in the form set out in Exhibit 1.  Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

 

Section 1.2. Affiliate Guaranty.  The payment by the Issuer of all amounts due with respect to the Notes and the performance by the Issuer of its obligations under this Agreement will be absolutely and unconditionally guaranteed by the Parent and certain of its and the Issuer’s Subsidiaries pursuant to the guaranty agreement substantially in the form of Exhibit 2 attached hereto and made a part hereof (as the same may be amended, modified, extended or renewed,
the “Affiliate Guaranty”).

 

 

  

  

Table of Contents

 

	
  

	
Section 2.    Sale and Purchase of Notes.

 

Subject to the terms and conditions of this Agreement, the Issuer will issue and sell to each Purchaser and each Purchaser will purchase from the Issuer, at the Closing provided for in Section 3, Notes of the Series and in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

 

	
  

	
Section 3.   Closing.

 

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 W. Monroe Street, Chicago, Illinois 60603, at 10:00 a.m., Chicago time, at a closing (the “Closing”) on December 19, 2011 or on such other Business Day thereafter on or prior to December 22, 2011 as may be agreed upon by the Issuer and the Purchasers.  At the Closing the Issuer will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note for each Series of Notes purchased (or such greater number of Notes in denominations of at
least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Issuer or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Issuer to the account number and name designated to the Purchasers at least three Business Days prior to the Closing.  If at the Closing the Issuer shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s reasonable satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser
may have by reason of such failure or such nonfulfillment.

 

	
  

	
Section 4.    Conditions to Closing.

 

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s reasonable satisfaction, prior to or at the Closing, of the following conditions:

 

Section 4.1. Representations and Warranties.  (a) The representations and warranties with respect to the Parent and the Issuer in this Agreement shall be correct when made and at the time of the Closing.

 

(b)The representations and warranties in this Agreement with respect to the other Guarantors shall be correct when made and at the time of the Closing.

 

Section 4.2. Performance; No Default. (a) The Issuer shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by
Section 5.14) no Default or Event of Default shall have occurred and be continuing.  Neither the Issuer nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 had such Section applied since such date.

 

 

  

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(b)Each Guarantor shall have performed and complied with all agreements and conditions contained in this Agreement or the Affiliate Guaranty required to be performed and complied with by it prior to or at the Closing, and after giving effect to the issue and sale of Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  Neither the Parent nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 had such Section applied since
such date.

 

Section 4.3. Compliance Certificates.

 

(a)Officer’s Certificate.  The Parent and the Issuer shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

 

(b)Guarantor Officer’s Certificate.  Each other Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Section 4.1(b), 4.2(b) and 4.9 have been fulfilled as to such Guarantor.

 

(c)Secretary’s Certificate.  The Parent shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement by Parent for itself and on behalf of the Issuer.

 

(d)Guarantor Officer’s Certificate.  Each other Guarantor shall have delivered to such Purchaser a certificate of an authorized officer, dated the date of the Closing, certifying as to the resolutions attached thereto and other legal proceedings relating to the authorization, execution and delivery of the Affiliate Guaranty.

 

(e)Certificates.  The certificates provided under this Section 4.3 may be combined and delivered as one or more certificates.

 

Section 4.4. Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Nixon, Peabody LLP, counsel for the Parent, the Issuer and the other Guarantors, covering the matters set forth in Exhibit 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Issuer hereby
instructs its counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

 

 

  

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Section 4.5. Purchase Permitted By Applicable Law, Etc.  On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably request to enable such Purchaser to determine whether such purchase is so permitted.

 

Section 4.6. Sale of Other Notes.  Contemporaneously with the Closing the Issuer shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule A.

 

Section 4.7. Payment of Special Counsel Fees.  Without limiting the provisions of Section 15.1, the Issuer shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Issuer at least one Business Day prior to the Closing.

 

Section 4.8. Private Placement Number.  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each Series of the Notes.

 

Section 4.9. Changes in Corporate Structure.  The Issuer shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

 

Section 4.10. Affiliate Guaranty.  The Affiliate Guaranty shall have been executed and delivered by each Guarantor and shall be in full force and effect.

 

Section 4.11. Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Issuer confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to
be deposited.

 

Section 4.12. Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments required pursuant to the terms of this Agreement shall be reasonably satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such
special counsel may reasonably request.

 

 

  

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Section 5.   Representations and Warranties of the Issuer.

 

The Parent and Issuer represent and warrant to each Purchaser as of the date hereof and as of the Closing that:

 

Section 5.1. Organization; Power and Authority.  The Parent is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  The Issuer is a limited partnership duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The sole General Partner of the Issuer is the Parent.  Each of the Parent and the Issuer has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and, in the case of the Issuer,
the Notes and to perform the provisions hereof and thereof.

 

Section 5.2. Authorization, Etc.  Each Note Document to which the Issuer is a party has been duly authorized by all necessary partnership action on the part of the Issuer, and the General Partner has the requisite power and authority to execute, deliver and perform this Agreement and the other Note Documents on behalf of the Issuer.  Each Note Document to which a Guarantor is a party has been duly authorized by all necessary action of each such Guarantor, and
each Guarantor has the requisite power and authority to execute, deliver and perform each Note Document to which it is a party.  Each Note Document to which the Issuer is a party constitutes, and upon execution and delivery thereof will constitute, a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  Each Note Document to which any Guarantor is a party constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with
its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

Section 5.3. Disclosure.  The Issuer, through its agents, Merrill Lynch, Pierce, Fenner & Smith, Incorporated and M&T Bank (the “Agents”), has delivered to each Purchaser a copy of a Private Placement Memorandum, dated November 8, 2011 (the “Memorandum”), relating to the transactions contemplated hereby.  The
Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Parent, the Issuer and their Subsidiaries.  This Agreement, the Memorandum and the documents, certificates or other instruments delivered to the Purchasers by or on behalf of the Issuer and the Guarantors in connection with the transactions contemplated hereby and identified in Schedule 5.3, and the financial statements listed in Schedule 5.5 (this Agreement, the Memorandum and such documents, certificates or other instruments and such financial statements delivered to each Purchaser prior to November 18, 2011 being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the circumstances under which they were made, provided that no representation is made as to any forward looking statements or projections, the Parent represents only that such information was prepared in good faith on the basis of (A) assumptions, estimates, methods and tests that are believed by the Parent to be reasonable at the time such projections were prepared and (B) information believed by the Parent to have been accurate based upon the information available to the Parent at the time such projections were furnished to the Purchasers; it being understood that (x) projections are by their nature subject to significant uncertainties and contingencies, many of which are beyond the Parent’s control, (y) actual results may differ
materially from the projections and such variations may be material, and (z) the projections are not a guarantee of performance.  Except as disclosed in the Disclosure Documents, since December 31, 2010, there has been no change in the financial condition, operations, business or properties of the Parent, the Issuer or any Subsidiary taken as a whole except changes that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Parent or the Issuer that would reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

 

 

  

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Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.  

 

(a)Schedule 5.4 contains (except as noted therein) complete and correct lists (i) of the Parent’s and the Issuer’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Parent and each other Subsidiary, (ii) of the Parent’s and the Issuer’s Affiliates, other than Subsidiaries, and (iii) of the Parent’s and the Issuer’s directors and senior officers.

 

(b)All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Parent, the Issuer and their Subsidiaries have been validly issued, are fully paid and nonassessable, except as otherwise provided by applicable law and only to the extent such concept is applicable to such entity, and are owned by the Parent, the Issuer or another Subsidiary free and clear of any Lien, except as otherwise disclosed in Schedule 5.4.

 

(c)Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing (to the extent such concept is applicable to legal entities of that type) under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

 

 

  

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(d)No Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Parent, the Issuer or any of their Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

 

Section 5.5. Financial Statements; Material Liabilities.  The Parent has delivered to each Purchaser copies of the consolidated financial statements of the Parent as listed on Schedule 5.5.  All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Parent and its Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).  The Parent and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

 

Section 5.6. Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Parent, the Issuer or any of the other Guarantors of any Note Document to which it is a party will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Parent, the Issuer or any of their Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Parent, the Issuer or any of their Subsidiaries is bound or by which the Parent, the Issuer or any of their Subsidiaries or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Parent, the Issuer or any of their Subsidiaries or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Parent, the Issuer or any of their Subsidiaries. 

 

Section 5.7. Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Parent, the Issuer or any of their Subsidiaries of any Note Document.

 

Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.  (a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Parent, threatened against or affecting the Parent, the Issuer or any of their Subsidiaries or any property of the Parent, the Issuer or any of their Subsidiaries in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.

 

 

  

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(b)Neither the Parent, the Issuer nor any of their Subsidiaries is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot Act) of any Governmental Authority, which default or violation, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

Section 5.9. Taxes.  Each of the Parent, the Issuer and each of their Subsidiaries has filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Parent, the Issuer or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  Neither the Parent nor the Issuer knows of any basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Parent, the Issuer and each of their Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the Parent, the Issuer and their Subsidiaries have been finally determined (whether by reason of completed audits or the
statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2007.

 

Section 5.10. Title to Property; Leases.  Each of the Parent, the Issuer and their Subsidiaries has good and sufficient title to its respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Parent, the Issuer or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary
course of business), in each case free and clear of Liens prohibited by this Agreement.  All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

 

Section 5.11. Licenses, Permits, Etc.  (a) The Parent, the Issuer and their Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.

 

(b)To the best knowledge of the Parent and the Issuer, no product of the Parent, the Issuer or any of their Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person.

 

(c)To the best knowledge of the Issuer, there is no Material violation by any Person of any right of the Parent, the Issuer or any of their Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Parent, the Issuer or any of their Subsidiaries.

 

 

  

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Section 5.12. Compliance with ERISA..  (a) Neither the Parent nor any ERISA Affiliate maintains, contributes to or is obligated to maintain or contribute to, or has at any time within the past five years, maintained, contributed to or been obligated to maintain or contribute to, any Plan which is subject to Title IV of ERISA.

 

(b)The Parent and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncom­pliance as have not resulted in and would not reasonably be expected to result in a Material Adverse Effect.  Neither the Parent nor any ERISA Affiliate has incurred any liability pursuant to Title I of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by the Parent or any ERISA Affiliate pursuant to Title I of ERISA or to such penalty or excise tax provisions, other than such liabilities as would not be individually or in the aggregate Material.

 

(c)The expected postretirement benefit obligation (determined as of the last day of the Parent’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Parent and its Subsidiaries is not Material.

 

(d)The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation by the Parent to each Purchaser in the first sentence of this Section 5.12(d) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such
Purchaser.

 

Section 5.13. Private Offering by the Issuer.  Neither the Issuer, the Parent nor the Agents, the only Persons authorized to act on behalf of the Issuer and the Parent, have offered the Notes or any similar securities for sale to (in any offering that could be integrated with the offering of the Notes under the Securities Act), or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the
Purchasers and not more than sixty (60) other Institutional Investors, each of which has been offered the Notes at a private sale for investment.  Neither the Issuer, the Parent nor anyone acting on their behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14. Use of Proceeds; Margin Regulations.  The Issuer will apply the proceeds of the sale of the Notes as set forth under the heading “Executive Summary – D.  Summary of Proposed Offering” in the Memorandum.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Issuer in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 5% of the value of the consolidated assets of the Issuer and its Subsidiaries and the Issuer does not have any present intention that margin stock will constitute more than 5% of the value of such assets.  As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

 

 

  

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Section 5.15. Existing Indebtedness; Future Liens.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Parent, the Issuer and their Subsidiaries as of October 31, 2011 (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any), since which date there has been no Material change in the amounts,
interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Parent, the Issuer or their Subsidiaries.  None of the Parent, the Issuer nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Parent, the Issuer or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Parent, the Issuer or any Subsidiary the outstanding principal amount of which exceeds $20,000,000 that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

 

(b)Except as disclosed in Schedule 5.15, none of the Parent, the Issuer nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that is Material.

 

(c)None of the Parent, the Issuer nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Parent or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Issuer, the Parent or any Subsidiary Guarantor except as specifically indicated in Schedule 5.15.

 

Section 5.16. Foreign Assets Control Regulations, Etc.  (a) None of the Parent, the Issuer nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, U.S. Department of Treasury (“OFAC”) (an “OFAC Listed
Person”) or (ii) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (ii) a “Blocked Person”).

 

 

  

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(b)No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used, directly by the Parent, the Issuer or indirectly through any Controlled Entity, in connection with any investment in, or any transactions or dealings with, any Blocked Person.

 

(c)To the Parent’s and the Issuer’s actual knowledge after making due inquiry, neither the Parent, the Issuer nor any Controlled Entity (i) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under any applicable law (collectively, “Anti-Money Laundering Laws”), (ii) has been assessed civil penalties under any Anti-Money Laundering Laws or (iii) has had any of its funds
seized or forfeited in an action under any Anti-Money Laundering Laws.  The Parent and the Issuer have taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that the Parent and the Issuer and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws.

 

(d)No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments to any governmental official or employee, political party, official of a political party, candidate for political office, official or any public international organization or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage.  The Parent and the Issuer have taken reasonable measures appropriate to the circumstances (in any event as required by applicable law) to ensure that the Parent and the Issuer and each
Controlled Entity is and will continue to be in compliance with all applicable current and future anti-corruption laws and regulations.

 

Section 5.17. Status under Certain Statutes.  None of the Parent, the Issuer or any of their Subsidiaries is subject to regulation under the Investment Issuer Act of 1940, as amended.

 

Section 5.18. Environmental Matters.  (a) Neither the Parent, the Issuer nor any of their Subsidiaries has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against the Parent, the Issuer or any of their Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect. 

 

(b)Neither the Parent, the Issuer nor any of their Subsidiaries has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.

 

(c)Neither the Parent, the Issuer nor any of their Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that would reasonably be expected to result in a Material Adverse Effect; and

 

 

  

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(d)All buildings on all real properties now owned, leased or operated by the Parent, the Issuer or any of their Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply would not reasonably be expected to result in a Material Adverse Effect.

 

Section 5.19. REIT Status.  The Parent has taken all actions necessary to qualify as a REIT under the Code for the taxable years ended December 31, 2010, 2009 and 2008, and has not taken any action which would prevent it from maintaining such qualification in the future.  Each Subsidiary of the Parent that is treated as a corporation for U.S. federal income tax purposes is either (i) a “qualified REIT subsidiary” within the meaning of
Section 856(i)(2) of the Code or (ii) a “taxable REIT subsidiary” within the meaning of Section 856(1) of the Code.

 

Section 5.20. Senior Debt Status.  The Issuer’s obligations hereunder and under the Notes and the Parent’s obligations under the Affiliate Guaranty rank at least pari passu in priority of payment with all other senior unsecured Indebtedness of the Issuer and the Parent, as the case may be.

 

	
  

	
Section 6.   Representations of the Purchasers.

 

Section 6.1. Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property
shall at all times be within such Purchaser’s or their control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Issuer is not required to register the Notes.

 

Section 6.2. Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

 

(a)the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

 

 

  

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(b)the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

 

(c)the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Issuer in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

 

(d)the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are included such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, as of the last day of its most recent calendar quarter, the QPAM does not own a 10% or more interest in the Issuer and no Person controlling or controlled by the QPAM (applying the definition of “control” in Section VI(e) of the QPAM Exemption) owns a 20% or more interest in the Issuer (or less than 20% but greater than 10%, if such Person exercises control over the management or policies of the Issuer by reason of its ownership interest),
and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Issuer in writing pursuant to this clause (d); or

 

(e)the Source constitutes assets of a “plan(s)” (within the meaning of Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, as of the last day of its most recent calendar quarter, neither the INHAM nor a Person controlling or controlled by the INHAM
(applying the definition of “control” in Section IV(d) of the INHAM Exemption) owns a 10% or more interest in the Issuer and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Issuer in writing pursuant to this clause (e); or

 

(f)the Source is a governmental plan; or

 

 

  

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(g)the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Issuer in writing pursuant to this clause (g); or

 

(h)the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

 

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

 

	
  

	
Section 7.   Information as to Issuer.

 

Section 7.1. Financial and Business Information.  The Parent shall deliver to each holder of record of Notes that is an Institutional Investor:

 

(a)Quarterly Statements — within 45 days after the end of each quarterly fiscal period in each fiscal year of the Parent (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of:

 

(i)a consolidated balance sheet of the Parent, the Issuer and their Subsidiaries as at the end of such quarter, and

 

(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent, the Issuer and their Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

 

setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Parent’s Form 10-Q prepared in compliance with the requirements therefor and filed with
the SEC shall be deemed to satisfy the requirements of this Section 7.1(a), provided, further, that the Issuer shall be deemed to have made such delivery of such Form 10-Q if it shall have timely made such Form 10-Q available on “EDGAR” and on its home page on the worldwide web (at the date of this Agreement located at:  http//www.homeproperties.com) and shall have given each Purchaser prior notice of such availability on EDGAR and on its home page in connection with each delivery (such availability and notice thereof being referred to as “Electronic Delivery”);

 

 

  

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(b)Annual Statements — within 90 days after the end of each fiscal year of the Parent, duplicate copies of

 

(i)a consolidated balance sheet of the Parent, the Issuer and their Subsidiaries as at the end of such year, and

 

(ii)consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent, the Issuer and their Subsidiaries for such year,

 

setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with the standards of the Public Company Accounting Oversight Board (United States), and that
such audit provides a reasonable basis for such opinion in the circumstances,

 

provided that the delivery within the time period specified above of the Parent’s Form 10-K for such fiscal year (together with the Parent’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b);

 

(c)SEC and Other Reports — promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Parent, the Issuer or any Subsidiary to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all amendments thereto filed by the Parent, the Issuer or any Subsidiary with the SEC and of all press releases and other statements made available generally by the Parent, the Issuer or any Subsidiary to the public concerning developments that are Material;

 

(d)Notice of Default or Event of Default — promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any written notice or taken any action with respect to a claimed default hereunder or that any Person has given any written notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Issuer is taking or
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(e)ERISA Matters — promptly, and in any event within five days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Parent or an ERISA Affiliate proposes to take with respect thereto:

 

(i)with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

 

(ii)the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Parent or any ERISA Affiliate of a notice from a Multi-employer Plan that such action has been taken by the PBGC with respect to such Multi-employer Plan; or

 

(iii)any event, transaction or condition that could result in the incurrence of any liability by the Parent or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Parent or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse
Effect;

 

(f)Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any written notice to the Parent or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect; and

 

(g)Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Parent or any of its Subsidiaries (including, but without limitation, actual copies of the Parent’s Form 10-Q and Form 10-K) or relating to the ability of (i) the Parent or the Issuer to perform its obligations hereunder and, in the case of the Issuer, under the Notes or (ii) the ability of any Guarantor to perform its obligations under the Affiliate
Guaranty, as from time to time may be reasonably requested by any holder of Notes by notice as provided in Section 18.

 

 

  

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Section 7.2. Officer’s Certificate.  Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by an Officer’s Certificate (which, in the case of Electronic Delivery of any such financial statements, shall be by separate concurrent delivery of such certificate to each holder of Notes) setting forth:

 

(a)Covenant Compliance — the information (including detailed calculations) required in order to establish whether the Parent and the Issuer was in compliance with the requirements of Section 10.5 through Section 10.6, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and

 

(b)Event of Default — a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Parent, the Issuer and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Parent, the Issuer or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Issuer shall have taken or proposes to take with respect thereto.

 

Section 7.3. Visitation.  The Parent and the Issuer shall permit the representatives of each holder of Notes that is an Institutional Investor, and in each case subject to the confidentiality provisions of Section 20:

 

(a)No Default — if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Parent and the Issuer, to visit the principal executive office of the Parent or the Issuer, to discuss the affairs, finances and accounts of the Parent, the Issuer and their Subsidiaries with the Parent’s and the Issuer’s officers, and with the consent of the Parent or the Issuer, as the case may be, which consent will not be unreasonably withheld, to visit with a representative of Parent the other offices and
properties of the Parent, the Issuer and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing but not more frequently than once a year; and

 

(b)Default — if a Default or Event of Default then exists, at the expense of the Parent and the Issuer to visit and inspect any of the offices or properties of the Parent, the Issuer or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Parent and the Issuer authorize said accountants to discuss the affairs,
finances and accounts of the Parent, the Issuer and its Subsidiaries), all at such times and as often as may be reasonably requested.

 

 

  

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Section 8.   Payment and Prepayment of the Notes.

 

Section 8.1. Maturity.  As provided therein, the entire unpaid principal balance of each Series of the Notes shall be due and payable on the stated maturity date thereof.

 

Section 8.2. Optional Prepayments with Make-Whole Amount.  The Issuer may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $5,000,000 in aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal
amount.  The Issuer will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not fewer than 30 days and not more than 60 days prior to the date fixed for such prepayment.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by an Officer’s Certificate as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days
prior to such prepayment, the Issuer shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

 

Section 8.3. Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding (without regard to Series) in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  Any prepayments pursuant to Section 8.7 shall be applied only to the Notes of the
holders electing to participate in such prepayment.

 

Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date,
unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Issuer and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

 

Section 8.5. Purchase of Notes.  Neither the Parent nor the Issuer will, nor will they permit any of their Affiliates to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Parent, the Issuer or any of their Affiliates pro rata to the holders of all Notes
at the time outstanding upon the same terms and conditions (except to the extent necessary to reflect differences in interest rates and maturities of Notes of different Series).  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 15 Business Days.  If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Issuer shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer.  The Issuer will promptly cancel all Notes acquired by it, the Parent or any other
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

 

 

  

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Section 8.6. Make-Whole Amount.

 

“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

 

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Note, .50% over the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date,
or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  

 

 

  

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In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the applicable U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the applicable U.S. Treasury security with the maturity closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the
applicable Note.

 

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be
paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.

 

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

Section 8.7. Change in Control.

 

(a)Notice of Change in Control.  The Issuer will, within five (5) Business Days after the occurrence of any Change in Control, give written notice (the “Change in Control Notice”) of such Change in Control to each holder of Notes.  Such Change in Control Notice shall contain and constitute an offer to prepay the Notes as described in Section 8.7(b) hereof and shall be accompanied by the certificate described in Section 8.7(e).

 

(b)Offer to Prepay Notes.  The offer to prepay Notes contemplated by Section 8.7(a) shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such Change in Control Notice (the “Proposed Prepayment
Date”).  Such date shall be not fewer than 30 days and not more than 90 days after the date of delivery of the Change in Control Notice.

 

 

  

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(c)Acceptance.  Any holder of Notes may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance to be delivered to the Issuer not fewer than 10 days prior to the Proposed Prepayment Date.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a rejection of such offer by such holder.

 

(d)Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of the Notes together with accrued and unpaid interest thereon but without any Make-Whole Amount or other premium.  The prepayment shall be made on the Proposed Prepayment Date.

 

(e)Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer and dated the date of delivery of the Change in Control Notice, specifying:  (i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note offered to be prepaid (which shall be 100% of the outstanding principal balance of each such Note); (iv) the interest that would be due on
each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that the conditions of this Section 8.7 required to be fulfilled prior to the giving of notice have been fulfilled and (vi) in reasonable detail, the general nature and date of the Change in Control.

 

	
  

	
Section 9.   Affirmative Covenants.

 

The Parent and the Issuer covenant that so long as any of the Notes are outstanding:

 

Section 9.1. Compliance with Law.  Without limiting Section 10.4, the Parent and the Issuer will, and will cause each of their Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot Act, Environmental Laws and other laws and regulations that are referred to in Section 5.16, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.2. Insurance.  The Parent and the Issuer will, and will cause each of their Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves, to the extent required by GAAP, are maintained with respect thereto) as is
customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.

 

 

  

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Section 9.3. Maintenance of Properties.  The Parent and the Issuer will, and will cause each of their Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not
prevent the Parent, the Issuer or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Parent or the Issuer, as the case may be, has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 9.4. Payment of Taxes and Claims.  The Parent and the Issuer will, and will cause each of their Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have
become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Parent, the Issuer or any Subsidiary, provided that neither the Parent, the Issuer nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Parent, the Issuer or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Parent, the Issuer or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Parent, the Issuer or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect.

 

Section 9.5. Corporate Existence, Etc.  Subject to Section 10.2, the Parent and the Issuer will at all times preserve and keep in full force and effect its their respective entity existence.  Subject to Section 10.2, the Parent and the Issuer will at all times preserve and keep in full force and effect the existence of each of its Subsidiaries (unless merged into the Parent, the Issuer or a Wholly-Owned Subsidiary) and all rights and franchises of the
Issuer and its Subsidiaries unless, in the good faith judgment of the Parent, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.

 

Section 9.6. Books and Records.  Each of the Parent and the Issuer will, and will cause each of their Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Parent, the Issuer or such Subsidiary, as the case may be.

 

Section 9.7. Additional Guarantors.

 

(a)Requirements to Become a Guarantor.  The Issuer shall cause any Subsidiary of the Issuer that is not already a Guarantor (a “New Guarantor”) that owns an Eligible Project that the Issuer would like to include as an Unencumbered Eligible Project hereunder to execute and deliver to the holders of the Notes an Accession Agreement to the Affiliate Guaranty as a condition to including such Eligible Project as an Unencumbered Eligible Project in accordance with the terms
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(b)Deliveries with Respect to New Guarantors.  No later than 45 days following the last day of each fiscal quarter of the Parent during which any New Guarantor has executed and delivered an Accession Agreement, the Issuer shall deliver to the holders of the Notes an opinion of counsel (who may be in-house counsel for the Issuer) addressed to each of the holders of the Notes in form reasonably satisfactory to the Required Holders, including an opinion that the Accession Agreement to the Affiliate Guaranty by such Person has been duly authorized,
executed and delivered by the New Guarantor and that the Affiliate Guaranty constitutes the legal, valid and binding contract and agreement of such Person enforceable in accordance with its terms, except as an enforcement of such terms may be limited by bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

 

(c)Release of Guarantors.  Subject to Section 9.7(d), the Issuer may request in writing that the holders of the Notes release a Guarantor, other than the Parent, if (i) upon its release as a Guarantor, such entity will no longer own an Unencumbered Eligible Project, (ii) no Default or Event of Default shall then be in existence or would occur as a result of such release and (iii) if any fee or other form of consideration is given to any holder of Indebtedness of the Parent, the Issuer or any Subsidiary for the purpose of releasing such
Guarantor, holders of the Notes shall receive equivalent consideration.  Together with any such request, the Issuer shall deliver to the holders of the Notes an Officer’s Certificate certifying that the conditions set forth in immediately preceding clauses (i) and (ii) will be true and correct upon the release of such Guarantor.  No later than 10 Business Days following the holders of the Notes receipt of such written request and the related Officer’s Certificate and so long as the conditions set forth in immediately preceding clauses (i) and (ii) will be true and correct, the release shall be effective automatically and the holders of the Notes shall execute and deliver, at the sole cost and expense of the Issuer, such documents as Issuer may reasonably request to evidence such release.

 

(d)Notwithstanding anything contained herein to the contrary, the Parent and the Issuer agree that so long as any Subsidiary of the Parent (other than the Issuer) or any Subsidiary of the Issuer is a borrower or guarantor under any Primary Credit Facility such Subsidiary shall at all times be a Guarantor.

 

Section 9.8. Priority of Obligations.  The Parent and the Issuer will ensure that their payment obligations under the Note Documents will at all times rank at least pari passu, without preference or priority, with all other senior unsecured unsubordinated Indebtedness of the Parent and the Issuer, respectively.

 

Section 9.9. Rating.  In the event that at any date the Issuer does not currently maintain a rating of its long-term unsecured Indebtedness by an Approved Rating Agency, then upon the written request of the Required Holders, the Company shall obtain a rating from an Approved Rating Agency no more than 180 days from the date of such request.

 

 

  

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Section 10.   Negative Covenants.

 

The Parent and the Issuer covenant that so long as any of the Notes are outstanding:

 

Section 10.1. Transactions with Affiliates.  Neither the Parent nor the Issuer will, nor will they permit any of their respective Subsidiaries to enter into directly or indirectly any transaction or group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate, other than the Parent, the Issuer or another Subsidiary,
except in the ordinary course and pursuant to the reasonable requirements of the Parent’s, the Issuer’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Parent, the Issuer or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate.

 

Section 10.2. Merger, Consolidation, Etc..  Neither the Parent nor the Issuer will, nor will they permit any other Guarantor to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:

 

(a)the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Parent, the Issuer or such other Guarantor as an entirety, as the case may be, shall be a solvent corporation or limited liability company or limited partnership organized and existing under the laws of the United States or any State thereof (including the District of Columbia), and, if the Parent (other than in a transaction including the Issuer), the Issuer (other than in a transaction involving the Parent) or such other Guarantor
(other than in a transaction involving the Parent or the Issuer) as applicable, is not such corporation or limited liability company or limited partnership,  such corporation or limited liability company or limited partnership shall have (i) executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes or the Affiliate Guaranty, as the case may be, and (ii) cause to be delivered to each holder of a Note an opinion or opinions of counsel reasonably satisfactory to the Required Holders as to the enforceability of such assumption and such other matters as the Required Holders may reasonably request; and

 

(b)each Guarantor shall have affirmed in writing its obligations under the Affiliate Guaranty to which it is a party; and

 

(c)immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.

 

No such conveyance, transfer or lease of substantially all of the assets of the Parent, the Issuer or such other Guarantor, as the case may be, shall have the effect of releasing the Parent, the Issuer or such other Guarantor, as the case may be, or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed in this Section 10.2 from its liability under this Agreement or the Notes or the Affiliate Guaranty, as the case may be.

 

 

  

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Section 10.3. Line of Business.  (a) The Parent will not and will not permit any Subsidiary to engage in any business if, as a result, the general nature of the business in which the Parent and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Issuer and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum.

 

(b)The Parent shall at all times (i) remain a publicly traded company listed on the New York Stock Exchange or another national securities exchange, (ii) maintain its status as a “real estate investment trust” under Sections 856-860 of the Code, and (iii) remain as a general partner of the Issuer with management and control of the Issuer.

 

Section 10.4. Terrorism Sanctions Regulations.  The Parent and the Issuer will not and will not permit any Controlled Entity to (a) become a Blocked Person or (b) have any investments in or engage in any dealings or transactions with any Blocked Person if such investments, dealings or transactions would cause any holder of a Note to be in violation of any laws or regulations that are administered or enforced by OFAC.

 

Section 10.5. Liens. Neither the Parent nor the Issuer will, nor will they permit any of their respective Subsidiaries to, secure any Indebtedness outstanding under or pursuant to any Primary Credit Facility unless and until the Notes (and any guaranty delivered in connection therewith) shall be concurrently secured equally and ratably with such Indebtedness pursuant to documentation reasonably acceptable to the Required
Holders in substance and in form.

 

Section 10.6. Financial Covenants. 

 

(a)Indebtedness and Other Financial Covenants.  Neither the Parent nor the Issuer shall, nor shall they permit any of their respective Subsidiaries to, directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness, except that the Parent, the Issuer and/or their respective Subsidiaries may create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness to the extent that it does not cause an Event of Default with the financial
covenants set forth in the next sentence.  The Parent and the Issuer shall not permit (i) Total Outstanding Indebtedness to exceed 60% of Total Value, (ii) Secured Indebtedness of the Consolidated Businesses to exceed 50% at any time prior to December 31, 2012, 47.5% at any time from December 31, 2012 to December 30, 2013 and 45% at all times from December 31, 2013 and thereafter, of Total Value, (iii) Recourse Secured Indebtedness to exceed 10% of Total Value, or (iv) Adjusted Recourse Secured Indebtedness to exceed 5% of Total Value.  Notwithstanding anything to the contrary herein contained, in no event shall (x) the aggregate amount of completion guarantees with respect to Projects at any time exceed 15% of Total Value or (y) the aggregate amount of Low Income Housing Credit Program Guarantees at any time exceed
$4,000,000.

 

(b)Minimum Equity Value.  The Equity Value shall at no time be less than $1,900,000,000, plus an amount equal to 85% of all Net Offering Proceeds of all Equity Issuances effected by the Parent or any Subsidiary of the Parent (including without limitation, the Issuer) after September 30, 2011 (other than Equity Issuances to the Parent or any Subsidiary of the Parent).

 

 

  

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(c)Minimum Consolidated Interest Coverage Ratio.  As of the first day of each calendar quarter for the immediately preceding four consecutive calendar quarters, the ratio of Adjusted EBITDA to Total Interest Expense for such period shall not be less than 2.0 to 1.0.

 

(d)Minimum Unsecured Interest Coverage Ratio.  As of the first day of each calendar quarter for the immediately preceding four consecutive calendar quarters, the ratio of the sum of Adjusted Unencumbered NOI of all Unencumbered Eligible Projects to Unsecured Interest Expense shall not be less than 1.75 to 1.0.

 

(e)Total Unencumbered Property Value.  At no time shall (i) the Total Outstanding Unsecured Indebtedness of the Consolidated Businesses be greater than 50% of the Total Unencumbered Property Value, (ii) the Total Unencumbered Property Value be less than $700,000,000 or (iii) the Unencumbered Eligible Projects consist of less than fifteen (15) Eligible Projects.  At no time shall the sum of items (i) and (ii) set forth in the definition of Total Unencumbered Property Value be less than $630,000,000.

 

Section 10.7. Negative Covenants of the Parent and the QRS Subsidiary.

 

Notwithstanding anything contained herein to the contrary, from and after the date hereof, the Parent will not incur any Indebtedness or any other obligations or liabilities or any Liens on its assets or any part thereof except (i)  as the general partner of the Issuer, (ii) Indebtedness, the net proceeds of which are contributed to the QRS Subsidiary or the Issuer, as the case may be, simultaneously with the incurrence thereof by the Parent, (iii) Guaranties of Indebtedness of any Affiliate of the Parent incurred in the ordinary course of such Affiliate’s business and (iv) the obligation to pay dividends when and if declared by the
Parent.  Notwithstanding anything contained herein to the contrary, from and after the date hereof, the QRS Subsidiary will not incur any Indebtedness or any other obligations or liabilities or any Liens on its assets or any part thereof.

 

	
  

	
Section 11.   Events of Default.

 

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

 

(a)the Issuer defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

(b)the Issuer defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

 

(c)the Parent or the Issuer defaults in the performance of or compliance with any term contained in Section 7.1(d) or Section 10.6; or

 

 

  

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(d)the Parent or the Issuer defaults in the perfor­mance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Issuer receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

 

(e)any representation or warranty made in writing by or on behalf of the Parent, the Issuer or any other Guarantor or by any officer of the Parent, the Issuer or any other Guarantor in this Agreement, the Affiliate Guaranty or in any other writing delivered to any holder in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or

 

(f)(i) the Parent, the Issuer or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $20,000,000 beyond any period of grace provided with respect thereto, or (ii) the Parent, the Issuer or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $20,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Parent, the Issuer or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $20,000,000, or (y) one or more Persons have the right to require the Parent, the Issuer or any Subsidiary so to purchase or
repay such Indebtedness; or

 

(g)the Parent, the Issuer, any Guarantor or any Significant Subsidiary: (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

 

(h)a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Parent, the Issuer, any Guarantor or any Significant Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Parent, the
Issuer any Guarantor or any Significant Subsidiary, or any such petition shall be filed against the Parent, the Issuer any Guarantor or any Significant Subsidiary and such petition shall not be dismissed within 60 days; or

 

 

  

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(i)a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 (in excess of the amount, if any, which is covered by insurance and for which insurance coverage has been acknowledged in writing by the applicable insurance carrier) are rendered against one or more of the Parent, the Issuer and their Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

 

(j)if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Issuer or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed $20,000,000, (iv) the Issuer or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Issuer or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Issuer or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Issuer or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or

 

(k)the Affiliate Guaranty or any other Note Document shall, at any time and for any reason other than pursuant to the terms thereof, cease to be in full force and effect or shall be declared null and void, or the validity or enforceability thereof shall be contested by the Parent or its Subsidiaries party thereto or the Parent or its Subsidiaries party thereto shall deny it has any further liability or obligation thereunder.

 

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.

 

 

  

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Section 12.   Remedies on Default, Etc.

 

Section 12.1. Acceleration.  (a) If an Event of Default with respect to the Issuer described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and
payable.

 

(b)If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Issuer, declare all the Notes then outstanding to be immediately due and payable.

 

(c)If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Issuer, declare all the Notes held by it or them to be immediately due and payable.

 

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Issuer acknowledges, and the parties hereto agree, that each holder of a Note has the right
to maintain its investment in the Notes free from repayment by the Issuer (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Issuer in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

 

Section 12.2. Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in
any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

Section 12.3. Rescission.  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders of the Notes then outstanding, by written notice to the Issuer, may rescind and annul any such declaration and its consequences if (a) the Issuer has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Issuer nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

 

 

  

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Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Issuer under Section 15, the Issuer will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

 

	
  

	
Section 13.   Registration; Exchange; Substitution of Notes.

 

Section 13.1. Registration of Notes.  The Issuer shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Issuer shall not be affected by any notice or knowledge to the contrary.  The Issuer shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

 

Section 13.2. Transfer and Exchange of Notes.  Upon surrender of any Note to the Issuer at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Issuer shall execute and deliver, at the Issuer’s expense (except as provided below), one or more new Notes of the same Series (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1-A or 1-B, respectively.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Issuer may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.

 

 

  

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Section 13.3. Replacement of Notes.  Upon receipt by the Issuer at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation),
and

 

(a)in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

(b)in the case of mutilation, upon surrender and cancellation thereof,

 

within ten Business Days thereafter, the Issuer at its own expense shall execute and deliver, in lieu thereof, a new Note, of the same Series dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

	
  

	
Section 14.   Payments on Notes.

 

Section 14.1. Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in Rochester, New York at the principal office of the Issuer in such jurisdiction.  The Issuer may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the
principal office of the Issuer in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

 

Section 14.2. Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Issuer will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as
such Purchaser shall have from time to time specified to the Issuer in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Issuer made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Issuer at its principal executive office or at the place of payment most recently designated by the Issuer pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Issuer in exchange for a new Note or
Notes pursuant to Section 13.2.  The Issuer will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

 

 

  

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Section 15.   Expenses, Etc.

 

Section 15.1. Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Issuer will pay all reasonable costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection
with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Affiliate Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation:  (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Affiliate Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Affiliate Guaranty or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Parent, the Issuer or any Subsidiary or in connection with any work-out or restructuring
of the transactions contemplated hereby and by the Notes and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $3,500 for each Series of Notes.  The Issuer will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).

 

Section 15.2. Survival.  The obligations of the Issuer under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

 

	
  

	
Section 16.   Survival of Representations and Warranties; Entire Agreement.

 

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Parent or the Issuer to the Purchasers pursuant to this Agreement shall be deemed representations and warranties of the Parent or the Issuer, as the case may be, under
this Agreement.  Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between each Purchaser and the Issuer and supersede all prior agreements and understandings relating to the subject matter hereof.

 

 

  

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Section 17.   Amendment and Waiver.

 

Section 17.1. Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Issuer and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21
hereof, or any defined term as it is used therein, will be effective as to any Purchaser unless consented to by such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

 

Section 17.2. Solicitation of Holders of Notes.

 

(a)Solicitation. The Issuer will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is reasonably required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes.  The Issuer will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section
17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

 

(b)Payment. None of the Parent, the Issuer or any Affiliate will directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on
the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

 

(c)Consent in Contemplation of Transfer.  Any consent made pursuant to this Section 17.2 by the holder of any Note that has transferred or has agreed to transfer such Note to the Parent, the Issuer, any of their respective Subsidiaries or any Affiliate of the Parent or the Issuer, and has provided or has agreed to provide such written consent as a condition to such transfer, shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been
or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such transferring holder.

 

 

  

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Section 17.3. Binding Effect, Etc.  Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Parent and the Issuer without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Issuer and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note.  As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

 

Section 17.4. Notes Held by Issuer, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Parent, the Issuer or any of their respective Affiliates shall be deemed not to be outstanding.

 

	
  

	
Section 18.   Notices.

 

All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

 

(i)if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Issuer in writing,

 

(ii)if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Issuer in writing, or

 

(iii)if to the Issuer and/or the Parent, to the Issuer at its address set forth at the beginning hereof to the attention of its Chief Financial Officer, with a copy to its General Counsel, or at such other address as the Issuer shall have specified to the holder of each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.

 

	
  

	
Section 19.   Reproduction of Documents.

 

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Issuer agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Issuer or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

 

  

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Section 20.   Confidential Information.

 

For the purposes of this Section 20, “Confidential Information” means all non-public, confidential information regarding the Parent and its affiliates delivered to any Purchaser by or on behalf of the Parent, the Issuer or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Issuer or such Subsidiary, provided that such term does not include information that (a) was publicly known or
otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Parent, the Issuer or any Subsidiary, or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers,
employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security of the Issuer (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this
Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and
remedies under such Purchaser’s Notes and this Agreement, provided, however, in each case described in clauses (i) and (ii) the Purchaser informs the recipient that the information is Confidential Information and that such Person is bound by the provisions of this Section 20, and in each case described in clauses (iv) and (v) if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Issuer in connection with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Issuer embodying the provisions of this Section 20.

 

 

  

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Section 21.   Substitution of Purchaser.

 

Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Issuer, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser.  In the event
that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Issuer of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

 

	
  

	
Section 22.   Miscellaneous.

 

Section 22.1. Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

 

Section 22.2. Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made
on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

 

 

  

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Section 22.3. Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with
GAAP.  For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Issuer to measure any financial liability using fair value (as permitted by Accounting Standard Codification topic No. 825-10-25 - Fair Value Option or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

 

Section 22.4. Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable
such provision in any other jurisdiction.

 

Section 22.5. Construction, Etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

 

Section 22.6. Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

 

Section 22.7. Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

Section 22.8. Jurisdiction and Process; Waiver of Jury Trial.  (a) The Parent and the Issuer irrevocably submit to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement, the Affiliate Guaranty or the Notes.  To the fullest extent permitted
by applicable law, the Issuer irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

 

  

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(b)Each of the Parent and the Issuer consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section.  Each of the Parent and the Issuer agrees that such service upon receipt (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

 

(c)Nothing in this Section 22.8 shall affect the right of any holder of a Note or the Parent or Issuer to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes or the Parent or Issuer may have to bring proceedings against the Parent or Issuer or any holder of a Note in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.

*    *    *    *    *

 

  

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Home Properties, L.P.Note Purchase Agreement

 

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Issuer, whereupon this Agreement shall become a binding agreement between you and the Issuer.

	
  

	
Very truly yours,

 

	
  

	
Home Properties, L.P.

	
  

	
By: Home Properties, Inc.

	
  

	
Its General Partner

 

	
  

	
By /s/ David P. Gardner

	
  

	
David P. Gardner

	
  

	
Executive Vice President and 

	
  

	
Chief Financial Officer

 

	
  

	
 Home Properties, Inc.

 

	
  

	
By /s/ David P. Gardner

	
  

	
David P. Gardner

	
  

	
Executive Vice President and 

	
  

	
Chief Financial Officer

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
The Prudential Insurance Company of America

	
  

	
By /s/ Thomas P. Goodsite

	
  

	
Name:  Thomas P. Goodsite

	
  

	
Title:    Vice President

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
New York Life Insurance Company

	
  

	
By  /s/ A. Post Howland

	
  

	
  Name:    A. Post Howland

	
  

	
  Title:      Corporate Vice President

	
  

	
New York Life Insurance and Annuity Corporation

	
  

	
ByNew York Life Investment Management LLC, its Investment Manager

 

	
  

	
By  /s/ A. Post Howland

	
  

	
  Name:  A. Post Howland

	
  

	
  Title:    Director

	
  

	
New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C)

	
  

	
ByNew York Life Investment Management LLC, its Investment Manager

	
  

	
By  /s/ A. Post Howland

	
  

	
  Name:  A. Post Howland

	
  

	
  Title:    Director

	
  

	
New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 3-2)

	
  

	
ByNew York Life Investment Management LLC, its Investment Manager

	
  

	
By /s/ A. Post Howland

	
  

	
  Name:  A. Post Howland

	
  

	
  Title:    Director

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
The Guardian Life Insurance Company of America

	
  

	
By /s/ Brian Keating

	
  

	
  Name:  Brian Keating

	
  

	
  Title:    Managing Director

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
USAA Life Insurance Company

	
  

	
By /s/ John Spear 

	
  

	
Name:  John Spear

	
  

	
Title:    Vice President

	
  

	
United Services Automobile Association

	
  

	
By /s/ Donna Baggerly 

	
  

	
Name:  Donna Baggerly

	
  

	
Title:    Vice President

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
Knights of Columbus

 

	
  

	
By /s/ Charles E. Maurer, Jr.

	
  

	
Name:   Charles E. Maurer, Jr.

	
  

	
Title:     Supreme Secretary

  

  

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This Agreement is hereby

accepted and agreed to as 

of the date thereof.

	
  

	
Primerica Life Insurance Company

 

	
  

	
Senior Health Insurance Company of Pennsylvania

	
  

	
By:Conning, Inc., as Investment Manager

By  /s/  John H. DeMallie

	
  

	
Name:   John H. DeMallie

	
  

	
Title:    Director

  

  

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Schedule A

Information Relating to Purchasers

 

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
The Prudential Insurance Company

  of America

c/o Prudential Mortgage Capital Company, LLC

3560 Lenox Road NE, Suite 1400

Atlanta, GA  30326

Attn:  Managing Director

	
Series A

	
$50,000,000

 

	
  

	
(1)All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

JPMorgan Chase Bank

New York, NY

ABA No.:  021-000-021

Account Name:  Prudential Managed Portfolio

Account No.:  P86188 (please do not include spaces)

with sufficient information to identify the source and application of such funds.

Each such wire transfer shall set forth the name of the Company, a reference to “4.46% Series A Senior Notes due December 19, 2018, Security No. INV11437, PPN 43730E A*7” and the due date and application (as among principal, interest, Make-Whole Amount) of the payment being made.

 

(2)Address for all notices relating to payments:

The Prudential Insurance Company of America

c/o Investment Operations Group

Gateway Center Two, 10th Floor

100 Mulberry Street

Newark, NJ  07102-4077

Attention:  Manager, Billings and Collections

  

A-1

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with a copy to:

Prudential Mortgage Capital Corporation

4 Gateway Center, Floor 8

Newark, New Jersey  07102-4069

Attn:  Kathleen M. Romanovich or Corporate Credit Specialist

 

(3)Address for all other communications and notices:

The Prudential Insurance Company of America

c/o Prudential Mortgage Capital Company, LLC

3560 Lenox Road NE, Suite 1400

Atlanta, GA  30326

Attention:  Managing Director

with a copy to:

Prudential Mortgage Capital Corporation

4 Gateway Center, Floor 8

Newark, New Jersey  07102-4069

Attn:  Kathleen M. Romanovich or Corporate Credit Specialist

 

(4)Address for Delivery of Notes:

 

Send physical security by nationwide overnight delivery service to:

 

Prudential Mortgage Capital Company, LLC

3560 Lenox Road NE, Suite 1400

Atlanta, GA  30326

Attention:  Thomas Goodsite

Telephone:  (404) 704-8946

 

(5)Tax Identification No.:  22-1211670

Schedule A

(to Note Purchase Agreement)

  

A-2

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
New York Life Insurance Company

c/o New York Life Investment Management

        LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010

Attention:  Fixed Income Investors Group,

Private Finance, 2nd Floor

Fax Number:  (212) 447-4122

	
Series A

	
$14,700,000

 

Payments

 

All payments by wire or intrabank transfer of immediately available funds to:

JPMorgan Chase Bank

New York, New York  10019

ABA #021-000-021

Credit:  New York Life Insurance Company

General Account No. 008-9-00687

With sufficient information (including issuer, PPN number, interest rate, maturity and whether payment is of principal, premium, or interest) to identify the source and application of such funds.

 

Notices

 

All notices with respect to payments and written confirmation of each such payment and any audit confirmation, to be addressed:

New York Life Insurance Company

c/o New York Life Investment Management LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Securities Operation, Private Group, 2nd Floor

Fax Number:  (908) 840-3385

with a copy sent electronically to:

FIIGLibrary@nylim.com

TraditionalPVtOps@nylim.com

 

 

  

A-3

Table of Contents

 

Any changes in the foregoing payment instructions shall be confirmed by e-mail to NYLIMWireConfirmation@nylim.com prior to becoming effective.

 

All other notices and communications to be addressed as first provided above, with a copy sent electronically to: (1) FIIGLibrary@nylim.com and (2) TraditionalPVtOps@nylim.com and with a copy of any notices regarding defaults or Events of Default under the operative documents to:  Attention:  Office of the General Counsel, Investment Section, Room 1016, Fax Number: (212) 576-8340.

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  13-5582869

Deliver Notes to:

New York Life Investment Management LLC

51 Madison Avenue

New York, NY  10010

Attn:  Matthew DelRosso, Esq.

Phone:  (212) 576-7976

 

  

A-4

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
New York Life Insurance and

 Annuity Corporation

c/o New York Life Investment Management LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Fixed Income Investors Group, Private Finance, 2nd Floor

Fax Number:  (212) 447-4122

	
Series A

	
$12,400,000

 

Payments

 

All payments by wire or intrabank transfer of immediately available funds to:

JPMorgan Chase Bank

New York, New York  

ABA #021-000-021

Credit:  New York Life Insurance and Annuity Corporation

General Account Number 323-8-47382

With sufficient information (including issuer, PPN number, interest rate, maturity and whether payment is of principal, premium, or interest) to identify the source and application of such funds.

 

Notices

 

All notices with respect to payments and written confirmation of each such payment and any audit confirmation, to be addressed:

New York Life Insurance and Annuity Corporation

c/o New York Life Investment Management LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Securities Operation, Private Group, 2nd Floor

Fax Number:  (908) 840-3385

with a copy sent electronically to:

FIIGLibrary@nylim.com

TraditionalPVtOps@nylim.com

 

 

  

A-5

Table of Contents

 

Any changes in the foregoing payment instructions shall be confirmed by e-mail to NYLIMWireConfirmation@nylim.com prior to becoming effective.

 

All other notices and communications to be addressed as first provided above, with a copy sent electronically to: (1) FIIGLibrary@nylim.com and (2) TraditionalPVtOps@nylim.com and with a copy of any notices regarding defaults or Events of Default under the operative documents to:  Attention:  Office of the General Counsel, Investment Section, Room 1016, Fax Number: (212) 576-8340.

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  13-3044743

Deliver Notes to:

New York Life Investment Management LLC

51 Madison Avenue

New York, NY  10010

Attn:  Matthew DelRosso, Esq.

Phone:  (212) 576-7976

 

  

A-6

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account

(BOLI 30C)

c/o New York Life Investment Management

        LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Fixed Income Investors Group, Private Finance, 2nd Floor

Fax Number:  (212) 447-4122

	
Series A

	
$2,500,000

 

Payments

 

All payments by wire or intrabank transfer of immediately available funds to:

JPMorgan Chase Bank

New York, New York

ABA #021-000-021

Credit: NYLIAC SEPARATE BOLI 30C

General Account Number 304-6-23970

With sufficient information (including issuer, PPN number, interest rate, maturity and whether payment is of principal, premium, or interest) to identify the source and application of such funds, with advice of such payments to:

 

Notices

 

All notices of payments, written confirmations of such wire transfers and any audit confirmation:

New York Life Insurance and Annuity Corporation

Institutionally Owned Life Insurance Separate Account

c/o New York Life Investment Management LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Securities Operation, Private Group, 2nd Floor

Fax Number:  (908) 840-3385

 

 

  

A-7

Table of Contents

 

with a copy sent electronically to:

FIIGLibrary@nylim.com

TraditionalPVtOps@nylim.com

Any changes in the foregoing payment instructions shall be confirmed by e-mail to NYLIMWireConfirmation@nylim.com prior to becoming effective.

 

All other notices and communications to be addressed as first provided above, with a copy sent electronically to: (1) FIIGLibrary@nylim.com and (2) TraditionalPVtOps@nylim.com and with a copy of any notices regarding defaults or Events of Default under the operative documents to:  Attention:  Office of the General Counsel, Investment Section, Room 1016, Fax Number: (212) 576-8340.

 

Name in which Notes are to be issued:  New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 30C)

 

Taxpayer I.D. Number:  13-3044743

Deliver Notes to:

New York Life Investment Management LLC

51 Madison Avenue

New York, NY  10010

Attn:  Matthew DelRosso, Esq.

Phone:  (212) 576-7976

 

  

A-8

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 3-2)

c/o New York Life Investment Management

        LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Fixed Income Investors Group,

Private Finance, 2nd Floor

Fax Number:  (212) 447-4122

	
Series A

	
$400,000

 

Payments

 

All payments by wire or intrabank transfer of immediately available funds to:

JPMorgan Chase Bank

New York, New York  

ABA #021-000-021

Credit:  NYLIAC SEPARATE BOLI 3-2

General Account Number 323-9-56793

With sufficient information (including issuer, PPN number, interest rate, maturity and whether payment is of principal, premium, or interest) to identify the source and application of such funds, with advice of such payments to:

 

Notices

 

All notices of payments, written confirmations of such wire transfers and any audit confirmation:

New York Life Insurance and Annuity Corporation

Institutionally Owned Life Insurance Separate Account

c/o New York Life Investment Management LLC

51 Madison Avenue

2nd Floor, Room 208

New York, New York  10010-1603

Attention:  Securities Operation, Private Group, 2nd Floor

Fax Number:  (908) 840-3385

 

 

  

A-9

Table of Contents

 

with a copy sent electronically to:

FIIGLibrary@nylim.com

TraditionalPVtOps@nylim.com

 

All other notices and communications to be addressed as first provided above, with a copy sent electronically to: (1) FIIGLibrary@nylim.com and (2) TraditionalPVtOps@nylim.com and with a copy of any notices regarding defaults or Events of Default under the operative documents to:  Attention:  Office of the General Counsel, Investment Section, Room 1016, Fax Number: (212) 576-8340.

 

Name in which Notes are to be issued:  New York Life Insurance and Annuity Corporation Institutionally Owned Life Insurance Separate Account (BOLI 3-2)

 

Taxpayer I.D. Number:  13-3044743

Deliver Notes to:

New York Life Investment Management LLC

51 Madison Avenue

New York, NY  10010

Attn:  Matthew DelRosso, Esq.

Phone:  (212) 576-7976

 

  

A-10

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
The Guardian Life Insurance Company of America

7 Hanover Square

New York, New York  10004-2616

Attention:  Brian Keating

Investment Dept. 9-A

Fax Number:  (212) 919-2658

Email:  brian_keating@glic.com

	
Series B

	
$25,000,000

 

Payments

 

All payments on account of the Notes shall be made by wire transfer of immediately available funds to:

JP Morgan Chase

FED ABA #021000021

CHASE/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C #G05978, Guardian Life, CUSIP #43730E A@5, Home Properties, L.P.

 

Notices

 

All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be addressed as first provided above.

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  13-5123390

 

Deliver Notes to:

JP Morgan Chase Bank, N.A.

4 Chase Metrotech Center, 3rd Floor

Brooklyn, New York  11245-0001

Ref:  A/C #G05978, Guardian Life

 

  

A-11

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
United Services Automobile Association

c/o USAA Asset Management

9800 Fredericksburg Road

San Antonio, TX  78288

	
Series A

	
$10,000,000

(Notes to be registered in the name of: ELL & CO.)

 

	
  

	
(1)All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Northern Chgo/Trust

ABA#071000152

Credit Wire Account # 5186041000

26-11037/ USAA

 

With sufficient information to identify the source and application of such funds, including the issuer name, the PPN of the issue, interest rate, payment due date, maturity date, interest amount, principal and premium amount.

 

	
  

	
(2)Address for notices relating to payments:

Ell & Co

c/o Northern Trust Company

PO Box 92395

Chicago, IL 60675-92395

Attn:  Income Collections

Please include the cusip and shares/par for the dividend/interest payment

 

	
  

	
(3)Address for all other communications:

Donna Baggerly

VP Insurance Portfolios

9800 Fredericksburg Road

San Antonio, TX 78288

(210) 498-5195

 

 

  

A-12

Table of Contents

 

	
  

	
(4)Physical Delivery of Notes:

The Northern Trust Company

Account: 26-11037

Trade Securities Processing, C-1N

801 South Canal Street

Chicago, IL  60607

 

	
  

	
(5)Tax Identification Number:  74-0959140

 

  

A-13

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
USAA Life Insurance Company

9800 Fredericksburg Road

San Antonio, TX  78288

	
Series B

	
$12,000,000

(Notes to be registered in the name of: ELL & CO.)

 

	
  

	
(1)All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to:

Northern Chgo/Trust

ABA#071000152

Credit Wire Account # 5186041000

26-11042/ Life Company

 

With sufficient information to identify the source and application of such funds, including the issuer name, the PPN of the issue, interest rate, payment due date, maturity date, interest amount, principal and premium amount.

 

	
  

	
(2)Address for notices relating to payments:

Ell & Co

c/o Northern Trust Company

PO Box 92395

Chicago, IL 60675-92395

Attn:  Income Collections

Please include the cusip and shares/par for the dividend/interest payment

 

	
  

	
(3)Address for all other communications:

John Spear

VP Insurance Portfolios

9800 Fredericksburg Road

San Antonio, TX 78288

(210) 498-8661

 

	
  

	
(4)Physical Delivery of Notes:

The Northern Trust Company

Account: 26-11042

Trade Securities Processing, C-1N

801 South Canal Street

Chicago, IL  60607

 

	
  

	
(5)Tax Identification Number:  74-1472662

 

  

A-14

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
Knights of Columbus

One Columbus Plaza

New Haven, CT  06510-3326

Attention:  Investment Accounting Department, 14th Floor

	
Series B

	
$10,000,000

 

Payments

 

All payments on account of the Notes held by such purchaser shall be made by wire transfer of immediately available funds to:

Bank of New York

ABA #021000018

CREDIT A/C:  GLA111566

ATTN: P&I Dept

A/C Name:  Knights of Columbus Life Account

Account #:  200700

P & I Breakdown:  ____________

Ref:  PPN 43730E A@5, Home Properties, L.P., 5.00% Senior Guaranteed Notes, Series B, due 2021

 

Notices

 

All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be e-mailed and mailed to:

Email:  Investments@kofc.org

Knights of Columbus

Life Account #200700

Attn:  Investment Department, 19th Floor

One Columbus Plaza

New Haven, CT  06510-3326

Ph:(203) 752-4127

Fax:(203) 752-4117

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  06-0416470

 

 

  

A-15

Table of Contents

 

Deliver Notes to:

The Bank of New York Mellon

One Wall Street

3rd Floor, Window A

New York, NY  10286

Attn:Mary Wong, Assistant Treasurer, Physical Delivery

marywong@bankofny.com  (212) 635-1003

Ref:  Knights of Columbus Life Account #200700

 

  

A-16

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
Knights of Columbus

One Columbus Plaza

New Haven, CT  06510-3326

Attention:  Investment Accounting Department, 14th Floor

	
Series B

	
$10,000,000

 

Payments

 

All payments on account of the Notes held by such purchaser shall be made by wire transfer of immediately available funds to:

Bank of New York

ABA #021000018

CREDIT A/C:  GLA111566

ATTN: P&I Dept

A/C Name:  Knights of Columbus FPA Account

Account #:  201047

P & I Breakdown:  ____________

Ref:  PPN 43730E A@5, Home Properties, L.P., 5.00% Senior Guaranteed Notes, Series B, due 2021

 

Notices

 

All notices and communications, including notices with respect to payments and written confirmation of each such payment, to be e-mailed and mailed to:

Email:  Investments@kofc.org

Knights of Columbus

FPA Account #201047

Attn:  Investment Department, 19th Floor

One Columbus Plaza

New Haven, CT  06510-3326

Ph:(203) 752-4127

Fax:(203) 752-4117

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  06-0416470

 

 

  

A-17

Table of Contents

 

Deliver Notes to:

The Bank of New York Mellon

One Wall Street

3rd Floor, Window A

New York, NY  10286

Attn:Mary Wong, Assistant Treasurer, Physical Delivery

marywong@bankofny.com  (212) 635-1003

Ref:  Knights of Columbus FPA Account #201047

 

  

A-18

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
Primerica Life Insurance Company

c/o Conning, Inc.

One Financial Plaza

Hartford, Connecticut  06103-2627

	
Series B

	
$1,500,000

 

Payments

 

All payments to be made by crediting (in the form of federal funds bank wire transfer, with sufficient information to identify the source and application of funds) the following account:

Primerica Life Insurance Company

Account No.:  900 9000 127

Account Name:  Trust Other Demand IT SSG Custody

FFC Acct. Name:  Primerica Life Insurance Company

FFC Acct. #:  G07131

JPMorgan Chase Bank

One Chase Manhattan Plaza

New York, New York  10081

ABA #021000021

Ref:   PPN 43730E A@5, Home Properties, L.P., 5.00% Senior Guaranteed Notes, Series B, due 2021 AND Breakdown (principal/income) __________

 

Notices

 

All notices and communication should be directed to:

Primerica Life Insurance Company

c/o Conning, Inc.

330 Madison Avenue, 9th Floor

New York, NY  10017

Attn:  John DeMallie

Phone:  212-573-0976

Facsimile: 860-299-0452

Email:  John.Demallie@Conning.com

 

 

  

A-19

Table of Contents

 

With a copy of all notices and communication directed to:

Primerica Life Insurance Company

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Private Placement Unit

Phone:  860-299-2173

Facsimile:  860-299-2442

Email:  Conning.Documents@Conning.com  

 

All legal notices and documentation should be directed to:

Primerica Life Insurance Company

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Vi R. Smalley

Phone:  860-299-2054

Facsimile:  860-299-0054

Email:  Vi.Smalley@Conning.com

 

Name of Nominee in which Notes are to be issued:  None

 

Taxpayer I.D. Number:  04-1590590

 

Deliver Notes to:

Primerica Life Insurance Company

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Vi R. Smalley

Phone:  860-299-2054

Facsimile:  860-299-0054

Email:  Vi.Smalley@Conning.com

 

  

A-20

Table of Contents

	
 

 

Name and Address of Purchaser

	
 

Series of Notes

to Be Purchased

	
Principal Amount of Notes

to Be Purchased

	
Senior Health Insurance Company of Pennsylvania

c/o Conning, Inc.

One Financial Plaza

Hartford, Connecticut  06103-2627

	
Series B

	
$1,500,000

 

Payments

 

All payments to be made by crediting (in the form of federal funds bank wire transfer, with sufficient information to identify the source and application of funds) the following account:

Senior Health Insurance Company of Pennsylvania

Bank of New York Mellon

One Wall Street

New York, NY  10286

ABA #021000018

Beneficiary:  GLA111566

Attn:  PP P&I Dept.

Ref:  Acct #0050688400-Sr. Health Insurance Co. of PA;

PPN 43730E A@5, Home Properties, L.P., 5.00% Senior Guaranteed Notes, Series B, due 2021 AND Breakdown (principal/income) __________

 

Notices

 

All notices and communication should be directed to:

Senior Health Insurance Company of Pennsylvania

c/o Conning, Inc.

330 Madison Avenue, 9th Floor

New York, NY  10017

Attn:  John DeMallie

Phone:  212-573-0976

Facsimile: 860-299-0452

Email:  John.Demallie@Conning.com

 

 

  

A-21

Table of Contents

 

With a copy of all notices and communication directed to:

Senior Health Insurance Company of Pennsylvania

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Private Placement Unit

Phone:  860-299-2173

Facsimile:  860-299-2442

Email:  Conning.Documents@Conning.com  

 

All legal notices and documentation should be directed to:

Senior Health Insurance Company of Pennsylvania

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Vi R. Smalley

Phone:  860-299-2054

Facsimile:  860-299-0054

Email:  Vi.Smalley@Conning.com

 

Name of Nominee in which Notes are to be issued:  HARE & CO.

 

Taxpayer I.D. Number:  23-0704970

 

Deliver Notes to:

Senior Health Insurance Company of Pennsylvania

c/o Conning, Inc.

One Financial Plaza, 13th Floor

Hartford, Connecticut  06103-2627

Attention:  Vi R. Smalley

Phone:  860-299-2054

Facsimile:  860-299-0054

Email:  Vi.Smalley@Conning.com

 

  

A-22

Table of Contents

 

Schedule B

Defined Terms

 

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

 

“Accession Agreement” means an Accession Agreement substantially in the form attached to the Affiliate Guaranty as Exhibit A.

 

“Adjusted EBITDA” means, for any period, the sum of NOI for such period for all Projects plus management, development and other income of the Consolidated Businesses for such period less the aggregate Capital Expenditure Reserve Amount with respect to all Projects for such period.

 

“Adjusted NOI” means, with respect to a Project for any period, NOI for such period from such Project less the Capital Expenditure Reserve Amount for such period with respect to such Project.

 

“Adjusted Recourse Secured Indebtedness” means all Secured Indebtedness affecting any Project which Secured Indebtedness is recourse (limited to the amount of such Secured Indebtedness that is recourse) to the Parent, the Issuer or their Subsidiaries or Unconsolidated Affiliates (but solely with respect to the Issuer’s pro rata share of such Secured Indebtedness of Unconsolidated Affiliates), if either (i) the amount of such Secured Indebtedness equals an amount greater than 60% of Total Property Value of such Project or (ii) the ratio of Adjusted NOI for the Project affected by such Secured Indebtedness to Debt Service of such
Project is less than 1.4 to 1.0.

 

“Adjusted Unencumbered NOI” means, for any period, NOI not subject to any Liens for such period derived from an Unencumbered Eligible Project less the Capital Expenditure Reserve Amount with respect to such Unencumbered Eligible Project for such period.

 

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Issuer.

 

“Affiliate Guaranty” means the Guaranty of the Parent and the other Guarantors from time to time guaranteeing the Issuer’s obligations hereunder and under the Notes substantially in the form of Exhibit 2 hereto.

 

“Anti-Terrorism Order” means Executive Order No. 13,224 of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

 

 

  

B-1

Table of Contents

 

“Approved Rating Agency” means any of Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc., Fitch Ratings, DBRS Ltd., and any other nationally recognized statistical rating organization that is considered an “Acceptable Rating Organization” by the NAIC.

 

“Bank Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of December 9, 2011 among the Issuer, the Parent and the lenders party thereto as amended, modified, joined, supplemented or restated from time to time, and any renewals, extensions or replacements thereof.

 

“Blocked Person” is defined in Section 5.16(a).

 

“Book Value” means the value at which a Project is reported on the financial statements of the Parent in accordance with GAAP, less the amount of any Indebtedness or Liens related to such Property.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.

 

“Capital Expenditure Reserve Amount” means, for any period, with respect to a Project an amount equal to (i) $300 multiplied by the number of apartment units contained in such Project multiplied by (ii) a fraction, the numerator of which is equal to the number of days in such period and the denominator of which is equal to 365.

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Capitalization Rate” shall have the meaning ascribed to such term in the Bank Credit Agreement, from time to time and, if for any reason, no Bank Credit Agreement then exists or such term is no longer used therein, the Capitalization Rate most recently in effect.  Notwithstanding the foregoing, in no event shall the “Capitalization Rate” at any time be less than 6.50% for purposes of this Agreement.

 

“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Parent; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Parent by Persons who were neither (i) nominated by the board of
directors of the Parent nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect Control of the Parent by any Person or group.

 

 

  

B-2

Table of Contents

 

“Closing” is defined in Section 3.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

 

“Confidential Information” is defined in Section 20.

 

“Consolidated Businesses” means the Parent, the Issuer, and each of their respective Subsidiaries.

 

“Contingent Obligation” as to any Person means, without duplication, (a) any contingent obligation of such Person required to be shown on such Person’s balance sheet in accordance with GAAP, and (b) any obligation required to be disclosed in the footnotes to such Person’s financial statements in accordance with GAAP, guaranteeing partially or in whole any non-recourse Indebtedness, lease, dividend or other obligation, exclusive of contractual indemnities (including, without limitation, any indemnity or price-adjustment provision relating to the purchase or sale of securities or other assets) and guarantees of nonmonetary
obligations (other than guarantees of completion) which have not yet been called on or quantified, of such Person or of any other Person.  The amount of any Contingent Obligation described in clause (b) shall be deemed to be (i) with respect to a guaranty of interest or interest and principal, or operating income guaranty, the sum of all payments required to be made thereunder (which in the case of an operating income guaranty shall be deemed to be equal to the debt service for the note secured thereby), calculated at the interest rate applicable to such Indebtedness, through (A) in the case of an interest or interest and principal guaranty, the stated date of maturity of the obligation (and commencing on the date interest could first be payable thereunder), or (B) in the case of an operating income guaranty, the date through which such guaranty will remain
in effect, and (ii) with respect to all guarantees not covered by the immediately preceding clause (i) an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as recorded on the balance sheet and on the footnotes to the most recent financial statements of such Person. Notwithstanding anything contained herein to the contrary, (1) guarantees of completion shall not be deemed to be Contingent Obligations unless and until a claim for payment has been made thereunder, at which time any such guaranty of completion shall be deemed to be a Contingent Obligation in an amount equal to any such claim and (2) Low Income Housing Credit Program Guarantees shall
not be deemed to be Contingent Obligations. Subject to the preceding sentence, (x) in the case of a joint and several guaranty given by such Person and another Person (but only to the extent such guaranty is recourse, directly or indirectly to such Person), the amount of the guaranty shall be deemed to be 100% thereof unless and only to the extent that (i) such other Person has delivered cash or cash equivalents described herein in the definition of Permitted Investments to secure all or any part of such Person’s guaranteed obligations or (ii) such other Person holds an Investment Grade Credit Rating from either Moody’s or S&P, and (y) in the case of a guaranty, (whether or not joint and several) of an obligation otherwise constituting Indebtedness of such Person, the amount of such guaranty shall be deemed to be only that amount in excess of the
amount of the obligation constituting Indebtedness of such Person.  Contingent Obligations of any Person shall include such Person’s pro rata share of the Contingent Obligations of any Unconsolidated Affiliate of such Person.

 

 

  

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“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Controlled Entity” means any of the Subsidiaries of the Parent or the Issuer and any of their respective Controlled Affiliates. 

 

“Debt Service” means for any period the sum of (i) all interest obligations accrued on all Indebtedness with respect to a Project, (ii) all payments of principal required to be made (other than payments of any principal balance remaining to be paid by the terms of the applicable Indebtedness at the maturity thereof) with respect to any Indebtedness on a Project, and (iii) the amortization of loan fees, original issue discount, non-cash interest payments, the interest component of Capital Lease Obligations and hedging costs (but excluding extraordinary interest expense, and net of amortization of deferred costs associated with new
financings or refinancings of existing Indebtedness), in each case with respect to such Project during such period.

 

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

 

“Default Rate” means with respect to each Series of Notes, that rate of interest for such Series of Notes that is the greater of (i) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of such Series of the Notes or (ii) 2.00% over the rate of interest publicly announced by Bank of America, N.A. in New York, New York as its “base” or “prime” rate.

 

“Development Project” means a Project currently under development that has not achieved while owned by the Issuer or any of its Wholly-owned Subsidiaries an Occupancy Rate of 90% or more for one full calendar quarter or on which the improvements (other than tenant improvements on unoccupied commercial space) related to the development have not been completed for one full calendar quarter; provided, however, a Development Project on which all improvements (other than tenant improvements on unoccupied commercial space) related to the development of such Project have been completed for at
least 24 months shall cease to constitute a Development Project as of the last day of the quarter immediately following such 24 month period notwithstanding the fact that such Project has not achieved an Occupancy Rate of at least 90%.

 

“Electronic Delivery” is defined in Section 7.1(a).

 

“Eligible Project” means, any Project that (i) is 100% owned by the Issuer and/or any of its Wholly-owned Subsidiaries, (ii) is free of all title defects and material structural defects, (iii) is not a Development Project, (iv) is managed by the Issuer or any Subsidiary of the Issuer, and (v) is free of all Hazardous Materials as verified by an environmental assessment report in the form and substance satisfactory to the Administrative Agent (as defined in the Bank Credit Agreement), unless there is no Administrative Agent, then the Required Holders.

 

 

  

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“Encumbered Eligible Project” means any Eligible Project all or any portion of which Eligible Project is encumbered by a Lien or subject to a Negative Pledge.

 

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

 

“Equity Interest” means, with respect to any Person, any share of capital stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of capital stock of (or other ownership or profit interests in) such Person, any security convertible into or exchangeable for any share of capital stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including,
without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

 

“Equity Issuance” means any issuance by a Person of any Equity Interest in such Person and shall in any event include the issuance of any Equity Interest upon the conversion or exchange of any security constituting Indebtedness that is convertible or exchangeable, or is being converted or exchanged, for Equity Interests.

 

“Equity Value” means, as of a given date, (a) the stockholders’ or owners’ equity of the Parent and its Subsidiaries determined on a consolidated basis, plus (b) accumulated depreciation and amortization, minus (c) the following (to the extent reflected in determining stockholders’ or owners’ equity of the Parent and its Subsidiaries):  (i) the amount of any write-up in the book value of any assets contained in any balance sheet resulting from revaluation thereof or any write-up in excess of the cost of such assets acquired, and (ii) all amounts appearing on the assets side of any such
balance sheet for assets which would be classified as intangible assets under GAAP, all determined on a consolidated basis.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 

 

“ERISA Affiliate” means any trade or business  (whether or not incorporated) that is treated as a single employer together with the Issuer under section 414 of the Code.

 

“Event of Default” is defined in Section 11.

 

 

  

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“Fair Market Value” means, as of any date, with respect to (a) security listed on a national securities exchange or the NASDAQ National Market, the closing price of such security as reported on such exchange or market by any widely recognized reporting method customarily relied upon by financial institutions and (b) with respect to any other property, the price which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction.

 

“Form 10-Q” means the Parent’s Quarterly Report filed with the SEC on Form 10-Q.

 

“Form 10-K” means the Parent’s Annual Report filed with the SEC on Form 10-K.

 

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

 

“General Partner” means the Parent and any successor general partners of the Issuer.

 

“Governmental Authority” means

 

(a)the government of

 

(i)the United States of America or any State or other political subdivision thereof, or

 

(ii)any other jurisdiction in which the Parent, the Issuer or any of their respective Subsidiaries conducts all or any part of its business, or which asserts jurisdiction over any properties of the Issuer or any Subsidiary, or

 

(b)any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

 

“Guarantor” means the Parent, the Subsidiaries of the Issuer owning Unencumbered Eligible Projects on the date hereof and each other Subsidiary of the Parent which becomes an additional guarantor under Section 9.7 hereof.

 

“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

 

(a)to purchase such indebtedness or obligation or any property constituting security therefor;

 

(b)to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

 

 

  

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(c)to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

 

(d)otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

 

provided, that the term Guaranty shall not include (i) endorsements for collection or deposit in the ordinary course of business, (ii) guarantees of completion unless and until a claim for payment has been thereunder, at which time any such guaranty of completion shall be deemed to be a Guaranty in an amount equal to any such claim and (iii) Low Income Housing Credit Program Guarantees.

 

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

 

“Hazardous Materials” means toxic substances, hazardous waste, hazardous materials or hazardous substances, as such terms are defined in the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 9601 ET SEQ.), the Comprehensive Environmental, Response, Compensation and Liability Act, as amended (42 U.S.C. Sections 9601 and 9657 ET SEQ.) and/or the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801 ET SEQ.), and the regulations promulgated pursuant to any such laws, any asbestos or asbestos related products and any oils, petroleum-derived compounds or pesticides;
provided that “Hazardous Materials” shall not include (a) materials which exist in quantities or in a compounded non-hazardous form in compliance with all applicable Federal, state and local laws, ordinances, rules and regulations such as asphalt contained in road surfacing materials and (b) materials customarily used in the day-to-day operation and maintenance of the Properties which are stored, used and disposed of in accordance with all applicable Federal, state and local laws, ordinances, rules and regulations such as cleaning fluids.

 

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement, collar transaction, cap transaction, other swap transaction or other interest or currency exchange rate or commodity price hedging arrangement.

 

“holder” means, with respect to any Note the Person in whose name such Note is registered in the register maintained by the Issuer pursuant to Section 13.1.

 

“Improvements” means all buildings, fixtures, structures, parking areas, landscaping and all other improvements whether existing now or hereafter constructed, together with all machinery and mechanical, electrical, HVAC and plumbing systems presently located thereon and used in the operation thereof, excluding (a) any such items owned by utility service providers, (b) any such items owned by tenants or other third-parties unaffiliated with the Issuer and (c) any items of personal property.

 

 

  

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“Indebtedness” of any Person means, without duplication, as of the date of determination:  (a) all obligations (including, without limitation, Contingent Obligations) of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations (including, without limitation, Contingent Obligations) of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations (including, without limitation, Contingent Obligations) of such Person upon which interest charges are customarily paid, (d) all obligations (including, without limitation, Contingent Obligations)
of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guaranties by such Person of Indebtedness of others, (h) all Capital Lease Obligations (including, without limitation, Contingent Obligations) of such Person, (i) all obligations (including, without limitation, Contingent Obligations) of such Person as an account party in respect of letters
of credit and letters of guaranty, (j) all obligations (including, without limitation, Contingent Obligations) of such Person in respect of bankers’ acceptances, (k) net obligations under any Hedging Agreement not entered into as a hedge against existing Indebtedness, in an amount equal to the mark-to-market value for such Hedging Agreement, as determined based upon one or more midmarket or other readily available quotations provided by any recognized dealer in such Hedging Agreement, and (l) such Person’s pro rata share of the Indebtedness of any Unconsolidated Affiliate of such Person.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 10% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

 

“Investment Grade Credit Rating” means a rating assigned by S&P or Moody’s to the senior unsecured long term debt of a Person of BBB-/Baa3 (or the equivalent) or higher.

 

“Issuer” means Home Properties, L.P., a New York limited partnership or any successor that becomes such in the manner prescribed in Section 10.2.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

 

  

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“Low Income Housing Credit Program Guarantees” means the assurance by the Issuer to limited partners of certain Affiliates of the Issuer, of which the Issuer or a Subsidiary of the Issuer is the general partner, that the real properties developed and operated by such Affiliates under the Low Income Housing Tax Credit program established under the Code will be kept in compliance with applicable requirements to avoid loss of, or recapture of, low income housing tax credits.

 

“Make-Whole Amount” is defined in Section 8.6.

 

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Parent, Issuer and their Subsidiaries taken as a whole.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, condition (financial or otherwise), of the Parent, the Issuer and its Subsidiaries taken as a whole, or (b) the ability of the Parent, the Issuer or any other Guarantor to perform its respective obligations under any Note Document, or (c) the validity or enforceability of any Note Document.

 

“Memorandum” is defined in Section 5.3.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” means a mortgage, deed of trust, deed to secure debt or similar security instrument made by a Person owning an interest in real estate granting a Lien on such interest in real estate as security for the payment of Indebtedness.

 

“Mortgage Receivable” means a promissory note secured by a Mortgage of which the Parent, the Issuer or any other Subsidiary is the holder and retains the rights of collection of all payments thereunder.

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

 

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

 

“Negative Pledge” means, with respect to a given asset, any provision of a document, instrument or agreement (other than any Note Document or the Primary Credit Facility) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning such asset or any other Person; provided, however, that an agreement that conditions a Person’s ability to encumber its assets upon the maintenance of one or more specified ratios that limit such Person’s ability to encumber its assets but that do not generally prohibit
the encumbrance of its assets, or the encumbrance of specific assets, shall not constitute a Negative Pledge.

 

 

  

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“Net Offering Proceeds” means with respect to any Equity Issuance by a Person, the aggregate amount of all cash and the Fair Market Value of all other property (other than securities of such Person being converted or exchanged in connection with such Equity Issuance) received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by such Person in connection with such Equity Issuance.

 

“NOI” means, net operating income derived from Projects determined in accordance with GAAP, adjusted, however, to exclude accrued rent with respect to tenants that are more than 90 days in arrears in the payment of rent, and further adjusted to account for the actual management fee, if any, paid with respect to Projects.

 

“Note Documents” means this Agreement, the Notes, and the Affiliate Guaranty.

 

“Notes” is defined in Section 1.1.

 

“Occupancy Rate” means, with respect to a Project at any time, the physical occupancy of such Project calculated in a manner consistent with the calculations of physical occupancy prior to the date hereof set forth under the heading Owned Community Results contained in the Earnings Release and Supplemental Information which has been furnished as an exhibit to Form 8-K.

 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Issuer whose responsibilities extend to the subject matter of such certificate.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

 

“Permitted Investments” means unrestricted:

 

(a)cash;

 

(b)marketable direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

 

(c)investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s ;

 

 

  

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(d)investments in domestic and Eurodollar certificates of deposit, banker’s acceptances, time deposits and floating rate certificates of deposit maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America, any State thereof or the District of Columbia which has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

(e)fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (b) above and entered into with a financial institution satisfying the criteria described in clause (d) above;

 

(f)publicly traded equity securities issued by a REIT that primarily owns multi-family properties provided, however, in no event shall investments under this clause (f) exceed 10% of Total Value at any one time; and

 

(g)other marketable securities accepted by the Required Holders.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Issuer or any ERISA Affiliate or with respect to which the Issuer or any ERISA Affiliate may have any liability.

 

“Preferred Equity Interests” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.

 

“Primary Credit Facility” means the Bank Credit Agreement and any other working capital, credit, loan or borrowing facility of the Parent, the Issuer or any of their respective Subsidiaries entered into to refinance, replace or supplement the foregoing (as amended, modified or supplemented from time to time).  

 

“Project” means any residential housing building, related group of buildings or community owned 100%, directly or indirectly, by any of the Consolidated Businesses.

 

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

 

“PTE” is defined in Section 6.2(a).

 

“Purchaser” is defined in the first paragraph of this Agreement.

 

 

  

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“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

 

“QRS Subsidiary” means Home Properties Trust.

 

“Real Property” means all of the Consolidated Businesses’ present and future right, title and interest (including, without limitation, any leasehold estate) in (i) any plots, pieces or parcels of land, (ii) any Improvements of every nature whatsoever (the rights and interests described in clauses (i) and (ii) above being the “Premises”), (iii) all easements, rights of way, gores of land or any lands occupied by streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and public places adjoining such land, and any other interests in property constituting appurtenances to the
Premises, or which hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with the right to extract, sever and remove such gas, oil and minerals), and easements, of every nature whatsoever, located in, on or benefiting the Premises and (v) all other rights and privileges thereunto belonging or appertaining and all extensions, additions, improvements, betterments, renewals, substitutions and replacements to or of any of the rights and interests described in clauses (iii) and (iv) above.

 

“Recourse Secured Indebtedness” means (a) Guaranties of Secured Indebtedness of the Parent, the Issuer and their Subsidiaries and the Issuer’s pro rata share of any Guarantees of Unconsolidated Affiliates, and (b) Secured Indebtedness affecting any Project that is recourse to the Parent, the Issuer or their Subsidiaries or Unconsolidated Affiliates, in the case of each of clauses (a) and (b) limited to the amount of such Guaranty or Secured Indebtedness that is recourse to the Parent, the Issuer or their Subsidiaries or Unconsolidated Affiliates, as the case may be.

 

“REIT” means a domestic trust or corporation that qualifies as a “real estate investment trust” under the Code.

 

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

 

“Required Holders” means, at any time, the holders of more than 50% in principal amount of the Notes (without regard to Series) at the time outstanding (exclusive of Notes then owned by the Parent, the Issuer or any of their Affiliates).

 

“Responsible Officer” means any Senior Financial Officer and any other officer of the Parent or the Issuer, as the case may be, with responsibility for the administration of the relevant portion of this Agreement.

 

“S&P” means Standard & Poor’s.

 

“SEC” shall mean the Securities and Exchange Commission of the United States, or any successor thereto.

 

 

  

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“Secured Indebtedness” means any Indebtedness secured by a Lien, and in the case of the Issuer, shall include (without duplication) the Issuer’s pro rata share of the Secured Indebtedness of its Unconsolidated Affiliates.

 

“Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities Act. 

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Parent or the Issuer, as the case may be.

 

“Series” is defined in Section 1.1.

 

“Series A Notes” is defined in Section 1.1.

 

“Series B Notes” is defined in Section 1.1.

 

“Significant Subsidiary” means at any time any Subsidiary that would at such time constitute a “significant subsidiary” (as such term is defined in Regulation S-X of the SEC as in effect on the date hereof) of the Company.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date.  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Parent or the Issuer as the context requires.

 

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

 

“Total Interest Expense” means, for any period, the sum of (i) interest expense of the Consolidated Businesses paid during such period and (ii) interest expense of the Consolidated Businesses accrued and/or capitalized for such period in each case including participating interest expense, the amortization of loan fees, original issue discount, non-cash interest payment, the interest component of Capital Lease Obligations and hedging costs but excluding extraordinary interest expense, and net of amortization of deferred costs associated with new financings or refinancings of existing Indebtedness.

 

“Total Outstanding Indebtedness” means, as of any date, the sum of (i) all Indebtedness of the Consolidated Businesses and (ii) without duplication, all Contingent Obligations of the Consolidated Businesses which are recourse to such Person or any other Consolidated Business. “Total Outstanding Indebtedness” shall not be deemed to include (a) completion guarantees of construction loans or (b) Low Income Housing Tax Credit Program Guarantees. For the avoidance of doubt, Total Outstanding Indebtedness shall include the Issuer’s pro rata share of the Indebtedness and Contingent Obligations of its Unconsolidated
Affiliates.

 

 

  

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“Total Outstanding Unsecured Indebtedness” means, as of any date, all Indebtedness which is not Secured Indebtedness.

 

“Total Property Value” means, as of any date, (i) with respect to any Project that has been owned by a Consolidated Business, and for any Project that has ceased to be a Development Project, for not less than four full consecutive calendar quarters, an amount equal to Adjusted NOI relating to such Project for the immediately preceding four full consecutive calendar quarters divided by the Capitalization Rate, (ii) with respect to any Project that has ceased to be a Development Project for more than one full calendar quarter but less than four full consecutive calendar quarters, an amount equal to (x) Adjusted NOI relating to such
Project for the immediately preceding full consecutive calendar quarters that such Project has ceased to be a Development Project, multiplied by (y) a ratio the numerator of which is four and the denominator of which is the number of immediately preceding full consecutive calendar quarters that such Project has ceased to be a Development Project and divided by (z) the Capitalization Rate and (iii) with respect to any Project which has been owned by a Consolidated Business for less than four full consecutive calendar quarters, an amount equal to the cost of acquiring such Projects less reasonable and customary transaction costs incurred in connection with such acquisition.

 

“Total Unencumbered Property Value” means, as of any measurement date, the sum of (i) with respect to Unencumbered Eligible Projects that have been owned by a Consolidated Business, and for any Unencumbered Eligible Project that has ceased to be a Development Project, for not less than four full consecutive calendar quarters, an amount equal to Adjusted NOI for all such Unencumbered Eligible Projects for the immediately preceding four full consecutive calendar quarters as of the measurement date, divided by the Capitalization Rate; (ii) with respect to all Unencumbered Eligible Projects that have ceased to be a Development Project for
more than one full calendar quarter but less than four full consecutive calendar quarters, an amount equal to (x) Adjusted NOI for each such Unencumbered Eligible Project for the immediately preceding full consecutive calendar quarters that such Unencumbered Eligible Project has ceased to be a Development Project, multiplied by (y) a ratio the numerator of which is four and the denominator of which is the number of immediately preceding full consecutive calendar quarters that such Unencumbered Eligible Project has ceased to be a Development Project and divided by (z) the Capitalization Rate; (iii) with respect to Unencumbered Eligible Projects which have been owned by a Consolidated Business for less than four full consecutive calendar quarters as of the measurement date, an amount equal to the cost of acquiring all such Unencumbered Eligible Projects less reasonable
and customary transaction costs incurred in connection with such acquisition and (iv) an amount equal to the lesser of (a) the sum of (x) 100% of Book Value of undeveloped land not subject to a Lien that is owned by the Consolidated Businesses and (y) 100% of Book Value of Projects not subject to a Lien on which construction is in progress; and (b) 25% of Total Unencumbered Property Value before including the amount of Total Unencumbered Property Value derived from this clause (iv).

 

 

  

B-14

Table of Contents

 

“Total Value” means, as of any date, the sum of (i) Total Property Value for all Eligible Projects; (ii) an amount equal to 75% of all investments in Mortgage Receivables provided, that the maximum value of investments in Mortgage Receivables that may be included for purposes of this Section (ii) shall not exceed 5% of Total Value; (iii) unrestricted Permitted Investments of the Consolidated Businesses; (iv) an amount equal to the lesser of (a) the sum of (x) 100% of Book Value of undeveloped land not subject to a Lien that is owned by the Consolidated
Businesses and (y) 100% of Book Value of any Development Projects; and (b) 10% of Total Value before including the amount of Total Value derived from this clause (iv); and (v) without duplication (including exclusion of any Project the value of which is included in clause (iv) above), any Consolidated Business’s pro rata share of investments in Real Property not constituting Eligible Projects, valued at the lower of the cost of such investment or the value of such investment as determined in a manner consistent with clauses (i) (calculated as if such investment were an Eligible Project) and clauses (ii) through (iv) above, as applicable.  The Issuer’s pro rata share of assets held by Unconsolidated Affiliates (excluding assets of the type described in the immediately preceding clause (iii)) will be included in Total Value
calculations consistent with the above described treatment for assets of Consolidated Businesses (including, without limitation, Eligible Projects of Unconsolidated Affiliates disregarding clause (i) of the definition of Eligible Projects).

 

“Unconsolidated Affiliate” means, with respect to any Person, any other Person in whom such Person holds an investment, which investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

 

“Unencumbered Eligible Project” means any Eligible Project which is 100% owned by the Issuer and/or any Guarantor and that is not an Encumbered Eligible Project.

 

“Unsecured Interest Expense” means the interest expense paid, accrued or capitalized on all Total Outstanding Indebtedness that is not Secured Indebtedness for the applicable period.

 

“USA Patriot Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

 

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Issuer and the Issuer’s other Wholly-Owned Subsidiaries at such time.

Schedule B

(to Note Purchase Agreement)

  

B-15

Table of Contents

 

SCHEDULE 5.3

Disclosure Documents

 

The following report of the Parent filed with the Securities and Exchange Commission and the documents incorporated therein by reference or filed as exhibits thereto:

	
·  

	
Annual Report on Form 10-K for the fiscal year ended December 31, 2009

 

	
·  

	
Annual Report on Form 10-K for the fiscal year ended December 31, 2010

 

	
·  

	
Quarterly Report on Form 10-Q for the quarter ended March 31, 2011

 

	
·  

	
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011

 

	
·  

	
Quarterly Report on Form 10-Q for the quarter ended September 30, 2011

 

	
·  

	
Current Report on Form 8-K filed on February 16, 2011

 

	
·  

	
Current Report on Form 8-K filed on May 5, 2011

 

	
·  

	
Current Reports (2) on Form 8-K filed on September 19, 2011

 

	
·  

	
Current Report on Form 8-K filed on September 20, 2011

 

	
·  

	
Current Report on Form 8-K filed on October 31, 2011

 

	
·  

	
Current Report on Form 8-K filed on December 13, 2011

 

 

The certificates of officers of the Parent, for itself, the Issuer and the Subsidiary Guarantors pursuant to Section 4.3 of the Note Purchase Agreement.

 

The other Schedules to the Note Purchase Agreement.

 

 

 

Schedule 5.3

(to Note Purchase Agreement)

 

 

  

  

Table of Contents

 

 

 

 

 

SCHEDULE 5.4

 

 

 

 

 

 

 

Schedule 5.4

(to Note Purchase Agreement)

 

 

  

  

Table of Contents

 

 

 

 

 

	
SCHEDULE 5.4

	
LIST OF SUBSIDIARIES

	  	  	  	  
	  	
State of

Formation

	
State(s) of

Qualification

	
Ownership interests*

	  	  	  	  
	
Limited Liability Companies:

	  	  	  
	
Arsenal Street Fee Holding, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Arsenal Street Leasehold Holding, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Barrington Gardens, LLC

	
NJ

	  	
100% owned by Home Properties, L.P.

	
Century Investors, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
The Colony of Home Properties, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Curren Terrace, L.L.C.

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Hackensack Gardens Apartments, L.L.C.

	
NJ

	  	
100% owned by Home Properties, L.P.

	
Hampton Lakes Associates, LLC

	
FL

	  	
100% owned by Home Properties, L.P.

	
Hampton Lakes II Associates, LLC

	
FL

	  	
100% owned by Home Properties, L.P.

	
Hampton Place Joint Venture, LLC

	
FL

	  	
100% owned by Home Properties, L.P.

	
Home Properties 1200 East West, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Annapolis Roads, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Bayview Colonial, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Beverly, LLC

	
MA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Blackhawk, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties Bonnie Ridge LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Braddock Lee, LLC

	
NY

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Broadlawn, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Brooke, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Cambridge Court, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Cambridge Village, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Canterbury No. 1, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Canterbury No. 2, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Canterbury No. 3, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Canterbury No. 4, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Castle Club, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Channel Townhomes, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Charleston, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Charleston IV, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Chatham Hill, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Cider Mill, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Cinnamon Run I, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Cinnamon Run II, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Cobblestone, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Colonies, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties Columbia, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Country Village LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Courtyard Village, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties Cove Townhomes, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Crescent Club, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Cypress Place, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties Deer Grove, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties DE Selford, LLC

	
DE

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properties DE South Bay, LLC

	
DE

	
NY

	
100% owned by Home Properties, L.P.

	
Home Properties DE Stoughton, LLC

	
DE

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties DE Tamarron, LLC

	
DE

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properties DE Woodmont, LLC

	
DE

	
NY

	
100% owned by Home Properties, L.P.

	
Home Properties of Devon, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Dulles, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties East Meadow, LLC

	
DE

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Elmwood Terrace, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fair Oaks, LLC

	
DE

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Falcon Crest Townhouses, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Falkland Chase, LLC

	
DE

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properties Falkland  North, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fox Hall 1, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fox Hall 2, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fox Hall 3, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fox Hall 4, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Fox Hall 5, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Gardencrest, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Golf Club, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Hauppauge, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Hawthorne, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Haynes Farm, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Heights MA, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Heritage Square, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Heritage Woods, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Highland House, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Holiday Square, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Hunters Glen, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Huntington Metro, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Lake Grove, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Lakeview, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Lakeview Townhomes, LLC

	
NY

	
IL

	
100% owned by Home Properties, L.P.

	
Home Properties Liberty Commons, LLC

	
NY

	
ME

	
100% owned by Home Properties, L.P.

	
Home Properties Liberty Place, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Lighthouse Townhomes, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Manor, LLC

	
DE

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Manor, LLC

	
NY

	
MD

	
100% owned by Home Properties Maryland XXVII, LLC

	
Home Properties Mansion House, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Marshfield, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Maryland, LLC

	
MD

	  	
33.33%-Home Properties Morningside Heights, LLC

33.33%-Home Properties Morningside North, LLC

33.33%-Home Properties Morningside Six, LLC

	
Home Properties Maryland II, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland III, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland IV, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland VI, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland VII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland VIII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland IX, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XI, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XIII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XIV, LLC

	
MD

	  	
27%-Home Properties Fox Hall 1, LLC

31%-Home Properties Fox Hall 2, LLC

22%-Home Properties Fox Hall 3, LLC

10%-Home Properties Fox Hall 4, LLC

10% Home Properties Fox Hall 5, LLC

	
Home Properties Maryland XV, LLC

	
MD

	  	
72%-Home Properties Peppertree Farm I, LLC

28%-Home Properties Peppertree Farm II, LLC

	
Home Properties Maryland XVI, LLC

	
MD

	  	
56%-Home Properties Cinnamon Run I, LLC

34%-Home Properties Peppertree Farm III, LLC

10%-Home Properties Cinnamon Run II, LLC

	
Home Properties Maryland XVII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XVIII, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XIX, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XX, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XXI, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XXII, LLC

	
DE

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XXIII, LLC

	
DE

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properties Maryland XXIV, LLC

	
MD

	  	
100% owned by Home Properties Annapolis Roads, LLC

	
Home Properties Maryland XXV, LLC

	
MD

	  	
100% owned by Home Properties Columbia, LLC

	
Home Properties Maryland XXVI, LLC

	
MD

	  	
100% owned by Home Properties Charleston, LLC

	
Home Properties Maryland XXVII, LLC

	
MD

	  	  
	
Home Properties Maryland XXVIII, LLC

	
MD

	  	
100% owned by Home Properties Heritage Woods, LLC

	
Home Properties Maryland XXIX, LLC

	
MD

	  	
100% owned by Home Properties Topfield, LLC

	
Home Properties Meadows MA, LLC

	
NY

	
MA

	
100% owned by Home Properties, L.P.

	
Home Properties Mid-Island, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Middlebrooke, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Morningside Heights LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Morningside North, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Morningside Six, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Mount Vernon, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Muncy, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Newport Village, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties North Plainfield, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Orleans Village, LLC

	
NY

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Owings Run 1, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Owings Run 2, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Patricia Gardens, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Peppertree Farm I, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Peppertree Farm II, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Peppertree Farm III, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Pleasant View, LLC

	
NJ

	  	
100% owned by Home Properties, L.P.

	
Home Properties Pleasure Bay, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Potomac Falls, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Racquet Club East, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Ridgeview Chase, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Ripley Street LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Rivers Edge, LLC

	
NJ

	  	
100% owned by Home Properties, L.P.

	
Home Properties Saddle Brooke, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Sandalwood, LLC

	
NY

	
MD

	
100% owned by Home Properties, L.P.

	
Home Properrties Sayville, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Selford Townhouses, LLC

	
MD

	  	
99%-Home Properties, L.P.

1%-Home Properties DE Selford, LLC

	
Home Properties Seminary Hills, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Seminary Towers, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Sherry Lake, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Sherwood Gardens, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Somerset Park, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties South Bay Manor LLC

	
NY

	  	
99%-Home Properties, L.P.

1%-Home Properties DE South Bay, LLC

	
Home Properties Southern Meadows, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Stoughton, LLC

	
NY

	
MA

	
99%-Home Properties, L.P.l

1%-Home Properties DE Stoughton, LLC

	
Home Properties Stratford Greens, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Sunset Gardens, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Sycamores, LLC

	
NY

	
VA

	
100% owned by Home Properties, L.P.

	
Home Properties Tamarron, LLC

	
MD

	  	
99%-Home Properties, L.P.

1%-Home Properties DE Tamarron, LLC

	
Home Properties Timbercroft I, LLC

	
MD

	  	
99%-Home Properties, L.P.

1%-Ann McCormick

	
Home Properties Timbercroft III, LLC

	
MD

	  	
99%-Home Properties, L.P.

1%-Ann McCormick

	
Home Properties Topfield, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Trexler Park, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Trexler Park West, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Tysons, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Village Square, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Virginia Village, LLC

	
VA

	  	
100% owned by Home Properties, L.P.

	
Home Properties Waterview, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Wayne Village, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Wellington Trace Apartments, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Westbrooke, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Westchester West, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Westwood Village, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Home Properties Whitemarsh, LLC

	
DE

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties William Henry, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties William Henry II, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties William Henry III, LLC

	
NY

	
PA

	
100% owned by Home Properties, L.P.

	
Home Properties Windsor, LLC

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	
Home Properties Woodleaf, LLC

	
DE

	
MD

	
95%-HPLP

5%-Century Investors, LLC

	
Home Properties WMF I, LLC

	
NY

	
VA, ME, NJ,

DE, OH

	
100% owned by Home Properties, L.P.

	
Home Properties Woodholme Manor, LLC

	
MD

	  	
100% owned by Home Properties, L.P.

	
Home Properties Woodmont Village, LLC

	
NY

	  	
99%-Home Properties, L.P.

1%-Home Properties DE Woodmont, LLC

	
Home Properties Yorkshire Village, LLC

	
NY

	  	
100% owned by Home Properties, L.P.

	
Jacob Ford Village, LLC

	
NJ

	  	
100% owned by Home Properties, L.P.

	
Royal Gardens Associates, L.L.C.

	
NY

	
NJ

	
100% owned by Home Properties, L.P.

	  	  	  	  
	
Corporations

	  	  	  
	
Hampton Village Property Owners' Association, Inc.

	
FL

	  	
33.33%-Hampton Lakes Associates, LLC

33.33%-Hampton Lakes II Associates, LLC

33.33%-Hampton Place Joint Venture, LLC

	
Briggs Wedgewood, Inc.

	
NY

	
OH

	
49%-Home Properties Resident Services, Inc.

51%-Affordable Housing Assistance Corp.

	  	  	  	  
	
Partnerships

	  	  	  
	
Briggs Wedgewood Associates, LP

	
NY

	
OH

	
.01%-Briggs Wedgewood, Inc. (GP)

99.9%-Boston Capital limited partners

	
Home Properties Bittersweet, L.P.

	
NY

	
MA

	
95%-HPLP

5%-Century Investors, LLC

	
Home Properties Dunfield Townhouses, LLLP

	
MD

	  	
95%-HPLP

5%-Century Investors, LLC

	
Home Properties Gateway Village Limited Partnership

	
MD

	  	
95%-HPLP

5%-Century Investors, LLC

	
Sherry Lake Associates

	
NY

	
PA

	
99.9%-HPLP

.1%-Home Properties Sherry Lake, LLC

	
Valley Park South Partnership

	
NY

	  	
99.9%-HPLP

.1%-Century Investors, LLC

*100% owned by Home Properties, L.P. unless otherwise indicated

 

 

 

 

 

Schedule 5.4

(to Note Purchase Agreement)

 

  

  

Table of Contents

SCHEDULE 5.4

SCHEDULE B

	  	  
	
Home Properties, Inc. (HME)

	
Maryland Corp.

	  	  
	  	
Qualified in: New York, Ohio, Pennsylvania, Virginia, Indiana, Illinois, DC, Massachusetts, Florida, New Jersey

	  	  
	  	
Authorized capital stock of HME consists of 80 million shares of Common Stock, par value $.01 per share, 10 million shares of Preferred Stock, par value $.01 per share and 10 million shares of Excess Stock, par value $.01 per share.  As of September 30, 2011 48,264,100 shares of Common Stock and 2,777,856 options to purchase stock under HME’s stock purchase plans were issued and outstanding.

	  	  
	
Home Properties, L.P.

	
New York limited partnership.

	  	  
	  	
Qualified in: Delaware, Maryland, Maine, Virginia, Illinois, Indiana, New Jersey, Ohio, Pennsylvania, Massachusetts, Florida, Connecticut, DC

	  	  
	  	
1% owned by Home Properties, Inc.; approximately 80.72% owned as of September 30, 2011 by Home Properties Trust

	  	  
	
Home Properties Trust

	
Maryland real estate trust 100% owned by Home Properties I, LLC

	  	  
	
Home Properties I, LLC

	
New York limited liability company 100% owned by HME

	  	  
	
Home Properties II, LLC

	
New York limited liability company 100% owned by HME

	  	  
	
Home Properties Resident Services, Inc.

	
Maryland corporation owned 100% by Home Properties, L.P.

	  	  
	
Home Properties Florida Management, Inc.

	
Florida corporation owned 100% by HME.

	  	  
	
Home Properties Springing Member, LLC

	
Delaware limited liability company owned 100% by HME.

	  	  
	
Other Subsidiaries

	
See Schedule A

 

 

 

Schedule 5.4

(to Note Purchase Agreement)

 

  

  

Table of Contents

SCHEDULE 5.4

SCHEDULE C

SENIOR OFFICERS AND DIRECTORS

OF HOME PROPERTIES, INC.

DIRECTORS

Stephen R. Blank

Alan L. Gosule

Leonard F. Helbig, III

Charles J. Koch

Thomas P. Lydon, Jr.

Edward Pettinella

Clifford W. Smith, Jr.

Amy L. Tait

OFFICERS:

	
Name:

	 	
Title:

	  
	
Lisa M. Critchley

	  	
Senior Vice President

	  
	
Scott A. Doyle

	  	
Senior Vice President

	  
	
David P. Gardner

	  	
Chief Financial Officer and Executive Vice President

	  
	
Donald R. Hague

	  	
Senior Vice President

	  
	
Robert J. Luken

	  	
Senior Vice President and Treasurer

	  
	
Ann M. McCormick

	  	
General Counsel, Executive Vice President & Secretary

	  
	
Bernard J. Quinn

	  	
Senior Vice President

	  
	
John E. Smith

	  	
Senior Vice President

	  

 

 

Schedule 5.4

(to Note Purchase Agreement)

  

  

Table of Contents

SCHEDULE 5.5

Financial Statements

 

All of the annual and quarterly consolidated financial statements and the notes thereto included in the Annual Reports on Form 10-K and the Quarterly Reports on Form 10-Q referenced in Schedule 5.3 to this Agreement.

Schedule 5.5

(to Note Purchase Agreement)

  

  

Table of Contents

 

 

Existing Indebtedness

	
Schedule 5.15

	 	 	 
	
HOME PROPERTIES

	 	
10/31/11

	 
	
Debt Summary Schedule - Contractual Terms and Balances

	 	 	 
	  	 	  	  	 	 	 	 	 	 	  	 	 	 
	  	 	  	  	 	 	 	 	
10/31/2011

	 	
MATURITY

	 	
YRS TO

	 
	
PROPERTY

	 	
LENDER

	
BORROWER

	 	
RATE

	 	 	
BALANCE

	 	
DATE

	 	
MATURITY

	 
	  	 	  	  	 	 	 	 	 	 	  	 	 	 
	
Mount Vernon Square

	(1)	
KeyBank RE Cap-Fannie Mae

	
Home Properties Mount Vernon, LLC

	 	 	5.23	 	 	$	82,909,586	 	
1/1/2012

	 	 	0.17	 
	
Multi-Property Notes Pay

	 	
Seller Financing

	
Home Properties, L.P.

	 	 	4.00	 	 	 	83,167	 	
2/1/2012

	 	 	0.25	 
	
Timbercroft III - 1st

	 	
Berkadia - HUD

	
Home Properties Timbercroft III, LLC

	 	 	8.00	 	 	 	53,775	 	
2/1/2012

	 	 	0.25	 
	
Castle Club Apartments

	 	
NorthMarq - Freddie Mac

	
Home Properties Castle Club, LLC

	 	 	7.08	 	 	 	6,091,998	 	
5/1/2012

	 	 	0.50	 
	
Gateway Village

	 	
Prudential - Fannie Mae

	
Home Properties Maryland II, LLC

	 	 	6.89	 	 	 	6,249,299	 	
5/1/2012

	 	 	0.50	 
	
The New Colonies

	 	
Prudential - Fannie Mae

	
Home Properties Colones, LLC

	 	 	7.11	 	 	 	17,565,941	 	
6/1/2012

	 	 	0.59	 
	
Woodholme Manor

	 	
Prudential - Fannie Mae

	
Home Properties Maryland III, LLC

	 	 	7.17	 	 	 	3,379,026	 	
7/1/2012

	 	 	0.67	 
	
Liberty Place

	(1)	
CW Capital- Fannie Mae

	
Home Properties Liberty Place, LLC

	 	 	6.79	 	 	 	5,681,613	 	
11/1/2012

	 	 	1.01	 
	
Hackensack Gardens - 1st

	 	
JPMorgan Chase - Fannie Mae

	
Hackensack Gardens Apartments, LLC

	 	 	5.26	 	 	 	4,297,069	 	
3/1/2013

	 	 	1.33	 
	
Hackensack Gardens - 2nd

	 	
JPMorgan Chase - Fannie Mae

	
Hackensack Gardens Apartments, LLC

	 	 	5.44	 	 	 	4,199,761	 	
3/1/2013

	 	 	1.33	 
	
Barrington Gardens

	 	
Wachovia - Freddie Mac

	
Barrington Gardens, LLC

	 	 	4.96	 	 	 	10,834,625	 	
4/1/2013

	 	 	1.42	 
	
Canterbury Apartments - 1st

	 	
M&T Realty-Fannie Mae

	
Home Properties Maryland VIII, LLC

	 	 	5.02	 	 	 	26,177,580	 	
5/1/2013

	 	 	1.50	 
	
Canterbury Apartments - 2nd

	 	
M&T Realty-Fannie Mae

	
Home Properties Maryland VIII, LLC

	 	 	6.46	 	 	 	16,444,783	 	
5/1/2013

	 	 	1.50	 
	
Multi-Property

	 	
Prudential - Fannie Mae

	
Home Properties Falcon Crest Townhouses, LLC

	 	 	6.48	 	 	 	100,000,000	 	
8/31/2013

	 	 	1.84	 
	  	 	  	
Home Properties Broadlawn, LLC

	 	 	 	 	 	 	 	 	  	 	 	 	 
	  	 	  	
Home Properties WMF I, LLC

	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Saddle Brook Apts. - 1st

	(1)	
Wells Fargo - Fannie Mae

	
Home Properties Maryland XIX, LLC

	 	 	4.87	 	 	 	27,212,006	 	
11/1/2013

	 	 	2.01	 
	
Saddle Brook Apts. - 2nd

	(1)	
Wells Fargo - Fannie Mae

	
Home Properties Maryland XIX, LLC

	 	 	6.12	 	 	 	3,158,372	 	
11/1/2013

	 	 	2.01	 
	
Falkland Chase

	 	
Centerline - Fannie Mae

	
Home Properties XI, LLC

	 	 	5.48	 	 	 	10,858,052	 	
4/1/2014

	 	 	2.42	 
	
The Apts. At Wellington Trace

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XIII, LLC

	 	 	5.52	 	 	 	23,526,669	 	
4/1/2014

	 	 	2.42	 
	
Hawthorne Court

	 	
Centerline - Fannie Mae

	
Home Properties Hawthorne, LLC

	 	 	5.27	 	 	 	33,900,398	 	
7/1/2014

	 	 	2.67	 
	
The Greens at Columbia

	 	
M&T Realty-Fannie Mae

	
Home Properties Maryland XXV, LLC

	 	 	4.93	 	 	 	9,358,727	 	
8/1/2014

	 	 	2.75	 
	
Curren Terrace - 1st

	 	
M&T Realty - Freddie Mac

	
Curren Terrace, LLC

	 	 	5.36	 	 	 	13,197,174	 	
10/1/2014

	 	 	2.92	 
	
Curren Terrace - 2nd

	 	
M&T Realty - Freddie Mac

	
Curren Terrace, LLC

	 	 	5.09	 	 	 	9,650,849	 	
10/1/2014

	 	 	2.92	 
	
Westchester West - 1st

	(1)	
Deutsche Bank - Freddie

	
Home Properties Maryland XX, LLC

	 	 	5.03	 	 	 	27,437,686	 	
3/1/2015

	 	 	3.33	 
	
Westchester West - 2nd

	(1)	
Deutsche Bank - Freddie

	
Home Properties Maryland XX, LLC

	 	 	5.89	 	 	 	7,553,096	 	
3/1/2015

	 	 	3.33	 
	
Stratford Greens

	 	
Capital One Bank

	
Home Properties Stratford Greens, LLC

	 	 	5.75	 	 	 	30,533,691	 	
7/1/2015

	 	 	3.67	 
	
Sayville Commons

	 	
M&T Realty - Freddie Mac

	
Home Properties Sayville, LLC

	 	 	5.00	 	 	 	39,070,157	 	
8/1/2015

	 	 	3.75	 
	
Charleston Place - Note 1

	(1)	
Wells Fargo - Freddie Mac

	
Home Properties Maryland XXVI, LLC

	 	 	4.97	 	 	 	31,200,000	 	
9/1/2015

	 	 	3.84	 
	
Charleston Place - Note 2

	(1)	
Wells Fargo - Freddie Mac

	
Home Properties Maryland XXVI, LLC

	 	 	5.29	 	 	 	21,300,000	 	
9/1/2015

	 	 	3.84	 
	
Charleston Place - Note 3

	(1)	
Wells Fargo - Freddie Mac

	
Home Properties Maryland XXVI, LLC

	 	 	5.92	 	 	 	18,250,000	 	
9/1/2015

	 	 	3.84	 
	
Cypress Place Apartments

	 	
Prudential - Fannie Mae

	
Home Properties Cypress Place, LLC

	 	 	6.56	 	 	 	10,090,590	 	
11/1/2015

	 	 	4.01	 
	
Golf Club Apartments

	 	
Prudential - Fannie Mae

	
Home Properties Golf Club, LLC

	 	 	6.38	 	 	 	32,528,051	 	
11/1/2015

	 	 	4.01	 
	
Northwood Apartments

	 	
M&T Realty - Freddie Mac

	
Home Properties North Plainfield, LLC

	 	 	5.50	 	 	 	10,405,186	 	
12/1/2015

	 	 	4.09	 
	
Cinnamon Run - 1st

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XVI, LLC

	 	 	5.25	 	 	 	49,323,547	 	
1/1/2016

	 	 	4.17	 
	
Cinnamon Run - 2nd

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XVI, LLC

	 	 	5.55	 	 	 	5,116,776	 	
1/1/2016

	 	 	4.17	 
	
Peppertree Farm - 1st

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XV, LLC

	 	 	5.25	 	 	 	75,918,652	 	
1/1/2016

	 	 	4.17	 
	
Peppertree Farm - 2nd

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XV, LLC

	 	 	5.55	 	 	 	1,860,642	 	
1/1/2016

	 	 	4.17	 
	
The Hamptons/Vinings at Hamptons

	 	
Prudential - Fannie Mae

	
Hampton Place Joint Venture, LLC

	 	 	5.57	 	 	 	50,081,133	 	
2/1/2016

	 	 	4.26	 
	  	 	  	
Hampton Lakes Associates, LLC

	 	 	 	 	 	 	 	 	  	 	 	 	 
	  	 	  	
Hampton Lakes II Associates, LLC

	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Devonshire - 1st

	 	
Wachovia - Fannie Mae

	
Home Properties Hauppague, LLLC

	 	 	5.60	 	 	 	36,659,464	 	
4/1/2016

	 	 	4.42	 
	
Devonshire - 2nd

	 	
Wachovia - Fannie Mae

	
Home Properties Hauppague, LLLC

	 	 	6.24	 	 	 	8,254,066	 	
4/1/2016

	 	 	4.42	 
	
Mid-Island

	 	
Prudential - Fannie Mae

	
Home Properties Mid-Island, LLC

	 	 	5.48	 	 	 	19,211,287	 	
4/1/2016

	 	 	4.42	 
	
Owings Run 1 & 2

	 	
Prudential - Fannie Mae

	
Home Properties Maryland XVIII, LLC

	 	 	5.59	 	 	 	41,591,986	 	
4/1/2016

	 	 	4.42	 
	
Country Village

	 	
Centerline - Fannie Mae

	
Home Properties Maryland XVII, LLC

	 	 	5.52	 	 	 	18,396,954	 	
6/1/2016

	 	 	4.59	 
	
Fox Hall Apartments

	 	
Columbia Nat'l - Freddie Mac

	
Home Properties Maryland XIV, LLC

	 	 	5.61	 	 	 	47,000,000	 	
6/1/2017

	 	 	5.59	 
	
Mill Towne Village

	 	
Prudential - Fannie Mae

	
Home Properties Maryland IV, LLC

	 	 	5.99	 	 	 	24,239,000	 	
9/1/2017

	 	 	5.84	 
	
Royal Gardens Apts.

	 	
M&T Realty - Freddie Mac

	
Royal Garden Associates, L.L.C.

	 	 	5.83	 	 	 	47,000,000	 	
11/1/2017

	 	 	6.01	 
	
Village Square 1, 2 & 3

	 	
Prudential - Fannie Mae

	
Home Properties Maryland VI, LLC

	 	 	5.81	 	 	 	39,285,000	 	
12/1/2017

	 	 	6.09	 
	
Chatham Hill

	 	
M&T Realty - Freddie Mac

	
Home Properties Chatham Hill. LLC

	 	 	5.59	 	 	 	43,934,235	 	
1/1/2018

	 	 	6.18	 
	
William Henry Apartments

	 	
PNC - Fannie Mae

	
Home Properties William Henry, LLC

	 	 	4.85	 	 	 	28,337,899	 	
1/1/2018

	 	 	6.18	 
	
Seminary Towers Apartments

	 	
Prudential - Fannie Mae

	
Home Properties Seminary Towers, LLC

	 	 	5.49	 	 	 	53,515,000	 	
7/1/2018

	 	 	6.67	 
	
The Manor (MD)

	 	
Prudential - Fannie Mae

	
Home Propeties Maryland XXVII, LLC

	 	 	4.23	 	 	 	46,000,119	 	
11/1/2018

	 	 	7.01	 
	
Bonnie Ridge - 1st

	 	
Prudential Life

	
Home Properties Maryland IX, LLC

	 	 	6.60	 	 	 	10,276,361	 	
12/15/2018

	 	 	7.13	 
	
Bonnie Ridge - 2nd

	 	
Prudential Life

	
Home Properties Maryland IX, LLC

	 	 	6.16	 	 	 	17,452,692	 	
12/15/2018

	 	 	7.13	 
	
Bonnie Ridge - 3rd

	 	
Prudential Life

	
Home Properties Maryland IX, LLC

	 	 	6.07	 	 	 	24,551,221	 	
12/15/2018

	 	 	7.13	 
	
Annapolis Roads

	 	
AmeriSphere - Fannie Mae

	
Home Properties XXIV, LLC

	 	 	5.12	 	 	 	23,742,173	 	
1/1/2019

	 	 	7.18	 
	
Ridgeview at Wakefield Valley

	 	
M&T Realty - Freddie Mac

	
Home Properties Maryland XXI, LLC

	 	 	5.75	 	 	 	18,080,799	 	
1/1/2019

	 	 	7.18	 
	
The Sycamores

	 	
M&T Realty - Freddie Mac

	
Home Properties Sycamores, LLC

	 	 	5.71	 	 	 	21,078,879	 	
1/1/2019

	 	 	7.18	 
	
Top Field Apartments

	 	
M&T Realty-Fannie Mae

	
Home Properties Maryland XIX, LLC

	 	 	4.84	 	 	 	16,443,541	 	
1/1/2019

	 	 	7.18	 
	
Westwood Village

	 	
M&T Realty - Freddie Mac

	
Home Properties Westwood Village, LLC

	 	 	5.68	 	 	 	46,185,958	 	
1/1/2019

	 	 	7.18	 
	
Timbercroft III - 2nd

	 	
M & T Realty - HUD

	
Home Properties Timbercroft III, LLC

	 	 	8.38	 	 	 	2,044,440	 	
6/1/2019

	 	 	7.59	 
	
Timbercroft Townhomes 1 - 2nd

	 	
M & T Realty - HUD

	
Home Properties Timbercroft I, LLC

	 	 	8.38	 	 	 	1,388,020	 	
6/1/2019

	 	 	7.59	 
	
The Brooke at Peachtree

	 	
Wells Fargo - Fannie Mae

	
Home Properties Brooke, LLC

	 	 	5.47	 	 	 	12,202,468	 	
7/1/2019

	 	 	7.67	 
	
Glen Manor

	 	
Prudential - Fannie Mae

	
Home Properties. L.P.

	 	 	5.83	 	 	 	7,841,119	 	
8/1/2019

	 	 	7.76	 
	
Ridley Brook

	 	
Prudential - Fannie Mae

	
Home Properties, L.P.

	 	 	5.83	 	 	 	13,016,939	 	
8/1/2019

	 	 	7.76	 
	
The Courts at Fair Oaks

	(1)	
CW Capital- Freddie Mac CME

	
Home Properties Fair Oaks, LLC

	 	 	5.66	 	 	 	45,909,331	 	
8/1/2019

	 	 	7.76	 
	
Southern Meadows

	 	
Red Mortgage - Fannie Mae

	
Home Properties Southern Meadows, LLC

	 	 	5.36	 	 	 	40,361,272	 	
10/1/2019

	 	 	7.92	 
	
Elmwood Terrace

	 	
M & T Realty - Fannie Mae

	
Home Properties Maryland VII, LLC

	 	 	5.56	 	 	 	26,492,289	 	
11/1/2019

	 	 	8.01	 
	
Lakeview

	 	
Greystone - Fannie Mae

	
Home Properties Lakeview, LLC

	 	 	5.31	 	 	 	8,996,441	 	
12/1/2019

	 	 	8.09	 
	
The Landings

	 	
Prudential - Fannie Mae

	
Valley Park South Partnership

	 	 	5.60	 	 	 	25,922,331	 	
1/1/2020

	 	 	8.18	 
	
East Meadow Apartments

	 	
M&T Realty - Freddie Mac CME

	
Home Properties East Meadow, LLC

	 	 	5.40	 	 	 	14,594,345	 	
5/1/2020

	 	 	8.51	 
	
Selford Townhomes

	 	
M&T Realty - Freddie Mac CME

	
Home Properties Maryland XXIII, LLC

	 	 	5.40	 	 	 	8,823,074	 	
5/1/2020

	 	 	8.51	 
	
South Bay Manor

	 	
M&T Realty - Freddie Mac CME

	
Home Properties South Bay Manor, LLC

	 	 	5.40	 	 	 	6,690,831	 	
5/1/2020

	 	 	8.51	 
	
Stone Ends Apts.

	 	
M&T Realty - Freddie Mac CME

	
Home Properties Stoughton, LLC

	 	 	5.40	 	 	 	24,851,659	 	
5/1/2020

	 	 	8.51	 
	
Tamarron Apartments

	 	
M&T Realty - Freddie Mac CME

	
Home Properties Maryland XXII, LLC

	 	 	5.40	 	 	 	14,602,188	 	
5/1/2020

	 	 	8.51	 
	
The Manor (VA)

	 	
M&T Realty - Freddie Mac CME

	
Home Properties Manor, LLC

	 	 	5.40	 	 	 	13,705,176	 	
5/1/2020

	 	 	8.51	 
	
Woodmont Village

	 	
M&T Realty - Freddie Mac CME

	
Home Properties Woodmont Village, LLC

	 	 	5.40	 	 	 	9,888,706	 	
5/1/2020

	 	 	8.51	 
	
Trexler Park

	 	
Greystone - Fannie Mae

	
Home Properties Trexler Park, LLC

	 	 	4.34	 	 	 	38,173,988	 	
9/1/2020

	 	 	8.84	 
	
Arbor Park of Alexandria

	 	
Prudential - Fannie Mae

	
Home Properties Orleans Village, LLC

	 	 	4.35	 	 	 	96,231,213	 	
11/1/2020

	 	 	9.01	 
	
New Orleans Park

	 	
M & T Realty - Fannie Mae

	
Home Properties, L.P.

	 	 	4.58	 	 	 	23,382,065	 	
11/1/2020

	 	 	9.01	 
	
Racquet Club East

	 	
PNC - Fannie Mae

	
Home Properties Racquest Club East, LLC

	 	 	4.74	 	 	 	37,409,170	 	
12/1/2020

	 	 	9.09	 
	
Heritage Woods Apts

	 	
Greystone - Fannie Mae

	
Home Properties Maryland XXVIII, LLC

	 	 	5.39	 	 	 	14,358,071	 	
1/1/2021

	 	 	9.18	 
	
The Meadows at Marlborough

	 	
Prudential - Fannie Mae

	
Home Properties Meadows MA, LLC

	 	 	5.50	 	 	 	20,967,335	 	
1/1/2021

	 	 	9.18	 
	
Home Properties of Devon

	 	
M & T Realty - Fannie Mae

	
Home Properties of Devon, LLC

	 	 	4.85	 	 	 	60,258,650	 	
8/1/2021

	 	 	9.76	 
	
Pleasant View Gardens

	 	
Prudential - Fannie Mae

	
Home Properties Pleasant View, LLC

	 	 	4.51	 	 	 	95,186,032	 	
11/1/2021

	 	 	10.01	 
	
Dunfield Townhomes

	 	
Centerline - HUD

	
Home Properties Dunfield Townhouses, LLLP

	 	 	5.25	 	 	 	11,535,925	 	
9/1/2028

	 	 	16.85	 
	
Highland House

	(1)	
Arbor Comml - Fannie Mae

	
Home Properties Highland House, LLC

	 	 	6.99	 	 	 	5,507,009	 	
1/1/2029

	 	 	17.18	 
	
Westwoods

	(1)	
Midland Loan Services - HUD

	
Home Properties Bittersweet, L.P.

	 	 	5.60	 	 	 	3,604,461	 	
6/1/2034

	 	 	22.60	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
     WTD AVG - FIXED SECURED

	 	  	  	 	 	5.39	 	 	 	2,140,680,861	 	  	 	 	5.78	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
VARIABLE RATE

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Virginia Village

	 	
Wachovia - Freddie Mac

	
Home Properties Virginia Village, LLC

	 	 	1.99	 	 	 	29,238,275	 	
7/1/2015

	 	 	3.67	 
	
 Adjusts Monthly - Freddie 30d Ref + 1.99

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Hill Brook Apts

	 	
M&T Realty - Freddie Mac

	
Home Properties, L.P.

	 	 	3.53	 	 	 	12,618,465	 	
9/1/2016

	 	 	4.84	 
	
 Adjusts Monthly - 30L + 2.85 + .44

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Wayne Village

	 	
M&T Realty - Freddie Mac

	
Home Properties Wayne Village, LLC

	 	 	3.63	 	 	 	25,694,986	 	
9/1/2016

	 	 	4.84	 
	
 Adjusts Monthly - 30L + 3.00 + .387

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Cider Mill Apts

	 	
M&T Realty - Freddie Mac

	
Home Properties Cider Mill, LLC

	 	 	3.41	 	 	 	61,720,293	 	
1/1/2017

	 	 	5.18	 
	
 Adjusts Monthly - 30L + 2.89 + .31

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
The Heights at Marlborough

	 	
PNC Real Estate

	
Home Properties Heights MA, LLC

	 	 	3.61	 	 	 	23,216,810	 	
1/1/2017

	 	 	5.18	 
	
 Adjusts Monthly - 30L + 3.02 + .35

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Sherry Lake

	 	
M&T Realty - Freddie Mac

	
Sherry Lake Associates

	 	 	3.14	 	 	 	25,602,298	 	
4/1/2017

	 	 	5.42	 
	
 Adjusts Monthly - 30L + 2.67 + .226

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Falkland Chase

	 	
Montgomery Cty HOC-Fannie Mae

	
Home Properties Falkland Chase, LLC

	 	 	1.19	 	 	 	24,695,000	 	
10/1/2030

	 	 	18.93	 
	
 Adjusts Weekly - BMA Index + 1.10

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
     WTD AVG - VARIABLE SECURED

	 	  	  	 	 	2.96	 	 	 	202,786,126	 	  	 	 	6.60	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
     WTD AVG - TOTAL SECURED DEBT

	 	  	  	 	 	5.18	 	 	 	2,343,466,987	 	  	 	 	5.85	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
SENIOR UNSECURED

	(1)	
Various Note Holders

	
Home Properties, L.P.

	 	 	4.13	 	 	 	140,000,000	 	
11/1/2011

	 	 	0.00	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
UNSECURED REVOLVER

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
Unsecured Line of Credit

	 	
M and T Bank et. al.

	
Home Properties, L.P.

	 	 	2.55	 	 	 	16,000,000	 	
8/31/2012

	 	 	0.84	 
	
      Variable Adjusts Daily  30 LIBOR + 2.30

	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	  	 	  	  	 	 	 	 	 	 	 	 	  	 	 	 	 
	
     WTD AVG - COMBINED DEBT

	 	  	  	 	 	5.11	 	 	$	2,499,466,987	 	  	 	 	5.49	 

	
(1)

	
General ledger balances and rates that are adjusted pursuant to ASC 805-10 (f.k.a FAS 141R) have been revised to reflect actual contractual amounts due to lenders.

 

 

 

Schedule 5.15

(to Note Purchase Agreement)

  

  

Table of Contents

[Form of Series A Note]

 

Home Properties, L.P.

 

4.46% Senior Guaranteed Note, Series A, Due December 19, 2018

 

No. [_____] [Date]

$[_______] PPN 43730E A*7

 

For Value Received, the undersigned, Home Properties, L.P. (herein called the “Issuer”), a limited partnership organized and existing under the laws of the State of New York, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] Dollars (or so
much thereof as shall not have been prepaid) on December 19, 2018, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.46% per annum from the date hereof, payable semiannually, on the nineteenth day of June and December in each year, commencing with the June 19 or December 19 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 6.46% or (ii) 2.00% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base”
or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of the Company in Rochester, New York or at such other place as the Issuer shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes, Series A, (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of December 19, 2011 (as from time to time amended, the “Note Purchase Agreement”), among the Parent, the Issuer and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Issuer may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any notice to the contrary.

 

 

  

  

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This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

This Note is guaranteed by the Parent and certain Affiliates of the Issuer pursuant to that certain Affiliate Guaranty.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the Issuer and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

	
  

	
Home Properties, L.P.

	
  

	
By:  Home Properties, Inc.,

	
  

	
Its general partner

	
  

	
By 

	
  

	
[Title]

Exhibit 1-A

(to Note Purchase Agreement)

  

  

Table of Contents

[Form of Series B Note]

 

Home Properties, L.P.

 

5.00% Senior Guaranteed Note, Series B, Due December 19, 2021

 

No. [_____] [Date]

$[_______] PPN 43730E A@5

 

For Value Received, the undersigned, Home Properties, L.P. (herein called the “Issuer”), a limited partnership organized and existing under the laws of the State of New York, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] Dollars (or so
much thereof as shall not have been prepaid) on December 19, 2021, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 5.00% per annum from the date hereof, payable semiannually, on the nineteenth day of June and December in each year, commencing with the June 19 or December 19 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 7.00% or (ii) 2.00% over the rate of interest publicly announced by Bank of America, N.A. from time to time in New York, New York as its “base”
or “prime” rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of the Company in Rochester, New York or at such other place as the Issuer shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes, Series B, (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of December 19, 2011 (as from time to time amended, the “Note Purchase Agreement”), among the Parent, the Issuer and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set
forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Issuer may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any notice to the contrary.

 

 

  

  

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This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

 

This Note is guaranteed by the Parent and certain Affiliates of the Issuer pursuant to that certain Affiliate Guaranty.

 

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of the Issuer and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

	
  

	
Home Properties, L.P.

	
  

	
By:  Home Properties, Inc.,

	
  

	
Its general partner

	
  

	
By 

	
  

	
[Title]

 

Exhibit 1-B

(to Note Purchase Agreement)

  

  

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Exhibit 2

 

 

 

 

Affiliate Guaranty

 

Dated as of December 19, 2011

 

of

 

Home Properties, Inc.

Home Properties 1200 East West, LLC

Home Properties Bayview Colonial, LLC

Home Properties Blackhawk, LLC

Home Properties Braddock Lee, LLC

Home Properties Cambridge Court, LLC

Home Properties Cambridge Village, LLC

Home Properties Courtyard Village, LLC

Home Properties Crescent Club, LLC

Home Properties Gardencrest, LLC

Home Properties Haynes Farm, LLC

Home Properties Heritage Square, LLC

Home Properties Holiday Square, LLC

Home Properties Hunters Glen, LLC

Home Properties Huntington Metro, LLC

Jacob Ford Village, L.L.C.

Home Properties Lake Grove, LLC

Home Properties Lakeview Townhomes, LLC

Home Properties Liberty Commons, LLC

Home Properties Middlebrooke, LLC

Home Properties Morningside Heights, LLC

Home Properties Morningside North, LLC

Home Properties Morningside Six, LLC

Home Properties Newport Village, LLC

Home Properties Pleasure Bay, LLC

Home Properties Sherwood Gardens, LLC

Home Properties Seminary Hills, LLC

Home Properties Somerset Park, LLC

The Colony of Home Properties, LLC

Home Properties Channel Townhomes, LLC

Home Properties Cove Townhomes, LLC

Home Properties Lighthouse Townhomes, LLC

Home Properties Marshfield, LLC

Home Properties Potomac Falls, LLC

Home Properties Beverly, LLC

Home Properties Waterview, LLC

Home Properties Westbrooke, LLC

Home Properties Windsor, LLC

Home Properties Yorkshire Village, LLC

Home Properties Woodleaf, LLC

 

 

 

 

  

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TABLE OF CONTENTS

 

	
SECTION

	
HEADING

	
PAGE

	  	  	  
	
SECTION 1.

	
GUARANTY

	
2

	  	  	  
	
SECTION 2.

	
OBLIGATIONS ABSOLUTE

	
3

	  	  	  
	
SECTION 3. 

	
WAIVER

	
4

	  	  	  
	
SECTION 4.

	
OBLIGATIONS UNIMPARIED

	
4

	  	  	  
	
SECTION 5.

	
SUBROGATION AND SUBORDINATION

	
5

	  	  	  
	
SECTION 6.

	
REINSTATEMENT OF GUARANTY

	
6

	  	  	  
	
SECTION 7.

	
RANK OF GUARANTY

	
6

	  	  	  
	
SECTION 8.

	
[RESERVED]

	
6

	  	  	  
	
SECTION 9.

	
REPRESENTATIONS AND WARRANTIES OF EACH GUARANTOR

	
6

	  	  	  
	
Section 9.1

	
Organization; Power and Authority

	
6

	
Section 9.2

	
Authorization, Etc.

	
6

	
Section 9.4

	
Compliance with Laws, Other instruments, Etc.

	
7

	
Section 9.5

	
Governmental Authorizations, Etc.

	
7

	
Section 9.6

	
Information regarding the Company

	
7

	
Section 9.7

	
Solvency

	
7

	  	  	  
	
SECTION 10.

	
[RESERVED]

	
8

	  	  	  
	
SECTION 11.

	
TERM OF GUARANTY AGREEMENT

	
8

	  	  	  
	
SECTION 12.

	
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

	
8

	  	  	  
	
SECTION 13.

	
AMENDMENT AND WAIVER

	
8

	  	  	  
	
Section 13.1

	
Requirements

	
8

	
Section 13.2

	
Solicitation of Holders of Notes

	
8

	
Section 13.3

	
Binding Effect

	
9

	
Section 13.4

	
Notes Held by Company, Etc.

	
9

	  	  	  
	
SECTION 14.

	
NOTICES

	
9

	  	  	  
	
SECTION 15.

	
MISCELLANEOUS

	
9

	  	  	  
	
Section 15.1

	
Successors and Assigns; Joinder

	
9

	
Section 15.2

	
Severability

	
10

	
Section 15.3

	
Construction

	
10

	
Section 15.4

	
Further Assurances

	
10

	
Section 15.5

	
Governing Law

	
10

	
Section 15.6

	
Jurisdiction and Process; Waiver of Jury Trial

	
10

	
Section 15.7

	
Obligation to Make Payment in United States Dollars

	
11

	
Section 15.8

	
Reproduction of Documents; execution

	
12

 

 

 

 

 

  

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Form of Affiliate Guaranty

 

This Affiliate Guaranty, dated as of December 19, 2011 (this “Affiliate Guaranty”), is made by each of the undersigned (each a “Guarantor” and, together with each of the other signatories hereto and any other entities from time to time parties hereto pursuant to Section 15.1 hereof, the
“Guarantors”) in favor of the Purchasers (as defined below) and the other holders from time to time of the Notes (as defined below).  The Purchasers and such other holders are herein collectively called the “holders” and individually a “holder.” 

 

Preliminary Statements: 

 

I.Home Properties, L.P., a New York limited partnership (the “Issuer”) and Home Properties, Inc., a Maryland corporation (the “Parent”), are entering into a Note Purchase Agreement dated as of December 19, 2011 (as amended, modified, supplemented or restated from time to time, the
“Note Agreement”) with the Persons listed on the signature pages thereto (the “Purchasers”) simultaneously with the delivery of this Affiliate Guaranty. Capitalized terms used herein have the meanings specified in the Note Agreement unless otherwise defined herein.  

 

II.The Issuer has authorized the issuance and sale, pursuant to the Note Agreement, of 4.46% Senior Guaranteed Notes, Series A, due December 19, 2018 in the aggregate principal amount of $90,000,000 (the “Series A Notes”) and 5.00% Senior Guaranteed Notes, Series B, due December 19, 2021 in the aggregate principal amount of $60,000,000 (the
“Series B Notes,” and collectively with the Series A Notes, the “Initial Notes”).  The Initial Notes and any other Notes that may from time to time be issued pursuant to the Note Agreement (including any notes issued in substitution for any of the Notes) are herein collectively called the “Notes” and individually a “Note”.  

 

III.It is a condition to the Agreement of the Purchasers to purchase the Notes that this Affiliate Guaranty shall have been executed and delivered by each Guarantor and shall be in full force and effect. 

 

IV.Each Guarantor will receive direct and indirect benefits from the financing arrangements contemplated by the Note Agreement.  The Issuer and each Guarantor, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses as an integrated operation and have determined it to be in their mutual best interests to enter into this Affiliate Guaranty in order to obtain financing from the Purchasers. The Board of Directors or
other governing body, as applicable, of each Guarantor has determined that the incurrence of such obligations is in the best interests of such Guarantor.

 

Now Therefore, in order to induce, and in consideration of, the execution and delivery of the Note Agreement and the purchase of the Notes by each of the Purchasers, each Guarantor hereby covenants and agrees with, and represents and warrants to each of the holders as follows: 

 

 

 

  

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Section 1.    Guaranty.  

 

Each Guarantor hereby irrevocably, unconditionally and jointly and severally with the other Guarantors guarantees to each holder, the due and punctual payment in full of (a) the principal of, Make-Whole Amount, if any, and interest on (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), and any other amounts due under, the Notes when and as the same shall become due and payable
(whether at stated maturity or by required or optional prepayment or by acceleration or otherwise), (b) any other sums which may become due under the terms and provisions of the Notes, the Note Agreement or any other instrument referred to therein, and (c) the performance of all other obligations of the Issuer under the Note Agreement (all such obligations described in clauses (a), (b) and (c) above are herein called the “Guaranteed Obligations”).  The guaranty in the preceding sentence is an absolute, present and continuing guaranty of payment and not of collectibility and is in no way conditional or contingent upon any attempt to collect from the Issuer or any other guarantor of the Notes
(including, without limitation, any other Guarantor hereunder) or upon any other action, occurrence or circumstance whatsoever.  In the event that the Issuer shall fail to so pay any of such Guaranteed Obligations, each Guarantor agrees to pay the same when due to the holders entitled thereto, without demand, presentment, protest or notice of any kind, in lawful money of the United States of America, pursuant to the requirements for payment specified in the Notes and the Note Agreement.  Each default in payment of any of the Guaranteed Obligations shall give rise to a separate cause of action hereunder and separate suits may be brought hereunder as each cause of action arises.  Each Guarantor agrees that the Notes issued in connection with the Note Agreement may (but need not) make reference to this Affiliate
Guaranty.

 

Each Guarantor agrees to pay and to indemnify and save each holder harmless from and against any damage, loss, cost or expense (including attorneys’ fees) which such holder may incur or be subject to as a consequence, direct or indirect, of (x) any breach by such Guarantor, by any other Guarantor or by the Issuer of any warranty, covenant, term or condition in, or the occurrence of any default under, this Affiliate Guaranty, the Notes, the Note Agreement or any other instrument referred to therein, together with all expenses resulting from the compromise or defense of any claims or liabilities arising as a result of any such breach or
default, (y) any legal action commenced to challenge the validity or enforceability of this Affiliate Guaranty, the Notes, the Note Agreement or any other instrument referred to therein and (z) enforcing or defending (or determining whether or how to enforce or defend) the provisions of this Affiliate Guaranty.  

 

Each Guarantor hereby acknowledges and agrees that such Guarantor’s liability hereunder is joint and several with the other Guarantors and any other Person(s) who may guarantee the obligations and Indebtedness under and in respect of the Notes and the Note Agreement.  

 

Notwithstanding the foregoing provisions or any other provision of this Affiliate Guaranty, the Purchasers (on behalf of themselves and their successors and assigns) and each Guarantor hereby agree that if at any time the Guaranteed Obligations exceed the Maximum Guaranteed Amount determined as of such time with regard to such Guarantor, then this Affiliate Guaranty shall be automatically amended to reduce the Guaranteed Obligations to the Maximum Guaranteed Amount.  Such amendment shall
not require the written consent of any Guarantor or any holder and shall be deemed to have been automatically consented to by each Guarantor and each holder.   Each Guarantor agrees that the Guaranteed Obligations may at any time exceed the Maximum Guaranteed Amount without affecting or impairing the obligation of such Guarantor.  “Maximum Guaranteed Amount” means as of the date of determination with respect to a Guarantor, the lesser of (a) the amount of the Guaranteed Obligations outstanding on such date and (b) the maximum amount that would not render such
Guarantor’s liability under this Affiliate Guaranty subject to avoidance under Section 548 of the United States Bankruptcy Code (or any successor provision) or any comparable provision of applicable state law.

 

 

 

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Section 2.    Obligations Absolute.  

 

The obligations of each Guarantor hereunder shall be primary, absolute, irrevocable and unconditional, irrespective of the validity or enforceability of the Notes, the Note Agreement or any other instrument referred to therein, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim such Guarantor may have against the Issuer or any holder or otherwise, and shall remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not such Guarantor shall have any knowledge or notice thereof), including, without
limitation: (a) any amendment to, modification of, supplement to or restatement of the Notes, the Note Agreement or any other instrument referred to therein (it being agreed that the obligations of each Guarantor hereunder shall apply to the Notes, the Note Agreement or any such other instrument as so amended, modified, supplemented or restated) or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the Notes or the addition, substitution or release of any other Guarantor or any other entity or other Person primarily or secondarily liable in respect of the Guaranteed Obligations; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Notes, the Note Agreement or any other instrument referred to therein; (c) any bankruptcy, insolvency, arrangement,
reorganization, readjustment, composition, liquidation or similar proceeding with respect to the Issuer or its property; (d) any merger, amalgamation or consolidation of any Guarantor or of the Issuer into or with any other Person or any sale, lease or transfer of any or all of the assets of any Guarantor or of the Issuer to any Person; (e) any failure on the part of the Issuer for any reason to comply with or perform any of the terms of any other agreement with any Guarantor; (f) any failure on the part of any holder to obtain, maintain, register or otherwise perfect any security; or (g) any other event or circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (whether or not similar to the foregoing), and in any event however material or prejudicial it may be to any Guarantor or to any subrogation, contribution or
reimbursement rights any Guarantor may otherwise have.  Each Guarantor covenants that its obligations hereunder will not be discharged except by indefeasible payment in full in cash of all of the Guaranteed Obligations and all other obligations hereunder.  

 

 

 

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Section 3.    Waiver.  

 

Each Guarantor unconditionally waives to the fullest extent permitted by law, (a) notice of acceptance hereof, of any action taken or omitted in reliance hereon and of any default by the Issuer in the payment of any amounts due under the Notes, the Note Agreement or any other instrument referred to therein, and of any of the matters referred to in Section 2 hereof, (b) all notices which may be required by statute, rule of law or otherwise to preserve any of the rights of any holder against such Guarantor, including, without limitation, presentment to or demand for payment from the Issuer or any Guarantor with respect to any Note,
notice to the Issuer or to any Guarantor of default or protest for nonpayment or dishonor and the filing of claims with a court in the event of the bankruptcy of the Issuer, (c) any right to require any holder to enforce, assert or exercise any right, power or remedy including, without limitation, any right, power or remedy conferred in the Note Agreement or the Notes, (d) any requirement for diligence on the part of any holder and (e) any other act or omission or thing or delay in doing any other act or thing which might in any manner or to any extent vary the risk of such Guarantor or otherwise operate as a discharge of such Guarantor or in any manner lessen the obligations of such Guarantor hereunder.

 

	
  

	
Section 4.    Obligations Unimpaired.

 

Each Guarantor authorizes the holders, without notice or demand to such Guarantor or any other Guarantor and without affecting its obligations hereunder, from time to time: (a) to renew, compromise, extend, accelerate or otherwise change the time for payment of, all or any part of the Notes, the Note Agreement or any other instrument referred to therein; (b) to change any of the representations, covenants, events of default or any other terms or conditions of or pertaining to the Notes, the Note Agreement or any other instrument referred to therein, including, without limitation, decreases or increases in amounts of principal, rates
of interest, the Make-Whole Amount or any other obligation; (c) to take and hold security for the payment of the Notes, the Note Agreement or any other instrument referred to therein, for the performance of this Affiliate Guaranty or otherwise for the Indebtedness guaranteed hereby and to exchange, enforce, waive, subordinate and release any such security; (d) to apply any such security and to direct the order or manner of sale thereof as the holders in their sole discretion may determine; (e) to obtain additional or substitute endorsers or guarantors or release any other Guarantor or any other Person or entity primarily or secondarily liable in respect of the Guaranteed Obligations; (f) to exercise or refrain from exercising any rights against the Issuer, any Guarantor or any other Person; and (g) to apply any sums, by whomsoever paid or however realized, to
the payment of the Guaranteed Obligations and all other obligations owed hereunder.  The holders shall have no obligation to proceed against any additional or substitute endorsers or guarantors or to pursue or exhaust any security provided by the Issuer, such Guarantor or any other Guarantor or any other Person or to pursue any other remedy available to the holders.  

 

If an event permitting the acceleration of the maturity of the principal amount of any Notes shall exist and such acceleration shall at such time be prevented or the right of any holder to receive any payment on account of the Guaranteed Obligations shall at such time be delayed or otherwise affected by reason of the pendency against the Issuer, any Guarantor or any other guarantors of a case or proceeding under a bankruptcy or insolvency law, such Guarantor agrees that, for purposes of this Affiliate Guaranty and its obligations hereunder, the maturity of such principal amount shall be deemed to have been accelerated with the same effect as if
the holder thereof had accelerated the same in accordance with the terms of the Note Agreement, and such Guarantor shall forthwith pay such accelerated Guaranteed Obligations.  

 

 

 

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Section 5.    Subrogation and Subordination.  

 

(a)Each Guarantor will not exercise any rights which it may have acquired by way of subrogation under this Affiliate Guaranty, by any payment made hereunder or otherwise, or accept any payment on account of such subrogation rights, or any rights of reimbursement, contribution or indemnity or any rights or recourse to any security for the Notes or this Affiliate Guaranty unless and until all of the Guaranteed Obligations shall have been indefeasibly paid in full in cash.

 

(b)Each Guarantor hereby subordinates the payment of all Indebtedness and other obligations of the Issuer or any other guarantor of the Guaranteed Obligations owing to such Guarantor, whether now existing or hereafter arising, including, without limitation, all rights and claims described in clause (a) of this Section 5, to the indefeasible payment in full in cash of all of the Guaranteed Obligations.  If the Required Holders so request, any such Indebtedness or other obligations shall be
enforced and performance received by such Guarantor as trustee for the holders and the proceeds thereof shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required Holders, but without reducing or affecting in any manner the liability of any Guarantor under this Affiliate Guaranty.  

 

(c)If any amount or other payment is made to or accepted by any Guarantor in violation of any of the preceding clauses (a) and (b) of this Section 5, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the holders and shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required
Holders, but without reducing or affecting in any manner the liability of such Guarantor under this Affiliate Guaranty.  

 

(d)Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Note Agreement and that its agreements set forth in this Affiliate Guaranty (including this Section 5) are knowingly made in contemplation of such benefits.  

 

(e)Each Guarantor hereby agrees that, to the extent that a Guarantor shall have paid an amount hereunder to any holder that is greater than the net value of the benefits received, directly or indirectly, by such paying Guarantor as a result of the issuance and sale of the Notes (such net value, its “Proportionate Share”), such paying Guarantor shall, subject to Section 5(a) and 5(b), be entitled to contribution from
any Guarantor that has not paid its Proportionate Share of the Guaranteed Obligations.  Any amount payable as a contribution under this Section 5(e) shall be determined as of the date on which the related payment is made by such Guarantor seeking contribution and each Guarantor acknowledges that the right to contribution hereunder shall constitute an asset of such Guarantor to which such contribution is owed.  Notwithstanding the foregoing, the provisions of this Section 5(e) shall in no respect limit the obligations and liabilities of any Guarantor to the holders of the Notes hereunder or under the Notes, the Note Agreement or any other document, instrument or agreement executed in connection therewith, and each Guarantor shall remain jointly and severally liable for the full payment and performance of the Guaranteed
Obligations.  

 

 

 

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Section 6.    Reinstatement of Guaranty.  

 

This Affiliate Guaranty shall continue to be effective, or be reinstated, as the case may be, if and to the extent at any time payment, in whole or in part, of any of the sums due to any holder on account of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by a holder upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Issuer or any other guarantors, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Issuer or any other guarantors or any part of its or their property, or otherwise, all as though such
payments had not been made.  

 

	
  

	
Section 7.    Rank of Guaranty.

 

Each Guarantor will ensure that its payment obligations under this Affiliate Guaranty will at all times rank at least pari passu, without preference or priority, with all other unsecured  and unsubordinated Indebtedness of such Guarantor now or hereafter existing.  

 

	
  

	
Section 8.    [Reserved]

 

	
  

	
Section 9.    Representations and Warranties of Each Guarantor.

 

Each Guarantor represents and warrants to each holder as follows: 

 

Section 9.1. Organization; Power and Authority.  Such Guarantor is a duly organized, validly existing and in good standing under the laws of its jurisdiction of its formation, and is duly qualified to do business and is in good standing in each jurisdiction in which such qualification is required
by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Such Guarantor has the entity power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Affiliate Guaranty and to perform the provisions hereof.  

 

Section 9.2. Authorization, Etc.   This Affiliate Guaranty has been duly authorized by all necessary action on the part of such Guarantor, and this Affiliate Guaranty constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its
terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).  

 

 

 

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 Section 9.3. Compliance with Laws, Other instruments, Etc.  The execution, delivery and performance by such Guarantor of this Affiliate Guaranty will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of any property of such Guarantor or any of its Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, organizational documents, or any other agreement or instrument to which such Guarantor or any of its Subsidiaries is bound or by which such Guarantor or any of its Subsidiaries or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to such Guarantor or any of its Subsidiaries or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to such Guarantor or any of its
Subsidiaries.  “Governmental Authority” means (x) the government of (i) the United States of America or any State or other political subdivision thereof, or (ii) any other jurisdiction in which such Guarantor or any of its Subsidiaries conducts all or any part of its business, or which asserts jurisdiction over any properties of such Guarantor or any of its Subsidiaries, or (y) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.  

 

Section 9.4. Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by such Guarantor of this Affiliate
Guaranty.  

 

Section 9.5. Information regarding the Issuer.  Such Guarantor now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of
the Issuer.  No holder shall have any duty or responsibility to provide such Guarantor with any credit or other information concerning the affairs, financial condition or business of the Issuer which may come into possession of the holders.  Such Guarantor has executed and delivered this Affiliate Guaranty without reliance upon any representation by the holders including, without limitation, with respect to (a) the due execution, validity, effectiveness or enforceability of any instrument, document or agreement evidencing or relating to any of the Guaranteed Obligations or any loan or other financial accommodation made or granted to the Issuer, (b) the validity, genuineness, enforceability, existence, value or sufficiency of any property securing any of the Guaranteed
Obligations or the creation, perfection or priority of any lien or security interest in such property or (c) the existence, number, financial condition or creditworthiness of other guarantors or sureties, if any, with respect to any of the Guaranteed Obligations.

 

Section 9.6. Solvency.  Upon the execution and delivery hereof, such Guarantor will be solvent, will be able to pay its debts as they mature, and will have capital sufficient to carry on its business.  

 

 

 

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Section 10.    [Reserved].

 

	
  

	
Section 11.    Term of Affiliate Guaranty.

 

This Affiliate Guaranty and all guarantees, covenants and agreements of the Guarantors contained herein shall continue in full force and effect and shall not be discharged until such time as all of the Guaranteed Obligations and all other obligations hereunder shall be indefeasibly paid in full in cash and shall be subject to reinstatement pursuant to Section 6.  

 

	
  

	
Section 12.    Survival of Representations and Warranties; Entire Agreement.  

 

All representations and warranties contained herein shall survive the execution and delivery of this Affiliate Guaranty and may be relied upon by any subsequent holder, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder.  All statements contained in any certificate or other instrument delivered by or on behalf of a Guarantor pursuant to this Affiliate Guaranty shall be deemed representations and warranties of such Guarantor under this Affiliate Guaranty.  Subject to the preceding sentence, this Affiliate Guaranty embodies the entire agreement and understanding between each
holder and the Guarantors and supersedes all prior agreements and understandings relating to the subject matter hereof.  

 

	
  

	
Section 13.    Amendment and Waiver. 

 

Section 13.1. Requirements.  Except as otherwise provided in the fourth paragraph of Section 1 of this Affiliate Guaranty, this Affiliate Guaranty may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), with (and only with) the written
consent of each Guarantor and the Required Holders, except that no amendment or waiver (a) of any of the first three paragraphs of Section 1 or any of the provisions of Section 2, 3, 4, 5, 6, 7, 10, 11, 13 or 15.7 hereof, or any defined term (as it is used therein), or (b) which results in the limitation of the liability of any Guarantor hereunder (except to the extent provided in the fourth paragraph of Section 1 of this Affiliate Guaranty) will be effective as to any holder unless consented to by such holder in writing.  

 

Section 13.2. Solicitation of Holders of Notes.

 

(a)Solicitation.  Each Guarantor will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof.  Each Guarantor will deliver
executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 13.2 to each holder promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.  

 

 

 

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(b)Payment.  The Guarantors will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder as consideration for or as an inducement to the entering into by any holder of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder even if such holder did not consent to such waiver or amendment.  

 

Section 13.3. Binding Effect.  Any amendment or waiver consented to as provided in this Section 13 applies equally to all holders and is binding upon them and upon each future holder and upon each Guarantor without regard to whether any Note has been marked to indicate such amendment or
waiver.  No such amendment or waiver will extend to or affect any obligation, covenant or agreement not expressly amended or waived or impair any right consequent thereon.  No course of dealing between a Guarantor and the holder nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder.  As used herein, the term “this Affiliate Guaranty” and references thereto shall mean this Affiliate Guaranty as it may be amended, modified, supplemented or restated from time to time.  

 

Section 13.4. Notes Held by Issuer, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal
amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Affiliate Guaranty, or have directed the taking of any action provided herein to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Guarantor, the Issuer or any of their respective Affiliates shall be deemed not to be outstanding.

 

	
  

	
Section 14.    Notices  

 

All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent: 

 

(a)if to any Guarantor, to c/o Home Properties, Inc., 850 Clinton Square, Rochester, NY 14604, Attn. Chief Financial Officer, or such other address as such Guarantor shall have specified to the holders in writing, or 

 

(b)if to any holder, to such holder at the addresses specified for such communications set forth in Schedule A to the Note Agreement, or such other address as such holder shall have specified to the Guarantors in writing.

 

	
  

	
Section 15.    Miscellaneous.  

 

Section 15.1. Successors and Assigns; Accession.  All covenants and other agreements contained in this Affiliate Guaranty by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns whether so expressed or not.  It is agreed and
understood that any Person may become a Guarantor hereunder by executing an Accession Agreement substantially in the form of Exhibit A attached hereto and delivering the same to the Holders.  Any such Person shall thereafter be a “Guarantor” for all purposes under this Affiliate Guaranty.  

 

 

 

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Section 15.2. Severability.  Any provision of this Affiliate Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law), not invalidate or render unenforceable such provision in any other jurisdiction.  

 

Section 15.3. Construction.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such express contrary provision) be deemed to excuse
compliance with any other covenant.  Whether any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.  

 

The section and subsection headings in this Affiliate Guaranty are for convenience of reference only and shall neither be deemed to be a part of this Affiliate Guaranty nor modify, define, expand or limit any of the terms or provisions hereof.  All references herein to numbered sections, unless otherwise indicated, are to sections of this Affiliate Guaranty.  Words and definitions in the singular shall be read and construed as though in the plural and vice versa, and words in the masculine, neuter or feminine gender shall be read and construed as though in either of the other genders where the context so
requires.  

 

The “Preliminary Statements” contained in this Affiliate Guaranty are incorporated herein by this reference.

 

Section 15.4. Further Assurances..  Each Guarantor agrees to execute and deliver all such instruments and take all such action as the Required Holders may from time to time reasonably request in order to effectuate fully the purposes of this Affiliate
Guaranty.  

 

Section 15.5. Governing Law..  This Affiliate Guaranty shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York, excluding choice-of-law principles of the law of such State that would permit the application of the
laws of a jurisdiction other than such State.  

 

Section 15.6. Jurisdiction and Process; Waiver of Jury Trial.  (a) Each Guarantor irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or
relating to this Affiliate Guaranty.  To the fullest extent permitted by applicable law, each Guarantor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  

 

 

 

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(b)Each Guarantor consents to process being served by or on behalf of any holder in any suit, action or proceeding of the nature referred to in Section 15.6(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 14 or at such other address of which such holder shall then have been notified pursuant to Section 14.  Each Guarantor agrees that such service
upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.  

 

(c)Nothing in this Section 15.6 shall affect the right of any holder to serve process in any manner permitted by law, or limit any right that the holders may have to bring proceedings against any Guarantor in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.  

 

(d)The Guarantors and the holders hereby waive trial by jury in any action brought on or with respect to this Affiliate Guaranty or other document executed in connection herewith.  

 

Section 15.7. Obligation to Make Payment in United States Dollars.  Any payment on account of an amount that is payable hereunder in United States Dollars which is made to or for the account of any holder in any other currency, whether as a result of any judgment or order or the enforcement
thereof or the realization of any security or the liquidation of any Guarantor, shall constitute a discharge of the obligation of such Guarantor under this Affiliate Guaranty only to the extent of the amount of United States Dollars which such holder could purchase in the foreign exchange markets in New York, New York, with the amount of such other currency in accordance with normal banking procedures at the rate of exchange prevailing on the New York Banking Day following receipt of the payment first referred to above.  If the amount of United States Dollars that could be so purchased is less than the amount of United States Dollars originally due to such holder, such Guarantor agrees to the fullest extent permitted by law, to indemnify and save harmless such holder from
and against all loss or damage arising out of or as a result of such deficiency.  This indemnity shall, to the fullest extent permitted by law, constitute an obligation separate and independent from the other obligations contained in this Affiliate Guaranty, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by such holder from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under any judgment or order.  As used herein the term “New York Banking Day” shall mean any day other than Saturday or Sunday or a day on which commercial banks are required or authorized by law to be closed in New York, New
York.

 

 

 

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Section 15.8. Reproduction of Documents; execution.  This Affiliate Guaranty may be reproduced by any holder by any photographic, photo static, electronic, digital, or other similar process and such holder may destroy any original document so reproduced.  Each Guarantor agrees and
stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such holder in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 15.8 shall not prohibit any Guarantor or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.  A facsimile or electronic transmission of the signature page of a Guarantor shall be as effective as delivery of a manually executed counterpart hereof and shall be
admissible into evidence for all purposes.

 

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In Witness Whereof, each Guarantor has caused this Affiliate Guaranty to be duly executed and delivered as of the date and year first above written.  

 

	
  

	
Home Properties, Inc.

 

	
  

	
By:  /s/ David P. Gardner

	
  

	
Name: David P. Gardner

	
  

	
Title: Executive Vice President and

	
  

	
        Chief Financial Officer

 

	
  

	
Address for Notices:

	
  

	
850 Clinton Square

	
  

	
Rochester, New York  14604

	
  

	
Attention: David P. Gardner, CFO

	
  

	
Telecopy Number: (505) 546-5433

	
  

	
Telephone Number:(505) 246-4113

 

 

 

 

 

[Signatures Continue on Next Page]

 

  

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Home Properties 1200 East West, LLC

	
  

	
Home Properties Bayview Colonial, LLC

	
  

	
Home Properties Blackhawk, LLC

	
  

	
Home Properties Braddock Lee, LLC

	
  

	
Home Properties Cambridge Court, LLC

	
  

	
Home Properties Cambridge Village, LLC

	
  

	
Home Properties Courtyard Village, LLC

	
  

	
Home Properties Crescent Club, LLC

	
  

	
Home Properties Gardencrest, LLC

	
  

	
Home Properties Haynes Farm, LLC

	
  

	
Home Properties Heritage Square, LLC

	
  

	
Home Properties Holiday Square, LLC

	
  

	
Home Properties Hunters Glen, LLC

	
  

	
Home Properties Huntington Metro, LLC

	
  

	
Jacob Ford Village, L.L.C.

	
  

	
Home Properties Lake Grove, LLC

	
  

	
Home Properties Lakeview Townhomes, LLC

	
  

	
Home Properties Liberty Commons, LLC

	
  

	
Home Properties Middlebrooke, LLC

	
  

	
Home Properties Morningside Heights, LLC

	
  

	
Home Properties Morningside North, LLC

	
  

	
Home Properties Morningside Six, LLC

	
  

	
Home Properties Newport Village, LLC

	
  

	
Home Properties Pleasure Bay, LLC

	
  

	
Home Properties Sherwood Gardens, LLC

 

 

	
  

	
By: Home Properties, L.P., as sole Member and Manager

	
  

	
By: Home Properties, Inc., General Partner

 

	
  

	
By: /s/ David P. Gardner

	
  

	
Name: David P. Gardner

	
  

	
Title: Executive Vice President and

	
  

	
        Chief Financial Officer

 

 

 

 

 

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Home Properties Seminary Hills, LLC

	
  

	
Home Properties Somerset Park, LLC

	
  

	
The Colony of Home Properties, LLC

	
  

	
Home Properties Channel Townhomes, LLC

	
  

	
Home Properties Cove Townhomes, LLC

	
  

	
Home Properties Lighthouse Townhomes, LLC

	
  

	
Home Properties Marshfield, LLC

	
  

	
Home Properties Potomac Falls, LLC

	
  

	
Home Properties Beverly, LLC

	
  

	
Home Properties Waterview, LLC

	
  

	
Home Properties Westbrooke, LLC

	
  

	
Home Properties Windsor, LLC

	
  

	
Home Properties Yorkshire Village, LLC

 

	
  

	
By: Home Properties, L.P., as sole Member and Manager

	
  

	
By: Home Properties, Inc., General Partner

 

	
  

	
By: /s/ David P. Gardner

	
  

	
Name: David P. Gardner

	
  

	
Title: Executive Vice President and

	
  

	
        Chief Financial Officer

 

 

	
  

	
Home Properties Woodleaf, LLC

 

	
  

	
By: Home Properties, L.P., as Member and Manager

	
  

	
By: Home Properties, Inc., General Partner

 

	
  

	
By: /s/ David P. Gardner

	
  

	
Name: David P. Gardner

	
  

	
Title: Executive Vice President and

	
  

	
        Chief Financial Officer

 

 

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Address for Notices:

	
  

	
c/o Home Properties, L.P.

	
  

	
850 Clinton Square

	
  

	
Rochester, New York  14604

	
  

	
Attention: David P. Gardner, CFO

	
  

	
Telecopy Number:(505) 546-5433

	
  

	
Telephone Number:(505) 246-4113

 

 

 

 

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Exhibit A

 

 

Accession Agreement

 

This Accession Agreement (the “Accession Agreement”), dated as of [__________] [__], 20[__] is made by [__________], a [____________] (the “Additional Guarantor”), in favor of the holders from time to time of the Notes issued pursuant to the Note Agreement described below:

 

Preliminary Statements:

 

I.Pursuant to the Note Purchase Agreement dated as of December 15, 2011 (as amended, modified, supplemented or restated from time to time, the “Note Agreement”), by and among Home Properties, L.P., a New York limited partnership (the “Issuer”), Home Properties, Inc., a Maryland corporation (the
“Parent”), and the Persons listed on the signature pages thereto (the “Purchasers”), the Issuer has issued and sold $90,000,000 aggregate principal amount of its Senior Guaranteed Notes, Series A, due December 19, 2018 (the “Series A Notes”) and $60,000,000 aggregate principal amount of its Senior Guaranteed Notes, Series B, due December 19, 2021 (the “Series B Notes,” and collectively with the Series A Notes, the “Initial
Notes”).  The Initial Notes and any other Notes that may from time to time be issued pursuant to the Note Agreement (including any notes issued in substitution for any of the Notes) are herein collectively called the “Notes” and individually a “Note”.

 

II.The Issuer is required pursuant to the Note Agreement to cause the Additional Guarantor to deliver this Accession Agreement in order to cause the Additional Guarantor to become a Guarantor under the Affiliate Guaranty dated as of December 19, 2011 executed by certain Affiliates of the Issuer (together with each entity that from time to time becomes a party thereto by executing an Accession Agreement pursuant to Section 15.1 thereof, collectively, the
“Guarantors”) in favor of each holder from time to time of any of the Notes (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Affiliate Guaranty”).

 

III.The Additional Guarantor has received and will receive substantial direct and indirect benefits from the Issuer’s compliance with the terms and conditions of the Note Agreement and the Notes issued thereunder.

 

IV.Capitalized terms used and not otherwise defined herein have the definitions set forth in the Note Agreement.

 

Now, Therefore, in consideration of the funds advanced to the Issuer by the Purchasers under the Note Agreement and to enable the Issuer to comply with the terms of the Note Agreement, the Additional Guarantor hereby covenants, represents and warrants to the holders as follows:

 

 

 

  

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The Additional Guarantor hereby becomes a Guarantor (as defined in the Affiliate Guaranty) for all purposes of the Affiliate Guaranty.  Without limiting the foregoing, the Additional Guarantor hereby (a) jointly and severally with the other Guarantors under the Affiliate Guaranty, guarantees to the holders from time to time of the Notes the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) and the full and prompt performance and observance of all Guaranteed Obligations ( as defined in Section 1 of the Affiliate Guaranty) in the same manner and to the same extent as is provided in the
Affiliate Guaranty, (b) accepts and agrees to perform and observe all of the covenants set forth therein, (c) waives the rights set forth in Section 3 of the Affiliate Guaranty, (d) makes the representations and warranties set forth in Section 9 of the Affiliate Guaranty and (e) waives the rights, submits to jurisdiction, and waives service of process as described in Section 15.6 of the Affiliate Guaranty.

 

Notice of acceptance of this Accession Agreement and of the Affiliate Guaranty, as supplemented hereby, is hereby waived by the Additional Guarantor.

 

The address for notices and other communications to be delivered to the Additional Guarantor pursuant to Section 14 of the Affiliate Guaranty is set forth below.

 

In Witness Whereof, the Additional Guarantor has caused this Accession Agreement to be duly executed and delivered as of the date and year first above written.

 

	
  

	
[Name of Additional Guarantor] 

 

	
  

	
By: 

Name: 

Title: 

 

	
  

	
Notice Address for such Guarantor 

 

 

 

 

 

 

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Matters To Be Covered in

 

Opinion of Special Counsel to the Issuer

 

 

Form of Opinion of Special Counsel

to the Issuer

 

NIXON PEABODY LLP

1300 Clinton Square

Rochester, New York 14604-1792

(585) 263-1000

Fax:  (585) 263-1600

December 19, 2011

Purchasers listed on Schedule A to

the Note Purchase Agreement referred to below

c/o Chapman and Cutler LLP

111 West Monroe Street

Chicago, Illinois 60603

Ladies and Gentlemen:

 

We are counsel to Home Properties, L.P., a New York limited partnership (the “Issuer”), and Home Properties, Inc., a Maryland corporation (the “Parent”), and have reviewed the Note Purchase Agreement, dated as of the date hereof (the “Agreement”), among the Issuer, the Parent, and the purchasers named on Schedule A to the Agreement (together with their respective successors and assigns, the “Purchasers”), each of the Notes made by the Issuer, dated as of the date hereof, and the Affiliate Guaranty, dated as of the date hereof, given by the Parent and the subsidiaries of the Issuer listed on Schedule I of Exhibit B attached hereto (each a “Subsidiary
Guarantor” and collectively, the “Subsidiary Guarantors”) in favor of the Purchasers under the Agreement.  Terms defined in the Agreement are used herein with the same meanings. This opinion is being furnished to you at the express request of the Issuer and the Parent pursuant to Section 4.4(a) of the Agreement.

 

We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate, partnership and limited liability company records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion.  We have, among other things, reviewed the Articles of Amendment and Restatement of the Articles of Incorporation, as amended, of the Parent (the “Charter”), the Second Amended and Restated Agreement of Limited Partnership, as amended, of the Issuer (“Operating Partnership Agreement”), the articles or certificates of formation
as limited liability companies and operating agreements of the Subsidiary Guarantors and such other documents, instruments, corporate, partnership, limited liability company and other records as we consider necessary in connection with the opinions expressed below.  As to any facts material to our opinion, we have relied upon the representations and warranties of the Issuer and the Parent made in the Agreement and the Affiliate Guaranty; certificates of officers of the Parent with respect to the Parent, the Issuer, and the Subsidiary Guarantors, copies of which are attached as Exhibits A and B hereto; and certificates of officials of governmental entities.  We have not independently established the facts so relied upon.  Our opinions expressed in the first three sentences of Paragraph 1 below are based solely upon the good standing certificates and
certificates of government officials provided to you pursuant to Sections 4.3(c) and (d) of the Agreement.  As to our opinion in Paragraph 10 below, we have relied as to certain factual matters on the representations of the Purchasers set forth in Section 6 of the Agreement.

 

In rendering the opinions expressed in this letter, we have assumed, without investigation, the authenticity of any document or other instrument submitted to us as an original, the conformity to the originals of any documents or other instruments submitted to us as a copy, the genuineness of all signatures on such originals or copies, and the due authorization, execution and delivery by all parties other than the Issuer, the Parent and the Subsidiary Guarantors.  We have made no review beyond a review of the documents and certificates described herein, and we have not undertaken any independent investigation or inquiry beyond that described herein.

 

Upon the basis of the foregoing and subject to the limitations, qualifications and assumptions set forth herein, we are of the opinion that:

 

	
1.

	
The Issuer is a limited partnership duly organized and validly existing under the laws of the State of New York.  The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland.  Each Subsidiary Guarantor listed on Schedule I to Exhibit B attached hereto is a limited liability company, duly organized, validly existing and, where such concept is applicable, in good standing, under the laws of the States of Delaware, Maryland, New Jersey or New York, or the laws of the Commonwealths of Massachusetts or Virginia.  Each of the Issuer, the Parent and each Subsidiary Guarantor has all requisite power and authority to carry on its business as now conducted by the Issuer and its Subsidiaries taken as a whole as
described in the Parent’s 1934 Act Reports (as defined below).  Except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, each of the Issuer, the Parent and the Subsidiary Guarantors is qualified to do business in, and is in good standing in, every jurisdiction where it owns properties or assets or where the conduct of its business makes such qualification necessary.

 

	
2.

	
The Transactions are within the Issuer’s partnership powers and have been duly authorized by all necessary limited partnership action and, if required, corporate action of the Parent as its general partner; provided, however, no opinion is expressed herein as to any use of the proceeds of Notes except as set forth in Paragraph 9 below.  Each of the Agreement and the Notes has been duly executed and delivered by the Issuer to the Purchasers and constitutes a legal, valid and binding obligation of the Issuer, enforceable by the Purchasers against the Issuer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

	
3.

	
The execution, delivery and performance of the Agreement and the Affiliate Guaranty are within the Parent’s powers and have been duly authorized by all necessary corporate action.  Each of the Agreement and the Affiliate Guaranty has been duly executed and delivered by the Parent and constitutes a legal, valid and binding obligation of the Parent, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

	
4.

	
The execution, delivery and performance of the Affiliate Guaranty are within each Subsidiary Guarantor’s powers and have been duly authorized by all necessary limited liability company action of each Subsidiary Guarantor and its manager or sole member.  The Affiliate Guaranty has been duly executed and delivered by each of the Subsidiary Guarantors and constitutes a legal, valid and binding obligation of each of the Subsidiary Guarantors, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

	
5.

	
The execution, delivery and performance of the Agreement, the Notes and the Affiliate Guaranty:  (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority on the part of the Issuer, the Parent or any Subsidiary Guarantor, except such as have been obtained or made and are in full force and effect and except filings providing public notice of the entering into of the Agreement, Note and Affiliate Guaranty and filing of the Agreement the Notes and the Affiliate Guaranty under applicable federal securities laws, (b) will not violate any applicable law, rule or regulation, the Charter or by-laws of the Parent or the certificate of limited partnership, the Operating Partnership Agreement of the Issuer, the
articles or certificate of formation and operating agreement of any Subsidiary Guarantor, or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument filed by Parent with the U.S. Securities and Exchange Commission as an Exhibit to its Form 10-K for the year ended December 31, 2010, or any Form 10-Q or Form 8-K filed since that date (collectively, the “1934 Act Reports”), or give rise to a right thereunder to require any payment to be made by the Issuer, the Parent or any of the Subsidiary Guarantors pursuant to such indenture, agreement or other instrument, and (d) will not result in the creation or imposition of any Lien on any asset of the Issuer, the Parent or any of the Subsidiary Guarantors; provided, however, no opinion is expressed herein as to any use of the proceeds of Notes except as
set forth in Paragraph 9 below.

 

	
6.

	
To our knowledge, none of the Issuer, the Parent or any Subsidiary Guarantor is in violation of any law, rules or regulation applicable to it or any order, writ, judgment, decree, determination or award, the violation of which will have or is reasonably likely to have a Material Adverse Effect.

 

	
7.

	
To our knowledge, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or affecting the Issuer, the Parent or any of the Subsidiary Guarantors as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, would reasonably be expected individually or in the aggregate, to have a Material Adverse Effect, or that involve the Agreement or the Transactions.

 

	
8.

	
None of the Issuer, the Parent or any Subsidiary Guarantor is an “investment company” subject to regulation under the Investment Company Act of 1940.

 

	
9.

	
The consummation of the Transactions on the date hereof including, without limitation, the use of the proceeds of the Notes by the Issuer pursuant to the terms of the Agreement, assuming, without investigation, that the Issuer will use such proceeds in accordance with the terms of the Agreement, will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

	
10.

	
The issuance, sale and delivery of the Notes and the Affiliate Guaranty under the circumstances contemplated by the Agreement does not, under existing law, require the registration of the Notes or the Affiliate Guaranty under the Securities Act of 1933, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

 

The opinions as to the enforceability of the Agreement, the Notes and the Affiliate Guaranty in paragraphs 2, 3 and 4 above are further qualified by the following:

 

	
(i)  

	
public policy limitations relating to concepts of materiality and principles of reasonableness, good faith and fair dealing may require the Purchasers to act reasonably and in good faith;

 

	
(ii)  

	
the limitation that certain of the provisions of, and some of the remedies provided for in, the Agreement or the Affiliate Guaranty may be affected by, or may be unenforceable in whole or in part by reason of, certain laws and judicial decisions, but the application of such laws and decisions would not materially interfere with the practical realization of the principal legal benefits afforded thereby under New York law;

 

	
(iii)  

	
the effectiveness of the provisions of the last paragraph of Section 1 of the Affiliate Guaranty;

 

	
(iv)  

	
whether a court located outside the State of New York would give effect to the choice of New York law;

 

	
(v)  

	
any provisions in the Affiliate Guaranty relating to or which might be construed as changing the standard of proof or the party bearing the burden of proof with respect to any claim;

 

	
(vi)  

	
any provisions in the Affiliate Guaranty relating to or which might be construed as a waiver of counterclaim, a waiver of defenses, including suretyship defenses, or a waiver of benefits of appraisal, valuation, stay, extension, moratorium, redemption, statutes of limitation, or other nonwaivable benefits bestowed by operation of law; and

 

	
(vii)  

	
any provisions in the Affiliate Guaranty which provide for indemnification, contribution, or release, or provisions exculpating or exempting a party from, or requiring indemnification or contribution for, liability, including clauses relating to releases of unmatured claims, clauses purporting to waive unmatured rights, and clauses similar in substance or nature to the foregoing clauses.

 

Certain opinions and other matters that are expressed herein to “our knowledge” or words of similar import mean that the opinions expressed herein to which such qualification relates is based solely on matter within the actual knowledge of the lawyers within this firm actively representing the Issuer and the Parent in connection with the Transactions described in the Agreement, derived from our representation of the Issuer and the Parent in other matters as to which we have been engaged by them as counsel and the certificates of officers described above, without any independent investigation.

 

We express no opinion herein regarding whether a court would give effect to the specification by the Required Purchasers of jurisdiction and venue outside courts located in New York or the waiver of inconvenient forum or any claim that venue is improper or provisions relating to subject matter jurisdiction of the courts set forth in the Agreement, the Notes and the Affiliate Guaranty.

 

We are members of the bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York; the General Corporation Law, Partnership Law and Limited Liability Company Law of the State of Maryland and the Limited Liability Company Law of the States of Delaware and New Jersey, and the Commonwealths of Massachusetts and Virginia set forth in standard compilations of corporation, limited liability company and other business statutes set forth in the Wolters Kluwer Law & Business Corporation: Statutes (Aspen Publishers) and the federal laws of the United States of America, each as in effect on the date hereof and which in our
experience are normally applicable to transactions comparable to the Transactions.

 

Our opinions expressed herein are rendered as of the date hereof and do not address the passage of time or other events subsequent to the date hereof.  We disclaim any undertaking to advise you of any change in law or fact which may affect the continued correctness of any opinion as of a later date.

 

No opinion expressed herein may be referred to, cited or quoted in any financial statement, prospectus, private placement memorandum or other similar document without our prior written consent. This opinion may not be relied upon by you for any other purpose than the Transactions or relied upon by any other person without our prior written consent except that:  (i) subsequent Institutional Investors purchasing the Notes may rely on this opinion as if they were an original addressee hereof, and (ii) you may provide copies of this opinion letter to (a) potential Institutional Investor transferees, (b) any governmental or regulatory agency (including, without limitation, the NAIC) having jurisdiction
over you, and (c) any court of law or other tribunal in connection with any matter relating to the Agreement, the Notes, the Affiliate Guaranty or this opinion letter.

 

Very truly yours,

/s/ Nixon Peabody LLP                                           

 

 

 

 

Exhibit 4.4(a)

(to Note Purchase Agreement)

  

  

Table of Contents

Form of Opinion of Special Counsel

to The Purchasers

 

[To Be Provided on a Case by Case Basis]

Exhibit 4.4(b)

(to Note Purchase Agreement)

  

  

Table of Contents

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