STOCK PURCHASE AGREEMENT
by and among
HOME PROPERTIES OF NEW YORK, INC.
HOME PROPERTIES OF NEW YORK, L.P.
and
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Dated as of June 5, 2000
SCHEDULES
EXHIBITS
EXHIBIT A -- Articles Supplementary
EXHIBIT B1 -- Form of Opinion of REIT Counsel
EXHIBIT B2 -- Form of Opinion of REIT's General Counsel
EXHIBIT C -- Form of REOC Opinion of REIT Counsel
EXHIBIT D -- Form of REIT Counsel Opinion
EXHIBIT E -- Form of Registration Rights Agreement
EXHIBIT F -- Form of Amendment to Partnership Agreement
EXHIBIT G -- Form of Ownership Limit Waiver Letter
EXHIBIT H -- Resolutions of the REIT's Board of Directors
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement") dated as of June 5, 2000 by
and among Home Properties of New York, Inc., a Maryland corporation (the
"REIT"), Home Properties of New York, L.P., a New York limited partnership
(the "Operating Partnership"), and The Equitable Life Assurance Society of
the United States ("Equitable" or the "Purchaser"). Unless otherwise
defined, capitalized terms used in this Agreement are defined in Section 7;
references to an "Exhibit" are, unless otherwise specified, to an exhibit
attached to this Agreement; references to a "Section" are, unless otherwise
specified, to a section of this Agreement.
In consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the REIT, the Operating
Partnership and the Purchaser respectively agree as follows:
1. AGREEMENT TO SELL AND PURCHASE THE SHARES1. AGREEMENT TO SELL
AND PURCHASE THE SHARES.
1.1 At the Closing provided for in Section 2, subject to the
terms and conditions of this Agreement, the REIT will issue and sell to the
Purchaser and the Purchaser will purchase from the REIT 250,000 shares (the
"Shares") of the REIT's Series D Convertible Cumulative Preferred Stock,
par value $.01 per share (the "Preferred Stock"), having the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption set forth
in the REIT's Articles Supplementary attached as EXHIBIT A.
1.2 The cash purchase price (the "Purchase Price") paid at the
Closing for each Share shall be $100.00.
1.3 The REIT will use the net proceeds from the sale of the
Shares to reduce outstanding indebtedness, to fund the acquisition of
additional properties and for general working capital purposes.
2. CLOSING OF SALE OF SHARES2. CLOSING OF SALE OF SHARES. The purchase
and delivery of the Shares to be purchased by the Purchaser shall take
place at the offices of Xxxxxxx, Procter & Xxxx LLP, Exchange Place,
Boston, Massachusetts, at a closing (the "Closing") on June 5, 2000 or at
such other place or on such other date as the Purchaser and the REIT may
mutually agree upon (such date on which the Closing shall have actually
occurred is hereinafter referred to as the "Closing Date"). At the
Closing, the REIT will deliver or cause to be delivered to the Purchaser
the Shares to be purchased by it against payment of the Purchase Price.
Payment of the Purchase Price for the Shares purchased by the Purchaser
shall be by wire transfer of immediately available funds to such account(s)
designated by the REIT to the Purchaser in writing at least two business
days prior to the Closing. If at the Closing (i) the REIT fails to issue
and deliver to the Purchaser any of the Shares to be purchased as provided
in this Section 2 or (ii) the Purchaser fails to pay the Purchase Price for
the Shares to the REIT, then the Purchaser or the REIT, as the case may be,
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any other rights each may have by reason
of such failure.
3. CONDITIONS TO CLOSING3. CONDITIONS TO CLOSING.
3.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER ON
THE CLOSING DATE. The Purchaser's obligation to purchase and pay for the
Shares to be sold to it at the Closing is subject to the fulfillment prior
to or at the Closing of the following conditions, any or all of which may
be waived in writing at the option of the Purchaser:
(a) REPRESENTATIONS AND WARRANTIES(A) REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the REIT and the
Operating Partnership contained in Section 4 hereof shall be true and
correct in all material respects when made and at the time of the Closing,
after giving effect to the sale of the Shares and the other transactions
contemplated to be consummated at the Closing by this Agreement and the
other Transaction Documents, except that all representations and warranties
that relate to a particular date or period shall be true and correct in all
material respects as of such date or period.
(b) PERFORMANCE(B) PERFORMANCE. Each of the REIT and the
Operating Partnership 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.
(c) CLOSING CERTIFICATES(C) CLOSING CERTIFICATES. Each of
the REIT and the Operating Partnership shall have delivered to the
Purchaser an Officer's Certificate or General Partner's Certificate, as
applicable, each dated the Closing Date, certifying that the conditions
specified in Sections 3.1(a) and (b) have been fulfilled.
(d) OPINIONS OF COUNSEL(D) OPINIONS OF COUNSEL. The
Purchaser shall have received the favorable opinions of REIT Counsel and
the REIT's General Counsel, each substantially in the form set forth in
EXHIBIT B1 and EXHIBIT B2, addressed to the Purchaser, dated the Closing
Date and otherwise satisfactory in substance and form to the Purchaser.
(e) REOC OPINION. The Purchaser shall
have received from REIT Counsel its favorable REOC Opinion substantially in
the form set forth in EXHIBIT C, addressed to the Purchaser, dated the
Closing Date and otherwise satisfactory in substance and form to the
Purchaser.
(f) REIT OPINION. The Purchaser shall
have received from REIT Counsel its favorable opinion relating to certain
tax matters substantially in the form set forth in EXHIBIT D, addressed to
the Purchaser, dated the Closing Date, and otherwise satisfactory in
substance and form to the Purchaser.
(g) LEGAL INVESTMENT. On the Closing Date, the
Purchaser's purchase of the Shares shall be permitted by all laws and
regulations to which the Purchaser is subject (including, without
limitation, Section 5 of the Securities Act or Section 1405(a)(8) of the
New York Insurance Law) and shall not be enjoined (temporarily or
permanently) under, prohibited by or contrary to any injunction, order or
decree applicable to the Purchaser.
(h) PROCEEDINGS AND DOCUMENTS. All corporate,
partnership and other proceedings contemplated by this Agreement and the
other Transaction Documents shall be satisfactory to the Purchaser and
Purchaser's Counsel, and the Purchaser and Purchaser's
Counsel shall have received all such counterpart originals or certified or
other copies of such documents as the Purchaser or Purchaser's Counsel may
reasonably request.
(i) REGISTRATION RIGHTS AGREEMENT.
Simultaneously with or prior to the issuance and sale to the
Purchaser of the Shares to be purchased by the Purchaser at the Closing,
the REIT and the Purchaser shall have duly entered into the Registration
Rights Agreement substantially in the form of EXHIBIT E, the Purchaser
shall have received a fully-executed counterpart of the Registration Rights
Agreement and such agreement shall be in full force and effect.
(j) ARTICLES SUPPLEMENTARY.
The Articles Supplementary attached as EXHIBIT A shall have been duly filed
by the REIT with the State Department of Assessments and Taxation of
Maryland (the "SDAT") and shall be effective. The Purchaser shall have
received a certified copy of the Articles Supplementary relating to the
designation of the Shares, as filed with the SDAT. Except for the
aforementioned Articles Supplementary, as of the Closing none of the REIT's
Charter Documents shall have been modified or amended since the date such
documents were delivered to the Purchaser by the REIT.
(k) AMENDMENT TO PARTNERSHIP AGREEMENT.
The Agreement of Limited Partnership of the Operating Partnership, as amended
(the "Partnership Agreement"), shall have been amended substantially
in the form of EXHIBIT F so as to create a
series of Preferred Partnership Units designated the Series D Partnership
Preferred Units. Such amendment shall be referred to hereinafter as the
"Amendment to the Partnership Agreement".
(l) NO ADVERSE U.S. LEGISLATION, ACTION OR DECISION.
No legislation, order, rule, ruling or regulation shall have been enacted
or made by or on behalf of any governmental body, department or agency of
the United States, nor shall any decision of any court of competent
jurisdiction within the United States have been rendered which, in the
reasonable judgment of the Purchaser, could have a Material Adverse Effect
on the REIT and the Subsidiaries on a consolidated basis. There shall be
no action, suit, investigation or proceeding pending or threatened, against
or affecting the Purchaser, any of its properties or rights, or any of its
Affiliates, associates, officers or directors, before any court, arbitrator
or administrative or governmental body which (i) seeks to restrain, enjoin,
prevent the consummation of or otherwise affect the transactions contemplated
by this Agreement and the other Transaction Documents, or (ii) questions the
validity or legality of any such transactions or seeks to recover damages
or to obtain other relief in connection with any such transactions, and
there shall be no valid basis for any such action, proceeding or
investigation.
(m) GOVERNMENTAL AND THIRD PARTY PERMITS, CONSENTS, ETC.
The REIT, the Operating Partnership and the Subsidiaries shall have duly
applied for and obtained all approvals, orders, licenses, consents and other
authorizations (collectively, the "Approvals") from each federal, state and
local government and governmental agency, department or body, or pursuant to
any agreement to which the REIT, the Operating Partnership or any Subsidiary
is a party or to which it or any of its assets is subject, which may be
required in connection with this Agreement and the other Transaction
Documents, except for any approvals of the Commission that may be required
to register the resale of the Common Stock into which the Preferred Stock
is convertible.
(n) NEW YORK STOCK EXCHANGE LISTING. As of the Closing, the
listing of shares of the Common Stock on the New York Stock Exchange shall
not have been terminated, nor shall the REIT have been notified that such
listing may be terminated or that any termination is contemplated.
In addition, the REIT shall have applied to have the shares of Common Stock
issuable upon conversion of the Shares approved for listing on the New York
Stock Exchange, and such application shall not have been disapproved.
(o) OWNERSHIP LIMIT WAIVER. The REIT shall have executed
and delivered to the Purchaser an Ownership Limit Waiver Letter substantially
in the form of EXHIBIT G. Notwithstanding anything contained in the REIT's
Articles of Amendment and Restatement of Articles of Incorporation, as
amended (the "Articles of Incorporation"), including, without limitation,
Section 7.7 thereof, the REIT's Board of Directors shall not amend, modify,
revoke or rescind such Ownership Limit Waiver with respect to the Purchaser
without the prior written consent of the Purchaser.
(p) CREDIT RATINGS. The REIT shall
have (i) applied for and received a rating on the Shares of at least BB+
from Duff & Xxxxxx and (ii) applied to the National Association of
Insurance Commissioners for a rating on the Shares.
(q) ADDITIONAL CERTIFICATES. The Purchaser
shall have received a certificate or certificates, dated the Closing Date,
from each of the Secretary (or Assistant Secretary) of the REIT and the
general partner of the Operating Partnership, certifying (i) their Charter
Documents and Partnership Documents (as appropriate), and resolutions
relating to the transactions contemplated hereby attached thereto, as true,
correct and complete, (ii) as to the absence of proceedings or other action
for dissolution, liquidation or reorganization of any of the REIT, the
Operating Partnership or the Subsidiaries, (iii) as to the incumbency and
specimen signatures of officers who shall have executed instruments,
agreements and other documents in connection with the transactions
contemplated hereby, (iv) as to the effect that certain agreements,
instruments and other documents are in the form approved in the resolutions
referred to in clause (i) above, (v) as to certain tax matters regarding
each of the REIT and the Operating Partnership, and (vi) covering such
other matters, and with such other attachments thereto, as Purchaser's
Counsel may reasonably request at least one business day before the Closing
Date, which certificate and attachments thereto shall be satisfactory in
form and substance to the Purchaser and Purchaser's Counsel.
3.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE REIT ON THE
CLOSING DATE. The REIT's obligation to issue and deliver the Shares at the
Closing is subject to the fulfillment prior to or at the Closing of the
following conditions, any or all of which may be waived in writing at the
option of the REIT:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchaser in Section 5 hereof shall be true and correct in
all material respects when made and at the time of the Closing, after giving
effect to the sale of the Shares and the other transactions contemplated to
be consummated at the Closing by this Agreement and the other Transaction
Documents, except that all representations and warranties that relate to a
particular date or period shall be true and correct in all material respects
as of such date or period.
(b) PERFORMANCE. The Purchaser shall have
performed and complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by them prior to or at
the Closing.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE REIT AND THE
OPERATING PARTNERSHIP. In order to induce the Purchaser to
purchase the Shares, the REIT and the Operating Partnership hereby
represent and warrant, jointly and severally, that:
4.1 ORGANIZATION AND QUALIFICATION; AUTHORITY
(a) Each of the REIT and the Subsidiaries: (i) is a
corporation duly incorporated, or a partnership, limited partnership or
limited liability company duly formed, and is validly existing and in good
standing under the laws of its jurisdiction of its incorporation or
formation; (ii) has full corporate, partnership or limited liability
company power and authority to own and lease its respective properties and
carry on its respective business as presently conducted; and (iii) is duly
qualified, registered or licensed as a foreign corporation, partnership,
limited partnership or limited liability company to do business and is in
good standing in each jurisdiction in which the ownership or leasing of its
respective properties or the character of its present operations makes such
qualification, registration or licensing necessary, except where the
failure to so qualify or be in good standing would not have a material
adverse effect on the condition (financial or otherwise), assets, business
or results of operations (a "Material Adverse Effect") of the REIT and the
Subsidiaries on a consolidated basis. The REIT has heretofore made
available to the Purchaser's Counsel complete and correct copies of the
Articles of Incorporation and the Bylaws or equivalent document of the
REIT, each as amended to date and as presently in effect (collectively, the
"Charter Documents").
(b) The Operating Partnership (i) is a limited partnershi
duly formed, validly existing and in good standing under the laws of the
jurisdiction of its formation; (ii) has full partnership power and authority
to own and lease its respective properties and carry on its respective
business as presently conducted; and (iii) is duly qualified, registered or
licensed as a foreign limited partnership to do business and is in good
standing in each jurisdiction in which the ownership or leasing of its
respective properties or the character of its present operations makes such
qualification, registration or licensing necessary, except where the
failure to so qualify or be in good standing would not have a Material
Adverse Effect on the Operating Partnership and its wholly or majority
owned Subsidiaries on a consolidated basis. The Operating Partnership has
heretofore made available to Purchaser's Counsel complete and correct
copies of its Partnership Agreement and certificate of limited partnership,
each as amended to date and as presently in effect (collectively, the
"Partnership Documents").
4.2. LICENSES. Each of the REIT, the Operating
Partnership and the Subsidiaries holds all licenses, franchises, permits,
consents, registrations, certificates and other approvals (individually, a
"License" and collectively, "Licenses") required for the conduct of its
business as presently conducted, and operates in substantial compliance
therewith, except where the failure to hold any such License or to operate
in compliance therewith would not have a Material Adverse Effect on the
REIT, the Operating Partnership and the Subsidiaries on a consolidated
basis. The REIT, the Operating Partnership and each of the Subsidiaries
are in compliance with all applicable laws, regulations, orders and
decrees, except in each case where the failure so to comply would not have
a Material Adverse Effect on the REIT, the Operating Partnership and the
Subsidiaries on a consolidated basis, or a Material Adverse Effect on the
ability of the REIT, the Operating Partnership or any of the Subsidiaries
to perform on a timely basis any obligation that they have or will have
under any Transaction Document to which they are a party.
4.3. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION
The execution, delivery and performance by the REIT, the Operating Partnership
and the Subsidiaries of the Transaction Documents and all other instruments or
agreements to be executed in connection herewith or therewith and the
issuance and sale to (and the purchase hereunder by) the Purchaser of the
Shares pursuant to this Agreement (a) are within the REIT's, the Operating
Partnership's and the Subsidiaries' respective corporate, partnership or
limited liability company powers; (b) have been duly authorized by all
necessary corporate, partnership or limited liability company action on the
part of the REIT, the Operating Partnership and each such Subsidiary;
(c) do not require any License or Approval (except such as have been
obtained or any approvals of the Commission that may be required to
register the resale of the Common Stock into which the Preferred Stock is
convertible); (d) do not and will not result in the creation or imposition
of any Lien on any asset of the REIT, the Operating Partnership or any of
its Subsidiaries, except where the creation or imposition of such Lien
would not have a Material Adverse Effect on the REIT, the Operating
Partnership and the Subsidiaries on a consolidated basis; and (e) do not
contravene or constitute a default under or violation of (i) any provision
of applicable law or regulation of any Governmental Authority, (ii) the
Charter Documents or Partnership Documents of the REIT, the Operating
Partnership or any of the Subsidiaries, (iii) any agreement (or require the
consent of any Person under any agreement that has not been made or
obtained) to which the REIT, the Operating Partnership or any of the
Subsidiaries are a party, or (iv) any judgment, injunction, order, decree
or other instrument binding upon the REIT, the Operating Partnership, any
of the Subsidiaries or any of their respective properties, except where
such contravention, default or violation would not have a Material Adverse
Effect on the REIT, the Operating Partnership and the Subsidiaries on a
consolidated basis. The REIT does not have any shareholder rights plan or
other "poison pill." The provisions of Subtitles 6 and 7 of Title 3 of the
Maryland General Corporation Law (the "MGCL") shall not apply to the
Purchaser, any acquisition of Shares pursuant to this Agreement or as a
result of the exchange, conversion or redemption of Shares pursuant to this
Agreement, the Articles Supplementary or any other transaction contemplated
by this Agreement. The resolutions in the form attached hereto as EXHIBIT
H have been adopted by the Board of Directors of the REIT, remain in full
force and effect and will not be amended, modified, rescinded or revoked in
any manner that would cause such provisions of the MGCL to apply to the
Purchaser or any such acquisition.
4.4 VALIDITY AND BINDING EFFECT
Each of the Transaction Documents has been duly authorized,
executed and delivered by the REIT, the Operating Partnership and any
Subsidiary which is a party thereto and is a valid and binding agreement
enforceable against the REIT, the Operating Partnership and any such
Subsidiary in accordance with its terms.
4.5. CAPITALIZATION.
(a) The authorized Capital Stock of the REIT consists of
80,000,000 shares of Common Stock, 1,666,667 shares of Series A Preferred
Stock, 2,000,000 shares of Series B Preferred Stock, and 400,000 shares of
Series C Preferred Stock. As of the date of this Agreement, (i) 20,503,054
shares of Common Stock were issued and outstanding, (ii) 1,666,667 shares
of Series A Preferred Stock were issued and outstanding, (iii) 2,000,000
shares of Series B Preferred Stock were issued and outstanding, (iv)
400,000 shares of Series C Preferred Stock were issued and outstanding, (v)
[1,750,000] shares have been authorized and reserved for issuance pursuant
to the REIT's Amended and Restated Stock Benefit Plan (the "Original
Plan"), (vi) 1,235,587 options to purchase Common Stock are outstanding
under the Original Plan, (vii) 2,200,000 shares have been authorized and
reserved for issuance under the REIT's 2000 Stock Benefit Plan (the "2000
Plan"), (viii) zero options to purchase Common Stock are outstanding under
the 2000 Plan, (ix) warrants to purchase 160,000 Common Shares in the
aggregate have been issued to Prudential Investment Management Services,
LLC. All of such issued and outstanding shares of capital stock of the
REIT are duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights. As of the Closing, the Shares will be duly
authorized and, upon payment therefor in accordance with the terms hereof,
will be validly issued, fully paid, nonassessable and free of any
preemptive or similar rights or of any encumbrances, equities or claims of
any nature whatsoever except as created in favor of the Purchaser.
(b) The Operating Partnership has 1,666,667 Class A Limited
Partnership Interests, 2,000,000 Series B Partnership Preferred Units, 400,000
Series C Partnership Preferred Units, and 35,517,809 common units of limited
partnership interest and 399,843 units of general partnership interest
issued and outstanding. Other than the foregoing, there are no other units
of limited partnership interest and no other units of general partnership
interest of the Operating Partnership outstanding. As of the Closing, the
Series D Partnership Preferred Units will be duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights.
(c) Except as disclosed in Section 4.5(a) and (b) hereof or
in the SEC Filings filed since December 31, 1999 and the REIT's agreement
to sell up to an additional 200,000 shares of its Series C Preferred Stock,
as of the Closing Date, there are no outstanding subscriptions, options,
warrants, rights, convertible or exchangeable securities or other
agreements or commitments of any character obligating the REIT, the
Operating Partnership or the Subsidiaries to issue any securities. As of
the Closing Date, there are no voting trusts or other agreements or
understandings to which the REIT, the Operating Partnership or the
Subsidiaries are a party with respect to the voting of the Capital Stock or
Partnership Interests of the REIT, the Operating Partnership or the
Subsidiaries, as the case may be. Except for such agreements that have
been filed as exhibits to an SEC filing, neither the REIT, the Operating
Partnership nor any of the Subsidiaries has entered into any agreement to
register their equity or debt securities under the Securities Act, other
than registration rights agreements pursuant to which the REIT has already
registered the common stock required to be registered thereunder and the
following agreements:
(1) Registration Rights Agreement, dated February 1,
2000, between the REIT and the following limited partners: Xxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx;
(2) Registration Rights Agreement, dated March 15,
2000, between the REIT and the following limited partners: Xxxxxx X.
Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx (as Executor of the Estate of
Xxxxx Xxxxxxxx), Gatesid-Bryn Bwar Company, L.P., King Road
Associates, Cottonwood Associates, Sagar Points, Inc., Staf-Arms Corp.
and the Xxxxxx Xxxxxxxx Trust; and
(3) Registration Rights Agreement, dated March 22,
2000, between the REIT and the following limited partners: Macomb
Apartments Limited Partnership and Deerfield Xxxxx Venture Limited
Partnership.
(d) All of the outstanding securities of the REIT and the
Subsidiaries were issued in compliance with all applicable federal and
state securities laws.
4.6. LITIGATION; DEFAULTS. There is no action,
suit, proceeding or investigation pending or, to the knowledge of the REIT
or the Operating Partnership, threatened against or affecting the REIT, the
Operating Partnership or any of the Subsidiaries, or any properties of any
of the foregoing, before or by any court or arbitrator or any governmental
body, agency or official which (individually or in the aggregate) would
reasonably be expected to (i) have a Material Adverse Effect on the REIT,
the Operating Partnership and the Subsidiaries on a consolidated basis, or
(ii) impair the ability of the REIT, the Operating Partnership or any
Subsidiary to perform fully any material obligation which the REIT, the
Operating Partnership or any such Subsidiary has or will have under any
Transaction Document. Neither the REIT, the Operating Partnership nor any
Subsidiary is in violation of, or in default under (and there does not
exist any event or condition which, after notice or lapse of time or both,
would constitute such a default under), any term of its Charter Documents
or Partnership Documents or of any term of any agreement, instrument,
judgment, decree, order, statute, injunction, governmental regulation, rule
or ordinance (including without limitation, those relating to zoning, city
planning or similar matters) applicable to the REIT, the Operating
Partnership or any Subsidiary or to which the REIT, the Operating
Partnership or any Subsidiary is bound, or to any properties of the REIT,
the Operating Partnership and any Subsidiary, except in each case to the
extent that such violations or defaults, individually or in the aggregate,
would not reasonably be expected to (a) affect the validity of any
Transaction Document, (b) have a Material Adverse Effect on the REIT, the
Operating Partnership and any Subsidiary on a consolidated basis, or
(c) impair the ability of the REIT, the Operating Partnership or any
Subsidiary to perform fully any material obligation which the REIT, the
Operating Partnership or any Subsidiary has or will have under any
Transaction Document.
4.7. PUBLIC REPORTS; NO MATERIAL ADVERSE CHANGE. As of the date
of this Agreement, each SEC Filing filed since January 1, 1999 complies as
to form in all material respects with the requirements of the Securities Act
and the 1934 Act and does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein, in light of
the circumstances under which they were made, or necessary to make the
statements therein not misleading. The REIT has made all of the SEC Filings
required to be made by it since January 1, 1999. Except as disclosed in the
SEC Filings filed since December 31, 1999, since December 31, 1999 there have
been (i) no adverse change in the condition (financial or other), assets,
business, or results of operations of the REIT, the Operating Partnership or
any of the Subsidiaries which could have a Material Adverse Effect on the
REIT, the Operating Partnership and the Subsidiaries on a consolidated basis,
(ii) no obligation or liability (contingent or otherwise) incurred by the
REIT, the Operating Partnership or any of the Subsidiaries, other than
obligations and liabilities which would not have a Material Adverse Effect on
the REIT, the Operating Partnership or on any of the Subsidiaries and no
mortgage, encumbrance or Lien placed on any of the properties of the REIT, the
Operating Partnership or any of the Subsidiaries which remains in existence
on the date hereof other than mortgages, encumbrances and Liens incurred in
the ordinary course of business, and (iii) no acquisition or disposition of
any material assets by the REIT, the Operating Partnership or any of the
Subsidiaries (or any contract or arrangement therefor), or any other
material transaction, otherwise than for fair value in the ordinary course
of business. There is no material fact known to the REIT or the Operating
Partnership which the REIT or the Operating Partnership have not disclosed
in the SEC Filings since December 31, 1999 which have or, insofar as the
REIT or the Operating Partnership can reasonably foresee, may have or will
have a Material Adverse Effect on the REIT, the Operating Partnership or
the Subsidiaries on a consolidated basis or a Material Adverse Effect on
the ability of the REIT or the Operating Partnership to perform their
respective obligations under any of the Transaction Documents to which they
are a party or any document contemplated hereby or thereby.
4.8. PRIVATE OFFERING. No form of
general solicitation or general advertising, including, but not limited to,
advertisements, articles, notices or other communications, published in any
newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising, was used by the REIT or any of
the REIT's representatives, or, to the knowledge of the REIT, any other
Person acting on behalf of the REIT in connection with the offering of the
Shares. The REIT further represents to the Purchaser that, assuming the
accuracy of the representations of the Purchaser as set forth in Section 5
hereof, neither the REIT nor any Person acting on the REIT's behalf has
knowingly taken or will take any action which would subject the issue and
sale of the Shares to the provisions of Section 5 of the Securities Act,
except as contemplated by the Registration Rights Agreement.
4.9. BROKER'S OR FINDER'S COMMISSIONS. Neither the REIT nor
any of its Subsidiaries has entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation
of such entity or the Purchaser to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or consummation of the transactions
contemplated hereby, except that the REIT has retained
Mercury Partners LLC as its financial advisor in connection with the
transactions contemplated by this Agreement. Other than the foregoing
arrangements and Mercury Partners LLC's arrangements with Lend Lease
Capital Markets, Inc. and Equitable, the REIT is not aware of any claim for
payment of any placement fee, finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations
leading to this Agreement or consummation of the transactions contemplated
hereby.
4.10. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY; U.S.
ENTITY. Neither the REIT nor any Subsidiary (i) is, nor will it become, an
"investment company" within the meaning of the 1940 Act, (ii) is, nor will
it become, an "investment company" for purposes of Section 12(d)(1) of the
1940 Act, (iii) is, nor will it become, a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, (iv) is, nor will it be, headquartered or
organized in any jurisdiction outside the United States of America and (v)
directly or indirectly conducts activities or own assets in any foreign
jurisdiction.
4.11. ERISA REQUIREMENTS.
(a) The REIT qualifies and will continue to qualify as a
"real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(e) (the "Plan Assets Regulation") for so long as any of the
Shares are outstanding.
(b) At or before the Closing and annually thereafter (if
requested in writing by the Purchaser), the Purchaser shall receive from
REIT Counsel (or such other counsel as shall be reasonably acceptable to
the Purchaser), a REOC Opinion, satisfactory in substance and form to the
Purchaser and Purchaser's Counsel. In no event shall REIT Counsel be
obligated to provide a REOC Opinion to the Purchaser more than once with
respect to any particular calendar year, except the REOC Opinion delivered
pursuant to Section 3.1(e) hereof shall not be included for purposes of the
foregoing limitation. Except for the REOC Opinion delivered pursuant to
Section 3.1(e) hereof, any such REOC Opinion provided under this Section
4.11(b) for a particular year shall be provided no later than thirty (30)
days after the expiration of the "annual valuation period" (as that term is
defined in the Plan Assets Regulation) which ends on or after the first day
of such year. The REIT has designated the ninety (90) day period
commencing each November 15 as its "annual valuation period."
4.12. TAX MATTERS.
(a) The REIT has been, for each year ending on or after
December 31, 1994, organized and operated in conformity with the
requirements for qualification and taxation as a "real estate investment
trust" under the Code and the Treasury Regulations promulgated thereunder.
(b) The REIT is not currently and, for so long as any
Shares are outstanding, will not be a "pension-held REIT" within the
meaning of Code Section 856(h)(3)(D) and the Treasury Regulations
promulgated thereunder.
(c) The Operating Partnership and each of the REIT's
Subsidiaries that is eligible to be classified as a partnership for federal
income tax purposes is so classified and taxed.
(d) The REIT and the Operating Partnership will not take
any action or permit any action to be taken (to the extent the action is
within the control of the REIT) that would cause any of the representations
set forth in this Section 4.12 to be incorrect or incomplete if made as of
any date following the Closing. In the event of the taking or proposed
taking of any action that would cause the representation set forth in
Section 4.12(b) to be incorrect if made as of any date following the
Closing, the REIT shall notify the Purchaser prior to the taking of such
action.
(e) From and after the date hereof, the REIT shall continue
to elect to be taxed as a "real estate investment trust" under the Code and
the Treasury Regulations promulgated thereunder, shall comply with all
applicable laws, rules and regulations of the Code relating to real estate
investment trusts, and shall not take any action or fail to take any action
which would reasonably be expected to, alone or in conjunction with any
other factors, result in the loss of its status as a real estate investment
trust for federal income tax purposes.
4.13. OPERATING PARTNERSHIP PREFERRED UNITS. The REIT, the
Operating Partnership and the Purchaser agree that for so long as any Shares
are outstanding, the REIT shall cause Home Properties Trust to (i) own and
hold Series D Partnership Preferred Units of the Operating Partnership on
behalf of the holders of the Shares in an amount equal to the number of
outstanding Shares and having, in all material respects, the same distribution
and liquidation preferences with respect to the Operating Partnership as the
Shares have with respect to the REIT, which distributions and preferences
shall be applied by Home Properties Trust exclusively to satisfy the rights
of the holders of Shares, and (ii) act solely at the direction of the holders
of a majority of the Shares in exercising any right or taking any action
requested to be taken by it in its capacity as a holder of the Series D
Partnership Preferred Units.
4.14. TITLE TO PROPERTIES; LEASEHOLD INTERESTS. Except for
Permitted Exceptions that do not materially detract from the value of the
property subject thereto or which, taken as a whole, could not have a Material
Adverse Effect, the REIT or, in the case of properties or assets owned by a
Subsidiary, the Subsidiary, owns good and marketable title to each of the
properties and assets owned by it free and clear of all security interests,
mortgages, pledges, liens, claims or encumbrances of any nature. Certain real
property used by the REIT or its Subsidiaries in the conduct of its
business is held under lease, and the REIT is not aware of any pending or
threatened claim or action by any lessor of any such property to terminate
any such lease, nor are any of the properties leased by the REIT or its
Subsidiaries subject to any security interests, mortgages, pledges, liens,
claims or encumbrances of any nature, which, taken as a whole, could have a
Material Adverse Effect. Each lease or agreement to which the REIT or a
Subsidiary is a party under which it is the lessee of any property, real or
personal, is a valid and subsisting agreement without any material default
of the REIT or the Subsidiary thereunder and, to the best of the REIT's
knowledge, without any material default thereunder of any other party
thereto. No event has occurred and is continuing which, with due notice or
lapse of time or both, would constitute a default or event of default by
the REIT or the Subsidiary under any such lease or agreement or, to the
best of the REIT's knowledge, by any party thereto, except for such
defaults that would not individually or in the aggregate have a Material
Adverse Effect. To the best of the REIT's knowledge, no claim has been
asserted against the REIT or any Subsidiary adverse to its rights in its
leasehold interests. The property and assets of the REIT and the
Subsidiaries are sufficient for the conduct of their business as presently
conducted. Neither the REIT nor any Subsidiary is in violation of any
zoning, building or safety ordinance, regulation or requirement or other
law or regulation applicable to the operation of its owed or leased
properties, which violation would have a Material Adverse Effect, nor has
it received any notice of any such violation which would have a Material
Adverse Effect. There are no defaults by the REIT, any Subsidiary or, to
the best knowledge of the REIT, by any other party, which might curtail in
any material respect the present use of the REIT's or the Subsidiaries'
real or personal property.
4.15. ENVIRONMENTAL COMPLIANCE.
(a) Except as would not have a Material Adverse Effect, the
REIT, the Operating Partnership and the Subsidiaries have no liability
under, have not violated, and are presently in material compliance with all
applicable Environmental Laws.
(b) Except as would not have a Material Adverse Effect,
neither the REIT, the Operating Partnership, any Subsidiary nor, to the
best knowledge of the REIT, any prior owner, operator, tenant, subtenant,
or invitee at any locations currently or formerly owned or occupied by the
REIT, the Operating Partnership or a Subsidiary ("Business Locations"), has
used, installed, stored, spilled, released, transported, disposed of,
discharged, generated, or otherwise handled any Hazardous Material except
in material compliance with all applicable Environmental Laws.
(c) Except as would not have a Material Adverse Effect, to
the best knowledge of the REIT, no Release or Threat of Release of any
Hazardous Material has occurred on, in, under, or adjacent to any Business
Locations.
(d) Except as would not have a Material Adverse Effect,
the REIT, the Operating Partnership and the Subsidiaries have all
Environmental Permits that are or have been necessary for all facilities,
improvements, operations, and activities at all Business Locations.
(e) Except as would not have a Material Adverse Effect,
neither the REIT, the Operating Partnership nor any Subsidiary has:
(i) entered into or been subject to any consent decree, compliance order,
or administrative order with respect to any Business Location;
(ii) received any request for information, notice, demand letter,
administrative inquiry, or formal or informal complaint or claim with
respect to environmental matters relating to any Business Location; or
(iii) been subject to or threatened with any governmental or citizen
enforcement action with respect to any Business Location; and neither the
REIT, the Operating Partnership nor any Subsidiary has any reason to
believe that any of the above will be forthcoming.
4.16. NEW YORK STOCK EXCHANGE LISTING. On or prior to the 30th
day following the Closing Date, the REIT shall have caused the shares of
Common Stock issuable upon conversion of the Shares to be approved for listing
on the New York Stock Exchange.
4.17. FINANCIAL AND OTHER INFORMATION. The REIT shall, at all
times, and whether or not the REIT shall be required to do so by law,
deliver to each holder of Shares:
(a) copies of all quarterly, annual and current reports
and other information, documents and reports (or copies of such portions of the
foregoing as the Commission may from time to time by rules or regulations
prescribe) which the REIT may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the 1934 Act or the rules and
regulations of the Commission thereunder; or, if the REIT is not required
to file information, documents or reports pursuant to either Section 13 or
Section 15(d) of the 1934 Act, then it will deliver to each holder of
Shares such annual, quarterly and current reports and such of the
information, documents and reports which a Person subject to Section 13 of
the 1934 Act and the rules and regulations of the Commission thereunder
would be required to file with the Commission in respect of a security
listed and registered on a national securities exchange; and
(b) all other information actually delivered to the holders
of REIT's Common Stock.
4.18. COVENANT COMPLIANCE CERTIFICATE. Quarterly reports provided
in accordance with Section 4.17 above shall be accompanied by a certificate
of the Chief Financial Officer of REIT setting forth:
(a) the information required in order to establish whether
the REIT was in compliance with the covenant requirements of Section 3(c)
of the Articles Supplementary pertaining to the particular calendar quarter
for which such quarterly reports have been provided; and
(b) a statement that such officer has reviewed the relevant
information provided for in Section 4.18(a) above and that such review
shall not have disclosed the existence during such calendar quarter of a
Covenant Failure (as such term is defined in the Articles Supplementary)
or, if any such Covenant Failure existed or exists, specifying the nature
and period of existence thereof and what action the REIT shall have taken
or proposes to take with respect thereto.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH PURCHASER.
In order to induce the REIT to sell the Shares, the Purchaser hereby
represents and warrants that:
5.1. PURCHASE FOR INVESTMENT; AUTHORITY.
(a) The Purchaser is an accredited investor as defined in
Regulation D under the Securities Act and that it is purchasing the Shares
for its own account or for one or more separate accounts maintained by it
or for the account of one or more institutional investors on whose behalf
the Purchaser has authority to make this representation for investment and
not with a view to the distribution thereof or with any present intention
or plan of distributing or selling any of the Shares except in compliance
with the Securities Act, provided that the disposition of the Shares shall
at all times be within its control. The Purchaser understands and agrees
that the Shares have not been registered under the Securities Act and may
be resold only if registered pursuant to the provisions thereunder or if an
exemption from registration is available.
(b) The Purchaser has full power and authority and has taken
all action necessary to authorize it to enter into and perform its obligations
under the Transaction Documents and all other documents or instruments
contemplated hereby. The Transaction Documents are legal, valid and
binding obligations of the Purchaser and are enforceable in accordance with
their terms.
5.2. OWNERSHIP LIMITS. The Purchaser
has received a copy of the Articles of Incorporation and understands the
restrictions on transfer and ownership of REIT's capital stock included
therein as modified by the Ownership Limit Waiver Letter.
5.3. NATURE OF PURCHASER'S OWNERSHIP. The Purchaser represents
and warrants that it is not an "individual" for purposes of Section 542 of
the Code as modified by Section 856(h) of the Code.
6. RESTRICTIONS ON TRANSFER.
6.1. RESTRICTIONS ON TRANSFER. The Purchaser agrees that for a
period of six (6) months following the Closing Date it shall not sell,
transfer, convey, assign, pledge, hypothecate or otherwise dispose of any of
the Shares, or any shares of Common Stock into which such Shares may be
converted, without the prior written consent of the REIT.
6.2. RESTRICTIVE LEGEND. Except as
otherwise permitted by this Section 6, each certificate representing Shares
issued pursuant to this Agreement shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, NOR PURSUANT TO THE SECURITIES OR "BLUE
SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE
TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN
ACCORDANCE WITH APPLICABLE "BLUE SKY" LAWS AND PURSUANT
TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE
144 OR RULE 144A UNDER SUCH ACT, OR (iii) ANY OTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO
SUCH ACT."
The REIT shall maintain a copy of this Agreement and any amendments
thereto on file in its principal offices, and will make such copy available
during normal business hours for inspection to any party thereto or will
provide such copy to the Purchaser or any transferee upon its or their
request.
Whenever the legend requirement imposed by this Section 6.2 shall
terminate, as provided in Section 6.3, the respective holders of Shares for
which such legend requirements have terminated shall be entitled to receive
from the REIT, at the REIT's expense, certificates representing the Shares
without such legend.
6.3. NOTICE OF TRANSFER. Each holder of
the Shares bearing the restrictive legend set forth in Section 6.2 above (a
"Restricted Security"), agrees with respect to any transfer of such
Restricted Security to give to the REIT written notice describing the
transferee and the circumstances, if any, necessary to establish the
availability of an exemption from the registration requirements of the
Securities Act or any state law. If for any reason the REIT shall fail to
notify such holder within ten business days after such holder shall have
delivered such notice to the REIT that the transfer may not be legally
effective, such holders shall thereupon be entitled to transfer the
Restricted Security as proposed, and the REIT will within a reasonable
period after such contemplated transfer, at the expense of such holder,
deliver new certificates for such Restricted Security which do not bear the
Securities Act legend set forth in Section 6.2 above. The restrictions
imposed by this Section 6 upon the transferability of any particular
Restricted Security shall cease and terminate when such Restricted Security
has been sold pursuant to an effective registration statement under the
Securities Act or transferred pursuant to Rule 144 promulgated under the
Securities Act. The holder of any Restricted Security as to which such
restrictions shall have terminated shall be entitled to receive from the
REIT at the expense of the REIT, a new security of the same type but not
bearing the restrictive Securities Act legend set forth in Section 6.2 and
not containing any other reference to the restrictions imposed by this
Section 6. As used in this Section 6.3, the term "transfer" encompasses
any sale, transfer or other disposition of any securities referred to
herein.
7. DEFINITIONS. As used herein the following terms
have the following respective meanings:
"1934 ACT" means the Securities Exchange Act of 1934, and the
rules and regulations of the Commission promulgated thereunder, as from
time to time amended.
"1940 ACT" means the Investment Company Act of 1940, and the
rules and regulations of the Commission promulgated thereunder, as from
time to time amended.
"2000 PLAN" has the meaning ascribed thereto in Section 4.5(a)
hereof.
"AFFILIATE," except as otherwise defined in this Agreement, means
with respect to any Person any other Person directly or indirectly controlling
or controlled by or under common control with such first Person or any of
its Subsidiaries; PROVIDED, HOWEVER, that, for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by agreement or otherwise.
"AGREEMENT" means this Agreement, as amended, modified or
supplemented from time to time, together with any exhibits, schedules,
appendices or other attachments thereto.
"APPROVALS" has the meaning ascribed thereto in Section 3.1(m)
hereof.
"ARTICLES OF INCORPORATION" has the meaning ascribed thereto in
Section 3.1(o).
"ARTICLES SUPPLEMENTARY" means the Articles Supplementary
Classifying and Designating a Series of Preferred Stock as Series D
Convertible Cumulative Preferred Stock and Fixing Distribution and Other
Preferences and Rights of Such Series.
"BUSINESS LOCATIONS" has the meaning ascribed thereto in Section
4.15(b) hereof.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participation, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrant or options exchangeable
for or convertible into such capital stock.
"CHARTER DOCUMENTS" has the meaning ascribed thereto in Section
4.1 hereof.
"CLOSING" has the meaning ascribed thereto in Section 2 hereof.
"CLOSING DATE" has the meaning ascribed thereto in Section 2
hereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
"COMMON STOCK" means the common stock, par value $.01 per share,
of the REIT.
"ENVIRONMENT" means soil, surface or subsurface strata, surface
water, groundwater, land, sediments, air, flora and fauna, or any
environmental medium.
"ENVIRONMENTAL LAWS" means any statute, regulation, rule,
ordinance, by-law, order or other binding decision of any governmental
entity, whether existing as of the date hereof, previously enforced, or
subsequently enacted, regarding health, safety, or the Environment.
"ENVIRONMENTAL PERMIT" means any permit, license, registration,
approval, consent, or authorization required, issued or issuable by any
governmental entity pursuant to any Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of
1974, and the rules and regulations thereunder, as amended from time to
time.
"GENERAL PARTNER'S CERTIFICATE" means a certificate executed on
behalf of the Operating Partnership by its general partner.
"GOVERNMENTAL AUTHORITY" means any governmental or
quasi-governmental authority including, without limitation, any federal,
state, territorial, county, municipal or other governmental or
quasi-governmental agency, board, branch, bureau, commission, court,
department or other instrumentality or political unit or subdivision,
whether domestic or foreign.
"HAZARDOUS MATERIAL" means any hazardous waste, hazardous
material, or hazardous substance, or any petroleum, petroleum product, oil,
toxic substance, chemical, smoke, vapors or other irritants, including
without limitation as any of the foregoing may be defined in or pursuant to
any Environmental Laws.
"INDEMNITORS" has the meaning ascribed thereto in Section 8.1(c)
hereof.
"LICENSE" or "LICENSES" has the meaning ascribed thereto in
Section 4.2 hereof.
"LIEN" means any mortgage, lien (statutory or otherwise), charge,
pledge, hypothecation, conditional sales agreement, adverse claim, title
retention agreement or other security interest, encumbrance or other title
defect in or on any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale, trust
receipt or other title retention agreement with respect to any Property or
asset of such Person.
"LOSSES" has the meaning ascribed thereto in Section 8.1(a)
hereof.
"MATERIAL ADVERSE EFFECT" has the meaning ascribed thereto in
Section 4.1(a) hereof.
"MGCL" has the meaning ascribed thereto in Section 4.3 hereof.
"OFFICER'S CERTIFICATE" means a certificate executed on behalf of
the REIT by the Chief Financial Officer of the REIT.
"OPERATING PARTNERSHIP" has the meaning ascribed thereto in the
introduction hereof.
"ORIGINAL PLAN" has the meaning ascribed thereto in Section 4.5(a) hereof.
"PARTNERSHIP AGREEMENT" has the meaning ascribed thereto in
Section 3.1(k) hereof.
"PARTNERSHIP DOCUMENTS" means partnership, limited partnership,
limited liability company agreements and operating agreements, each as
amended and restated to date and presently in effect, and certificates
required to be filed in such entities' state of organization or formation.
"PERMITTED EXCEPTIONS" means: (i) real estate taxes and
assessments not yet delinquent (provided that all real estate taxes and
assessments that are due and payable but not yet delinquent have been
properly accounted for in accordance with generally accepted accounting
principles), (ii) covenants, restrictions, easements and other similar
agreements, provided that the same are not violated in any material respect
by existing improvements or the current use and operation of the REIT's,
the Operating Partnership's or any Subsidiary's real property, (iii) zoning
laws, ordinances and regulations, building codes, rules and other
governmental laws, regulations, rules and orders affecting any of the
REIT's, the Operating Partnership's or any Subsidiary's real property,
provided that the same are not violated by existing improvements or the
current use and operation of such property (including existing
improvements), (iv) minor liens and/or encumbrances which do not materially
and adversely affect the current use, operation or enjoyment of any of the
REIT's, the Operating Partnership's or any Subsidiary's real property
(including existing improvements) and do not render title to such real
property unmarketable or uninsurable and do not materially impair the value
of such real property (including existing improvements), and (v) mortgage
financing disclosed in the SEC filings.
"PERSON" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"PLAN ASSETS REGULATION" has the meaning ascribed thereto in
Section 4.11 hereof.
"PREFERRED STOCK" has the meaning ascribed thereto in Section 1.1
hereof.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PURCHASE PRICE" has the meaning ascribed thereto in Section 1.2
hereof.
"PURCHASER" has the meaning ascribed thereto in the introduction
hereof.
"PURCHASER'S COUNSEL" means Xxxxxxx, Procter & Xxxx LLP.
"PURCHASER INDEMNIFIED PARTY" or "PURCHASER INDEMNIFIED PARTIES"
has the meaning ascribed thereto in Section 8.1(a) hereof.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement by and between the REIT and the Purchaser, as amended or
supplemented from time to time in accordance with the terms thereof.
"REIT" has the meaning ascribed thereto in the introduction
hereof.
"REIT COUNSEL" means Xxxxx Xxxxxxx LLP.
"RELEASE" means any release, migration, seepage, discharge, or
disposal into the Environment, including without limitation as any of the
foregoing may be defined in or pursuant to any Environmental Laws.
"REOC OPINION" means an opinion of REIT Counsel or such other
counsel as may be reasonably satisfactory to the Purchaser that the REIT is
a "real estate operating company" within the meaning of the Plan Assets
Regulations.
"RESTRICTED SECURITY" has the meaning ascribed thereto in Section
6.3 hereof.
"RULE 144" means Rule 144 as promulgated by the Commission under
the Securities Act, and any successor rule or regulation thereto.
"RULE 144A" means Rule 144A as promulgated by the Commission
under the Securities Act, and any successor rule or regulation thereto.
"SDAT" has the meaning ascribed thereto in Section 3.1(j) hereof.
"SEC FILINGS" means official filings made by the REIT with the
Commission in accordance with the Securities Act and the 1934 Act.
"SECURITIES ACT" means the Securities Act of 1933, and the rules
and regulations of the Commission promulgated thereunder, as from time to
time amended.
"SHARES" has the meaning ascribed thereto in Section 1 hereof.
"SUBSIDIARIES" means subsidiary corporations, partnerships,
limited partnerships, joint ventures and limited liability companies, which
are directly or indirectly and wholly or majority owned by the REIT,
including, unless the context requires otherwise, the Operating
Partnership.
"THREAT OF RELEASE" or "THREATENED RELEASE" means a substantial likelihood
of a Release which requires action to prevent or mitigate damage to the
Environment which may result from such Release, including without
limitation as any of the foregoing may be defined in or pursuant to any
Environmental Laws.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, the
Articles Supplementary, the Amendment to the Partnership Agreement, the
Registration Rights Agreement, the Ownership Limit Waiver Letter, and any
and all agreements, certificates, instruments and other documents of the
REIT and the Operating Partnership required thereby or executed and
delivered pursuant hereto.
8. MISCELLANEOUS.
8.1 INDEMNIFICATION; EXPENSES, ETC.
(a) In addition to any and all other obligations of the
REIT and the Operating Partnership (collectively, the "Indemnitors")
hereunder or under the other Transaction Documents, the Indemnitors shall
jointly and severally indemnify and hold harmless the Purchaser, its
Affiliates and the employees, officers, directors, trustees, direct and
indirect partners, members, agents and investment advisors of the Purchaser
and its Affiliates (individually, a "Purchaser Indemnified Party" and
collectively, the "Purchaser Indemnified Parties") from and against any and
all losses, claims, damages, liabilities, costs (including the costs of
preparation and reasonable attorneys' fees) and reasonable expenses
(including expenses of investigation) (collectively, "Losses") incurred or
suffered by a Purchaser Indemnified Party in connection with or arising out
of any material breach by the Indemnitors or either of them of any
covenant, warranty or representation made by the Indemnitors in this
Agreement. Each of the Indemnitors agrees as promptly as practicable to
reimburse any Purchaser Indemnified Party for all such Losses as they are
incurred or suffered by such Purchaser Indemnified Party.
(b) If any Purchaser Indemnified Party is entitled to
indemnification hereunder, such Purchaser Indemnified Party or its
representative shall give prompt notice to the Indemnitors of any claim or of
the commencement of any proceeding against such Purchaser Indemnified Party
brought by any third party with respect to which such Purchaser Indemnified
Party seeks indemnification pursuant hereto; PROVIDED, HOWEVER, that the
failure to so notify the Indemnitors shall not relieve the Indemnitors from any
obligation or liability except to the extent the Indemnitors are prejudiced
by such failure. The Indemnitors shall have the right, exercisable by
giving written notice to a Purchaser Indemnified Party promptly after the
receipt of written notice from such Purchaser Indemnified Party of such
claim or proceeding, to assume, at the expense of the Indemnitors, the
defense of any such claim or proceeding with counsel reasonably
satisfactory to such Purchaser Indemnified Party unless (1) the Purchaser
Indemnified Party has reasonably concluded (based on advice of counsel)
that there may be legal defenses available to it or other Purchaser
Indemnified Parties that are different from or in addition to those
available to the Indemnitors, (2) a conflict or potential conflict exits
(based on advice of counsel to the Purchaser Indemnified Party) between the
Purchaser Indemnified Party and the Indemnitors or (3) the Indemnitors have
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action,
in each of which cases the reasonable fees, disbursements and other charges
of the Purchaser Indemnified Party's counsel will be at the expense of the
Indemnitors. The Purchaser Indemnified Party or Parties will not be
subject to any liability for any settlement made without its or their
consent (but such consent will not be unreasonably withheld). The
Indemnitors shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
giving by claimant or plaintiff to such Purchaser Indemnified Party or
Parties of a release, in form and substance satisfactory to the Purchaser
Indemnified Party or Parties, from all liability in respect of such claim,
litigation or proceeding.
8.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SEVERABILITY. All
representations and warranties contained in this Agreement or the
Transaction Documents or made in writing by or on behalf of the REIT, the
Operating Partnership or the Purchaser in connection with the transactions
contemplated by this Agreement or the Transaction Documents shall survive,
for the duration of any statutes of limitation applicable thereto, the
execution and delivery of this Agreement, any investigation at any time
made by the REIT, the Operating Partnership, the Purchaser or on such
party's behalf, the purchase of the Shares by a Purchaser under this
Agreement and any disposition of or payment on the Shares. All statements
contained in any certificate or other instrument delivered to the Purchaser
by or on behalf of the REIT or the Operating Partnership or delivered to
the REIT or the Operating Partnership by or on behalf of the Purchaser
pursuant to this Agreement or the other Transaction Documents shall be
deemed representations and warranties of the REIT and the Operating
Partnership, or the Purchaser, as applicable, under this Agreement. 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 or affecting the validity or enforceability of such
provisions in any other jurisdiction.
8.3. AMENDMENT AND WAIVER. This
Agreement may be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may be given, provided that the
same are in writing and signed by all of the parties hereto.
8.4. NOTICES, ETC. Except as otherwise provided in
this Agreement, notices and other communications under this Agreement shall
be in writing and shall be sent by facsimile, with receipt confirmed, or
delivered or mailed by registered or certified mail, return receipt
requested, or by a nationally recognized overnight courier, postage
prepaid, addressed, (a) if to the Purchaser, at the address set forth on
the Purchaser's signature page hereto or such other address as the
Purchaser shall have furnished to the REIT in writing, or (b) if to any
other holder of any Shares, at such address as such other holder shall have
furnished to the REIT in writing, or, until any such other holder so
furnishes to the REIT an address, then to and at the address of the last
holder of such Shares who has furnished an address to the REIT, or (c) if
to the REIT or the Operating Partnership, at the address set forth on their
signature page hereto, to the attention of the President of the REIT, or at
such other address, or to the attention of such other officer, as the REIT
shall have furnished to the Purchaser and each such other holder in
writing. This Agreement and the other Transaction Documents and all
documents delivered in connection herewith or therewith embody the entire
agreement and understanding between the Purchaser and the REIT and the
Operating Partnership and supersede all prior agreements and understandings
relating to the subject matter hereof, including any confidentiality
agreements by and between the REIT and the Purchaser, which agreements
shall be terminated effective as of the Closing.
8.5. SUCCESSORS AND ASSIGNS.
Whenever in this Agreement any of the parties hereto are referred to, such
reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
respective parties which are contained in this Agreement shall bind and
inure to the benefit of the successors and assigns of all other parties,
except for the Ownership Limit Waiver Letter. Except for the Ownership
Limit Waiver Letter and as otherwise provided herein, the terms and
provisions of this Agreement and the other Transaction Documents shall
inure to the benefit of and shall be binding upon any assignee or
transferee of the Purchaser, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Purchaser
shall automatically extend to and be vested in, and become an obligation
of, such transferee or assignee, all subject to the terms and conditions
hereof.
8.6 DESCRIPTIVE HEADINGS. The headings
in this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof.
8.7. SATISFACTION REQUIREMENT. If
any agreement, certificate or other writing, or any action taken or to be
taken, is by the terms of this Agreement required to be satisfactory to a
particular party, the determination of such satisfaction shall be made by
such party, as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such
determination.
8.8. 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 Maryland without regard to
principles of conflict of law.
8.9. EXPENSES. If the Closing shall occur, the
REIT will pay at the Closing (or on such later date as one or more invoices
may be submitted to the REIT) the Purchaser's reasonable expenses incurred
in connection with the transactions contemplated hereby, including, without
limitation, the reasonable legal fees of Purchaser's Counsel, due diligence
expenses and documentation expenses; PROVIDED, HOWEVER, that in no event
shall such fees exceed $70,000 in the aggregate.
8.10. COUNTERPARTS. This Agreement may be
executed simultaneously in two or more counterparts, each of which shall be
deemed an original.
8.11. INVALID PROVISIONS. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present
or future law, and if the rights or obligations of any party hereto under
this Agreement will not be materially and adversely affected thereby, (a)
such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions
of this Agreement will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of
this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible to
give effect to the intention of the parties hereto.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be duly executed as of the date first set forth above.
HOME PROPERTIES OF NEW YORK, INC., a Maryland
corporation
By: /s/ Xxx X. Xxxx
Name: Xxx X. Xxxx
Title: Executive Vice President
HOME PROPERTIES OF NEW YORK, L.P., a New York
limited partnership
By: Home Properties of New York, Inc.
Its: General Partner
By: /s/ Xxx X. Xxxx
Name: Xxx X. Xxxx
Title: Executive Vice President
NOTICE ADDRESS:
Home Properties of New York, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxx, Executive Vice
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Home Properties of New York, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. XxXxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
STOCK PURCHASE AGREEMENT PURCHASER SIGNATURE PAGE
Accepted and agreed as of the Number and Manner of Payment
date first written above: of Purchase Price of Shares to be
Purchased:
250,000 Shares of Series D
Convertible Cumulative Preferred
Stock of Home Properties of New
York, Inc.
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
Purchase Price: $25,000,000
By:/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title:Executive Vice President and
Chief Investment Officer
Address: The Equitable Life Assurance Society
of the United States
1290 Avenue of the Americas
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Nominee (name in which the Shares are to be
registered, if different than name of Purchaser):
________________________________________
(Nominee's Name)
COPIES OF NOTICES TO:
Tax I.D. Number: _____________
(if acquired in the name of a The Equitable Life Assurance
Society
nominee, the taxpayer I.D. of the United States
number of such nominee) 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and
Xxxxx X. Xxxxxx, P.C.
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
