Exhibit 10.28
SUBORDINATION AGREEMENT
The undersigned makes and grants this Subordination Agreement to THE
CHASE MANHATTAN BANK and its affiliates, including subsidiaries whether now
existing or hereafter created, (collectively, "Chase"), having an office
located at Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx ("Business Office").
RECITAL. Pursuant to their participation in the Executive Stock
Purchase and Loan Program (the "Program") of Home Properties of New York,
Inc., the Directors and officers listed on Rider A hereto (individually, a
"Borrower", and collectively, the "Borrowers"), are now indebted to the
undersigned in the principal sums set forth opposite their respective names on
Rider A (collectively, the "Subordinated Debt").
This Subordination Agreement includes any Rider attached hereto.
CONSIDERATION. To induce Chase, at its option, to make loans to the
Borrowers to enable them to purchase shares of the undersigned's common stock
under the Program, with or without security, the undersigned hereby agrees
with each of the Borrowers, for the benefit of Chase, as hereinafter set
forth.
STANDBY. With respect to each Borrower, except as may be provided
herein, the undersigned will not ask, demand, xxx for, take or receive from a
Borrower, by set-off or in any other manner, the whole or any part of any
moneys, principal or interest, now or hereafter owing by that Borrower to the
undersigned as part of the Subordinated Debt, nor any security therefor,
unless and until all indebtedness of that Borrower to Chase with respect to
his/her loan described above, whether now existing or hereafter arising,
direct or indirect, absolute or contingent, joint or several, secured or
unsecured, due or not due, and whether arising directly between the Borrower
and Chase or acquired outright, conditionally or as collateral security from
another by Chase (collectively, the "Chase Debt"), shall have been fully paid,
with interest (including interest accruing after the commencement of any
proceeding mentioned in the paragraph next following).
DISTRIBUTIONS. In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by operation of
law or otherwise, of all or any part of the assets of a Borrower or the
proceeds thereof, to creditors of that Borrower, or upon any indebtedness of
that Borrower, by reason of any receivership, insolvency or bankruptcy
proceeding, or assignment for the benefit of
Page 1
creditors, or any proceeding by
or against that Borrower for any relief under any bankruptcy or insolvency law
or laws relating to the relief of debtors, readjustment of indebtedness,
reorganizations, compositions or extensions, then and in any such event any
payment or distribution of any kind or character, either in cash, securities
or other property, which shall be payable or deliverable upon or with respect
to any or all Subordinated Debt, shall be paid or delivered direct to Chase
for application on the Chase Debt, due or not due, until the Chase Debt shall
have first been fully paid and satisfied. The undersigned irrevocably
authorizes and empowers Chase, in any proceeding mentioned in the preceding
sentence, to demand, xxx for, collect and receive every such payment or
distribution and give acquittance therefor; and to file claims and take such
other steps, in Chase's own name or in the name of the undersigned or
otherwise, as Chase may deem necessary or advisable for the enforcement of
this agreement or of any and all claims upon or with respect to any and all
Subordinated Debt or for the collection of any and all payments or
distributions which may be payable or deliverable at any time upon or with
respect to any of the Subordinated Debt. An irrevocable power of attorney is
granted to Chase to effect the foregoing, including supplying any necessary
endorsements.
RECEIPT OF PROCEEDS. Except as may be provided herein, should any
payment or distribution or security or proceeds thereof be received by the
undersigned upon or with respect to any of the Subordinated Debt prior to the
satisfaction of all of the Chase Debt, the undersigned will forthwith deliver
the same to Chase in precisely the form received (except for the indorsement
or assignment of the undersigned where necessary), for application on any of
the Chase Debt, due or not due, and, until so delivered, the same will be held
in trust by the undersigned as property of Chase. In the event of the lure of
the undersigned to make any such indorsement or assignment, Chase, or any of
its officers or employees, are hereby irrevocably authorized to make the same.
SECURITY. As security for its obligations to Chase hereunder and as
security for payment of the Chase Debt, the undersigned hereby assigns to
Chase, and grants Chase a security interest in, the Subordinated Debt and any
instrument evidencing the same. The undersigned and each Borrower will do all
things necessary in the opinion of Chase to protect the rights of Chase
hereunder including but not limited to delivering possession to Chase of any
instrument evidencing the Subordinated Debt, or, if no such instrument exists,
creating an instrument evidencing such Subordinated Debt and delivering
possession of the same to Chase. Upon the failure by a Borrower to pay when
due any of his/her the Chase Debt, whether by acceleration or otherwise, or
upon the occurrence of any event, condition or act
Page 2
(including notice and lapse
of time, if specified) which is defined or described as a default or an event
of default in any document or instrument pertaining to or evidencing the Chase
Debt, Chase may, without limitation of any other provision herein, in its name
or the name of the undersigned or otherwise, take any action for the
collection of the Subordinated Debt, may receive the proceeds thereof and give
acquittances therefor and after deducting the costs and expenses of any action
taken, including reasonable counsel fees, may apply such proceeds to any of
the obligations of the undersigned hereunder or to any of the Chase Debt as
Chase may elect, accounting to the undersigned for any balance remaining. The
undersigned irrevocably appoints Chase as the lawful attorney and agent of the
undersigned to execute financing statements on behalf of the undersigned and
to file such financing statements signed by Chase alone in any public office.
NO ASSIGNMENT WITHOUT SUBROGATION. The undersigned will not assign or
transfer, or further subordinate, to others any claim the undersigned has or
may have against a Borrower while any Chase Debt remains unpaid, unless such
assignment, transfer or subordination is made expressly subject and
subordinate to this agreement and the rights of Chase hereunder.
REPRESENTATIONS AND WARRANTIES. If the undersigned is other than an
individual, the undersigned represents and warrants upon the execution and
delivery of this Subordination Agreement, that: (a) it is duly organized and
validly existing under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good standing; (b) it has
the power to execute and deliver this Subordination Agreement and to perform
its obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance; (c) such execution, delivery and
performance do not violate or conflict with any law applicable to it, any
provision of its organizational documents, any order or judgment of any court
or other agency of government applicable to it or any of its assets or any
material contractual restriction binding on or materially affecting it or any
of its assets; (d) to the best of undersigned's knowledge, all governmental
and other consents that are required to have been obtained by it with respect
to this Subordination Agreement have been obtained and are in full force and
effect and all conditions of any such consents have been complied with;
(e) its obligations under this Subordination Agreement constitute its legal,
valid and binding obligations, enforceable in accordance with its terms except
to the extent that such enforcement may be limited by applicable bankruptcy,
insolvency or other similar laws affecting creditors' rights generally;
(f) all financial statements and related information furnished and to be
furnished to Chase from time to time by the undersigned are true and complete
and
Page 3
fairly present the financial or other information stated therein as at
such dates or for the periods covered thereby; (g) there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
undersigned, threatened against or affecting the undersigned before any court,
governmental agency or arbitrator, which involve forfeiture of any assets of
the undersigned or which may materially adversely affect the financial
condition, operations, properties or business of the undersigned or the
ability of the undersigned to perform its obligation under this Subordination
Agreement; and (h) there has been no material adverse change in the financial
condition of the undersigned since the last such financial statements or
information.
CHANGES TO CHASE DEBT. Chase, at any time and from time to time, may
enter into such agreement or agreements with a Borrower as Chase may deem
proper extending the time of payment of or renewing or otherwise altering the
terms of all or any of the obligations of that Borrower to Chase or affecting
the security underlying any or all of such obligations, or may exchange, sell
or surrender or otherwise deal with any such security, or may release any
balance of funds of that Borrower with Chase, or may release any guarantor,
without notice to the undersigned, and without in any way impairing or
affecting this Subordination Agreement thereby.
BOOKS OF ACCOUNT. The undersigned shall make and maintain in its books
of account notations satisfactory to Chase of its rights and priorities
hereunder and from time to time on request, shall furnish Chase with sworn
financial statements. Chase may inspect the books of account and records of
the undersigned at any time during business hours.
COSTS. The undersigned agree(s) to reimburse Chase on demand for all
costs, expenses and charges (including, without limitation, fees and charges
of external legal counsel for Chase and costs allocated by its internal legal
department) in connection with the enforcement of this Subordination
Agreement.
NOTICES. All notices, requests, demands or other communications to or
upon the undersigned or Chase shall be in writing and shall be deemed to be
delivered upon receipt if teletransmitted by telecopier or delivered by hand
or overnight courier or five days after mailing to the telecopier number or
address, respectively (a) of the undersigned as set forth next to the
undersigned's execution of this agreement, (b) of Chase at the address set
forth above or (c) of the undersigned or Chase at such other telecopier number
or address as the undersigned or Chase shall specify to the other in writing.
Page 4
ENTIRE AGREEMENT, AMENDMENT AND WAIVERS BY CHASE. This Subordination
Agreement and any attachments hereto constitute the entire agreement between
the undersigned and Chase in respect of the subject matter hereof and may be
amended only by a writing signed on behalf of each party and shall be
effective only to the extent set forth in that writing. No delay by Chase in
exercising any power or right hereunder shall operate as a waiver thereof or
of any other power or right; nor shall any single or partial exercise of any
power or right preclude other or future exercise thereof, or the exercise of
any other power or right hereunder. No waiver shall be deemed to be made by
Chase of any of its rights hereunder unless the same shall be in writing
signed on behalf of Chase, and each waiver, if any, shall be a waiver only
with respect to the specific instance involved and shall in no way impair the
rights of Chase or the obligations of the undersigned to Chase in any other
respect at any other time.
WAIVERS BY UNDERSIGNED. All obligations and liabilities of the Borrowers
to Chase shall be deemed to have been made or incurred at the request of the
undersigned and in reliance upon this Subordination Agreement, and the
undersigned expressly waives all notice of the acceptance by Chase of this
Subordination Agreement, all other notices whatsoever, reliance by Chase upon
the subordination herein provided for, and any circumstance which might
otherwise constitute a defense available to, or discharge of any Borrower or
any subordinated creditor.
SUCCESSORS. This Subordination Agreement shall be binding upon the
undersigned, and the executors, administrators, successors and assigns of the
undersigned.
GOVERNING LAW; JURISDICTION. This Subordination Agreement shall be
governed by and construed in accordance with the laws of the State of New
York. The undersigned consent(s) to the nonexclusive jurisdiction and venue
of the state of federal courts located in such state. In the event of a
dispute hereunder, suit may be brought against the undersigned in such courts
or in any jurisdiction where the undersigned or any of its assets may be
located. Service of process by Chase in connection with any dispute shall be
binding on the undersigned if sent to the undersigned by registered mail at
the address(es) specified below or to such further address(es) as the
undersigned may specify to Chase in writing.
WAIVER OF JURY TRIAL. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
SUBORDINATION AGREEMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S
OPTION, BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Page 5
IN WITNESS WHEREOF, the undersigned has executed this instrument or has
caused this instrument to be duly executed by its proper officer(s) this
12th day of August, 1996.
HOME PROPERTIES OF NEW YORK, INC.,
By: /s/ Xxxxxx X. Xxxxxxxxx
___________________________________
Xxxxxx X. Xxxxxxxxx, President
Address for notices:
000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Rider A
Acknowledgment of Subordination
The undersigned Borrower hereby accepts, and acknowledges receipt of a
copy of, the foregoing Subordination Agreement, and agrees that he/she will
not repay any of the Subordinated Debt to the above-signed subordinating
creditor except as in the foregoing agreement provided. In the event of a
breach by such subordinating creditor or the undersigned Borrower of any of
the provisions of the foregoing agreement, all of the obligations and
liabilities of the undersigned Borrower to Chase shall, without notice or
demand, become immediately due and payable unless Chase shall otherwise elect.
No waiver by Chase of any right hereunder shall be valid unless in
writing and no waiver by Chase of any right shall be deemed a waiver of any
other right. Nothing herein shall limit or affect in any manner any right
Chase may have by virtue of any other instrument or agreement.
Borrower Signature:
___________________________
Address:
Principal Amount of Loan:
