Exhibit 4.10
DEMAND GRID NOTE
Rochester, New York March 5, 1997 $35,000,000
For purposes of this Note:
1. The "Bank" means Manufacturers and Traders Trust
Company, a New York banking corporation having its chief
executive office at One M&T Plaza, Buffalo, New York 14240.
2. The "Bank's Prime Rate" means the rate per year
announced by the Bank as the prime rate of interest of the Bank.
3. The "Borrower" means Home Properties of New York, L.P.,
a New York limited partnership having its chief executive office
at 850 Clinton Square, Rochester, New York 14604.
4. "Business Day" means any day on which banks are open to
conduct regular business in both New York City and London.
5. The "Corporate General Partner" means Home Properties
of New York, Inc., a Maryland business corporation having its
chief executive office at 850 Clinton Square, Rochester, New York
14604.
6. The "Credit" means a line of credit made available by
the Bank to the Borrower in the maximum principal amount equal to
the Limiting Principal Amount.
7. "Demand" means any demand by the Holder for the payment
of the Outstanding Principal Amount.
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8. "Distribution" means, with respect to any corporation,
(a) any dividend or other distribution, whether in cash or in the
form of any other asset, on account of any of its stock or (b)
any payment on account of the purchase, redemption, retirement or
other acquisition of any of its stock.
9. The "Holder" means the Bank or any transferee of this
Note.
10. The "Limiting Principal Amount" means $35,000,000.
11. "Loan" means any loan made by the Bank pursuant to the
Credit.
12. "One-Month Libor Rate" means, for any calendar month,
the rate, as determined by the Bank from any broker, quoting
service or commonly available source utilized by the Bank and as
adjusted, in the sole discretion of the Bank, to reflect any
increased cost directly or indirectly resulting from, or any
reserve required by, applicable law, any guideline or program of
any court, agency or other governmental authority or any other
circumstance affecting the London interbank eurodollar market, at
which United States dollar deposits in immediately available
funds are offered in the London interbank eurodollar market at
approximately 11:00 a.m. London time (or as soon thereafter as
practicable) on the date that is two Business Days before the
first Business Day of such calendar month
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for delivery on the
first Business Day of such calendar month for a one-month period.
13. The "Outstanding Principal Amount" means the
outstanding principal amount of this Note.
14. "Person" means (a) any individual, corporation,
partnership, limited liability company, joint venture, trust or
unincorporated association or (b) any other entity, body,
organization or group.
15. "Related Entity" means (a) the Borrower, (b) the
Corporate General Partner or (c) any Person (i) of which the
Borrower or the Corporate General Partner now or hereafter has
beneficial ownership, whether direct or indirect, of 50% or more
of the outstanding shares of any class of stock or 50% or more of
any class of other ownership interest or (ii) such lower
percentage of the outstanding shares of any class of such stock
or any class of such other ownership interest as is sufficient to
render such Person a subsidiary of the Borrower or the Corporate
General Partner for purposes of generally accepted accounting
principles as in effect at the time of determination of the
status of such Person for purposes of this definition.
16. "Request" means any oral (including, but not limited
to, telephonic), written (including, but not limited to,
facsimile)
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or other request for a Loan that (a) states the
original principal amount of such Loan, the date such Loan is
requested to be made and the purpose of such Loan, (b) certifies
that no change in the Partnership Agreement of the Borrower or
the Certificate of Incorporation or By-laws of the Corporate
General Partner has been made since the date of this Note except
as disclosed in such request or a prior such request and (c)
contains any other information required by the Bank prior to the
making of such Loan.
For value received, the Borrower promises to pay to the
order of the Bank at any of the banking offices of the Bank, in
lawful money of the United States and immediately available
funds, on demand (a) the Limiting Principal Amount or the
Outstanding Principal Amount, if less, (b) interest, calculated
on the basis of a 360-day year for the actual number of days each
year (365 or 366, as applicable), on the Outstanding Principal
Amount from and including the date of this Note to but not
including the date the Outstanding Principal Amount is paid in
full at a rate per year that shall (i) on each day beginning
before the Outstanding Principal Amount becomes due, whether
pursuant to any Demand or otherwise, be 1.75% above the One-Month
Libor Rate for the calendar month in which such day falls and
(ii) on each day subsequent to the last day described in clause
(a)(i) of this sentence be 4% above the rate in effect such
subsequent day as the Bank's Prime Rate (provided, however, that
(A) in no event shall such interest be payable at a rate in
excess of the maximum rate permitted by applicable law and
(B) solely to the extent
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necessary to result in such interest not
being payable at a rate in excess of such maximum rate, any
amount that would be treated as part of such interest under a
final judicial interpretation of applicable law shall be deemed
to have been a mistake and automatically canceled, and, if
received by the Bank, shall be refunded to the Borrower, it being
the intention of the Bank and the Borrower that such interest not
be payable at a rate in excess of such maximum rate) and (c) each
cost and expense (including, but not limited to, the reasonable
fees and disbursements of counsel to the Holder, whether retained
for advice, litigation or any other purpose) incurred by the
Holder in endeavoring to (i) collect any amount payable pursuant
to this Note and remaining unpaid, (ii) preserve or exercise any
right or remedy of the Holder pursuant to this Note or (iii)
preserve or exercise any right or remedy of the Holder relating
to, enforce or realize upon any guaranty, endorsement,
collateral, subordination or other security or assurance of
payment now or hereafter securing the payment of or otherwise now
or hereafter applicable to any amount payable pursuant to this
Note.
In the absence of any Demand, a payment of interest
pursuant to this Note shall become due on the first day of each
calendar month.
In the absence of any earlier Demand, the Outstanding
Principal Amount shall become due on August 22, 1997.
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If any of the Outstanding Principal Amount or any
interest payable pursuant to this Note is not paid within ten
days after the date it becomes due, whether pursuant to any
Demand or otherwise, the Borrower shall pay to the Holder on
demand a late charge of 6% thereof.
The Bank may make any Loan in reliance upon any Request
that the Bank in good faith believes to be valid and to have been
made in the name or on behalf of the Borrower by any officer of
the Corporate General Partner unless prior to receipt of such
Request by the Bank the Bank received from the Corporate General
Partner and had a reasonable time to act on written notice
revoking the authority of such officer to make a Request in the
name or on behalf of the Borrower. The Bank shall not incur any
liability to the Borrower or any other Person as a direct or
indirect result of making any Loan in accordance with the
preceding sentence.
The Credit is available subject to the Bank's
continuing review and right of modification, restriction,
suspension or termination at any time for any reason without any
prior notice to the Borrower. No modification, restriction,
suspension or termination of the Credit shall affect the
obligation of the Borrower to repay the original principal amount
of each Loan, the obligation of the Borrower to pay interest on
the outstanding principal amount of each Loan or any other
obligation of the Borrower to the Holder pursuant to this Note or
otherwise.
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For each period (1) beginning on the date of this Note
and ending on the last day of the calendar quarter containing
such date, (2) consisting of any calendar quarter beginning after
the calendar quarter containing the date of this Note and before
the calendar quarter containing the first date any Demand is made
or (3) beginning on the first day of the calendar quarter
containing the first date any Demand is made and ending on such
date, the Borrower shall pay to the Bank on demand a non-usage
fee equal to the product obtained by multiplying (a) the
difference between the Limiting Principal Amount and the daily
average during such period of the Outstanding Principal Amount
first by (b) 1/4% and then by (c) the fraction obtained by
dividing the number of days in such period by 360 (provided,
however, that (i) in no event shall there be payable any such non-
usage fee that would result in interest being payable on the
Outstanding Principal Amount at a rate in excess of the maximum
rate permitted by applicable law and (ii) solely to the extent
necessary to result in such interest not being payable at a rate
in excess of such maximum rate, any amount that would be treated
as part of such interest under a final judicial interpretation of
applicable law shall be deemed to have been a mistake and
automatically canceled and, if received by the Bank, shall be
refunded to the Borrower, it being the intention of the Bank and
the Borrower that such interest not be payable at a rate in
excess of such maximum rate).
There shall be payable as principal pursuant to this
Note only so much of the Limiting Principal Amount as shall have
been
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advanced by the Bank as a Loan or Loans and is outstanding.
The Holder shall set forth on the schedule attached to and made a
part of this Note or any similar schedule (including, but not
limited to, any similar schedule maintained in computerized
records) annotations evidencing (1) the date and original
principal amount of each Loan, (2) the date and amount of each
payment to be applied to the Outstanding Principal Amount and (3)
the Outstanding Principal Amount after each Loan and each such
payment. Each such annotation shall, in the absence of manifest
error, be conclusive and binding upon the Borrower. No failure
by the Holder to make and no error by the Holder in making any
annotation on such attached schedule or any such similar schedule
shall affect the obligation of the Borrower to repay the original
principal amount of each Loan, the obligation of the Borrower to
pay interest on the outstanding principal amount of each Loan or
any other obligation of the Borrower to the Holder pursuant to
this Note or otherwise.
Until the Credit has been terminated by the Bank and
all amounts payable pursuant to this Note have been fully and
indefeasibly paid or otherwise discharged, the Borrower shall,
unless the prior written consent of the Holder to not doing so
shall have been obtained by the Borrower, assure that:
1. The aggregate outstanding principal amount at any
time of liabilities of Related Entities arising from the
borrowing of any money or the deferral of any of the purchase
price of any asset or
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pursuant to any capital lease does not
exceed 50% of the total of (a) the aggregate market value at such
time of all outstanding shares of stock of the Corporate General
Partner, (b) the aggregate market value at such time of all
outstanding partnership interests in the Borrower not owned by
the Corporate General Partner and (c) the aggregate outstanding
principal amount at such time of liabilities of the Borrower and
the Corporate General Partner arising from the borrowing of any
money or the deferral of any of the purchase price of any asset
or pursuant to any capital lease;
2. The combined net income of all Related Entities
for any fiscal year of the Corporate General Partner before
distributions and non-cash expenses is at least 120% of the
higher of (a) all principal and interest scheduled to become due
during the immediately following fiscal year of the Corporate
General Partner with respect to liabilities of Related Entities
arising from the borrowing of any money or the deferral of any of
the purchase price of any asset or pursuant to any capital lease,
except for any balloon payment of any of such principal that is
scheduled to become due during such immediately following fiscal
year and is reasonably expected to be refinanced, extended or
paid prior to becoming due, or (b) all principal and interest
that would be scheduled to become due during such immediately
following fiscal year in connection with a loan for which (i) the
principal amount was equal to the aggregate outstanding principal
amount at the end of such fiscal year of such liabilities, (ii)
the rate of interest was a fixed rate of 9% per year and (iii)
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300 monthly payments of principal and interest equal in amount
were scheduled to be made to repay the principal amount thereof
and pay interest in connection therewith;
3. The combined earnings of all Related Entities for
any fiscal year of the Corporate General Partner before interest,
tax, depreciation and amortization expense are at least 200% of
all principal and interest scheduled to become due during the
immediately following fiscal year of the Corporate General
Partner with respect to liabilities of Related Entities arising
from the borrowing of any money or the deferral of the purchase
price of any asset or pursuant to any capital lease, except for
any balloon payment of any of such principal that is scheduled to
become due during such immediately following fiscal year and is
reasonably expected to be refinanced, extended or paid prior to
becoming due;
4. The aggregate outstanding principal amount at the
end of each fiscal quarter of the Corporate General Partner of
liabilities of Related Entities does not exceed 550% of the
combined earnings of all Related Entities for such fiscal quarter
before interest, tax, depreciation and amortization expense;
5. The combined earnings of all Related Entities for
any fiscal year of the Corporate General Partner before interest,
tax, depreciation and amortization expense that are attributable
to assets not subject to any mortgage, security interest or other
lien are at
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least 200% of the higher of (a) all principal and
interest scheduled to become due during the immediately following
fiscal year of the Corporate General Partner with respect to
liabilities of Related Entities (i) arising from the borrowing of
any money or the deferral of the purchase price of any asset or
pursuant to any capital lease and (ii) the payment of which is
not secured by any mortgage, security interest or other lien on
any asset of any Related Entity, except for any balloon payment
of any of such principal that is scheduled to become due during
such immediately following fiscal year and is reasonably expected
to be refinanced, extended or paid prior to becoming due, or (b)
all principal and interest that would be scheduled to become due
during such immediately following fiscal year in connection with
a loan for which (i) the principal amount was equal to the daily
average of the Outstanding Principal Amount during such fiscal
year of such liabilities, (ii) the rate of interest was a fixed
rate of 8% per year and (iii) 300 monthly payments of principal
and interest equal in amount were scheduled to be made the repay
the principal amount thereof and pay interest in connection
therewith;
6. The aggregate market value at any time of all real
property interests of Related Entities not subject to any
mortgage, security interest or other lien is at least 150% of the
aggregate outstanding principal amount at such time of
liabilities of Related Entities (a) arising from the borrowing of
any money or the deferral of any of the purchase price of any
asset or pursuant to any capital lease and (b) the payment of
which is not secured by any mortgage,
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security interest or other lien on any asset of any Related Entity; and
7. No Related Entity that is a corporation declares,
pays or makes any Distribution, except for (a) dividends payable
solely in any of its stock, (b) cash dividends paid to the
Borrower or the Corporate General Partner by any Related Entity
all of the outstanding shares of stock of which other than shares
required by applicable law to enable any individual to serve as a
director of such Related Entity are owned by the Borrower or the
Corporate General Partner at the time of such payment and (c)
during each fiscal year of the Corporate General Partner, cash
dividends declared or paid by the Corporate General Partner in an
amount not exceeding (i) the consolidated earnings of the
Corporate General Partner for such fiscal year before
depreciation and amortization expense minus (ii) all principal
scheduled to become due during the immediately following fiscal
year of the Corporate General Partner with respect to liabilities
of Related Entities arising from the borrowing of any money or
the deferral of any of the purchase price of any asset or
pursuant to any capital lease, except for any balloon payment of
any of such principal that is scheduled to become due during such
immediately following fiscal year and is reasonably expected to
be refinanced, extended or paid prior to becoming due.
Each accounting term used in this Note shall be
construed as of any time in accordance with generally accepted
accounting
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principles as in effect at such time. Each accounting
computation that this Note requires to be made as of any time
shall be made in accordance with such principles as in effect at
such time, except where such principles are incompatible with any
requirement of this Note.
All amounts payable pursuant to this Note and remaining
unpaid shall, without any notice, demand, presentment or protest
of any kind (each of which is knowingly, voluntarily,
intentionally and irrevocably waived by the Borrower),
automatically become immediately due if the Borrower commences or
has commenced against it any proceeding pursuant to any
bankruptcy or insolvency statute.
This Note shall be governed by and construed,
interpreted and enforced in accordance with the internal law of
the State of New York, without regard to principles of conflict
of laws.
This Note is given in replacement of and substitution
for, but not payment of, a Demand Grid Note, dated August 22,
1996, in the maximum principal amount of $25,000,000 executed and
delivered to the Bank by the Borrower.
THE BORROWER KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY ACTION OR OTHER LEGAL PROCEEDING, WHETHER BASED ON
ANY CONTRACT, ON ANY NEGLIGENT OR INTENTIONAL TORT, ON ANY
STATUTE,
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REGULATION OR OTHER LAW OR OTHERWISE, IN CONNECTION
WITH, OR OTHERWISE RELATING TO, (A) THIS NOTE OR ANY GUARANTY,
ENDORSEMENT, COLLATERAL, SUBORDINATION OR OTHER SECURITY OR
ASSURANCE OF PAYMENT NOW OR HEREAFTER DIRECTLY OR INDIRECTLY
SECURING THE PAYMENT OF, OR OTHERWISE NOW OR HEREAFTER DIRECTLY
OR INDIRECTLY APPLICABLE TO, ANY AMOUNT PAYABLE PURSUANT TO THIS
NOTE, (B) ANY OTHER WRITING HERETOFORE OR HEREAFTER EXECUTED IN
CONNECTION WITH, OR OTHERWISE RELATING TO, THIS NOTE OR ANY SUCH
GUARANTY, ENDORSEMENT, COLLATERAL, SUBORDINATION OR OTHER
SECURITY OR ASSURANCE OF PAYMENT OR (C) ANY COURSE OF DEALING,
COURSE OF PERFORMANCE OR OTHER CONDUCT HERETOFORE OR HEREAFTER
PURSUED, ANY ACTION HERETOFORE OR HEREAFTER TAKEN OR OMITTED TO
BE TAKEN, OR ANY ORAL OR WRITTEN REPRESENTATION HERETOFORE OR
HEREAFTER MADE, BY OR ON BEHALF OF THE HOLDER IN CONNECTION WITH,
OR OTHERWISE RELATING TO, THIS NOTE OR ANY SUCH GUARANTY,
ENDORSEMENT, COLLATERAL, SUBORDINATION OR OTHER SECURITY OR
ASSURANCE OF PAYMENT.
HOME PROPERTIES OF NEW YORK, L.P.
By HOME PROPERTIES OF NEW YORK, INC.,
Its Sole General Partner
By /s/ Nelson B. Leenhouts
-----------------------
Nelson B. Leenhouts, President
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ACKNOWLEDGMENT
STATE OF NEW YORK )
: SS.
COUNTY OF MONROE )
On the 5th day of March in year 1997, before me person-
ally came Nelson B. Leenhouts, to me known, who being by me duly
sworn, did depose and say that he resides at 1200 Fairway 18,
Macedon, New York; that he is the President of Home Properties of
New York, Inc., the corporation which executed the above
instrument on behalf of Home Properties of New York, L.P., the
limited partnership described therein and of which said corpora
tion is the sole general partner; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Ann M. McCormick
--------------------
Notary Public
Ann M. McCormick
Notary Public in the State of New York
Monroe County
Commission Expires March 21, 1998
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SCHEDULE OF ADVANCES AND PAYMENTS
Original Outstanding
Principal Date Principal Principal
Date of Amount of of Amount of Amount of Approving
Loan Loan Payment Payment Note Employee
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