Exhibit 10.27
GUARANTY
(UNLIMITED AMOUNT)
This Guaranty is granted by the Guarantor to THE CHASE MANHATTAN BANK
having an office located at One Chase Square, Rochester, New York ("Business
Office"), and/or any of its subsidiaries and/or affiliates and wherever located
(hereinafter with their respective successors and assigns, collectively or
individually, as the context may require, referred to as "Chase").
RECITALS. Pursuant to separate notes (the "notes"), Chase is providing
up to 24 term loans aggregating up to $2.1 million (the "loans") to the
Directors and certain key employees (individually, a "Borrower" and
collectively, the "Borrowers") of Home Properties of New York, Inc. ("Home
Properties") to assist the Borrowers in financing their purchases of shares of
the common stock of Home Properties under its Executive Stock Purchase and Loan
Program (the "Program"); and Home Properties and its subsidiary, Home
Properties of New York, L.P. ("Home Properties L.P.") (Home Properties and Home
Properties L.P. are hereinafter collectively referred to as the "Guarantor",
and the term "Guarantor" shall mean each Guarantor individually and both of
them together) represents that, by assisting the Borrowers in financing such
purchases and thereby acquiring a significant equity interest in Home
Properties, it expects to derive advantage from each and every such
accommodation.
CONSIDERATION. To induce Chase, at its option, at any time or from time
to time, to extend the above described loans, with or without security, to or
for the accounts of the Borrowers, each Guarantor hereby agrees as follows:
GUARANTY. The Guarantor (and if there is more than one Guarantor,
jointly and severally) absolutely and unconditionally guarantees to Chase that
each Borrower will promptly perform and observe every agreement and condition
contained in any instrument, writing or arrangement relating to or the subject
of the loan to each Borrower (a "Credit Arrangement") to be performed or
observed by such Borrower, that all sums stated to be payable in, or which
become payable under, any Credit Arrangement, will be promptly paid in full
when due, whether at maturity or earlier by reason of acceleration or
otherwise, together with interest and any and all legal and other costs and
expenses paid or incurred in connection therewith by Chase (collectively, the
"Guaranteed Obligations"), and, in case of one or more extensions of time of
payment or renewals, in whole or in part, of any Credit Arrangement or
obligation, that the same will be promptly paid or performed when due,
according to each such extension or renewal, whether at maturity or earlier by
reason of acceleration or otherwise. The Guarantor agrees that, as between the
Guarantor and Chase, the Guaranteed Obligations may be declared to be due and
payable for purposes of this Guaranty notwithstanding any stay, injunction or
other prohibition which may prevent, delay or vitiate any such declaration as
against any Borrower and that, in the event of any such declaration (or
attempted declaration), the Guaranteed Obligations (whether or not due and
payable by any Borrower) shall forthwith become due and payable by the
Guarantor for purposes of this Guaranty. The Guarantor further guarantees that
all payments made by any Borrower to Chase of any Guaranteed Obligation will,
when made, be final and agrees that if any such payment is recovered from, or
repaid by, Chase in whole or in part by reason of any bankruptcy, insolvency or
similar proceeding instituted by or against such Borrower, this Guaranty shall
continue to be fully applicable to such obligation to the same extent as though
the payment so recovered or repaid had never been originally made on such
obligation.
Each Guarantor further specifically guarantees to make prompt payment
when due of the additional interest ("interest rate differential") payments
with respect to the loans, as further described below.
This is a guaranty of payment and performance and not a guaranty of
collection only.
This Guaranty is enforceable irrespective of the validity, regularity or
enforceability of any instrument, writing or arrangement relating to or the
subject of a Credit Arrangement or the obligations thereunder and irrespective
of any present or future law or order of any government (whether of right or in
fact and whether Chase shall have consented thereto) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any obligation of
any Borrower or other obligor or to vary the terms of payment.
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CONSENTS AND WAIVERS. The Guarantor hereby consents that from time to
time, without notice to or further consent of the Guarantor, the performance or
observance by any Borrower of any Credit Arrangement or Guaranteed Obligation
may be waived or the time of performance thereof extended by Chase, and payment
of any Guaranteed Obligation may be accelerated in accordance with any
agreement governing the same, or may be extended, or any Credit Arrangement may
be renewed in whole or in part, or the terms of any Credit Arrangement or any
part thereof may be changed, including increase or decrease in the rate of
interest thereon, or any collateral therefor may be exchanged, surrendered or
otherwise dealt with as Chase may determine, or any co-guarantor or any other
party liable upon or in respect of any obligation may be released, and any of
the acts mentioned in any Credit Arrangement may be done, all without notice to
or affecting the liability of the Guarantor hereunder. The Guarantor waives
notice of acceptance of this Guaranty and of the creation of any Guaranteed
Obligations. The Guarantor hereby waives presentment of any instrument, demand
for payment, protest and notice of non-payment or protest thereof or of any
exchange, sale, surrender or other handling or disposition of any such
collateral, and any requirement that Chase exhaust any right, power or remedy
or proceed against any Borrower under any Credit Arrangement or against any
other person under any other guaranty of, or security for, any of the
Guaranteed Obligations. The Guarantor hereby further waives any defense
whatsoever which might constitute a defense available to, or discharge of, any
Borrower or a guarantor. No payment by the Guarantor pursuant to any provision
hereunder shall entitle the Guarantor, by subrogation to the rights of Chase or
otherwise, to any payment by any Borrower (or out of the property of such
Borrower) except after payment in full of all sums (including interest, costs
and expenses) which may be or become payable by any Borrower to Chase at any
time or from time to time, unless the Guaranteed Obligations shall be paid in
full.
FINANCIAL STATEMENTS. Each Guarantor shall furnish to Chase, within 120
days after the end of the Guarantor's fiscal year or at such other times or
intervals as Chase may request, audited financial statements showing the
Guarantor's financial condition at the end of and for the entire fiscal year.
Such statements shall fairly present the financial condition of the Guarantor
as at the end of such fiscal year or periods in accordance with generally
accepted accounting principles consistently applied.
RIGHTS CUMULATIVE. The rights, powers and remedies granted to Chase
herein shall be cumulative and in addition to any rights, powers and remedies
to which Chase may be entitled either by operation of law or pursuant to any
other document or instrument delivered or from time to time to be delivered to
Chase in connection with any Credit Arrangement.
SECURITY. As collateral security for the payment of any and all
obligations and liabilities of the Guarantor to Chase, now existing or
hereafter arising, the Guarantor grants to Chase a security interest in and a
lien upon and right of offset against all moneys, deposit balances, securities
or other property or interest therein of the Guarantor now or at any time
hereafter held or received by or for or left in the possession or control of
Chase or any of its affiliates, whether for safekeeping, custody, transmission,
collection, pledge or for any other or different purpose.
REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and warrants
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
Guaranty 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 Guarantor's knowledge,
all governmental and other consents that are required to have been obtained by
it with respect to this Guaranty 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 Guaranty 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 Guarantor are true and complete and 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 Guarantor, threatened
against or affecting the Guarantor before any court, governmental agency or
arbitrator, which involve forfeiture of any assets of the Guarantor or which
may materially adversely affect the financial condition, operations, properties
or business of the Guarantor or the ability of the
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Guarantor to perform its
obligation under this Guaranty; and (h) there has been no material adverse
change in the financial condition of the Guarantor since the last such
financial statements or information.
COVENANTS. Each Guarantor hereby covenants that: (a) all shares of Home
Properties' common stock purchased pursuant to the Program will be registered
under the Securities Act of 1933 and freely tradeable on the New York Stock
Exchange and can be sold without restriction by Chase, as pledgee, pursuant to
each Borrower's Pledge Security Agreement securing his/her loan; (b) during the
initial five years of the term of each loan, each Guarantor will pay Chase, in
cash on the date interest on each loan is due and payable, an interest rate
differential payment on each loan equal to 0.94% per annum on the aggregate
principal amount of each loan outstanding; (c) at the end of any fiscal quarter
of Home Properties, the aggregate outstanding principal amount of the
liabilities of Home Properties, Home Properties L.P. and any entity owned 50%
or more by Home Properties or Home Properties L.P. (collectively, the "Related
Entities") shall not exceed 60% of the total of (i) the aggregate market value
at such time of all outstanding shares ot Home Properties' common stock plus,
(ii) the aggregate market value at such time of all outstanding partnership
interests in Home Properties L.P. on an as-converted basis based upon the then-
current conversion price of such interests into shares of Home Properties'
common stock, plus (iii) the aggregate outstanding principal amount of
liabilities of the Related Entities; (d) for any fiscal year of Home
Properties, the combined net income of all Related Entities before
distributions and non-cash expenses shall be at least 120% of all principal and
interest payments due during that fiscal year with respect to the liabilities
of the Related Entities. For purposes of the foregoing calculations, the term
"liabilities" shall mean the liabilities of the Related Entities as shown on
their respective balance sheets and determined in accordance with generally
accepted accounting principles consistently applied. Home Properties will
provide Chase with reports showing the calculations required by subparagraphs
(c) and (d) above within 15 days following the end of a quarter and within 30
days following a year end.
DEFAULT. If any of the following events of default shall occur (each an
"Event of Default"):
(a) Either Guarantor shall fail to timely make any interest rate
differential payment or shall fail to pay any other amount payable
under this Guaranty within five days after demand by Chase;
(b) any representation or warranty made or deemed made by the
Guarantor in this Guaranty or in any other document executed in
connection with the loans (this Guaranty and all agreements,
instruments or other documents executed by the Guarantor in
connection with the loans being the "Facility Documents") or which
is contained in any certificate, document, opinion, financial or
other statement furnished at any time under or in connection with
any Facility Document, shall prove to have been incorrect in any
material respect on or as of the date made or deemed made;
(c) the Guarantor shall fail to perform or observe any term,
covenant or agreement contained in any Facility Document on its
part to be performed or observed, and such failure shall continue
for five consecutive days;
(d) the Guarantor shall fail to pay when due any indebtedness
(including but not limited to indebtedness for borrowed money) or
if any such indebtedness shall become due and payable, or shall be
capable of becoming due and payable at the option of any holder
thereof, by acceleration of its maturity, or if there shall be any
default by the Guarantor under any agreement relating to such
indebtedness;
(e) the Guarantor: (i) shall generally not, or be unable to, or
shall admit in writing its inability to, pay its debts as such
debts become due; (ii) shall make an assignment for the benefit of
creditors; (iii) shall file a petition in bankruptcy or for any
relief under any law of any jurisdiction relating to
reorganization, arrangement, readjustment of debt, dissolution or
liquidation; (iv) shall have any such petition filed against it and
the same shall remain undismissed for a period of 30 days or shall
consent or acquiesce thereto; or (v) shall have had a receiver,
custodian or trustee appointed for all or a substantial part of its
property;
(f) any Facility Document shall at any time and for any reason
cease to be in full force and effect or shall be declared null and
void, or its validity or enforceability shall be contested by the
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relevant Guarantor or such Guarantor shall deny it has any further
liability or obligation under any Facility Document or shall fail
to perform its obligations under any Facility Document;
(g) any security agreement or other agreement by the Guarantor
granting a security interest, lien, mortgage or other encumbrance
securing obligations under any Facility Document shall at any time
and for any reason cease to create a valid and perfected first
priority security interest, lien, mortgage or other encumbrance in
or on the property purported to be subject to such agreement or
shall cease to be in full force and effect or shall be declared
null and void, or the validity or enforceability of any such
agreement shall be contested by any party to such agreement, or
such party shall deny it has any further liability or obligation
under such agreement or any such party shall fail to perform any of
its obligations under such agreement, or an event of default shall
occur under such agreement;
(h) the Guarantor shall make or permit to be made any material
change in the character, management or direction of its business
or operations (including, but not limited to, a change in its
executive management or in the ownership of its capital stock which
effects a change in the control of any such business or
operations), which is not satisfactory to Chase;
(i) the Guarantor shall suffer a material adverse change in its
business, financial condition, properties or prospects;
(j) any action, suit, proceeding or investigation against or
affecting the Guarantor before any court or governmental agency
which involves forfeiture of any assets of the Guarantor shall
have been commenced;
(k) Home Properties ceases paying cash dividends of at least $.42
per share per quarter on or before March 5th, June 5th, September
5th and December 5th each year;
(l) failure of either Guarantor to provide an audited set of
financial statements within 120 days after each year end as
required by the terms of this Guaranty, or the failure of Home
Properties to provide the required quarterly and annual financial
calculations required by the terms of this Guaranty a within 15
days following the end of a quarter or within 30 days following a
year end as the case may be, provided that in each such case, the
relevant Guarantor shall first have five days to cure such a
default after receiving notice from Chase of such default;
THEN, IN ANY SUCH CASE, if Chase shall so elect, in the exercise of its sole
discretion, by notice to the Guarantor, Chase may require that Guarantor
forthwith pay the unpaid principal amount of any or all of the loans,
together with accrued interest; provided that in the case of an event of
default under (e) above, all such amounts shall immediately become due and
payable without any notice or other action by Chase.
COSTS. The Guarantor agrees 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 Guaranty.
ENTIRE AGREEMENT, AMENDMENT AND WAIVERS. This Guaranty constitutes the
entire agreement between the Guarantor 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
Guarantor to Chase in any other respect at any other time.
SUCCESSORS. This agreement shall be immediately binding upon the
Guarantor, and the successors of the Guarantor. Chase may assign this Guaranty
or any of its rights and powers hereunder, with all or any of the obligations
hereby guaranteed, and may assign and/or deliver to any such assignee any of
the security therefor and, in the event of such assignment, the assignee hereof
or of such rights and powers and of such security, if any such security be so
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assigned and/or delivered, shall have the same rights and remedies as if
originally named herein in place of Chase, and Chase shall be thereafter
fully discharged from all responsibility with respect to any such Security
so assigned and/or delivered.
GOVERNING LAW; JURISDICTION. This Guaranty 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 or 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.
GUARANTOR WAIVERS. EACH GUARANTOR 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 GUARANTY, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S OPTION,
BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
Address for notices: HOME PROPERTIES OF NEW YORK, INC.
850 Clinton Square By: /s/ Nelson B. Leenhouts_
Rochester, NY 14604 Print Name: Nelson B. Leenhouts
Telecopier No. (716) 546-5433 Title: President
HOME PROPERTIES OF NEW YORK, L.P.
Address for notices: By: HOME PROPERTIES OF NEW YORK, INC.
Its General Partner
850 Clinton Square
By: /s/ Nelson B. Leenhouts
Rochester, NY 14604
Print Name: Nelson B. Leenhouts
Telecopier No. (716) 546-5433 Title: President
STATE OF )
) ss:
COUNTY OF )
On this _____ day of ________________, 199___, before me
came ______________________________, and ________________________________ to
me known to be the individual(s) described in and who executed the
foregoing instrument and __________ duly acknowledged that __________
executed the same.
State of New York)
) ss:
County of Monroe )
On this 12th day of August, 1996, before me personally came
Nelson B. Leenhouts, to me known, who, being by me duly sworn, did depose
and say that he resides in Macedon, NY; that he is President of Home Properties
of New York, Inc., the corporation described in and which executed the above
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
/s/ Thomas P. Young
-------------------
Thomas P. Young
Notary Public, State of New York
Monroe County
My commission expires 11/30/97
State of New York)
) ss:
County of Monroe )
On this 12th day of August, 1996, before me came Nelson B. Leenhouts,
to me known to be the President of the general partner of the partnership of
Home Properties of New York, L.P. and to me known to be the person described
in and who executed the foregoing instrument in the partnership name of
Home Properties of New York, L.P., and he acknowledges that he executed the
same as the act and deed of said partnershp for the uses and purposes therein
mentioned.
/s/ Thomas P. Young
-------------------
Thomas P. Young
Notary Public, State of New York
Monroe County
My commission expires 11/30/97