-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BxFQEUBJ/LNiZXAn95aCxSJU3wl/y/LHFywjINlyWyFy/ikR0W8NaZLJ4vlB1wcM XAyCD4d12+ealIB9MFeJ3A== /in/edgar/work/20000612/0000923118-00-000021/0000923118-00-000021.txt : 20000919 0000923118-00-000021.hdr.sgml : 20000919 ACCESSION NUMBER: 0000923118-00-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000602 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000612 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME PROPERTIES OF NEW YORK INC CENTRAL INDEX KEY: 0000923118 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 161455126 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13136 FILM NUMBER: 652983 BUSINESS ADDRESS: STREET 1: 850 CLINTON SQ CITY: ROCHESTER STATE: NY ZIP: 14604 BUSINESS PHONE: 7162464105 MAIL ADDRESS: STREET 1: 850 CLINTON SQUARE CITY: ROCHESTER STATE: NY ZIP: 14604 8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Act of 1934 Date of Report (Date of earliest event reported): June 2, 2000 HOME PROPERTIES OF NEW YORK, INC. ------------------------------------------------------- (Exact name of registrant as specified in its charter) Maryland 1-13136 16-1455126 ---------------- ------------ ------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File No.) Identification No.) 850 Clinton Square, Rochester, New York 14604 - ---------------------------------------------------------------------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (716)546-4900 Not Applicable ------------------------------------------------------------------ (Former name or former address, if changed since last report.) Item 5. OTHER EVENTS On June 5, 2000, the Registrant entered into a Purchase Agreement with The Equitable Life Assurance Society of the United States (the "Purchaser") whereby the Registrant agreed to sell to the Purchaser 250,000 shares of Series D Cumulative Convertible Preferred Stock. The related press release is attached hereto as Exhibit 99.1. The Purchase Agreement is attached hereto as Exhibit 10.1 and the related Articles Supplementary are attached hereto as Exhibit 3.1. Item 7. FINANCIAL STATEMENTS AND EXHIBITS c. Exhibits Exhibit 3.1 Articles Supplementary Exhibit 10.1 Purchase Agreement between Home Properties of New York, Inc. and The Equitable Life Assurance Society of the United States. Exhibit 99.1 Press Release SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: June 12, 2000 HOME PROPERTIES OF NEW YORK, INC. (Registrant) By: /s/ Amy L. Tait ------------------------- Amy L. Tait, Executive Vice President EX-3 2 0002.txt Series D Convertible Cumulative Preferred Stock ARTICLES SUPPLEMENTARY HOME PROPERTIES OF NEW YORK, INC. 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 Dated as of June 2, 2000 HOME PROPERTIES OF NEW YORK, INC. 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 Home Properties of New York, Inc., a Maryland corporation (the "CORPORATION"), hereby certifies to the State Department of Assessments and Taxation of Maryland, pursuant to section 2-602(b) of the Annotated Code of Maryland, that: FIRST: Pursuant to authority granted by the Articles of Amendment and Restatement of Articles of Incorporation of the Corporation, as amended, the Board of Directors adopted a resolution at a meeting held on April 25, 2000 designating and classifying 500,000 unissued and undesignated shares of preferred stock as Series D Convertible Cumulative Preferred Stock. SECOND: The following is a description of the Series D Convertible Cumulative Preferred Stock, including the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption thereof: Section . Number of Shares and Designation. This class of preferred stock shall be designated as Series D Convertible Cumulative Preferred Stock and the number of shares which shall constitute such series shall not be more than 500,000 shares, par value $0.01 per share, which number may be decreased (but not below the number thereof then outstanding) from time to time by the Board of Directors or increased by the Board of Directors only upon the approval of the holders of at least two-thirds of the Series D Preferred Stock outstanding at that time. Section . Definitions. For purposes of the Series D Preferred Stock, the following terms shall have the meanings indicated: "Authorized LP Distributions" shall have the meaning set forth in Section 3(f). "Authorized Preferred Unit DistriBUTIONS" shall have the meaning set forth in Section 3(f). "Board of Directors" shall mean the Board of Directors of the Corporation or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Series D Preferred Stock. "Business Day" shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York City, New York are not required to be open. "CALL DATE" shall mean the date fixed for the redemption of the Series D Preferred Stock that is specified in the notice to holders required under Section 5(e) as the Call Date. "CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations of the Corporation, the Operating Partnership or any Subsidiary under any capital lease which under GAAP are required to be reflected as a liability on a consolidated balance sheet of the Corporation. "CHANGE OF CONTROL" shall mean each occurrence of any of the following: (i) the acquisition, directly or indirectly, by any individual or entity or group (as such term is used in Section 13(d)(3) of the Exchange Act) of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act, except that such individual or entity shall be deemed to have beneficial ownership of all shares that any such individual or entity has the right to acquire, whether such right is exercisable immediately or only after passage of time) of (A) more than 25% of the value of the Corporation's outstanding capital stock, (B) more than 25% of the voting power to elect directors of the Corporation (excluding the voting power of any series of preferred stock to elect directors pursuant to Section 10 herein) or (C) more than 25% of the value of the equity interests in the Operating Partnership; (ii)(A) the Corporation consolidates with or merges into another entity or conveys, transfers, or leases outside the ordinary course of business all or substantially all of its assets (including, but not limited to, real property investments) to any individual or entity, or (B) any entity consolidates with or merges into the Corporation which, in the case of a merger or consolidation under (A) or (B) is pursuant to a transaction in which the outstanding Common Stock is reclassified or changed into or exchanged for cash, securities or other property; PROVIDED, HOWEVER, that the events described in this clause (ii) shall not be deemed to be a Change of Control if the sole purpose of such event is that the Corporation is seeking to change its domicile or to change its form of organization from a corporation to a statutory business trust; or (iii) other than with respect to the election, resignation or replacement of any director designated, appointed or elected by the holders of the Series A Preferred Stock or any other series of preferred stock of the Corporation (each a "PREFERRED DIRECTOR"), if during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Corporation (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Corporation was approved by a vote of a majority of the directors of the Corporation (excluding Preferred Directors) then still in office who were either directors at the beginning of such period, or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office. "CHANGE OF CONTROL PRICE" shall mean: (i) from the Issue Date through the day preceding the fifth anniversary of the Issue Date, an amount per share of Series D Preferred Stock equal to the Liquidation Preference plus an amount equal to a 15% annual return thereon from the Issue Date until the date of redemption of such share of Series D Preferred Stock, compounded annually, less an amount equal to the sum of the aggregate amount of cash dividends theretofore paid or payable concurrently with such redemption on such share of Series D Preferred Stock, plus an amount equal to a 15% annual return on such cash dividends from the date of payment until the date of redemption of such share of Series D Preferred Stock and (ii) beginning on the fifth anniversary of the Issue Date, an amount equal to 100% of the Liquidation Preference, plus all accumulated, accrued and unpaid dividends to the date of repurchase. "CHANGE OF CONTROL RATE" shall have the meaning set forth in Section 3(d). "CHARTER" shall mean the Articles of Amendment and Restatement of the Articles of Incorporation of the Corporation, as amended. "CODE" shall mean the Internal Revenue Code of 1986, as amended. "COMMON STOCK" shall mean the shares of Common Stock, par value $0.01 per share, of the Corporation. "CONSOLIDATED BUSINESSES" means the Corporation, the Operating Partnership, Home Properties Management, Inc., Conifer Realty Corporation and each of their direct and indirect majority-owned Subsidiaries. "CONSTITUENT PERSON" shall have the meaning set forth in Section 7(e). "CONVERSION ADJUSTMENT PRICE" shall mean the price per share of Common Stock which is the lesser of: (i) $29.70 (which shall be adjusted in the case of any combination (by reverse stock split or otherwise) of its outstanding shares of Common Stock into smaller number of shares); or (ii) the Conversion Price. "CONVERSION PRICE" shall mean the conversion price per share of Common Stock into which the shares of Series D Preferred Stock are convertible, as such Conversion Price may be adjusted pursuant to Section 7. The initial conversion price shall be $30.00 (equivalent to a conversion rate of 3.33333 shares of Common Stock for each share of Series D Preferred Stock). "CONVERTIBLE SECURITIES" shall have the meaning set forth in Section 7(d)(v). "CURRENT MARKET PRICE" of publicly traded shares of Common Stock or any other class of shares of capital stock or other security of the Corporation or any other issuer for any day shall mean the last reported sale price or, if no sale takes place on such day, the average of the reported closing bid and asked prices on such day in either case as reported on the New York Stock Exchange ("NYSE") or, if such security is not listed or admitted for trading on the NYSE, on the principal national securities exchange on which such security is listed or admitted for trading or, if not listed or admitted for trading on any national securities exchange, on the NASDAQ Stock Market ("NASDAQ") National Market System or, if such security is not quoted on such National Market System, the average of the closing bid and asked prices on such day in the over- the-counter market as reported by NASDAQ or, if bid and asked prices for such security on such day shall not have been reported through NASDAQ, the average of the bid and asked prices on such day as furnished by any NYSE member firm regularly making a market in such security selected for such purpose by the Board of Directors in accordance with the terms hereof and applicable laws. "DIVIDEND PAYMENT DATE" shall mean (i) for any Dividend Period with respect to which the Corporation pays a dividend on the Common Stock, the date on which such dividend is paid, or (ii) for any Dividend Period ending December 31, March 31, June 30 or September 30 with respect to which the Corporation does not pay a dividend on the Common Stock, the 25{th} day of February, May, August and November, respectively, or, if such date is not a Business Day, the next succeeding Business Day. "DIVIDEND PAYMENT RECORD DATE" shall mean the date on which record is to be taken for purposes of determining the stockholders entitled to receive a dividend payment to be made on the Series D Preferred Stock with respect to a Dividend Period, which shall be the same date on which record is to be taken for purposes of determining the stockholders entitled to receive a dividend payment to be made on the Common Stock with respect to such Dividend Period, or if a dividend is not to be paid on the Common Stock with respect to such Dividend Period, then a date selected by the Board of Directors in accordance with the terms hereof and applicable laws. "DIVIDEND PERIODS" shall mean quarterly dividend periods commencing on January 1, April 1, July 1 and October 1 of each year and ending on and including the day preceding the first day of the next succeeding Dividend Period (other than the initial Dividend Period, which shall commence on the Issue Date and end on and include the last calendar day of the calendar quarter containing the Issue Date, and other than the Dividend Period during which any shares of Series D Preferred Stock shall be redeemed pursuant to Section 5 or repurchased pursuant to Section 6, which shall end on and include the Call Date with respect to the shares of Series D Preferred Stock being redeemed or the Repurchase Date for the shares being repurchased, as the case may be). "EBITDA" means, for any period, the Consolidated Businesses' earnings before giving effect to expenses for interest, taxes, depreciation and amortization. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "EXPIRATION TIME" shall have the meaning set forth in Section 7(d)(iv). "FAIR MARKET VALUE" shall mean the average of the daily Current Market Prices of a share of Common Stock on the 20 Trading Days immediately preceding the day in question. "FIXED CHARGES" means with respect to any fixed period, the sum of (1) Total Interest Expense; and (2) the aggregate of all dividends declared and payable on the Corporation's preferred stock and partnership preferred units (other than those partnership preferred units held on behalf of the Corporation's preferred stockholders in an amount equal to the number of outstanding shares of preferred stock and having, in all material respects, the same distribution and liquidation preferences with respect to the Operating Partnership as the preferred stock has with respect to the Corporation). "FULLY JUNIOR STOCK" shall mean the Common Stock and any other class or series of capital stock of the Corporation now or hereafter issued and outstanding over which the Series D Preferred Stock has preference or priority in both (i) the payment of dividends and (ii) the distribution of assets on any liquidation, dissolution or winding up of the Corporation. "FUNDAMENTAL CHANGE" shall mean each occurrence of any of the following: (i) the acquisition, directly or indirectly, by any Person of Beneficial Ownership (as defined in the Charter) of (A) more than 25% of the value of the Corporation's outstanding capital stock, (B) more than 25% of the voting power to elect directors of the Corporation (excluding the voting power of any series of preferred stock to elect directors pursuant to Section 10) or (C) more than 25% of the value of the equity interests in the Operating Partnership; (ii) other than with respect to the election, resignation or replacement of any Preferred Director or the election of a new director in replacement of any director who has died or resigned (each a "Replacement Director"), during any period of two consecutive years, the Board of Directors fails to nominate for election by the stockholders of the Corporation a majority of the individuals who at the beginning of such period constitute the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Corporation was approved by a vote of a majority of the directors of the Corporation (excluding Preferred Directors and Replacement Directors) then still in office who were either directors at the beginning of such period, or whose election or nomination for election was previously so approved); (iii) the Corporation or one of its Subsidiaries is not the sole general partner of the Operating Partnership; (iv) the Corporation or any direct or indirect subsidiary of the Corporation, in one transaction or a series of related transactions, sells all or substantially all of the assets of the Corporation and its direct and indirect subsidiaries on a consolidated basis, acquires from any individual or entity, whether by way of merger, consolidation, purchase of stock or assets, lease or other form of business combination, any entity, assets or business for aggregate consideration payable in cash, securities, other property or any combination of the foregoing, with a fair market value (as determined in good faith by the Board of Directors) exceeding 50% of Total Market Capitalization determined prior to giving effect to the transaction or series of related transactions described in this clause (iv) or in exchange for a number of shares of Common Stock or common equity interests of the Operating Partnership (or securities convertible into, exercisable for or exchangeable for such securities) representing, in the aggregate, more than 40% of the combined sum of the shares outstanding immediately prior to such transaction or series of related transactions of Common Stock and the common equity interests in the Operating Partnership not held by the Corporation or any direct or indirect subsidiary immediately prior to such transaction or series of related transactions; (v) the Corporation effects any recapitalization or restructuring as a result of which more than 25% of the Common Stock is reclassified into shares of preferred stock or changed into or exchanged for cash, a different class of common stock, preferred stock, evidences of indebtedness, other property or any combination of the foregoing; (vi) the Corporation shall have incurred or suffered to exist Indebtedness exceeding 65% of Total Value and such condition continues to exist for 30 days; or (vii) the de-listing by the Corporation or failure by the Corporation to take reasonable actions within its control to not maintain the listing of its Common Stock on the New York Stock Exchange. "FUNDS FROM OPERATIONS" shall mean net income (loss) (computed in accordance with generally accepted accounting principles) excluding gains (or losses) from debt restructuring, and distributions in excess of earnings allocated to other Operating Partnership interests or minority interests (as reflected in the financial statements of the Corporation) plus depreciation and amortization of assets unique to the real estate industry, all computed in a manner consistent with the revised definition of Funds From Operations adopted by the National Association of Real Estate Investment Trusts (NAREIT), in its White Paper dated October, 1999, as such definitions may be modified from time to time, as determined by the Corporation in good faith. "GAAP" shall mean generally accepted accounting principles as applied in the United States. "GUARANTEES" of the Corporation, the Operating Partnership or any Subsidiary shall mean (without duplication on a consolidated basis) all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of the Corporation, the Operating Partnership or any Subsidiary guaranteeing, any Indebtedness, dividend or other obligation of any other person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by the Corporation, the Operating Partnership or any Subsidiary : (i) to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (ii) to advance or supply funds: (x) for the purchase or payment of such Indebtedness or obligation, (y) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the primary obligor to make payment of such Indebtedness or obligation, or (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof, PROVIDED, HOWEVER, that the term "Guarantees" shall not include (y) guarantees of completion unless and until a claim for payment has been made thereunder, at which time such completion guarantee shall be deemed Indebtedness to the extent of the claim, and (z) Low Income Housing Credit Guarantees, unless and until a claim for payment is made thereunder. For the purposes of any computations made under these Articles Supplementary, a Guarantee in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of the Indebtedness for borrowed money which has been guaranteed, and a Guarantee in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend. "INDEBTEDNESS" shall mean, without duplication on a consolidated basis (i) all obligations of the Corporation, the Operating Partnership or any Subsidiary for borrowed money, (ii) all obligations of the Corporation, the Operating Partnership or any Subsidiary evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of the Corporation, the Operating Partnership or any Subsidiary under conditional sale or other title retention agreements relating to property purchased by the Corporation, the Operating Partnership or any Subsidiary, (iv) all obligations of the Corporation, the Operating Partnership or any Subsidiary issued or assumed as the deferred purchase price of property or services (other than accounts payable to suppliers and similar accrued liabilities incurred in the ordinary course of business and paid in a manner consistent with industry practice), (v) all other obligations, contingent or otherwise, which, in accordance with GAAP, should be classified on the Corporation's, Operating Partnership's or any Subsidiary's balance sheets as liabilities, whether or not so classified, (vi) all liabilities secured by any mortgage, pledge, security interest, lien charge or other encumbrance existing on any property or asset now owned by, or acquired by, the Corporation, the Operating Partnership, or any of their Subsidiaries (vii) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien or security interest on property owned or acquired by the Corporation, the Operating Partnership or any Subsidiary whether or not the obligations secured thereby have been assumed, (viii) all Capitalized Lease Obligations of the Corporation, the Operating Partnership or any Subsidiary, (ix) all Guarantees of the Corporation, the Operating Partnership or any Subsidiary, (x) all obligations (including but not limited to reimbursement obligations) relating to the issuance of letters of credit for the account of the Corporation, the Operating Partnership or any Subsidiary, (xi) all obligations arising out of foreign exchange contracts, and (xii) all obligations arising out of interest rate and currency swap agreements, cap, floor and collar agreements, interest rate insurance, currency spot and forward contracts and other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates, as valued in accordance with GAAP consistently applied. "ISSUE DATE" shall mean the date on which the shares of Series D Preferred Stock are issued. "JUNIOR STOCK" shall mean the Common Stock and any other class or series of capital stock of the Corporation now or hereafter issued and outstanding over which the Series D Preferred Stock has preference or priority in (i) the payment of dividends or (ii) the distribution of assets on any liquidation, dissolution or winding up of the Corporation. "LIQUIDATION PREFERENCE" shall have the meaning set forth in Section 4(a). "LOW INCOME HOUSING CREDIT GUARANTEES" means assurances by the Corporation or the Operating Partnership to limited partners of certain affiliates of the Corporation that the properties developed and operated by such affiliates will be kept in compliance with applicable provisions of the Code to avoid loss or recapture of low income housing tax credits. "NON-ELECTING SHARE" shall have the meaning set forth in Section 7(e). "OPERATING PARTNERSHIP" shall mean Home Properties of New York, L.P., a New York limited partnership. "OPERATING PARTNERSHIP AGREEMENT" shall mean the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended. "PARITY STOCK" shall have the meaning set forth in Section 9(b). "PERSON" shall mean any individual, firm, partnership, corporation, limited liability company or other entity, and shall include any successor (by merger or otherwise) of such entity. "PURCHASED SHARES" shall have the meaning set forth in Section 7(d)(iv). "PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement dated as of June 5, 2000 by and among the Corporation, the Operating Partnership and The Equitable Life Assurance Society of the United States. "RECORD DATE" shall have the meaning set forth in Section 7(f). "REIT TERMINATION EVENT" shall mean the earliest to occur of: (i) the filing of a federal income tax return by the Corporation for any taxable year on which the Corporation does not elect to be taxed as a real estate investment trust; (ii) the approval by the stockholders of the Corporation of a proposal for the Corporation to cease to qualify as a real estate investment trust; (iii) the public announcement by the Corporation that it has ceased to qualify as a real estate investment trust; (iv) a determination by the Board of Directors of the Corporation, based on the advice of counsel, that the Corporation has ceased to qualify as a real estate investment trust; or (v) the Corporation or its duly authorized representatives shall receive a determination or conclusion, whether in proposed or final form, from the Internal Revenue Service or one of its representatives that the Corporation has failed to meet the requirements for REIT qualification and taxation as a REIT under Sections 856-860 of the Code for one or more taxable years, occurring from and after January 1, 1994, including, without limitation, a statutory notice of deficiency, a notice of proposed deficiency, a proposed or final revenue agent's report, a Field Service Advice, Technical Advice Memorandum, or similar conclusion; PROVIDED, HOWEVER, that if the determination or conclusion is in proposed or draft form, such receipt shall not constitute a "REIT Termination Event" unless such determination or conclusion is not withdrawn or otherwise terminated within 270 days following such receipt, or if the Company receives an opinion of its independent counsel or accountants that the Company's REIT status should be upheld. "REPURCHASE DATE" shall mean the date of repurchase of the shares of Series D Preferred Stock or the date such payment is made available as provided in Section 6(a)(iii). "REPURCHASE OFFER" shall have the meaning set forth in Section 6(a)(ii). "REPURCHASE PRICE" shall have the meaning set forth in Section 6(a)(i). "SECURITIES" and "SECURITY" shall have the meanings set forth in Section 7(d)(iii). "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SENIOR STOCK" shall mean any class or series of capital stock of the Corporation hereafter issued and outstanding which has preference or priority over the Series D Preferred Stock (i) in the payment of dividends or (ii) in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. "SERIES A PREFERRED STOCK" shall mean the shares of Series A Senior Convertible Preferred Stock issued by the Corporation. "SERIES D PREFERRED STOCK" shall mean the shares of Series D Convertible Cumulative Preferred Stock. "SET APART FOR PAYMENT" shall mean that funds for the payment of dividends or other distributions are irrevocably delivered to a disbursing, paying or other similar agent for the sole purpose of satisfying the Corporation's obligation to make a required dividend payment or other distribution. "SHARES" shall have the meaning set forth in Section 12. "STATED VALUE" shall mean $100.00 per share of Series D Preferred Stock. "SUBSIDIARIES" shall mean any entities that would be treated as consolidated subsidiaries of the Corporation or the Operating Partnership for financial accounting purposes under GAAP. "TOTAL INTEREST EXPENSE" means, for any period, the sum of: (i) interest expense of the Consolidated Businesses paid during such period; and (ii) interest expense of the Consolidated Businesses accrued and/or capitalized for such period, in each case including any participating interest expense, the amortization of loan fees, original issue discount, non-cash interest payment, the interest component of Capitalized Lease Obligations and hedging costs, but excluding any extraordinary interest expense and net of amortization of deferred costs associated with new financings or refinancings of existing Indebtedness. "TOTAL VALUE" shall mean, as of any date, the sum of: (i) the Undepreciated Real Estate Assets; and (ii) all other assets of the Corporation and its Subsidiaries on a consolidated basis determined in accordance with GAAP (but excluding intangibles and accounts receivable). "TRADING DAY" shall mean any day on which the securities in question are traded on the NYSE, or if such securities are not listed or admitted for trading on the NYSE, on the principal national securities exchange on which such securities are listed or admitted, or if not listed or admitted for trading on any national securities exchange, on the National Market System of NASDAQ, or if such securities are not quoted on such National Market System, in the securities market in which the securities are traded. "TRANSACTION" shall have the meaning set forth in Section 7(e). "TRANSFER AGENT" shall mean Chase Manhattan Shareholder Services or such other agent or agents of the Corporation as may be designated by the Board of Directors or their designee as the transfer agent, registrar and dividend disbursing agent for the Series D Preferred Stock. "UNDEPRECIATED REAL ESTATE ASSETS" shall mean, as of any date, the cost (original cost plus capital improvements) of real estate assets of the Corporation and its Subsidiaries on such date, before depreciation, amortization, or other market value adjustments (as such market value adjustments would otherwise be required by GAAP) determined on a consolidated basis in accordance with GAAP. "UNITS" shall mean Partnership Units as that term is defined in the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended. "VOTING PREFERRED STOCK" shall have the meaning set forth in Section 10. Section 3. DIVIDENDS. (a) The holders of record of shares of Series D Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available therefor, cash dividends which are cumulative; preferential over the dividends paid on the Corporation's Common Stock and pari passu with the dividends paid on the Corporation's Parity Stock; and payable in arrears in an amount per share equal to the greatest of: (i) 8.775% of the Liquidation Preference per annum (equivalent to $8.775 per share of Series D Preferred Stock) subject to adjustment in accordance with Section 3(d), (ii) the ordinary cash dividends (determined on each Dividend Payment Date) on the shares of Common Stock, or portion thereof, into which a share of Series D Preferred Stock is convertible, or (iii) the rate set forth in Section 3(c) if Section 3(c) is applicable. The dividends referred to in clause (ii) of the preceding sentence shall equal the number of shares of Common Stock, or portion thereof, into which a share of Series D Preferred Stock is convertible, multiplied by the most current quarterly dividend on a share of Common Stock declared on or before the applicable Dividend Payment Date. If the Corporation declares and pays an ordinary cash dividend on the Common Stock with respect to a Dividend Period after a Dividend Payment Date is determined pursuant to clause (ii) of the definition of Dividend Payment Date and the dividend calculated pursuant to clause (ii) of this paragraph (a) with respect to such Dividend Period is greater than the dividend previously declared on the Series D Preferred Stock with respect to such Dividend Period, the Corporation shall pay an additional dividend to the holders of the Series D Preferred Stock on the date on which the dividend on the Common Stock is paid, in an amount equal to the difference between (y) the dividend calculated pursuant to clause (ii) of this paragraph (a) and (z) the amount of dividends previously declared on the Series D Preferred Stock with respect to such Dividend Period. The dividends shall begin to accrue and shall be fully cumulative from the first day of the applicable Dividend Period, whether or not in any Dividend Period or Periods there shall be funds of the Corporation legally available for the payment of such dividends, and shall be payable quarterly in arrears, when, as and if declared by the Board of Directors, on Dividend Payment Dates. Each such dividend shall be payable in arrears to the holders of record of shares of Series D Preferred Stock as they appear in the records of the Corporation at the close of business on such record dates, not fewer than 10 nor more than 50 days preceding such Dividend Payment Dates thereof, as shall be fixed by the Board of Directors. To the extent that a dividend required by this Section 3 is not paid on any Dividend Payment Date, the amount not paid shall accumulate and accrue interest at the annual rate of 8.775% compounded quarterly on each Dividend Payment Date that it remains unpaid. Accrued and unpaid dividends (and any interest thereon) for any past Dividend Periods may be declared and paid at any time and for such interim periods, without reference to any regular Dividend Payment Date, to holders of record on such date, not fewer than 10 nor more than 50 days preceding the payment date thereof, as may be fixed by the Board of Directors. Any dividend payment made on Series D Preferred Stock shall first be credited against the earliest accrued but unpaid dividend due with respect to Series D Preferred Stock which remains payable. (b) The amount of dividends referred to in clauses (i) and (iii) of Section 3(a) payable for each full Dividend Period on the Series D Preferred Stock shall be computed by dividing the annual dividend rate by four. The initial Dividend Period will include a partial dividend for the period from the Issue Date until the last calendar day of the calendar quarter containing the Issue Date. The amount of dividends payable either under clause (i), clause (ii) or clause (iii) for such period, or any other period shorter than a full Dividend Period, on the Series D Preferred Stock shall be computed ratably on the basis of a 360-day year of twelve 30-day months and the amount of such dividend shall equal the dividend payable with respect to the Dividend Period multiplied by a fraction (x) the numerator of which is (i) the number of days from the Issue Date to the end of the Dividend Period, or (ii) the number of days from the beginning of the Dividend Period to the Call Date or the Repurchase Date, as the case may be, and (y) the denominator of which is 90. Holders of shares of Series D Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or shares, in excess of cumulative dividends, as herein provided, on the Series D Preferred Stock. (c) If at the end of any calendar quarter the ratio of EBITDA to Fixed Charges shall be less than 1.75 to 1.0 (a "Covenant Failure"), the dividend rate payable upon the shares of Series D Preferred Stock pursuant to paragraph (a)(i) of this Section 3 (as such dividend rate may be increased in accordance with Section 3(d) below) shall be increased by .50% per annum until the last day of the calendar quarter during which such Covenant Failure shall have been cured and shall no longer be continuing, subject to revesting in the event of any subsequent Covenant Failure. (d) If at any time a Change of Control shall occur, the dividend rate payable upon the shares of Series D Preferred Stock pursuant to subsection (a)(i) of this Section 3 shall be from and after the date of such Change of Control a per annum rate equal to the sum of (A) 8.00% plus (B) the then published (in the Wall Street Journal) rate for a U.S. Treasury note maturing on the date closest to the five year anniversary of the date the Change of Control occurs, such rate to be fixed as of the date such Change of Control occurs (the "CHANGE OF CONTROL RATE"); provided, however, that in no event shall such rate be less than 8.775%. (e) So long as any shares of Series D Preferred Stock are outstanding, no dividends, except as described in the immediately following sentence, shall be declared or paid or set apart for payment on any class or series of Parity Stock for any period unless full cumulative dividends have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for such payment on the Series D Preferred Stock for all Dividend Periods terminating on or prior to the dividend payment date on such class or series of Parity Stock. When dividends are not paid in full or a sum sufficient for such payment is not set apart, as aforesaid, all dividends declared upon Series D Preferred Stock and all dividends declared upon any other class or series of Parity Stock shall be declared ratably in proportion to the respective amounts of dividends accumulated and unpaid on the Series D Preferred Stock and accumulated and unpaid on such Parity Stock. (f) So long as any shares of Series D Preferred Stock are outstanding, (i) no dividends (other than dividends or distributions paid solely in shares of, or options, warrants or rights to subscribe for or purchase shares of, Fully Junior Stock) shall be declared or paid or set apart for payment and no other distribution shall be declared or made or set apart for payment upon Junior Stock; (ii) no shares of any Junior Stock shall be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Stock made for purposes of an employee incentive or benefit plan of the Corporation or any Subsidiary) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Stock) by the Corporation, directly or indirectly (except by conversion into or exchange for Fully Junior Stock); and (iii) the Corporation shall not authorize, take or cause or permit to be taken or caused any action of the general partner of the Operating Partnership, that will result in (A) the declaration or payment by the Operating Partnership of any distribution to its partners (other than distributions made concurrently with distributions payable to the Corporation in respect of its partnership interest or preferred units in each case that will be used by the Corporation to fund the payment in full of all accrued dividends (such distributions to the Corporation in respect of its partnership interest being referred to as "Authorized LP Distributions" and such distributions to the Corporation in respect of its preferred units being referred to as "Authorized Preferred Unit Distributions"), or the setting aside of any funds or assets for payment of any distributions to its partners (other than those made concurrently with Authorized LP Distributions or Authorized Preferred Unit Distributions) or (B) the redemption or purchase (directly or indirectly, including, without limitation, through the Operating Partnership or any Subsidiaries), or the setting aside of any funds or other assets for the redemption or purchase of any partnership interests in the Operating Partnership, except for exchange or conversions of partnership interests in the Operating Partnership in the ordinary course into shares of Common Stock, or the payment of cash by the Operating Partnership upon the exercise by any partner of the Operating Partnership to a Limited Partner, upon such partner's exercise of its Purchase Rights (as defined in the Operating Partnership Agreement), in accordance with Section 6.08 of the Operating Partnership Agreement, unless in each case (i) the full cumulative dividends (and interest thereon) on all outstanding Senior Stock, Series D Preferred Stock and any other Parity Stock of the Corporation shall have been or contemporaneously are declared and paid or declared and set apart for payment for all past dividend periods with respect to the Senior Stock, all past Dividend Periods with respect to the Series D Preferred Stock and all past dividend periods with respect to such Parity Stock, and (ii) sufficient funds shall have been or contemporaneously are set apart for payment in full of any obligations of the Corporation in respect of Series D Preferred Stock called for redemption by the Corporation pursuant to Section 5 or required to be repurchased from any holder pursuant to Section 6. (g) No distributions on Series D Preferred Stock shall be declared by the Board of Directors or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation, including any agreement relating to its Indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law. Section 4. LIQUIDATION PREFERENCE. (a) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Stock, the holders of shares of the Series D Preferred Stock shall be entitled to receive One Hundred Dollars ($100.00) (the "LIQUIDATION PREFERENCE") per share of Series D Preferred Stock plus an amount equal to all dividends (whether or not declared) accumulated, accrued and unpaid thereon to the date of final distribution to such holders; but such holders shall not be entitled to any further payment; PROVIDED, that the dividend payable with respect to the Dividend Period containing the date of final distribution shall be equal to the greater of (i) the dividend provided in Section 3(a)(i) or (iii), as applicable, or (ii) the dividend determined pursuant to Section 3(a)(ii) for the preceding Dividend Period. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of the shares of Series D Preferred Stock shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any other shares of any class or series of Parity Stock, then such assets, or the proceeds thereof, shall be distributed among the holders of Series D Preferred Stock and any such other Parity Stock ratably in accordance with the respective amounts that would be payable on such Series D Preferred Stock and any such other Parity Stock if all amounts payable thereon were paid in full. For the purposes of this Section 4, (i) a consolidation or merger of the Corporation with one or more corporations, real estate investment trusts or other entities, (ii) a sale, lease or conveyance of all or substantially all of the Corporation's property or business, or (iii) a statutory share exchange shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Corporation. (b) Subject to the rights of the holders of shares of any series or class or classes of shares of capital stock ranking on a parity with or prior to the Series D Preferred Stock upon liquidation, dissolution or winding up, upon any liquidation, dissolution or winding up of the Corporation, after payment shall have been made in full to the holders of the Series D Preferred Stock, as provided in this Section 4, any other series or class or classes of Junior Stock shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series D Preferred Stock shall not be entitled to share therein. Section 5. REDEMPTION AT THE OPTION OF THE CORPORATION. (a) Except as provided in paragraph (b) below, the Series D Preferred Stock shall not be redeemable by the Corporation prior to the fifth anniversary of the Issue Date. The Series D Preferred Stock may be redeemed, in whole but not in part, at the option of the Corporation at any time on or after the fifth anniversary of the Issue Date out of funds legally available therefor at a redemption price per share payable in cash equal to the Liquidation Preference per share of Series D Preferred Stock (plus all accumulated, accrued and unpaid dividends as provided below). The Series D Preferred Stock shall be redeemed in whole by the Company on the fiftieth anniversary of the Issue Date. In the event the Series D Preferred Stock is redeemed on the fiftieth anniversary of the Issue Date, then the redemption price per share of Series D Preferred Stock shall be payable, at the option of the Corporation, either: (i) in cash in an amount equal to the Liquidation Preference per share of Series D Preferred Stock (plus all accumulated, accrued and unpaid dividends as provided below); or (ii) by issuance of that number of fully paid and non- assessable shares of Common Stock equal to the quotient obtained by dividing (A) the Liquidation Preference per share of Series D Preferred Stock (plus all accumulated, accrued and unpaid dividends) by (B) the Conversion Price (as in effect at the time). (b) If a Change of Control shall occur, the Corporation shall have the right, to the extent that the Corporation shall have funds legally available therefor, to redeem, in whole but not in part, the outstanding shares of Series D Preferred Stock at a redemption price per share payable in cash equal to the Change of Control Price, by notice in writing to the holders of Series D Preferred Stock no later than 30 days following the occurrence of such Change of Control. (c) Concurrently with any redemption of shares of Series D Preferred Stock pursuant to this Section 5, and except for dividends paid pursuant to the next sentence, the Corporation shall pay all accumulated, accrued and unpaid dividends (whether or not declared and including any interest thereon), if any, thereon through and including the Call Date. If the Call Date falls after a Dividend Payment Record Date and prior to the corresponding Dividend Payment Date, then each holder of shares of Series D Preferred Stock at the close of business on such Dividend Payment Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding any redemption of such shares before such Dividend Payment Date or a default in the payment of the dividend due. (d) The Corporation may not purchase or acquire shares of Series D Preferred Stock, otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of Series D Preferred Stock. (e) Notice of the redemption of shares of Series D Preferred Stock under this Section 5 shall be mailed by certified mail, return receipt requested, to each holder of record of shares of Series D Preferred Stock to be redeemed at the address of each such holder as shown on the Corporation's records, not fewer than 30 nor more than 60 days prior to the Call Date. No failure to give such notice or any defect therein or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series D Preferred Stock except as to the holder to whom notice was defective or not given. In addition to any information required by law, each such mailed notice shall state, as appropriate: (1) the Call Date; (2) the redemption price; (3) the place or places at which certificates for such shares are to be surrendered; (4) the then-current Conversion Price; and (5) that dividends on the shares to be redeemed shall cease to accrue on such Call Date except as otherwise provided herein. Notice having been mailed as aforesaid, from and after the Call Date (unless the Corporation shall fail to make available an amount of cash necessary to effect such redemption), (i) except as otherwise provided herein, dividends on the shares of Series D Preferred Stock so called for redemption shall cease to accrue, (ii) such shares shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of shares of Series D Preferred Stock of the Corporation shall cease (except the rights to convert and to receive the redemption price, without interest thereon, upon surrender and endorsement of their certificates if so required and to receive any dividends accrued and payable thereon through and including the Call Date). The Corporation's obligation to provide cash in accordance with the preceding sentence shall be deemed fulfilled if, on or before the Call Date, the Corporation shall: (i) deposit with a bank or trust company (which may be an affiliate of the Corporation) that has an office in the Borough of Manhattan, City of New York, and that has, or is an affiliate of a bank or trust company that has, capital and surplus of at least $500,000,000, the funds in cash necessary for such redemption (including amounts sufficient to pay all accumulated, accrued and unpaid dividends through the Call Date), in trust, with irrevocable instructions that such cash be applied to the redemption of the shares of Series D Preferred Stock so called for redemption; and (ii) provide adequate notice of such arrangements to the holders of Series D Preferred Stock for purpose of surrendering their shares. No interest shall accrue for the benefit of the holders of shares of Series D Preferred Stock to be redeemed on any cash so set aside by the Corporation. Subject to applicable escheat laws, any such cash unclaimed at the end of six months from the Call Date shall revert to the general funds of the Corporation, after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of such cash. As promptly as practicable after the surrender in accordance with such notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and if the notice shall so state), such shares shall be exchanged for the redemption price (without interest thereon) for which such shares have been redeemed. Section 6. REPURCHASE UPON FUNDAMENTAL CHANGE OR REIT TERMINATION EVENT. (a) If a Fundamental Change or REIT Termination Event shall occur: (i) Each holder of shares of Series D Preferred Stock shall have the right to require the Corporation, to the extent that the Corporation shall have funds legally available therefor, to repurchase, in whole or in part, such holder's shares of Series D Preferred Stock held on the date that such holder receives the notice described in subsection 6(a)(ii) at a repurchase price (the "REPURCHASE PRICE") payable in cash in an amount equal to (x) in the case of a Fundamental Change, 100% of the Liquidation Preference or (y) in the case of a REIT Termination Event, 105% of the Liquidation Preference (plus, in the case of each of (x) and (y), all accumulated, accrued and unpaid dividends through and including the date of repurchase) in each case as described below; PROVIDED, HOWEVER, that if a REIT Termination Event occurs subsequent to five (5) years following the Issue Date, the Repurchase Price shall equal 100% of the Liquidation Preference plus all accumulated, accrued and unpaid dividends (whether or not declared and including any interest thereon) through and including the date of repurchase. (ii) Upon occurrence of such Fundamental Change or REIT Termination Event, the Corporation shall mail by certified mail, return receipt requested, or deliver by overnight courier a notice (the "REPURCHASE OFFER") to each holder of shares of Series D Preferred Stock stating (A) that a Fundamental Change or REIT Termination Event has occurred, describing in general terms the nature of such event, and that such holder has the right to require the Corporation to repurchase all shares of Series D Preferred Stock then held by such holder in cash; (B) the Repurchase Date (which shall be a Business Day, no earlier than 30 days and no later than 60 days from the occurrence of such Fundamental Change or REIT Termination Event, or such later date as may be necessary to comply with the requirements of the Exchange Act); (C) the Repurchase Price; (D) the place or places at which certificates for such shares are to be surrendered; (E) that dividends on the shares to be repurchased shall cease to accrue on such Repurchase Date except as otherwise provided herein; and (F) the reasonable instructions determined by the Corporation, consistent with this subsection, that such holder must follow in connection with the repurchase of its shares of Series D Preferred Stock. (iii) On the Repurchase Date, the Corporation shall, to the extent lawful (and to the extent any payment is unlawful, promptly after the date on which such payment thereafter becomes lawful), accept for payment the shares of Series D Preferred Stock tendered pursuant to the Repurchase Offer described in Subsection 6(a)(ii). The Corporation's obligation to provide cash in accordance with Subsection 6(a)(ii) shall be deemed fulfilled if, on or before the Repurchase Date, the Corporation shall: (A) deposit with a bank or trust company (which may be an affiliate of the Corporation) that has an office in the Borough of Manhattan, City of New York, and that has, or is an affiliate of a bank or trust company that has, capital and surplus of at least $500,000,000, the funds in cash necessary for such repurchase of all shares of Series D Preferred Stock so tendered (including amounts sufficient to pay all accumulated, accrued and unpaid dividends through the Repurchase Date), in trust, with irrevocable instructions that such cash be applied to the repurchase of the shares of Series D Preferred Stock so tendered for repurchase; and (B) provide adequate notice of such arrangements to the holders of Series D Preferred Stock for purposes of surrendering their shares. No interest shall accrue for the benefit of the holders of shares of Series D Preferred Stock to be repurchased on any cash so set aside by the Corporation. Subject to applicable escheat laws, any such cash unclaimed at the end of six months from the Repurchase Date shall revert to the general funds of the Corporation, after which reversion the holders of such shares so called for repurchase shall look only to the general funds of the Corporation for the payment of such cash. (iv) As promptly as practicable after the surrender in accordance with such notice of the certificates for any such shares so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require and if the notice shall so state), such shares shall be exchanged for any cash (without interest thereon) for which such shares have been repurchased. (b) Notwithstanding anything else herein, to the extent they are applicable to any such repurchase, the Corporation will comply with any federal and state securities laws, rules and regulations and all time periods and requirements shall be adjusted only as necessary to comply with such laws, rules and regulations. (c) The Corporation may, upon ten (10) Business Days' advance notice to each holder of the Series D Preferred Stock of a Fundamental Change, request a waiver of such holder's rights under this Section 6; PROVIDED, HOWEVER, that the failure of any holder to respond to or otherwise act upon such request shall not be deemed to create or imply a waiver or otherwise affect such holder's rights under this Section 6. Section 7. CONVERSION. Holders of shares of Series D Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock, as follows: (a) Subject to and upon compliance with the provisions of this Section 7 and the provisions of Article VII of the Corporation's Amended and Restated Articles of Incorporation, as amended, a holder of shares of Series D Preferred Stock shall have the right, at any time, at his or her option, to convert all or any part of such shares into the number of fully paid and non-assessable shares of Common Stock obtained by dividing: (1) the sum of (A) the aggregate Liquidation Preference of such shares plus (B) the aggregate amount, if any, of all dividends (except for the quarter in which the conversion occurred, whether or not declared) accumulated, accrued and unpaid (and any interest thereon through the date of conversion) on the Shares of Series D Preferred Stock to be converted by (2) the Conversion Price (as in effect at the time and on the date provided for in the last paragraph of paragraph (b) of this Section 7); PROVIDED, HOWEVER, that the right to convert shares called for redemption pursuant to Section 5 or to be repurchased pursuant to Section 6 shall terminate at the close of business on the fifth Business Day prior to the date fixed for such redemption or repurchase, unless the Corporation shall default in making payment of the cash payable upon such redemption or repurchase under Section 5 or Section 6, as the case may be. (b) In order to exercise the conversion right, the holder of each share of Series D Preferred Stock to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Corporation or in blank, at the office of the Transfer Agent or if there is no Transfer Agent, at the principal offices of the Corporation, accompanied by written notice to the Corporation that the holder thereof elects to convert such share of Series D Preferred Stock. Unless the shares issuable on conversion are to be issued in the same name as the name in which such Series D Preferred Stock is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Corporation or the Transfer Agent, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). Holders of shares of Series D Preferred Stock at the close of business on a Dividend Payment Record Date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the conversion thereof following such Dividend Payment Record Date and prior to such Dividend Payment Date. The Corporation shall make no payment or allowance for undeclared dividends on the shares of Series D Preferred Stock that would have accrued otherwise in the quarter in which the conversion occurred. As promptly as practicable after the surrender of certificates for shares of Series D Preferred Stock as aforesaid (and in any event within three business days following such surrender), the Corporation shall issue and shall deliver at such office to such holder, or on his or her written order, a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such shares in accordance with provisions of this Section 7, and any fractional interest in respect of a share of Common Stock arising upon such conversion shall be settled as provided in paragraph (c) of this Section 7. Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for the shares of Series D Preferred Stock to be converted shall have been surrendered and such notice shall have been received by the Corporation as aforesaid, and the person or persons in whose name or names any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date unless the share transfer books of the Corporation shall be closed on that date, in which event such person or persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such share transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such surrendered shares shall have been surrendered and such notice is received by the Corporation. (c) No fractional shares or scrip representing fractions of shares of Common Stock shall be issued upon conversion of the shares of Series D Preferred Stock. Instead of any fractional interest in a share of Common Stock that would otherwise be issuable upon the conversion of a share of Series D Preferred Stock, the Corporation shall pay to the holder of such share an amount in cash based upon the Current Market Price of the Common Stock on the Trading Day immediately preceding the date of conversion. If more than one share shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of Series D Preferred Stock so surrendered. (d) The Conversion Price shall be adjusted from time to time as follows: (i) If the Corporation shall, after the Issue Date: (A) pay a dividend or make a distribution on its capital stock in shares of Common Stock, (B) subdivide its outstanding shares of Common Stock into a greater number of shares, (C) combine its outstanding shares of Common Stock into a smaller number of shares or (D) issue any shares of capital stock by reclassification of its shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or distribution or at the opening of business on the Business Day next following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any shares of Series D Preferred Stock thereafter surrendered for conversion shall be entitled to receive the number of shares of Common Stock that such holder would have owned or have been entitled to receive after the happening of any of the events described above as if such shares of Series D Preferred Stock had been converted immediately prior to the record date in the case of a dividend or distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this subparagraph (i) shall become effective immediately after the opening of business on the Business Day next following the record date (except as provided in paragraph (h) below) in the case of a dividend or distribution and shall become effective immediately after the opening of business on the Business Day next following the effective date in the case of a subdivision, combination or reclassification. (ii) If the Corporation shall issue, after the Issue Date, rights, options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase shares of Common Stock at a price per share less than the Fair Market Value per share of Common Stock on the record date for the determination of stockholders entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the Business Day next following such record date shall be adjusted to equal the price determined by multiplying (A) the Conversion Price in effect immediately prior to the opening of business on the Business Day next following the date fixed for such determination by (B) a fraction, the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding on the close of business on the date fixed for such determination and (y) the number of shares that the aggregate proceeds to the Corporation from the exercise of such rights, options or warrants for shares of Common Stock would purchase at Fair Market Value, and the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding on the close of business on the date fixed for such determination and (y) the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in paragraph (h) below). In determining whether any rights, options or warrants entitle the holders of shares of Common Stock to subscribe for or purchase shares of Common Stock at less than Fair Market Value, there shall be taken into account any consideration received by the Corporation upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board of Directors. (iii) If the Corporation shall distribute to all holders of Common Stock any securities of the Corporation (other than shares of Common Stock) or evidence of its indebtedness or assets (excluding cumulative cash dividends or distributions paid with respect to the shares of Common Stock after December 31, 1999 which are not in excess of the following: the sum of (A) the Corporation's cumulative undistributed Funds from Operations at December 31, 1999, plus (B) the cumulative amount of Funds from Operations, as determined by the Board of Directors, after December 31, 1999, minus (C) the cumulative amount of dividends accrued or paid in respect of the Series D Preferred Stock or any other class or series of preferred stock of the Corporation after the Issue Date) or rights, options or warrants to subscribe for or purchase any of its securities (excluding those rights, options and warrants issued to all holders of shares of Common Stock entitling them for a period expiring within 45 days after the record date referred to in subparagraph (ii) above to subscribe for or purchase shares of Common Stock, which rights and warrants are referred to in and treated under subparagraph (ii) above) (any of the foregoing being hereinafter in this subparagraph (iii) collectively called the "SECURITIES" and individually a "SECURITY"), then in each such case the Conversion Price shall be adjusted so that it shall equal the price determined by multiplying (x) the Conversion Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by (y) a fraction, the numerator of which shall be the Fair Market Value per share of Common Stock on the record date for the determination of stockholders entitled to receive such distribution less the then fair market value (as determined by the Board of Directors, whose determination, if made in good faith, shall be conclusive), of the portion of the Securities or assets or evidences of indebtedness so distributed or of such rights, options or warrants applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock on the record date for the determination of stockholders entitled to receive such distribution. Such adjustment shall become effective immediately at the opening of business on the Business Day next following (except as provided in paragraph (h) below) the record date for the determination of stockholders entitled to receive such distribution. For the purposes of this subparagraph (iii), the distribution of a Security, which is distributed not only to the holders of the shares of Common Stock on the date fixed for the determination of stockholders entitled to such distribution of such Security, but also is distributed with each share of Common Stock delivered to a Person converting a share of Series D Preferred Stock after such determination date, shall not require an adjustment of the Conversion Price pursuant to this subparagraph (iii); PROVIDED that on the date, if any, on which a person converting a share of Series D Preferred Stock would no longer be entitled to receive such Security with a share of Common Stock (other than as a result of the termination of all such Securities), a distribution of such Securities shall be deemed to have occurred and the Conversion Price shall be adjusted as provided in this subparagraph (iii) (and such day shall be deemed to be "the date fixed for the determination of the stockholders entitled to receive such distribution" and "the record date" within the meaning of the two preceding sentences). (iv) In case a tender or exchange offer (which term shall not include open market repurchases by the Corporation) made by the Corporation or any subsidiary of the Corporation for all or any portion of the shares of Common Stock shall expire and such tender or exchange offer shall involve the payment by the Corporation or such subsidiary of consideration per share of Common Stock having a fair market value (as determined by the Board of Directors, whose determination, if made in good faith, shall be conclusive and described in a resolution of the Board of Directors), at the last time (the "EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or exchange offer, that exceeds the Current Market Price per share of Common Stock on the Trading Day next succeeding the Expiration Time, the Conversion Price shall be reduced to equal the price determined by multiplying the Conversion Price in effect immediately prior to the effectiveness of the Conversion Price reduction contemplated by this subparagraph, by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Expiration Time, multiplied by the Current Market Price per share of Common Stock on the Trading Day next succeeding the Expiration Time, and the denominator shall be the sum of (A) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based upon the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any maximum, being referred to as the "PURCHASED SHARES") and (B) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price per share of Common Stock on the Trading Day next succeeding the Expiration Time, such reduction to become effective immediately prior to the opening of business on the day following the Expiration Time. (v) If the Corporation shall, after the Issue Date, issue or sell shares of its Common Stock or securities convertible or exchangeable into Common Stock ("Convertible Securities") for a gross consideration per share (including any gross consideration payable upon conversion or exchange of the Convertible Securities) less than the Conversion Adjustment Price in effect immediately prior to the time of such issue or sale, then upon such issue or sale, the Conversion Price shall be reduced to an amount determined by dividing (a) the sum of (1) the product derived by multiplying (i) the Conversion Price in effect immediately prior to such issuance or sale by (ii) the number of outstanding shares of Common Stock immediately prior to such issuance or sale, plus (2) the gross proceeds, if any, received by the Corporation upon such issuance or sale (including any gross consideration payable upon conversion or exchange of the Convertible Securities), by (b) the number of outstanding shares of Common Stock (assuming the full conversion or exercise of all such Convertible Securities) immediately after such issuance or sale. (vi) No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; PROVIDED, HOWEVER, that any adjustments that by reason of this subparagraph (vi) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and PROVIDED, FURTHER, that any adjustment shall be required and made in accordance with the provisions of this Section 7 (other than this subparagraph (vi)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock. Notwithstanding any other provisions of this Section 7, the Corporation shall not be required to make any adjustment of the Conversion Price: (a) for the issuance of any shares of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the Corporation and the investment of additional optional amounts of cash in shares of Common Stock under such plan; (b) the issuance of options and the shares of Common Stock issued upon exercise of such options pursuant to an employee or director stock option program approved by the Board of Directors of the Corporation; or (c) the issuance of limited partnership interests in the Operating Partnership, or any other equity or debt securities which are convertible, directly or indirectly, into or exchangeable for Common Stock in connection with the acquisition of property or real estate operating businesses or equity interests in such businesses and the Common Stock issued upon conversion thereof. All calculations under this Section 7 shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this paragraph (d) to the contrary notwithstanding, the Corporation shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Price, in addition to those required by this paragraph (d), as it in its discretion shall determine to be advisable in order that any share dividends, subdivision of shares, reclassification or combination of shares, distribution of rights or warrants to purchase shares or securities, or distribution of other assets (other than cash dividends) hereafter made by the Corporation to its stockholders shall not be taxable. (e) If the Corporation shall be a party to any transaction (including without limitation a merger, consolidation, statutory share exchange, self tender offer for all or substantially all of its Common Stock, sale of all or substantially all of the Corporation's assets, either taken alone or on a consolidated basis, or recapitalization of the shares of Common Stock and excluding any transaction as to which subparagraph (d)(i) of this Section 7 applies) (each of the foregoing being referred to herein as a "TRANSACTION"), in each case as a result of which all or substantially all of the shares of Common Stock are converted into the right to receive shares, securities or other property (including cash or any combination thereof), each share of Series D Preferred Stock which is not redeemed or converted into the right to receive shares, securities or other property prior to such Transaction shall upon consummation of such Transaction be converted into the right to receive the kind and amount of shares, securities and other property (including cash or any combination thereof) receivable upon the consummation of such Transaction by a holder of that number of shares of Common Stock into which one share of Series D Preferred Stock was convertible immediately prior to such Transaction, assuming such holder of Common Stock (i) is not a Person with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be ("CONSTITUENT PERSON"), or an affiliate of a Constituent Person and (ii) failed to exercise his rights of election, if any, as to the kind or amount of shares, securities and other property (including cash) receivable upon such Transaction (provided that if the kind or amount of shares, securities and other property (including cash) receivable upon such Transaction is not the same for each share of Common Stock held immediately prior to such Transaction by other than a Constituent Person or an affiliate thereof and in respect of which such rights of election shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of this paragraph (e) the kind and amount of shares, securities and other property (including cash) receivable upon such Transaction by each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). The Corporation shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this paragraph (e), and it shall not consent or agree to the occurrence of any Transaction until the Corporation has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the shares of Series D Preferred Stock that will contain provisions enabling the holders of the shares of Series D Preferred Stock that remain outstanding after such Transaction to convert into the consideration received by holders of shares of Common Stock at the Conversion Price in effect immediately prior to such Transaction. The provisions of this paragraph (e) shall similarly apply to successive Transactions. (f) If: (i) the Corporation shall declare a dividend (or any other distribution) on its Common Stock (other than cash dividends or distributions paid with respect to the shares of Common Stock after December 31, 1999 not in excess of the sum of the Corporation's cumulative undistributed Funds from Operations at December 31, 1999, plus the cumulative amount of Funds from Operations, as determined by the Board of Directors, after December 31, 1999, minus the cumulative amount of dividends accrued or paid in respect of the shares of Series D Preferred Stock or any other class or series of preferred stock of the Corporation after the Issue Date); or (ii) the Corporation shall authorize the granting to all holders of shares of Common Stock of rights, options or warrants to subscribe for or purchase any shares of any class or any other rights, options or warrants; or (iii) there shall be any reclassification of the shares of Common Stock (other than an event to which subparagraph (d)(i) of this Section 7 applies) or any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or a statutory share exchange, or a self tender offer by the Corporation for all or substantially all of its outstanding shares of Common Stock or the sale or transfer of all or substantially all of the assets of the Corporation as an entirety; or (iv) there shall occur the voluntary or involuntary liquidation, dissolution or winding up of the Corporation; then the Corporation shall cause to be filed with the Transfer Agent and shall cause to be mailed to the holders of shares of Series D Preferred Stock at their addresses as shown on the records of the Corporation a notice stating (A) the date on which a record is to be taken (the "RECORD DATE") for the purpose of such dividend, distribution or granting of rights, options or warrants, or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution or rights, options or warrants are to be determined or (B) the date on which such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up is expected to become effective (the "EFFECTIVE DATE"), and the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up. Such notice shall be given to the holders of shares of Series D Preferred Stock as promptly as possible, but in all cases at least 10 days prior to the Record Date for purposes of clause (A) above and the Effective Date for purposes of clause (B) above, as the case may be. Failure to give or receive such notice or any defect therein to any holder of Series D Preferred Stock shall not affect the legality or validity of the proceedings described in this Section 7, except as to the holder to whom notice was defective or not given. (g) Whenever the Conversion Price is adjusted as herein provided, the Corporation shall promptly file with the Transfer Agent an officer's certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after delivery of such certificate, the Corporation shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the effective date of such adjustment and shall mail such notice of such adjustment of the Conversion Price to the holder of each share of Series D Preferred Stock at such holder's last address as shown on the records of the Corporation. (h) In any case in which paragraph (d) of this Section 7 provides that an adjustment shall become effective on the day next following the record date for an event, the Corporation may defer until the occurrence of such event (A) issuing to the holder of any share of Series D Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder any amount of cash in lieu of any fraction pursuant to paragraph (c) of this Section 7. (i) There shall be no adjustment of the Conversion Price in case of the issuance of any shares of capital stock of the Corporation in a reorganization, acquisition or other similar transaction except as specifically set forth in this Section 7. If any action or transaction would require adjustment of the Conversion Price pursuant to more than one paragraph of this Section 7, only one adjustment shall be made and such adjustment shall be the amount of adjustment that has the highest absolute value. (j) If the Corporation shall take any action affecting the shares of Common Stock, other than actions described in this Section 7, that in the opinion of the Board of Directors would materially and adversely affect the conversion rights of the holders of the shares of Series D Preferred Stock, the Conversion Price for the shares of Series D Preferred Stock may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors, in its sole discretion, may determine to be equitable in the circumstances. (k) The Corporation covenants that it will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares of Common Stock, for the purpose of effecting conversion of the shares of Series D Preferred Stock, the full number of shares of Common Stock issuable upon the conversion of all outstanding shares of Series D Preferred Stock not theretofore converted. For purposes of this paragraph (k), the number of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of Series D Preferred Stock shall be computed as if at the time of computation all such outstanding shares were held by a single holder. The Corporation covenants that any shares of Common Stock issued upon conversion of the shares of Series D Preferred Stock shall be validly issued, fully paid and non-assessable. Before taking any action that would cause an adjustment reducing the Conversion Price below the then-par value of the shares of Common Stock issuable upon conversion of the shares of Series D Preferred Stock, the Corporation will take any action that, in the opinion of its counsel, may be necessary in order that the Corporation may validly and legally issue fully paid and non- assessable shares of Common Stock at such adjusted Conversion Price. The Corporation will cause to be listed the shares of Common Stock required to be delivered upon conversion of the shares of Series D Preferred Stock, prior to such delivery, upon each national securities exchange, if any, upon which the outstanding shares of Common Stock are listed at the time of such delivery. The Corporation shall endeavor to comply with all federal and state securities laws and regulations thereunder in connection with the issuance and delivery of any securities that the Corporation shall be obligated to deliver upon conversion of the shares of Series D Preferred Stock. The certificates evidencing such securities shall bear such legends restricting transfer thereof in the absence of registration under applicable securities laws or an exemption therefrom as the Corporation may in good faith deem appropriate. (l) The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock or other securities or property on conversion of the shares of Series D Preferred Stock pursuant hereto; PROVIDED, HOWEVER, that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issue or delivery of shares of Common Stock or other securities or property in a name other than that of the holder of the shares of Series D Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Corporation, or provided for such payment to the reasonable satisfaction of the Corporation, the amount of any such tax or established, to the reasonable satisfaction of the Corporation, that such tax has been paid. Section 8. SHARES TO BE RETIRED. All shares of Series D Preferred Stock which shall have been issued and reacquired in any manner by the Corporation shall be restored to the status of authorized but unissued shares of capital stock of the Corporation, without designation as to class or series. Section 9. RANKING. The Series D Preferred Stock shall, with respect to the payment of dividends and rights upon liquidation, dissolution or winding up of the Corporation, rank (a) senior to all classes or series of Common Stock of the Corporation, and to all equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank junior to such Series D Preferred Stock; (b) on a parity with the Corporation's Series B Convertible Cumulative Preferred Stock and Series C Convertible Cumulative Preferred Stock, and all other equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank on a parity with the Series D Preferred Stock (such equity securities are herein referred to as "Parity Stock"); and (c) junior to the Corporation's Series A Preferred Stock, and to all equity securities issued by the Corporation the terms of which specifically provide that such equity securities rank senior to the Series D Preferred Stock. The term "equity securities" shall not include convertible debt securities. Section 10. VOTING. If and whenever six or more quarterly dividends (whether or not consecutive) payable on the shares of Series D Preferred Stock or any series or class of Parity Stock shall be in arrears (which shall, with respect to any such quarterly dividend, mean that any such dividend has not been paid in full), whether or not declared, the Board of Directors shall take such action as may be necessary to increase the number of directors by two and the holders of Series D Preferred Stock, together with the holders of shares of every other series of Parity Stock (any such other series, the "VOTING PREFERRED STOCK"), voting as a single class regardless of series, shall be entitled to elect the two additional directors to serve on the Board of Directors at any annual meeting of stockholders or special meeting held in place thereof, or at a special meeting of the holders of the shares of Series D Preferred Stock and the Voting Preferred Stock called as hereinafter provided. Whenever all arrears in dividends on the shares of Series D Preferred Stock and the Voting Preferred Stock then outstanding shall have been paid and dividends thereon for the current quarterly dividend period shall have been paid or declared and a sum sufficient for the payment thereof set apart, then the right of the holders of the shares of Series D Preferred Stock and the Voting Preferred Stock to elect such additional two directors shall cease (but subject always to the same provision for the vesting of such voting rights in the case of any similar future arrearage in quarterly dividends), and the terms of office of all persons elected as directors by the holders of the shares of Series D Preferred Stock and the Voting Preferred Stock shall forthwith terminate and the number of the Board of Directors shall be reduced accordingly. At any time after such voting power shall have been so vested in the holders of shares of Series D Preferred Stock and the Voting Preferred Stock, the Secretary of the Corporation may, and upon the written request of any holder of shares of Series D Preferred Stock (addressed to the Secretary at the principal office of the Corporation) shall, call a special meeting of the holders of the shares of Series D Preferred Stock and of the Voting Preferred Stock for the election of the directors to be elected by them as herein provided, such call to be made by notice similar to that provided in the By- laws of the Corporation for a special meeting of the stockholders or as required by law. If any such special meeting required to be called as above provided shall not be called by the Secretary within 20 days after receipt of any such request, then any holder of shares of Series D Preferred Stock may call such meeting at the expense of the Corporation, upon the notice above provided, and for that purpose shall have access to the records of the Corporation. The directors elected at any such special meeting shall hold office until the next annual meeting of the stockholders or special meeting held in lieu thereof if such office shall not have previously terminated as above provided. If any vacancy shall occur among the directors elected by the holders of the shares of Series D Preferred Stock and the Voting Preferred Stock, a successor shall be elected by the Board of Directors, upon the nomination of the then-remaining director elected by the holders of the shares of Series D Preferred Stock and the Voting Preferred Stock or the successor of such remaining director, to serve until the next annual meeting of the stockholders or special meeting held in place thereof if such office shall not have previously terminated as provided above. So long as any shares of Series D Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Corporation's Amended and Restated Articles of Incorporation, as amended, the approval of at least 66-2/3% of the votes entitled to be cast by the holders of the shares of Series D Preferred Stock given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating: (a) Any amendment, alteration or repeal of any of the provisions of the Charter, the Corporation's By-Laws, as amended, or these Articles Supplementary that materially and adversely affects any of the voting powers, rights, preferences or privileges of the holders of the shares of Series D Preferred Stock; PROVIDED, HOWEVER, that the amendment of the Charter, so as to authorize or create or increase the authorized amount of any shares of Fully Junior Stock, any shares of Junior Stock that are not senior in any respect to the Series D Preferred Stock, or any shares of Parity Stock shall not be deemed to materially adversely affect the voting powers, rights, preferences or privileges of the holders of shares of Series D Preferred Stock; or (b) A share exchange that affects the shares of Series D Preferred Stock, a consolidation with or merger of the Corporation into another entity, or a consolidation with or merger of another entity into the Corporation, unless in each such case each share of Series D Preferred Stock (i) shall remain outstanding without a material and adverse change to its terms and rights or (ii) shall be converted into or exchanged for convertible preferred stock of the surviving entity having preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms or conditions of redemption thereof identical to that of a share of Series D Preferred Stock (except for changes that do not materially and adversely affect the holders of the shares of Series D Preferred Stock); or (c) The authorization, reclassification or creation of, or the increase in the authorized amount of, any shares of any class or series or any security convertible into shares of any class ranking prior to the shares of Series D Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up of the Corporation or in the payment of dividends; or (d) Any increase in the authorized amount of shares of Series D Preferred Stock or decrease in the authorized amount of shares of Series D Preferred Stock below the number of shares then issued and outstanding; PROVIDED, HOWEVER, that no such vote of the holders of shares of Series D Preferred Stock shall be required if, at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such prior shares or convertible security is to be made, as the case may be, provision is made for the redemption or repurchase of all shares of Series D Preferred Stock at the time outstanding to the extent such redemption or repurchase is authorized by Sections 5 or 6 of these Articles Supplementary; and PROVIDED, FURTHER, that except as otherwise required by law or provided in the Charter, the holders of Common Stock shall not be entitled to vote on any matter submitted to a vote of the holders of Series D Preferred Stock pursuant to Section 10 hereof. For purposes of the foregoing provisions of this Section 10, each share of Series D Preferred Stock shall have one (1) vote per share, except that when any other series of preferred stock shall have the right to vote with the shares of Series D Preferred Stock as a single class on any matter, then the shares of Series D Preferred Stock and such other series shall have with respect to such matters one (1) vote per $100.00 of stated Liquidation Preference. Except as otherwise required by applicable law or as set forth herein, the shares of Series D Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers other than as set forth herein, and the consent of the holders thereof shall not be required for the taking of any Corporation action. Section 11. RECORD HOLDERS. The Corporation and the Transfer Agent may deem and treat the record holder of any shares of Series D Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the Transfer Agent shall be affected by any notice to the contrary. Section 12. Ownership Limit. The acquisition and ownership of the shares of Series D Preferred Stock and the shares of Common Stock into which such shares may be converted (collectively, the "Shares") shall be exempt from the Ownership Limit (as defined in Section 7.2 of the Charter) and shall not be included when calculating whether a person has "Beneficial Ownership" of Stock (as defined in Section 7.1 of the Charter) in excess of the Ownership Limit, except, if the Beneficial Ownership of the Shares in excess of the Ownership Limit would cause the Company to be disqualified as a REIT (as defined in the Charter) under the REIT Provisions (as defined in the Charter), then the Shares in excess of the Ownership Limit shall convert to Excess Shares in accordance with Section 7.5 of the Charter. Except as provided above in this Section 12, all restrictions on ownership and transferability of Preferred Stock and Common Stock as set forth in the Charter shall apply to the Shares and to the holders thereof and the exemption set forth above in this Section 12 shall only be available to the initial holders who purchase their Series D Preferred Stock directly from the Company and shall not automatically attach to the Shares or be available automatically to any subsequent purchaser of the Shares. Notwithstanding anything contained in the Charter, including, without limitation, Section 7.7 thereof, the exemption provided for in this Section 12 shall be irrevocable and the Board of Directors shall not amend, modify, revoke or rescind the exemption with respect to any such initial holder without their prior written consent. IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed its name and on its behalf by its authorized officers who acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief, all matters and facts set forth herein relating to the authorization and approval of this document are true in all material respects and this statement is made under penalties of perjury. June 2, 2000 HOME PROPERTIES OF NEW YORK, INC. By: /s/ Nelson B. Leenhouts Name: Nelson B. Leenhouts Its: President I, Ann M. McCormick, Secretary, hereby acknowledge on behalf of Home Properties of New York, Inc. that the foregoing Articles Supplementary are the corporate act of said corporation under penalties of perjury. Attest: /s/ Ann M. McCormick Name Ann M. McCormick Secretary EX-10 3 0003.txt 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 Goodwin, Procter & Hoar 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 & Phelps 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: Louis J. Siegel, Andrew N. Siegel and Herbert J. Siegel; (2) Registration Rights Agreement, dated March 15, 2000, between the REIT and the following limited partners: Norman M. Feinberg, Ronald Altman, Ronald Altman (as Executor of the Estate of David Dolgenos), Gatesid-Bryn Bwar Company, L.P., King Road Associates, Cottonwood Associates, Sagar Points, Inc., Staf-Arms Corp. and the Helene Sterling Trust; and (3) Registration Rights Agreement, dated March 22, 2000, between the REIT and the following limited partners: Macomb Apartments Limited Partnership and Deerfield Woods 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 Goodwin, Procter & Hoar 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 Nixon Peabody 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/ Amy L. Tait Name: Amy L. Tait 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/ Amy L. Tait Name: Amy L. Tait Title: Executive Vice President NOTICE ADDRESS: Home Properties of New York, Inc. 850 Clinton Square Rochester, New York 14604 Attention: Amy L. Tait, Executive Vice President Telephone: (716) 246-4108 Facsimile: (716) 546-5433 with a copy to: Home Properties of New York, Inc. 850 Clinton Square Rochester, New York 14604 Attention: Ann M. McCormick, Esq. Telephone: (716) 246-4105 Facsimile: (716) 232-3147 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/ Peter D. Noris Name: Peter D. Noris Title:Executive Vice President and Chief Investment Officer Address: The Equitable Life Assurance Society of the United States 1290 Avenue of the Americas New York, NY 10104 Attn: Lydia M. Pitts Telephone: (212) 314-3902 Telecopier: (212) 707-7981 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) 1290 Avenue of the Americas New York, NY 10104 Attn: Lydia M. Pitts Telephone: (212) 314-3902 Telecopier: (212) 707-7981 and David W. Watson, P.C. Goodwin, Procter & Hoar LLP Exchange Place Boston, Massachusetts 02109 Telephone No.: 617-570-1888 Telecopier No.: 617-523-1231 EX-99 4 0004.txt Exhibit 99.1 HOME PROPERTIES ISSUES SERIES D CONVERTIBLE PREFERRED EQUITY FOR IMMEDIATE RELEASE: Tuesday, June 6, 2000 Rochester, New York/ PR Newswire/ -- Home Properties (NYSE:HME) has completed the sale of $25 million of Series D Cumulative Convertible Preferred Stock ("Series D Preferred Stock") through a private transaction with The Equitable Life Assurance Society of the United States ("Equitable"). The Series D Preferred Stock has been assigned a rating of 'BBB-' (Triple-B Minus) by Fitch, the international rating agency formed through the recent merger of Fitch IBCA and Duff & Phelps Credit Rating Co. Fitch has also recently assigned a corporate credit rating to Home Properties of `BBB' (Triple-B). The Series D Preferred Stock carries an annual dividend rate equal to the greater of 8.775% or the actual dividend paid on the number of the Company's common shares into which the Series D Preferred Stock is convertible. The Series D Preferred Stock has a conversion price of $30.00 per share and can be redeemed at the Company's option after five years. Proceeds will be used to fund potential acquisitions and property upgrades. Mercury Partners LLC acted as financial advisor to Home Properties in connection with the transaction. According to Amy L. Tait, Executive Vice President of Home Properties, "We are delighted to have Equitable as our partner and are excited about the potential to expand this alliance as our Company grows. Using convertible preferred stock allows us to raise equity on terms that more closely reflect the underlying net asset value of our portfolio, thereby enabling us to continue to make value-added acquisitions without diluting our shareholders." Equitable is an affiliate of AXA Financial, Inc., which has approximately $500 billion in assets under management and is one of the world's premier financial services organizations. Its family of strong, well-recognized brands includes: Equitable, AXA Advisors, Donaldson, Lufkin & Jenrette (DLJ), DLJDIRECT, Pershing, iNautix, and Alliance Capital Management. AXA Financial is a member of the global AXA Group, which has operations in over 60 countries and has more than $700 billion in assets under management. Ken Rosen of Lend Lease Rosen Real Estate Securities LLC, which currently has approximately $1.2 billion under management, provided investment advice in connection with the transaction. Lend Lease Capital Markets, an affiliate of Lend Lease Real Estate Investments, negotiated the transaction on behalf of Equitable. Lend Lease Real Estate Investments is one of the largest real estate investment managers in the world and a leading U.S. real estate advisor to pension funds. The company has $35 billion in real estate and commercial mortgages under management for more than 500 institutional and private clients in the US. In addition, the group services some $50 billion of commercial real estate loans. Home Properties, the 11th largest apartment company in the United States, is a fully integrated, self-administered, and self-managed real estate investment trust ("REIT"). With operations in select Northeast, Midwest, and Mid-Atlantic markets, the Company owns, operates, acquires, rehabilitates, and develops apartment communities. Currently, Home Properties operates 297 communities containing 47,155 apartment units. Of these, 36,331 units in 135 communities are owned directly by the Company, 7,690 units are partially owned and managed by the Company as general partner, and 3,134 units are managed for other owners. The Company also manages 1.7 million square feet of commercial space. Home Properties' common stock is traded on the New York Stock Exchange under the symbol "HME" and on the Berlin Stock Exchange under the symbol "HMP GR." For more information, please visit Home Properties' new Web site at WWW.HOMEPROPERTIES.COM. ***** FOR FURTHER INFORMATION: Amy L. Tait, Executive Vice President, 716-246-4108 David Gardner, Chief Financial Officer, 716-246-4113 Home Properties of New York, Inc. -----END PRIVACY-ENHANCED MESSAGE-----