EXHIBIT 4.1
AGENCY FEE AND WARRANT AGREEMENT
MAY 22, 2000
HOME PROPERTIES OF NEW YORK, INC.
850 Clinton Square
Rochester, New York 14604
Attention: MS. AMY L. TAIT
EXECUTIVE VICE PRESIDENT
Dear Amy,
This will confirm the understanding and agreement (the "Agreement")
between Prudential Investment Management Services LLC ("PIMS") and HOME
PROPERTIES OF NEW YORK, INC.(the "Company") as follows:
1. SCOPE OF ENGAGEMENT
The Company hereby acknowledges the services of PIMS in facilitating the
negotiation and placement (the "Transaction") of $40 million of the Company's
Series C Convertible Preferred Stock (collectively, the "Securities") to The
Prudential Insurance Company of America and Teachers Insurance and Annuity
Association of America ("TIAA"), (the foregoing qualified institutional
investors identified as "Purchasers" in the Purchase Agreement dated as of May
22, 2000 (the "Purchase Agreement")).
Option.
The Company hereby grants to PIMS or its designee acceptable to the
Company the option to purchase up to 200,000 Shares (the "Additional Shares")
on the same terms and conditions as described in the Purchase Agreement and in
the Series C Articles Supplementary, provided however, that in addition to the
Purchase Price any purchaser of the Additional Shares shall also pay to the
Company any dividends that have accrued on the Shares to and including the date
of purchase of the Additional Shares. This option shall expire if notice of
exercise is not received by the Company by at 5:00 p.m. on the fifteenth
(15{th}) business day following the Closing of the sale of Securities pursuant
to the Purchase Agreement.
2. COMPANY'S RESPONSIBILITIES, REPRESENTATIONS AND WARRANTIES
In connection with PIMS' engagement, the Company has furnished to PIMS all
information concerning the Company that PIMS has reasonably requested and
provided PIMS with access to the Company's officers, directors, accountants,
counsel and other advisors. The Company represents and warrants to PIMS that
(a) all such information is and was true and accurate in all material respects
and does not and did not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading; and
(b) any projected financial information or other forward-looking information
which the Company has provided to PIMS has been made by the Company in good
faith, based on management's best estimates then available and based on facts
and assumptions which the Company believes to be reasonable.
3. COMPENSATION TO PIMS
As compensation for the services rendered by PIMS in connection with the
Transaction, the Company shall pay PIMS, at the closing of the Transaction:
a) A cash agency fee of $400,000.
a) The Company shall issue to PIMS, or any affiliate thereof designated by
PIMS,warrants to purchase 142,220 shares of the common stock of the
Company The terms of the warrants shall be set forth in the warrant
itself.
In the event that the Company issues Additional Shares by reason of the
exercise of the Option referred to in Section 1 hereof, the Company shall pay
PIMS, at the closing of the sale of such Additional Shares:
a) A cash agency fee of one percent of the Purchase Price of such
Additional Shares, excluding any accrued dividends paid in connection
with the purchase, as contemplated in Section 1; and
a) the Company shall issue to PIMS, or any affiliate thereof designated by
PIMS, warrants to purchase such number of shares of the common stock of
the Company as equals the product of (X) 80,000 times (Y) the quotient
of (1) the number of Additional Shares issued by reason of the exercise
of the Option, divided by (2) 200,000. The terms of the warrants shall
be as set forth in the warrant itself, but shall be on the same terms
of the warrants issued in connection with the closing of the
Transaction.
4. COMMITMENT FEE TO TIAA
In consideration of TIAA's agreement and as an inducement to
purchase the Securities pursuant to the Purchase Agreement, the Company hereby
agrees to issue to TIAA warrants to purchase 17,780 shares of the common stock
of the Company. The terms of the warrants shall be set forth in the warrant
itself.
5. DISCLOSURE TO THIRD PARTIES
Without the prior written consent of PIMS, the Company will not publicly
refer to PIMS or publicly disclose or otherwise make available to third parties
other than to Investors (except the Company's counsel or other advisers,
provided the Company informs them of this provision), any advice, either oral
or written, which PIMS provides to the Company in connection with this
transaction.
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This Agreement may not be amended or modified except in a writing signed by the
party against whom enforcement is sought and shall be governed by and construed
in accordance with the laws of the State of New York, without regard to its
principles of conflicts of laws.
Very truly yours,
PRUDENTIAL INVESTMENT
MANAGEMENT SERVICES LLC
By: /S/ Robert Falzon
-----------------------
Name: Robert Falzon
Title: President
Accepted and agreed as of the
date first above written:
HOME PROPERTIES OF NEW YORK, INC.
By: /s/ Amy L. Tait
Name: Amy L. Tait
Title: Executive Vice President
