Exhibit 99(b)(1)
CREDIT AGREEMENT
(ACQUISITION / REVOLVING LINE OF CREDIT)
DATED AS OF November 16, 1999
AMONG
N'TANDEM TRUST,
an unincorporated California Business Trust
AS BORROWER,
CP LIMITED PARTNERSHIP,
a Maryland limited partnership
AS CP LIMITED,
AND
U.S. BANK NATIONAL ASSOCIATION
AS BANK
CREDIT AGREEMENT
(Acquisition / Revolving Line Of Credit)
This Credit Agreement, dated as of November 16, 1999, is among N'TANDEM
TRUST, an unincorporated California Business Trust (the "Borrower"), CP LIMITED
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PARTNERSHIP, a Maryland limited partnership (the "CP Limited"), and U.S. BANK
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NATIONAL ASSOCIATION (the "Bank").
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RECITALS
A. The Borrower is primarily engaged in the business of directly and
indirectly through its Subsidiaries, acquiring, owning, managing, developing,
renovating and expanding manufactured home communities. The Borrower intends
from time to time to acquire manufactured housing communities.
B. The Borrower's single largest shareholder is CP Limited.
C. CP Limited is the operating partnership of Chateau Parent and an
Affiliate of Borrower.
D. The Borrower has applied to the Bank for the extension of credit to
fund such acquisitions and provide for working capital line of credit.
E. The Bank is willing to extend credit for such acquisitions and a
working capital line of credit pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which a natural person or
an Entity or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"Advance" means a disbursement under the Loan.
"Advance Request" means the written request for Advances made by Borrower
and more particularly described in Section 4.3 below, in the form attached as
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Exhibit A.
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"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.
"Agreement Execution Date" means the date this Agreement has been fully
executed and delivered by all parties hereto.
"Approved Ground Leases" means (i) the ground lease at the Xxxxxx Xxxxx Xxx
Xxxxxx Xxxx Xxxx, Xxxxxxx, (ii) the ground lease at the Dud's/Cedar Grove Mobile
Home Park, Connecticut, (iii) the ground lease at the Evergreen Mobile Home
Park, Florida, (iv) the ground lease at the India Rocks Mobile Home Park,
Florida, (v) the ground lease at the Xxxxx Xxxx Xxxxxxx Xxxxxx Xxxx Xxxx,
Xxxxxxx, (vi) the ground lease at the Camp Inn RV Park, Florida, (vii) the
ground lease at the Crystal Lake Mobile Home Park, Florida, (viii) the ground
lease at the Xxxxxx Xxxx Mobile Home Park, Florida (ix) the Winter Paradise RV
Park, Florida, (x) three ground leases covering 209 acres of land at the Colony
Cove project in Ellenton, Florida, (xi) the ground lease covering 40.3 acres of
land at the Colony Project in Rancho Mirage, California and (xii) those ground
leases which affect Projects subsequently acquired by CP Limited or its
Subsidiaries and which (A) are Financeable Ground Leases and (B) do not cause
the aggregate Net Operating Income of all Projects then included in Unencumbered
Assets which are subject to a ground lease to exceed (a) prior to November 1,
1999, twenty percent (20%) of the aggregate Net Operating Income of all
Unencumbered Assets and (b) from and after November 1, 1999, fifteen percent
(15%) of the aggregate Net Operating Income of all Unencumbered Assets.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" of an Entity means any of the President, the Chief
Executive Officer, any Executive Vice President, the Chief Operating Officer,
the Chief Financial Officer or any Vice President, acting singly of that Person.
"Borrower" means N'Tandem Trust, an unincorporated California business
trust, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Business Day" means every day except a Saturday, Sunday or public holiday
on which the Bank is required or permitted to be closed.
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"CSI" means Community Sales, Inc., an Unconsolidated Subsidiary of Chateau
Parent which buys manufactured homes and sells and finances the sales of such
manufactured homes to lessees at Borrower's and CP Limited's manufactured home
communities. Chateau Parent owns all of the preferred stock and 5% of the
common stock of CSI.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person, if
such Person is or were an Entity.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP, if
such Person is or were an Entity.
"Cash Equivalents" means, as of any date:
(i) securities issued or directly and fully guaranteed or insured
by the United States Government or any agency or instrumentality thereof
having maturities of not more than one year from such date;
(ii) mutual funds organized under the United States Investment
Company Act rated AAm or Aam-G by S&P, P-1 by Xxxxx'x and A by Fitch;
(iii) certificates of deposit or other interest-bearing obligations
of a bank or trust company which is a member in good standing of the
Federal Reserve System having a short term unsecured debt rating of not
less than A-1 by S&P, not less than P-1 by Xxxxx'x and F-1 by Fitch (or in
each case, if no bank or trust company is so rated, the highest comparable
rating then given to any bank or trust company, but in such case only for
funds invested overnight or over a weekend) provided that such investments
shall mature or be redeemable upon the option of the holders thereof on or
prior to a date one month from the date of their purchase;
(iv) certificates of deposit or other interest-bearing obligations
of a bank or trust company which is a member in good standing of the
Federal Reserve System having a short term unsecured debt rating of not
less than A-1+ by S&P, and not less than P-1 by Xxxxx'x and which has a
long term unsecured debt rating of not less than A1 by Xxxxx'x (or in each
case, if no bank or trust company is so rated, the highest comparable
rating then given to any bank or trust company, but in such case only for
funds invested overnight or over a weekend) provided that such investments
shall mature or be redeemable upon the option of the holders thereof on or
prior to a date three months from the date of their purchase;
(v) bonds or other obligations having a short term unsecured debt
rating of not less than A-1+ by S&P and P-1+ by Xxxxx'x and having a long
term debt rating of not
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less than A1 by Xxxxx'x issued by or by authority of any state of the
United States, any territory or possession of the United States, including
the Commonwealth of Puerto Rico and agencies thereof, or any political
subdivision of any of the foregoing;
(vi) repurchase agreements issued by an entity rated not less than
A-1+ by S&P, and not less than P-1 by Xxxxx'x which are secured by U.S.
Government securities of the type described in clause (i) of this
definition maturing on or prior to a date one month from the date the
repurchase agreement is entered into;
(vii) short term promissory notes rated not less than A-1+ by S&P,
and not less than P-1 by Xxxxx'x maturing or to be redeemable upon the
option of the holders thereof on or prior to a date one month from the date
of their purchase; and
(viii) commercial paper (having original maturities of not more than
365 days) rated at least A-1+ by S&P and P-1 by Xxxxx'x and issued by a
foreign or domestic issuer who, at the time of the investment, has
outstanding long-term unsecured debt obligations rated at least Al by
Xxxxx'x.
"Change in Control" means, with respect to CP Limited, that CP Limited's
management and directors shall cease to beneficially own in the aggregate a
minimum of 2,000,000 shares of the common stock of Chateau Parent (or the
equivalent in operating partnership units in CP Limited), and with respect to
Borrower, it shall mean that Chateau Parent shall own less than the majority
interest of the Borrower.
"Chateau Parent" means Chateau Communities, Inc., a Maryland corporation.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment Amount" means Twenty Million Dollars ($20,000,000.00).
"Consolidated Debt Service" means, for any period, (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of all dividend
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payments on preferred stock issued by either of the General Partners, CP Limited
or any of its Consolidated Subsidiaries required to be made during such period
plus (c) the aggregate amount of scheduled principal payments of indebtedness
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(excluding optional prepayments and scheduled principal payments due on maturity
of any Indebtedness) required to be made during such period by either of the
General Partners, CP Limited or any of its Consolidated Subsidiaries plus (d) a
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replacement reserve for such period calculated at the rate of $50.00 per annum
per homesite for all homesites owned or leased by CP Limited or any of its
Consolidated Subsidiaries as of the end of such period plus (e) without
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duplication of the foregoing, the Consolidated Group Pro Rata Share of the
Unconsolidated Debt Service. In calculating Consolidated Debt Service for any
period, the Consolidated Debt Service attributable to any Indebtedness first
incurred or preferred stock first issued by either of the General Partners, CP
Limited or its Consolidated Subsidiaries during such period shall be increased
for purposes of this definition to reflect the full amount of interest,
dividends and scheduled principal payments that would have been payable if such
Indebtedness or preferred stock, as the case may be, had been outstanding for
the full period (except to the extent such
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Indebtedness or preferred stock refinances or replaces previously existing
Indebtedness or preferred stock, respectively).
"Consolidated Group Pro Rata Share" means, with respect to any
Unconsolidated Subsidiary, the percentage of the total equity ownership
interests held by CP Limited and its Consolidated Subsidiaries in the aggregate,
in such Unconsolidated Subsidiary, determined by calculating the greater of (i)
the percentage of the issued and outstanding stock, partnership interests or
membership interests in such Unconsolidated Subsidiary held by CP Limited and
its Consolidated Subsidiaries in the aggregate and (ii) the percentage of the
total book value of such Subsidiary that would be received by CP Limited and its
Consolidated Subsidiaries in the aggregate, upon liquidation of such
Unconsolidated Subsidiary after repayment in full of all Indebtedness of such
Unconsolidated Subsidiary.
"Consolidated Interest Expense" means, for any period, the amount of
interest expense of the General Partner, CP Limited and its Consolidated
Subsidiaries for such period on the aggregate principal amount of their
Indebtedness, determined on a consolidated basis in accordance with GAAP. In
calculating Consolidated Interest Expense for any period, the interest expense
on any Indebtedness first incurred during such period shall be increased for
purposes of this definition to reflect the full amount of interest that would
have been payable had such Indebtedness been outstanding for the full period
(except to the extent such Indebtedness refinances previously existing
Indebtedness).
"Consolidated Market Value" means, as of any date, an amount equal to the
sum of (i) EBITDA (excluding any portion of EBITDA attributable to Development
Projects) for the most recent fiscal quarter for which CP Limited has reported
results under Section 6.1, multiplied by 4 and divided by (I) with respect to
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that portion of EBITDA attributable to CSI, 0.15, and (II) with respect to all
other EBITDA, 0.095 plus (ii) with respect to Development Projects, the greater
of (A) EBITDA attributable to such Development Projects for such most recent
fiscal quarter multiplied by 4 and divided by 0.095 and (B) an imputed value
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equal to 75% of the portion of CP Limited's investment in such entity (whether
as an equity contribution, a loan or Indebtedness of such entity which is
guaranteed by CP Limited), provided that (1) the imputed value in clause (B)
shall not be used at any time after the first quarter in which the EBITDA-based
amount in clause (A) has exceeded the amount in clause (B), (2) such imputed
value under clause (B) shall not exceed five percent (5%) of Consolidated Market
Value and (3) Bank shall be provided from time to time with quarterly reports on
the status and asset value of the land development program for all Development
Projects plus (iii) 75% of the Consolidated Group Pro Rata Share of the book
value (determined in accordance with GAAP) of CSI's inventory of manufactured
homes.
"Consolidated Net Income" means, for any period, consolidated net income
(or loss) of CP Limited and its Consolidated Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
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shall be excluded (a) the income (or deficit) of any other Person accrued prior
to the date it becomes a Subsidiary of CP Limited or is merged into or
consolidated with CP Limited or any of its Subsidiaries and (b) the
undistributed earnings of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary.
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"Consolidated Net Worth" means, as of any date of determination, an amount
equal to (a) Consolidated Market Value minus (b) Consolidated Outstanding
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Indebtedness as of such date.
"Consolidated Outstanding Indebtedness" means, as of any date of
determination, without duplication, the sum of (i) all Indebtedness of the
General Partners, CP Limited and its Consolidated Subsidiaries outstanding at
such date, determined on a consolidated basis in accordance with GAAP, (ii) the
Consolidated Group Pro Rata Share of the indebtedness for borrowed money of
Unconsolidated Subsidiaries outstanding at such date and (iii) 100% of all
Indebtedness of CSI other than CSI's indebtedness for borrowed money, to the
extent in excess of three percent (3%) of Consolidated Market Value.
"Consolidated Secured Indebtedness" means, as of any date of determination,
the sum of (a) the aggregate principal amount of all Indebtedness of CP Limited
and its Consolidated Subsidiaries outstanding at such date secured by any Lien
on the Property of CP Limited (including without limitation its interests in the
Consolidated Subsidiaries) or of its Consolidated Subsidiaries, without regard
to recourse, plus (b) the Consolidated Group Pro Rata Share of Indebtedness of
the Unconsolidated Subsidiaries outstanding at such date secured by any Lien on
the Property of the Unconsolidated Subsidiaries.
"Consolidated Senior Unsecured Indebtedness" means, as of any date of
determination, the aggregate principal amount of all Senior Unsecured
Indebtedness of the General Partners, Borrower, CP Limited and its Consolidated
Subsidiaries outstanding at such date, including without limitation all the
outstanding Indebtedness under this Agreement as of such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means (i) any Subsidiary of CP Limited which is
consolidated for financial reporting purposes with CP Limited pursuant to GAAP
and (ii) any 99% Partnership, whether or not consolidated for financial
reporting purposes with CP Limited pursuant to GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, or CP Limited and any of its Subsidiaries,
are treated as a single employer under Section 414(b) or (c) of the Code.
"CP Limited" means CP Limited Partnership, a Maryland limited partnership.
"Default" means an event of Default described in ARTICLE VII.
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"Development Project" means any land and related site improvements under
development for use as a manufactured home community which is owned by either
the Borrower or CP Limited or by a joint venture, limited liability company or
other entity with respect to which either Borrower or CP Limited (i) has
invested through a loan to such entity or an equity contribution to such entity
or by guaranteeing the Indebtedness of such entity all or substantially all of
the development costs and (ii) has the right to acquire 100% of the equity
interests of such
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entity under a purchase price established by formula in an agreement with such
entity or with the other owners of such entity.
"EBITDA" means earnings before interest, taxes (other than real estate
taxes), depreciation and amortization, as reported by the Borrower and CP
Limited and its Subsidiaries on a consolidated basis, plus a percentage of
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EBITDA of any Unconsolidated Subsidiary equal to the Consolidated Group Pro Rata
Share in such Unconsolidated Subsidiary held by Borrower or CP Limited or any
Consolidated Subsidiary, plus all EBITDA of any Unconsolidated Subsidiary all of
the Indebtedness of which is guaranteed by the Borrower or CP Limited or a
Consolidated Subsidiary and included in Consolidated Outstanding Indebtedness
(provided that no item of income or expense shall be included more than once in
such calculation even if it falls within more than one of the foregoing
categories), all as calculated in accordance with GAAP. The annualized EBITDA
for any Entity or Property will be calculated by determining actual EBITDA for
the most recently ended fiscal quarter and annualizing the same (provided that
in calculating EBITDA for any quarter, EBITDA attributable to any Projects first
acquired or opened by Borrower or CP Limited during such quarter shall be
increased for purposes of this definition to reflect the full amount of EBITDA
that would have been generated by such Project if it had been owned or opened
for the full quarter.)
"Entity" means any Person other than a natural person.
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to the Borrower or CP Limited or any Subsidiary or any
of their respective assets or Projects.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Financeable Ground Lease" means a ground lease satisfactory to the Bank's
counsel in their reasonable discretion, which must provide protections for a
potential leasehold mortgagee ("Mortgagee") which include, among other things
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(i) a remaining term of no less than 25 years from the Agreement Execution Date,
(ii) that the lease will not be terminated until the Mortgagee has received
notice of a default and has had a reasonable opportunity to cure or complete
foreclosure, and fails to do so, (iii) a new lease on the same terms to the
Mortgagee as tenant if the ground lease is terminated for any reason, (iv) non-
merger of the fee and leasehold estates, (v) free transferability of the
tenant's interest under the ground lease and (vi) that insurance proceeds and
condemnation awards (from the fee interest as well as the leasehold interest)
will be applied pursuant to the terms of a leasehold mortgage.
"Financial Undertaking" of a Person means (i) any transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person, or (ii)
any agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates,
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exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to, interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options.
"Fitch" means Fitch Investor Services, Inc. and its successors.
"Funds From Operations" means, for any period, Consolidated Net Income for
such period, excluding gains (losses) from debt restructuring and sales of
property, plus depreciation and amortization, after adjustments for
unconsolidated joint venture and partnerships.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 6.1.
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"General Partners" means ROC and Chateau Parent.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantor" means CP Limited, who has or will execute and deliver the
Guaranty Agreement to the Bank in connection with this Agreement.
"Guaranty Agreement" means the continuing guarantee agreement executed and
delivered by CP Limited to the Bank, as the same may be amended, restated,
modified or supplemented from time to time.
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"),
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any obligation (determined without duplication) of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under any Letter
of Credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter-indemnity, express guaranty of payment, or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
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of any other third Person (the "primary obligor") in any manner, whether
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directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the
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absence of any such stated amount or stated liability, the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Bank in good
faith.
"Indebtedness" of any Person at any date means without duplication, (a) all
indebtedness of such Person for borrowed money including without limitation any
repurchase obligation or liability of such Person with respect to securities,
accounts or notes receivable sold by such Person, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all Capitalized Lease Obligations, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (f) all
Guarantee Obligations of such Person (excluding in any calculation of
consolidated Indebtedness of CP Limited, Guarantee Obligations of CP Limited in
respect of primary obligations of any Consolidated Subsidiary), (g) all
reimbursement obligations of such Person for letters of credit and other
contingent liabilities, and (h) all liabilities secured by any lien (other than
liens for taxes not yet due and payable) on any property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof. Notwithstanding the foregoing, but without limitation on its
scope, the Guarantee Obligations of CP Limited under the Guaranty Agreement
shall be included as Indebtedness of CP Limited.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, notes, debentures or other securities of any other Person made by
such Person.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means the revolving loan commitment in the maximum principal amount
of $20,000,000.00 made available to the Borrower by the Bank under the terms of
this Agreement and the Loan Documents.
"Loan Documents" means this Agreement, the Note, the Guaranty Agreement and
any other document from time to time evidencing or securing indebtedness
incurred by the Borrower under this Agreement, as any of the foregoing may be
amended or modified from time to time.
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"Market Value" means, as of any date for any Subsidiary, an amount equal to
EBITDA for such Subsidiary for the most recent fiscal quarter for which such
Subsidiary has reported results, multiplied by 4 and divided by 0.095.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property or condition (financial or otherwise) of the Borrower, or CP
Limited and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
and CP Limited to perform their obligations under the Loan Documents, or (iii)
the validity or enforceability of any of the Loan Documents.
"Material Subsidiary" means each Subsidiary that owns a Substantial Portion
of the aggregate Property of CP Limited and its Subsidiaries, as a whole.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea formaldehyde insulation.
"Maturity Date" means (i) a date twenty-four (24) months after the date of
this Agreement or (ii) the date on which the Loan is accelerated as a
consequence of any Default.
"Maximum Legal Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or in the Note, or other Loan Documents, under the laws of such state
or states whose laws are held by any court of competent jurisdiction to govern
the interest rate provision of the Loan.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or CP
Limited or any member of the Controlled Group is a party to which more than one
employer is obligated to make contributions and which otherwise is a
"Multiemployer Plan" as defined in Section 3(37) of ERISA.
"Net Operating Income" means, with respect to any Project for any period,
"property rental and other income" (as determined by GAAP) attributable to such
Project accruing for such period minus the amount of all expenses (as determined
in accordance with GAAP) incurred in connection with and directly attributable
to the ownership and operation of such Project for such period, including,
without limitation, Management Fees and amounts accrued for the payment of real
estate taxes and insurance premiums, but excluding interest expense or other
debt service charges and any non-cash charges such as depreciation or
amortization of financing costs. As used herein "Management Fees" means, with
respect to each Project for any period, an amount equal to two and one-half
percent (2.5%) of the aggregate rent due and payable for such period under
leases with tenants at such Project. In calculating Net Operating Income
attributable to any Project first acquired or opened by Borrower or CP Limited
or its Subsidiaries during a quarter, "property rental and other income" and
expenses shall be adjusted for purposes of this definition to reflect the full
amount of "property rental and other income" and expenses that would have been
attributable to such Project if it had been owned or opened for the full
quarter.
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"99% Partnership" means any limited partnership in which CP Limited holds
at least 99% of the partnership interests as a limited partner and Chateau
Parent, directly or indirectly, is the sole general partner and holds not more
than 1% of the partnership interests.
"Note" means the Revolving Promissory Note of even date herewith in the
stated amount of $20,000,000.00 made by Borrower to the order of the Bank, as
the same may be modified, amended, extended, replaced or restated.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Note, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower to the Bank, or any
indemnified party hereunder arising under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisitions" are defined in Section 6.14.
------------
"Permitted Liens" are defined in Section 6.15.
------------
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower, CP Limited or any member of the Controlled Group
may have any liability.
"Project" means any real estate asset owned by Borrower or CP Limited or
any of its Subsidiaries and operated as a manufactured home community.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043(c)
(but not (c) (a) or (ii)) of ERISA and the regulations issued under such
section, with respect to a Plan, excluding, however, such events as to which the
PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event,
-11-
provided, however, that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"ROC" means ROC Communities, Inc., a Maryland corporation.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Senior Unsecured Indebtedness" means all Indebtedness other than
Subordinated Indebtedness of any Person that is not secured by a Lien on any
asset of such Person.
"Single Employer Plan" means a Plan maintained by the Borrower or CP
Limited or any member of the Controlled Group for employees of the Borrower or
CP Limited or any member of the Controlled Group.
"Subordinated Indebtedness" means Indebtedness which is contractually
subordinated to the Obligations on terms reasonably acceptable to the Bank.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so directly or indirectly owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of the CP Limited.
"Substantial Portion" means, with respect to the Property of CP Limited and
its Subsidiaries, Property which (i) as of the date of determination represents
more than 10% of the consolidated assets of CP Limited and its Subsidiaries as
would be shown in the consolidated financial statements of CP Limited and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made, or (ii) is responsible for more than
10% of the Consolidated Net Income of CP Limited and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Unconsolidated Debt Service" means, for any period, without duplication,
(a) Unconsolidated Interest Expense for such period plus (b) the aggregate
----
amount of all dividend payments on preferred stock issued by any Unconsolidated
Subsidiary required to be made during such period plus (c) the aggregate amount
----
of scheduled principal payments of Indebtedness (excluding optional prepayments
and scheduled principal payments due on maturity of any Indebtedness) required
to be made during such period by any Unconsolidated Subsidiary plus (d) a
----
replacement reserve for such period calculated at the rate of $50.00 per annum
per homesite for all homesites owned by any Unconsolidated Subsidiary as of the
end of such period. In calculating Unconsolidated Debt Service for any period,
the Unconsolidated
-12-
Debt Service attributable to any Indebtedness first incurred or preferred stock
first issued by any Unconsolidated Subsidiary during such period shall be
increased for purposes of this definition to reflect the full amount of
interest, dividends and scheduled principal payments that would have been
payable if such Indebtedness or preferred stock, as the case may be, had been
outstanding for the full period (except to the extent such Indebtedness
refinances previously existing Indebtedness).
"Unconsolidated Interest Expense" means, for any period, without
duplication, the amount of interest expense of the Unconsolidated Subsidiaries
for such period on the aggregate principal amount of their Indebtedness,
determined in accordance with GAAP. In calculating Unconsolidated Interest
Expense for any period, the interest expense on any Indebtedness first incurred
during such period shall be increased for purposes of this definition to reflect
the full amount of interest that would have been payable had such Indebtedness
been outstanding for the full period (except to the extent such Indebtedness
refinances previously existing Indebtedness).
"Unconsolidated Subsidiary" means any Subsidiary of CP Limited which is not
consolidated for financial reporting purposes with Borrower pursuant to GAAP.
"Unencumbered Asset" means any Project owned by CP Limited, a Wholly-Owned
Subsidiary or Borrower which Project, at any date of determination, (a) is not
subject to any Liens or claims, including restrictions on transferability or
assignability of any kind (including any such Lien, claim or restriction imposed
by the organizational documents of any Subsidiary, provided that an Unencumbered
Asset may be subject to (i) Approved Ground Leases, (ii) Permitted Liens other
than those identified in Sections 6.15(v) and (vi), and (iii) any restriction on
-------------------------
sale imposed in connection with the acquisition of a Project in exchange for an
interest in CP Limited) (b) is not subject to any agreement (including (i) any
agreement governing Indebtedness incurred in order to finance or refinance the
acquisition of such Project, and (ii) if applicable, the organizational
documents of any Subsidiary) which prohibits or limits the ability of CP Limited
or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any assets or Capital Stock of CP Limited or any of its Subsidiaries,
including, without limitation, any negative pledge or similar covenant or
restriction, (c) is not subject to any agreement (including any agreement
governing Indebtedness incurred in order to finance or refinance acquisition of
such asset) which entitles any Person to the benefit of any Lien (other than
Permitted Liens) on any assets or Capital Stock of CP Limited or any of its
Subsidiaries, or would entitle any Person to the benefit of any Lien (other than
Permitted Liens) or such assets or Capital Stock upon the occurrence of any
contingency (including, without limitation, pursuant to an "equal and ratable"
clause), (d) has been improved with a manufactured home community and has all
approvals necessary for occupancy of the improved portion of such Project and
(e) if owned by a Wholly-Owned Subsidiary or a 99% Partnership, is owned by an
entity which has no Indebtedness for borrowed money, whether secured or
unsecured. For the purposes of this Agreement, any Project of a Subsidiary
shall not be deemed to be unencumbered unless both (i) such Project and (ii) all
Capital Stock of such Subsidiary held by CP Limited is unencumbered. In the
event that any credit or other agreement of the Borrower requires maintenance of
unencumbered assets, an asset hereunder shall not be deemed to be unencumbered
unless there are sufficient unencumbered assets of CP Limited to satisfy both
the covenants with respect to Unencumbered Assets contained herein and the
requirements of any such other agreement.
-13-
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrestricted Cash and Cash Equivalents" means, as of any date of
determination, the sum of (a) the aggregate amount of Unrestricted cash then
held by CP Limited or any of its Consolidated Subsidiaries and (b) the aggregate
amount of Unrestricted Cash Equivalents (valued at the lower of cost and fair
market value) then held by CP Limited or any of its Consolidated Subsidiaries.
As used in this definition, "Unrestricted" means the specified asset is not
subject to any Liens in favor of any Person.
"Unsecured Indebtedness" means all Indebtedness of any Person that is not
secured by a Lien on any asset of such Person.
"Value of Unencumbered Assets" means, as of any date, an amount equal to
the sum of (i) Net Operating Income attributable to Unencumbered Assets for the
most recent full fiscal quarter for which CP Limited has reported results under
Section 6.1 (excluding any portion of Net Operating Income attributable to
-----------
Unencumbered Assets acquired by CP Limited or its Wholly-Owned Subsidiaries or
the 99% Partnerships during or after such period) multiplied by 4, and divided
------------- -------
by 0.095, plus (ii) with respect to those Unencumbered Assets so acquired by CP
-- ----
Limited or its Wholly-Owned Subsidiaries or the 99% Partnerships during such
period of one full fiscal quarter, CP Limited's estimated annual Net Operating
Income for such Unencumbered Assets based on leases in existence at the date of
such acquisition divided by 0.095.
----------
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDIT
----------
2.1 Establishment of Credit Facility. Upon the terms and subject to the
--------------------------------
conditions hereafter set forth, the Bank agrees to make Advances available to
the Borrower to finance the acquisition of manufactured housing communities and
to provide for a working capital line of credit. The total amount which the
Bank may from time to time commit to lend to the Borrower hereunder shall at no
time exceed the Commitment Amount.
-14-
2.2 Revolving Credit. This Loan shall be a revolving credit, against
----------------
which Advances may be made to Borrower, repaid by Borrower and additional
Advances made to Borrower, subject to the limitations contained in this
Agreement.
2.3 The Loan.
--------
(i) The Note. The Borrower's obligation to pay the principal of
--------
and interest on the Loan shall be evidenced by Borrower's Note which shall (a)
be duly executed and delivered by Borrower, (b) be dated as of the date hereof,
(c) be in the stated principal amount of the Loan, (d) mature on the Maturity
Date, (e) bear interest as provided in the Note, and (f) be entitled to the
benefits of this Agreement and the Loan Documents.
(ii) Term. The Loan shall have a term which commences as of the
----
date hereof and expires on the Maturity Date.
(iii) Interest and Payment. Advances outstanding under the Note
--------------------
shall bear interest at the Adjusted LIBOR Rate, as set forth in the Note, from
the date of disbursement until the Maturity Date or the occurrence of any
Default, in which event all Obligations shall bear interest at the Default Rate
as defined in the Note. If not sooner paid, all outstanding obligations owing
under the Loan Documents shall be paid in full on the Maturity Date.
(iv) Minimum Amount of Each Advance. Each Advance shall be in the
------------------------------
minimum amount of $250,000 (and in multiples of $50,000 if in excess thereof).
(v) Evidence of Obligations Under Loan. Amounts outstanding under
----------------------------------
the Loan and the Borrower's Obligations to the Bank in connection with the Loan
shall be evidenced by the Note, the Loan Documents, and this Agreement.
(vi) Default Rate; Late Charges. Upon the occurrence of a Default
--------------------------
under the Loan, the Bank shall have the right to collect interest on the
outstanding indebtedness under the Loan at the Default Rate, as set forth in the
Note; provided that any interest at the Default Rate which has accrued shall be
paid at the time of and as a condition precedent to the curing of any Default
under the Loan. In the event any payment of principal, interest, or other sum
due in connection with the Loan is not made within ten (10) days after the due
date, the Bank may, at its option, require the payment of a late charge in the
amount of four percent (4%) of the delinquent sum ("Late Charge").
(vii) Guaranty Agreement. The Obligations will be guaranteed by the
------------------
Guaranty Agreement executed and delivered by Guarantor in form and substance
satisfactory to the Bank, jointly and severally guaranteeing the prompt and full
payment of the Obligations when due or declared to be due and at all time
thereafter.
(viii) Prepayment of Principal. Borrower shall have the right to
-----------------------
prepay the Loan, in whole or in part, at any time and from time to time.
(ix) Payments Due on Days Other than Business Days. Whenever any
---------------------------------------------
payment to be made under this Agreement or under the Note shall be stated to be
due on a day
-15-
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day, and interest shall be payable at the applicable rate
during such extension.
2.4 Method of Payment. All payments of the Obligations hereunder shall be
-----------------
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Bank at the Bank's address specified pursuant to ARTICLE XII, by noon
-----------
(Denver, Colorado time) on the date when due and shall be applied as expressly
provided herein.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1 Yield Protection. If (a) any change in any law, governmental or quasi-
----------------
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) in effect on the Agreement Execution Date, or a change
in any interpretation thereof, or the compliance by the Bank therewith, or (b)
the enactment following the Agreement Execution Date of any new law,
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance by the Bank therewith, results in:
(i) the Bank being subjected to any tax, duty, charge or
withholding on or from payments due from the Borrower (excluding federal
taxation of the overall net income of the Bank), or the basis of taxation of
payments to the Bank in respect of its Loan or other amounts due it hereunder
being changed, or
(ii) any reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, the Bank being imposed, increased or deemed applicable, or
(iii) any other condition being imposed, the result of which is to
increase the cost to the Bank of making, funding or maintaining loans or reduce
any amount receivable by the Bank in connection with loans, or the Bank being
required to make any payment calculated by reference to the amount of loans held
or interest received by it, by an amount deemed material by the Bank, then,
within 30 days of demand by the Bank, the Borrower shall pay the Bank that
portion of such increased expense incurred or reduction in an amount received
which the Bank in good faith determines is attributable to making, funding and
maintaining its Loan and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If the Bank in good faith
---------------------------------------
determines the amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank is increased as a result of a
Change (as hereinafter defined), then, within 30 days of demand by the Bank, the
Borrower shall pay the Bank the amount necessary to compensate for any shortfall
in the rate of return on the portion of such increased capital which the Bank in
good faith determines is attributable to this Agreement, its Loan or its
obligation to make the Loan hereunder (after taking into account the Bank's
policies as to capital adequacy). "Change" means (i) any change after the date
------
of this Agreement in the Risk-Based Capital Guidelines (as hereinafter defined)
or (ii) any adoption of or change in any other law, governmental or quasi-
governmental rule, regulation, policy, guideline, interpretation, or
-16-
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank. "Risk-Based
----------
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
------------------
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1 Initial Advance. The Bank shall not be required to make the initial
---------------
Advance hereunder unless (a) the Borrower shall, prior to or concurrently with
such initial Advance, have paid all fees due and payable to the Bank, and (b)
the Borrower shall have furnished to the Bank the following:
(i) The duly executed originals of the Loan Documents, including
the Note, payable to the order of the Bank and this Agreement;
(ii) (A) Certificates of good standing for the Borrower, the
General Partners, CP Limited and each Material Subsidiary, from the states in
which they are organized and have their principal place of business and chief
executive offices, certified by the appropriate governmental officer and dated
not more than thirty (30) days prior to the Agreement Execution Date, and (B)
foreign qualification certificates for the Borrower, CP Limited and each of its
Material Subsidiary, certified by the appropriate governmental officer and dated
not more than sixty (60) days prior to the Agreement Execution Date for each
other jurisdiction where the failure of such entity to so qualify or be licensed
(if required) would have a Material Adverse Effect;
(iii) Copies of the formation documents (including code of
regulations, if appropriate) of the Borrower, the General Partners and CP
Limited, certified by an officer of the applicable General Partner, Borrower and
CP Limited, together with all amendments thereto;
(iv) Incumbency certificates, executed by officers of the
applicable Borrower, General Partners and CP Limited, which shall identify by
name and title and bear the signature of the Persons authorized to sign the Loan
Documents and to make borrowings hereunder on behalf of the Borrower, upon which
certificate the Bank shall be entitled to rely until informed of any change in
writing by the Borrower;
(v) Copies, certified by an officer or trustee of the Borrower, of
the Board of Trustees' resolutions (and resolutions of other bodies, if any are
reasonably deemed necessary by counsel for the Bank) of the Borrower authorizing
the Advances provided for herein, with respect to the Borrower, and the
execution, delivery and performance of the Loan Documents to be executed and
delivered by the Borrower hereunder;
-17-
(vi) Copies, certified by the Secretary or an Assistant Secretary
of Chateau Parent, of the Board of Directors' resolutions (and resolutions of
other bodies, if any are reasonably deemed necessary by counsel for the Bank) of
Chateau Parent authorizing the execution by Chateau Parent, as general partner
of CP Limited, authorizing the execution by CP Limited as guarantor of this
Agreement and the Guaranty Agreement;
(vii) Copies, certified by the Secretary or an Assistant Secretary
of ROC, of the Board of Directors' resolutions (and resolutions of other bodies,
if any are reasonably deemed necessary by counsel for the Bank) of ROC
authorizing the execution by ROC as general partner of CP Limited, authorizing
the execution by CP Limited as guarantor of this Agreement and the Guaranty
Agreement;
(viii) A written opinion of the Borrower's and CP Limited's counsel,
addressed to the Bank in substantially the form of Exhibit B hereto or such
---------
other form as the Bank may reasonably approve;
(ix) A certificate, signed by an officer of CP Limited, stating
that on the initial Borrowing Date no Default or Unmatured Default has occurred
and is continuing and that all representations and warranties of the Borrower
are true and correct as of the initial Borrowing Date provided that such
certificate is in fact true and correct;
(x) The most recent financial statements of the Borrower, CP
Limited and Chateau Parent;
(xi) UCC financing statement, judgment, and tax lien searches with
respect to the Borrower and CP Limited from the states in which the Borrower and
CP Limited are organized and have their principal place of business and chief
executive offices;
(xii) Written money transfer instructions, in substantially the form
of Exhibit C hereto, addressed to the Bank and signed by an Authorized Officer
---------
of Borrower, together with such other related money transfer authorizations as
the Bank may have reasonably requested; and
(xiii) Such other documents as the Bank or its counsel may have
reasonably requested, the form and substance of which documents shall be
reasonably acceptable to the parties and their respective counsel.
4.2 Subsequent Advances. The Bank shall not be required to make any
-------------------
subsequent Advance unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in ARTICLE V are
true and correct in all material respects as of such Borrowing Date with respect
to Borrower and CP Limited and to any Subsidiary in existence on such Borrowing
Date, except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date; and
-18-
(iii) There shall have been no change in the business, Property or
condition (financial or otherwise) of the Borrower and CP Limited and its
Subsidiaries from the preparation date of the most recent consolidated financial
statements which could reasonably be expected to have a Material Adverse Effect.
4.3 Advances. Provided that no Default has occurred under this Agreement,
--------
Advances will be made by the Bank within five (5) Business Days after receipt by
the Bank of a disbursement request in the form of Exhibit A, executed by an
---------
Authorized Officer of Borrower and certifying to the matters contained therein
("Advance Request").
ARTICLE V
REPRESENTATIONS AND WARRANTEES
------------------------------
The Borrower and CP Limited represent and warrant to the Bank that:
5.1 Existence. Borrower is an unincorporated California business trust
---------
duly organized and validly existing as an unincorporated business trust under
the laws of the State of California, with its principal place of business in
Greenwood Village, Colorado and is duly qualified as a foreign business trust,
properly licensed (if required), in good standing and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be so qualified, licensed and in good
standing and to have the requisite authority would not have a Material Adverse
Effect. As of the Agreement Execution Date, Chateau Parent is the single largest
shareholder of the Borrower and controls 100% of the stock in the "Advisor" to
Borrower, The Windsor Corporation.
5.2 Existence of Chateau Parent. Chateau Parent is a corporation duly
---------------------------
organized and validly existing as a corporation under the laws of the State of
Maryland and is qualified as a real estate investment trust under Section 856
through 860 of the Code, with its principal place of business in Greenwood
Village, Colorado and is duly qualified as a foreign corporation, properly
licensed (if required), in good standing and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to be so qualified, licensed and in good standing and
to have the requisite authority would not have a Material Adverse Effect. Each
of Chateau Parent's Subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where failure to be so qualified, licensed and in
good standing and to have the requisite authority would not have a Material
Adverse Effect. As of the Agreement Execution Date, the only assets of Chateau
Parent (other than cash held for distribution to its shareholders) are its
interest in Borrower, its interest in CP Limited, its interest in ROC, and its
interest in various partnerships in which it owns, directly or indirectly, not
more than 1% of the partnership interests and in which CP Limited owns, directly
or indirectly, all of the remaining partnership interests.
5.3 Existence of CP Limited. CP Limited is a limited partnership duly
-----------------------
organized and validly existing as a limited partnership under the laws of the
State of Maryland, with its principal place of business in Greenwood Village,
Colorado and is duly qualified as a foreign limited partnership, properly
licensed (if required), in good standing and has all requisite
-19-
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to be so qualified, licensed and in good
standing and to have the requisite authority would not have a Material Adverse
Effect. Each of CP Limited's Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where failure to be so qualified, licensed and
in good standing and to have the requisite authority would not have a Material
Adverse Effect. As of the Agreement Execution Date, (a) the only general
partners of CP Limited are ROC and Chateau Parent, and (b) CP Limited is the
sole limited partner of each of the 99% Partnership.
5.4 Existence of ROC. ROC is a corporation duly organized and validly
----------------
existing as a corporation under the laws of the State of Maryland, with its
principal place of business in Englewood, Colorado and is duly qualified as a
foreign corporation, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to be so qualified, licensed
and in good standing and to have the requisite authority would not have a
Material Adverse Effect. Each of ROC's Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted. As of the Agreement Execution Date, the only
assets of ROC (other than cash held for distribution to its shareholders) are
its interest in CP Limited and 100% of the common stock in CCC, Inc., which is
the sole general partner of, and the holder of a 1% partnership interest in, CCF
Financing Partnership.
5.5 Authorization and Validity. The Borrower and CP Limited, where
--------------------------
applicable, each have the power and authority and legal right to execute and
deliver the Loan Documents and to perform its obligations thereunder. The
execution and delivery by the Borrower and CP Limited of the Loan Documents and
the performance of their obligations thereunder have been duly authorized by
proper proceedings, and the Loan Documents constitute legal, valid and binding
obligations of the Borrower and CP Limited enforceable against the Borrower and
CP Limited in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.6 No Conflict, Government Consent. Neither the execution and delivery by
-------------------------------
the Borrower or CP Limited of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or the General Partners or CP Limited,
any of its Subsidiaries or the partnership agreement, indenture, articles of
incorporation or by-laws or other organizational documents, as the case may be,
of such entities, or the provisions of any indenture, instrument or agreement to
which the Borrower, the General Partners or CP Limited or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, except where such
violation, conflict or default would not have a Material Adverse Effect, or
result in the creation or imposition of any Lien in, of or on the Property of
the Borrower or the General Partners or CP Limited or a Subsidiary pursuant to
the terms of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required in connection with the
execution, delivery and performance of
-20-
any of the Loan Documents other than the filing of a copy of this Agreement, or
the filing of information concerning this Agreement, with the Securities and
Exchange Commission, the New York Stock Exchange and certain state securities
administrators. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exception by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or for the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
5.7 Financial Statements, Material Adverse Change. All consolidated
---------------------------------------------
financial statements of the Borrower, CP Limited and its Subsidiaries heretofore
delivered to the Bank were prepared in accordance with GAAP in effect on the
preparation date of such statements and fairly present in all material respects
the consolidated financial condition and operations of the Borrower, CP Limited
and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended, subject, in the case of interim financial
statements, to normal and customary year-end adjustments. From the preparation
date of the most recent financial statements delivered to the Bank through the
Agreement Execution Date, there was no change in the business, Property, or
condition (financial or otherwise) of the Borrower or CP Limited and its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
5.8 Taxes. The Borrower and CP Limited and its Subsidiaries have filed
-----
all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or CP Limited or any of its
Subsidiaries except such taxes, if any, as are being contested in good faith and
as to which adequate reserves have been provided. No tax liens have been filed
and remain outstanding. The charges, accruals and reserves on the books of the
Borrower, CP Limited and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.9 Litigation and Guarantee Obligations. Except as set forth on
------------------------------------
Schedule 2 hereto or as set forth in written notice to the Bank from time to
----------
time, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower, or CP Limited or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect. The Borrower and CP Limited have no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section 6.1
-----------
or as set forth in written notices to the Bank given from time to time after the
Agreement Execution Date on or about the date such material contingent
obligations are incurred.
5.10 ERISA. The Unfunded Liabilities of all Single Employer Plans as of
-----
the Agreement Execution Date do not in the aggregate exceed $1,000,000 or,
subsequent to the Agreement Execution Date, exceed in the aggregate an amount
which could have a Material Adverse Effect. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate as of the Agreement Execution Date, or subsequent to the Agreement
Execution Date, exceed in the aggregate an amount which could have a Material
Adverse Effect. Each Plan (other than a Multiemployer Plan) complies in all
material respects with all applicable requirements of law and regulations (other
than those the failure with which
-21-
to comply would not result in a Material Adverse Effect), no Reportable Event
has occurred with respect to any Plan (other than a Multiemployer Plan), neither
the Borrower nor any other members of the Controlled Group has withdrawn from
any Multiemployer Plan or initiated steps to do so, and no steps have been taken
to reorganize or terminate any Multiemployer Plan which could reasonably be
expected to have a Material Adverse Effect.
5.11 Accuracy of Information. All factual information heretofore or
-----------------------
contemporaneously furnished by or on behalf of the Borrower and CP Limited or
any of its Subsidiaries to the Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of the Borrower, CP Limited or
any of its Subsidiaries to the Bank will be, to the knowledge of Borrower and CP
Limited true and accurate (taken as a whole) in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading in light of the circumstances and purposes for which
such information was provided at such time.
5.12 Regulation U. The Borrower has not used the proceeds of any Advance
------------
to buy or carry any margin stock (as defined in Regulation U) in violation of
the terms of this Agreement.
5.13 Material Agreements. Neither the Borrower, nor CP Limited and any
-------------------
Subsidiary is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could reasonably be expected to have a
Material Adverse Effect. The Borrower, CP Limited and any Subsidiary are not in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default could have a Material Adverse Effect, or (ii) any agreement or
instrument evidencing or governing Indebtedness, which default would constitute
a Default hereunder.
5.14 Compliance With Laws. The Borrower and CP Limited and its
--------------------
Subsidiaries have complied with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof, having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property, except for
any non-compliance which would not have a Material Adverse Effect. Neither the
Borrower, nor CP Limited and any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could have a Material Adverse Effect.
5.15 Ownership of Properties. Except as set forth on Schedule 1 hereto,
----------------------- ----------
on the date of this Agreement, the Borrower, CP Limited and its Subsidiaries
will have good and marketable (or the equivalent) title, free of all Liens other
than those permitted by Section 6.15, to all of the Property and assets
------------
reflected in the financial statements as owned by it.
5.16 Investment Company Act. The Borrower, CP Limited and any Subsidiary
----------------------
are not an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
-22-
5.17 Public Utility Holding Company Act. The Borrower, CP Limited and
----------------------------------
any Subsidiary are not a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.18 Solvency. (i) Immediately after the Agreement Execution Date and
--------
immediately following the making of the Loan and after giving effect to the
application of the proceeds of the Loan, (a) the fair value of the assets of the
Borrower, CP Limited and its Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the Borrower, CP Limited and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the Property of the Borrower, and
CP Limited and its Subsidiaries on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of the Borrower, CP
Limited and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and CP Limited and its
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower, CP Limited and
its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) Neither the Borrower nor CP Limited intend to permit any of
their Subsidiaries to, and do not believe that they or any of their Subsidiaries
will, incur debts beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.19 Insurance. The Borrower, CP Limited and its Subsidiaries carry
---------
insurance on their Projects with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar Projects in localities where the Borrower, CP Limited and its
Subsidiaries operate, including, without limitation:
(i) Property and casualty insurance in the amount of the
replacement cost of the improvements at the Project (other than improvements
owned by a tenant thereof), including flood and other water damage insurance as
deemed appropriate by the Borrower and/or CP Limited depending on the location
and flood zone;
(ii) Insurance that covers builder's risk exposures on projects
under construction;
(iii) Loss of rental income insurance for up to six months
following a covered property loss; and
(iv) Liability insurance in an amount of at least $6,000,000 per
occurrence.
5.20 REIT Status. Chateau Parent's common stock is listed on the New York
-----------
Stock Exchange and Chateau Parent is in compliance with all requirements for
continued listing of
-23-
such stock, and Chateau Parent is qualified as a real estate investment trust
under Sections 856 through 860 of the Code and currently is in compliance in all
material respects with all provisions of the Code applicable to the
qualification of Chateau Parent as a real estate investment trust under such
Code sections.
5.21 Environmental Matters. Each of the following representations and
---------------------
warranties is true and correct on and as of the Agreement Execution Date except
as disclosed on Schedule 3 attached hereto and to the extent that the facts and
----------
circumstances giving rise to any such failure to be so true and correct, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and where applicable, CP
Limited, except as set forth on Schedule 3, the Projects of the Borrower, CP
Limited and its Subsidiaries do not contain any Materials of Environmental
Concern in amounts or concentrations which constitute a violation of, or could
reasonably be expected to give rise to liability of the Borrower or CP Limited
or any Subsidiary under, Environmental Laws.
(b) To the best knowledge of the Borrower, CP Limited, and except as
set forth on Schedule 3, (i) the Projects of the Borrower, CP Limited and its
Subsidiaries and all operations at the Projects are in material compliance with
all applicable Environmental Laws, and (ii) with respect to all Projects owned
by the Borrower, CP Limited and/or its Subsidiaries (x) for at least two (2)
years, have in the last two years, or (y) for less than two (2) years, have for
such period of ownership, been in compliance in all material respects with all
applicable Environmental Laws.
(c) The Borrower, CP Limited and any of its Subsidiaries have not
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Projects which remains outstanding,
nor does the Borrower or CP Limited have knowledge or reason to believe that any
such notice will be received or is being threatened in writing.
(d) To the best knowledge of the Borrower and CP Limited, Materials
of Environmental Concern have not been transported or disposed of from the
Projects of the Borrower, CP Limited and its Subsidiaries in violation of, or in
a manner or to a location which could reasonably be expected to give rise to
liability of the Borrower or CP Limited or any Subsidiary under, Environmental
Laws, nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Projects of the Borrower, CP
Limited and its Subsidiaries in violation of, or in a manner that could
reasonably be expected to give rise to liability of the Borrower, CP Limited or
any Subsidiary under, any applicable Environmental Laws.
(e) No judicial proceeding or governmental or administrative action
is pending, or, to the knowledge of the Borrower or CP Limited, threatened,
under any Environmental Law to which the Borrower or CP Limited or any of its
Subsidiaries is a party or, to the Borrower's and CP Limited's knowledge, will
be named as a party with respect to the Projects of the Borrower, CP Limited and
its Subsidiaries, nor are there any consent decrees or other decrees, consent
orders, administrative order or other orders, or other administrative or
judicial
-24-
requirements outstanding under any Environmental Law with respect to the
Projects of the Borrower, CP Limited and its Subsidiaries.
(f) To the best knowledge of the Borrower and CP Limited, there has
been no release or threat of release of Materials of Environmental Concern at or
from the Projects of the Borrower, CP Limited and its Subsidiaries, or arising
from or related to the operations of the Borrower, CP Limited and its
Subsidiaries in connection with the Projects in violation of or in amounts or in
a manner that could reasonably be expected to give rise to liability under
Environmental Laws.
(g) The Borrower and CP Limited represent that the matters disclosed
on Schedule 3 could not reasonably be expected to have a Material Adverse
----------
Effect.
5.22 Compliance With Other Agreements. Issuance of the Guaranty Agreement
--------------------------------
does not violate the terms of any other loan or agreement to which CP Limited is
a party.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Bank shall otherwise consent
in writing:
6.1 Financial Reporting. Each of the Borrower and CP Limited will
-------------------
maintain, for itself and each Subsidiary, a system of accounting established and
administered in accordance with GAAP, and furnish to the Bank the following
(provided that the following balance sheets and statements may be furnished in
the form of balance sheets and statements of Chateau Parent, with accompanying
adjustments and calculations adequate to separately determine the financial
condition of the Borrower, CP Limited and its Subsidiaries):
(i) As soon as available, but in any event not later than 60 days
after the close of each of the first three fiscal quarters, for the Borrower, CP
Limited and its Consolidated Subsidiaries, an unaudited consolidated balance
sheet as of the close of each such period and the related unaudited consolidated
statements of income of the Borrower, CP Limited and its Consolidated
Subsidiaries for such period and the portion of the fiscal year through the end
of such period, setting forth in each case in comparative form the figures for
the previous year, all certified by the Borrower's and CP Limited's chief
financial officer or chief accounting officer;
(ii) As soon as available, but in any event not later than 60 days
after the close of each fiscal quarter, for the Borrower, CP Limited and its
Consolidated Subsidiaries, the following reports in form and substance
reasonably satisfactory to the Bank, all certified by the entity's chief
financial officer or chief accounting officer: a statement of Funds From
Operations, a statement detailing Consolidated Outstanding Indebtedness,
Consolidated Secured Indebtedness, Consolidated Senior Unsecured Indebtedness,
Unconsolidated Debt Service and EBITDA (with a breakdown between Unencumbered
Assets and other assets), a report listing and describing all newly acquired
Projects, including their net operating income, cash flow, cost and secured or
unsecured Indebtedness assumed in connection with such acquisition, if any,
summary information and such other information on all Projects as may be
reasonably requested,
-25-
including, without limitation, if requested by the Bank, operating statements in
form reasonably satisfactory to Bank;
(iii) As soon as available, but in any event not later than 120
days after the close of each fiscal year, for the Borrower, CP Limited and its
Subsidiaries, audited financial statements, including a consolidated balance
sheet as at the end of such year and the related consolidated statements of
income and retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, without a
"going concern" or like qualification or exception, or qualification arising out
of the scope of the audit, prepared by Pricewaterhouse Coopers LLP (or other
independent certified public accountants of nationally recognized standing
reasonably acceptable to Bank);
(iv) As soon as available, but in any event not later than 120
days after the close of each fiscal year, for the Borrower, CP Limited and its
Subsidiaries, a statement detailing the contributions to EBITDA from each
individual Project for the prior fiscal year in form and substance reasonably
satisfactory to the Bank, certified by the entity's chief financial officer or
chief accounting officer;
(v) Upon the request of the Bank, a statement of cash flows for
each individual Project and, to the extent not included in the Securities and
Exchange Commission filings, a listing of capital expenditures;
(vi) Together with the quarterly and annual financial statements
required hereunder, a compliance certificate in substantially the form of
Exhibit D hereto signed by Chateau Parent's and CP Limited's chief financial
---------
officer or chief accounting officer showing the calculations and computations
necessary to determine compliance with this Agreement and stating that, to such
officer's knowledge, no Default or Unmatured Default exists, or if, to such
officer's knowledge, any Default or Unmatured Default exists, stating the nature
and status thereof;
(vii) As soon as possible and in any event within 15 days after a
responsible officer of Borrower or, where applicable, CP Limited, knows that any
Reportable Event has occurred with respect to any Plan, a statement, signed by
the chief financial officer of the Borrower or CP Limited describing said
Reportable Event and the action which the Borrower or CP Limited propose to take
with respect thereto;
(viii) As soon as possible and in any event within 15 days after
receipt by a responsible officer of the Borrower or CP Limited, a copy of (a)
any notice or claim to the effect that the Borrower or CP Limited or any of its
Subsidiaries is or may be liable to any Person as a result of the release by the
Borrower, CP Limited or any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or CP Limited or any of its
Subsidiaries, which, in either case, could have a Material Adverse Effect;
(ix) Promptly upon the furnishing thereof to the shareholders of
Chateau Parent, copies of all financial statements, reports and proxy statements
so furnished;
-26-
(x) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other reports and any other public
information which the Borrower, CP Limited, the General Partners or any of their
respective Subsidiaries file with the Securities and Exchange Commission; and
(xi) Such other information (including, without limitation,
financial statements for the Borrower, CP Limited and nonfinancial information)
as the Bank may from time to time reasonably request.
6.2 Use of Proceeds. The Borrower will use the proceeds of the Advances
---------------
for the general corporate purposes of the Borrower, including working capital
needs, interim financing for property acquisitions, capital improvements,
expansions and financing and construction of manufactured home communities. The
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Advances (i) to purchase or carry any "margin stock" (as defined in
Regulation U) if such usage could constitute a violation of Regulation U by the
Bank, (ii) to fund any purchase of, or offer for, any Capital Stock of any
Person, unless such Person (or its board of directors, general partner or
equivalent in other entities) has consented to such offer prior to any public
announcements relating thereto, or (iii) to make any Acquisition other than a
Permitted Acquisition.
6.3 Notice of Default. The Borrower and CP Limited will give, and will
-----------------
cause each of its Subsidiaries to give, prompt notice in writing to the Bank of
the occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect.
6.4 Conduct of Business. The Borrower, the General Partners and CP
-------------------
Limited will do, and will cause each of its Subsidiaries to do, all things
necessary to remain duly incorporated or duly qualified, validly existing and in
good standing as a real estate investment trust, corporation, general
partnership or limited partnership, as the case may be, in its jurisdiction of
incorporation/formation and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted and to carry on
and conduct their businesses in substantially the same manner as they are
presently conducted where the failure to do so could reasonably be expected to
have a Material Adverse Effect and, specifically, the Borrower, CP Limited and
its Subsidiaries may not undertake any business other than the acquisition,
development, ownership, management, operation, leasing, improvement, renovation
and expansion of manufactured home communities and ancillary businesses
specifically related to such types of properties.
6.5 Taxes. The Borrower and CP Limited will pay, and will cause each of
-----
its Subsidiaries to pay, when due all taxes, assessments and governmental
charges and levies upon them of their income, profits or Projects, except those
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside.
6.6 Insurance. The Borrower and CP Limited will, and will cause each of
---------
its Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all their Property in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar projects in
-27-
localities where the Borrower, CP Limited and its Subsidiaries operate,
including without limitation the coverages described in Section 5.19, and the
------------
Borrower will furnish to the Bank upon reasonable request full information as to
the insurance carried.
6.7 Compliance with Laws. The Borrower and CP Limited will, and will
--------------------
cause each of its Subsidiaries to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which they may be
subject, the violation of which could reasonably be expected to have a Material
Adverse Effect.
6.8 Maintenance of Properties. The Borrower and CP Limited will, and
-------------------------
will cause each of its Subsidiaries to, do all things necessary to maintain,
preserve, protect and keep their respective Projects and all Properties
reasonably necessary for the continuous operation of the Projects, in good
repair, working order and condition, ordinary wear and tear excepted.
6.9 Inspection. The Borrower and CP Limited will, and will cause each of
----------
their Subsidiaries to, permit the Bank upon reasonable notice, by its respective
representatives and agents, to inspect any of the Projects, corporate books and
financial records of the Borrower, CP Limited and each of its Subsidiaries, to
examine and make copies of the books of accounts and other financial records of
the Borrower, CP Limited and each of its Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower, CP Limited and each of its
Subsidiaries with officers thereof, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Bank may
designate.
6.10 Maintenance of Status. The Borrower and CP Limited shall at all
---------------------
times cause (i) the common stock of Chateau Parent to be listed on the New York
Stock Exchange, and (ii) Chateau Parent to remain qualified as a real estate
investment trust under the Code.
6.11 Dividends. Provided there is no then-existing Default or (after
---------
notice thereof to Borrower and CP Limited) Unmatured Default hereunder, the
Borrower and CP Limited shall be permitted to make distributions to its
partners, and Chateau Parent shall be permitted to declare and pay dividends on
its Capital Stock from time to time in amounts determined by Borrower, CP
Limited or Chateau Parent, as the case may be, provided, however, that in no
-----------------
event shall Borrower or CP Limited make any such distributions, or suffer or
permit Chateau Parent to declare or pay dividends on its Capital Stock, if such
distributions or dividends paid on account of any calendar year, in the
aggregate, would exceed 95% of Funds From Operations for such calendar year.
Notwithstanding the foregoing, provided that there exists no Default or
Unmatured Default hereunder, the Borrower and CP Limited shall be permitted to
make distributions to their partners and stockholders, including without
limitation Chateau Parent, and Chateau Parent shall be permitted at all times to
distribute to its shareholders whatever amount of dividends or distributions is
necessary to maintain Chateau Parent's tax status as a real estate investment
trust.
6.12 Merger, Sale of Assets. Neither the Borrower nor CP Limited will,
----------------------
nor will any of them permit any of their General Partners or Subsidiaries to,
enter into any merger, consolidation, reorganization or liquidation or transfer
or otherwise dispose of all or a Substantial Portion of their Properties, except
for (i) such transactions that occur between Wholly-Owned Subsidiaries or
between Borrower, or CP Limited and a Wholly-Owned Subsidiary, (ii) a merger
-28-
of Chateau Parent, ROC or CP Limited or a Subsidiary (the "Chateau Acquiring
Entity") and another entity engaged in substantially the same business as
Chateau Parent, Borrower or CP Limited as the case may be, provided that (A)
Chateau Acquiring Entity is the surviving entity, (B) the entity with which such
Chateau Acquiring Entity merges (and all consolidated subsidiaries thereof taken
as a whole) has less than 50% of the consolidated then current market value of
Chateau Parent, the Borrower, CP Limited and the Consolidated Subsidiaries taken
as a whole and (C) the surviving entity will continue to be managed by
substantially the same management team as is then managing Chateau Parent, or
(iii) as otherwise approved in advance by the Bank.
6.13 Sale and Leaseback. Neither the Borrower nor CP Limited will, nor
------------------
will it permit any of its Subsidiaries to, sell or transfer a Substantial
Portion of its Property in order to concurrently or subsequently lease such
Property as lessee.
6.14 Acquisitions and Investments. Neither the Borrower nor CP Limited
----------------------------
will, nor will any of them permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or become or remain a
partner in any partnership or joint venture, or to make any Acquisition of any
Person, except:
(i) Cash Equivalents;
(ii) Investments in Projects, and Investments in direct or
indirect wholly owned Subsidiaries engaged substantially in the business of
owning, operating, leasing and managing Projects;
(iii) Subject to the last sentence of this Section 6.14,
-----------
Investments in land (other than land which is part of a completed Project) which
do not exceed, in the aggregate, ten percent (10%) of Consolidated Market Value;
(iv) Subject to the last sentence of this Section 6.14,
------------
Investments in commercial real estate (other than Projects or land which is
included under clause (iii) above) which do not exceed, in the aggregate, ten
percent (10%) of Consolidated Market Value;
(v) Subject to the last sentence of this Section 6.14,
------------
Investments in joint ventures, partnerships and Subsidiaries which are not
either 99% Partnerships or Wholly Owned Subsidiaries which do not exceed, in the
aggregate, ten percent (10%) of Consolidated Market Value;
(vi) Subject to the last sentence of this Section 6.14,
------------
Investments in stocks and securities (other than Cash Equivalents) which do not
exceed, in the aggregate, ten percent (10%) of Consolidated Market Value; and
(vii) Subject to the last sentence of this Section 6.14,
------------
Investments in mortgage loans or other types of indebtedness secured by real
property which do not exceed, in the aggregate, ten percent (10%) of
Consolidated Market Value;
-29-
provided that, after giving effect to such Acquisitions and Investments,
Borrower and CP Limited continue to comply with all its covenants herein.
Acquisitions permitted pursuant to this Section 6.14 shall be deemed to be
------------
"Permitted Acquisitions". Notwithstanding the foregoing, the Investments of
-----------------------
Borrower or of CP Limited and its Subsidiaries described in clauses (iii), (iv),
(v), (vi) and (vii) above shall not, in the aggregate, exceed fifteen percent
(15%) of Consolidated Market Value. All Investments shall be valued in
accordance with GAAP.
6.15 Liens. Neither the Borrower nor CP Limited will, nor will it permit
-----
any of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or
on the Property of the Borrower or CP Limited or any of its Subsidiaries,
except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith and
by appropriate proceedings and for which adequate reserves shall have been set
aside on its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation;
(iv) Easements, restrictions and such other encumbrances or
charges against real property as are of a nature generally existing with respect
to properties of a similar character and which do not in any material adverse
way affect the marketability of the same or interfere with the use thereof in
the business of the Borrower or CP Limited or its Subsidiaries;
(v) Liens on Projects existing on the date hereof which secure
Indebtedness as described in Schedule 1 hereto;
----------
(vi) Liens other than Liens described in subsections (i) through
(iv) above arising in connection with any Indebtedness permitted hereunder to
the extent such Indebtedness will not result in a Default in any of Borrower's
or CP Limited's covenants herein;
(vii) Leases of space in Projects to tenants in the ordinary course
of business; and
(viii) All ground leases, whether or not Approved Ground Leases.
Liens permitted pursuant to this Section 6.15 shall be deemed to be "Permitted
------------ ---------
Liens".
-----
6.16 Affiliates. The Borrower and CP Limited will not, nor will they
----------
permit any of their Subsidiaries to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's or
-30-
CP Limited's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower or CP Limited or such Subsidiary than the
Borrower or CP Limited or such Subsidiary would obtain in a comparable arms-
length transaction.
6.17 Financial Undertakings. Neither the Borrower nor CP Limited will
----------------------
enter into or remain liable upon, nor will it permit any Subsidiary to enter
into or remain liable upon, any Financial Undertaking, except to the extent
required to protect the Borrower, Chateau Parent, CP Limited and its
Subsidiaries against increases in interest payable by them under variable
interest Indebtedness.
6.18 Variable Interest Indebtedness. Neither the Borrower nor CP Limited
------------------------------
and its Subsidiaries shall at any time permit the outstanding principal balance
of Indebtedness hereunder which bears interest at an interest rate that is not
fixed through the maturity date of such Indebtedness to exceed $125,000,000,
unless all of such Indebtedness in excess $125,000,000 is subject to a swap,
rate cap or other interest rate management program reasonably approved by the
Bank that effectively converts the interest rate on such excess to a fixed rate.
6.19 Consolidated Net Worth. CP Limited shall maintain a Consolidated Net
----------------------
Worth, calculated as of the last day of each fiscal quarter, of not less than
the sum of $500,000,000 plus (ii) seventy-five percent (75%) of the aggregate
proceeds received by the CP Limited (net of customary related fees and expenses)
in connection with any offering of stock in either of the General Partners after
_______________, 1999 [date of Credit Agreement] and on or prior to the date
such determination of Consolidated Net Worth is made.
6.20 Indebtedness and Cash Flow Covenants. CP Limited on a consolidated
------------------------------------
basis with its Subsidiaries shall not permit:
(i) Consolidated Outstanding Indebtedness to exceed fifty percent
(50%) of Consolidated Market Value, based on reported results for the most
recent full fiscal quarter;
(ii) Consolidated Secured Indebtedness to exceed twenty-five percent
(25%) of Consolidated Market Value, based on reported results for the most
recent full fiscal quarter;
(iii) the Value of Unencumbered Assets, based on reported results for
the most recent full fiscal quarter, to be less than 2.0 times the Consolidated
Senior Unsecured Indebtedness;
(iv) EBITDA to be less than 2.0 times the Consolidated Debt Service,
based on results for the two most recent full fiscal quarters for which CP
Limited has reported results under Section 6.1, annualized; and
-----------
(v) The ratio of (a) Net Operating Income attributable to
Unencumbered Assets to (b) Consolidated Interest Expense attributable to
Unsecured Indebtedness, in each case based on reported results for the most
recent full fiscal quarter, to be less than 2.0.
6.21 Environmental Matters. Borrower, CP Limited and its Subsidiaries
---------------------
shall:
-31-
(a) Comply with, and use all reasonable efforts to ensure compliance
by all tenants and subtenants of the Projects or other Property of Borrower, CP
Limited and its Subsidiaries, if any, with, all applicable Environmental Laws
and obtain and comply with and maintain, and use all reasonable efforts to
ensure that all such tenants and subtenants obtain (to the extent necessary) and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, except to
the extent that failure to do so could not be reasonably expected to have a
Material Adverse Effect; provided that in no event shall the Borrower, CP
Limited or its Subsidiaries be required to modify the terms of leases, or
renewals thereof, with existing tenants (i) at Projects owned by the Borrower,
CP Limited or its Subsidiaries as of the date hereof, or (ii) at Projects
hereafter acquired by the Borrower, CP Limited or its Subsidiaries as of the
date of such acquisition, to add provisions to such effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions with respect to the
Projects and other Property of Borrower, CP Limited and its Subsidiaries
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that (i) the same are being contested
in good faith by appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse Effect, or (ii) the
Borrower or CP Limited has determined in good faith that contesting the same is
not in the best interests of the Borrower, CP Limited and its Subsidiaries and
the failure to contest the same could not be reasonably expected to have a
Material Adverse Effect.
(c) Defend, indemnify and hold harmless Bank, and its respective
officers and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature
known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under any
Environmental Laws applicable to the operations of the Borrower, CP Limited, its
Subsidiaries or the Projects, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. This indemnity shall continue in full force
and effect regardless of the termination of this Agreement.
(d) Prior to the acquisition of a new Project after the Agreement
Execution Date, perform or cause to be performed an environmental investigation
which investigation shall at a minimum comply with the specifications and
procedures attached hereto as Exhibit E. In connection with any such
---------
investigation, Borrower shall cause to be prepared a report of such
investigation, to be made available to the Bank upon reasonable request, for
informational purposes and to assure compliance with the specifications and
procedures.
6.22 Ownership of Borrower. Chateau Parent shall at all times, either
---------------------
directly or indirectly (including as general partner of CP Limited), hold
controlling interests in the "Advisor" to the Borrower, The Windsor Corporation.
-32-
6.23 Restrictions of General Partners. Neither General Partner shall own or
--------------------------------
acquire any manufactured home community, (ii) any land for the development of
any manufactured home community or (iii) any other type of assets (other than
one or more interests in the Borrower or CP Limited ) if such other types of
assets have an aggregate market value of more than $10,000,000.
6.24 Year 2000 Compliance. Borrower and CP Limited have each reviewed and
--------------------
assessed its business operations and computer systems and applications to
address the "year 2000 problem" (that is, that computer applications and
equipment used by Borrower or CP Limited, directly or indirectly through third
parties, may be unable to properly perform date-sensitive functions before,
during and after January 1, 2000). Borrower and CP Limited reasonably believe
that the year 2000 problem will not result in a Material Adverse Effect in
Borrower's or CP Limited's business condition (financial or otherwise),
operations, properties or prospects or ability to repay Bank. Borrower and CP
Limited agree that this representation will be true and correct on and shall be
deemed made by Borrower and CP Limited on each date Borrower requests any
Advance under this Agreement or Note or delivers any information to Bank.
Borrower and CP Limited will promptly deliver to Bank such information relating
to this representation as Bank requests from time to time.
6.25 Further Assurances. Borrower and CP Limited will at any time and from
------------------
time to time upon request of the Bank take or cause to be taken any action,
execute, acknowledge, deliver or record any further documents, opinions or other
instruments or obtain such additional insurance as Bank in its reasonable
discretion deems necessary or appropriate to carry out the purposes of this
Agreement.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
a Default:
7.1 Nonpayment of any principal payment on the Note when due.
7.2 Nonpayment of interest on the Note or other payment Obligations under
any of the Loan Documents within five (5) Business Days after the same becomes
due.
7.3 The breach of any of the terms or provisions of Sections 6.2, 6.10
------------------
through 6.20, 6.22 and 6.23.
---------------------------
7.4 Any representation or warranty made or deemed made by or on behalf of
the Borrower, CP Limited or any of its Subsidiaries to the Bank under or in
connection with this Agreement, the Loan, or any material certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which the same was made.
7.5 The breach by the Borrower or CP Limited (other than a breach which
constitutes a Default under Section 7.1, 7.2, 7.3 and 7.4) of any of the terms
-----------------------------
or provisions of this Agreement which is not remedied within fifteen (15) days
after written notice from the Bank; provided,
-33-
however, that if such breach cannot reasonably be remedied within fifteen (15)
days, such fifteen (15) day period shall be extended for an additional thirty
(30) days provided that Borrower and/or CP Limited has commenced and is
diligently prosecuting the remedy of such breach.
7.6 Failure of the Borrower or CP Limited, any of its Subsidiaries or
either General Partner to pay any Indebtedness in a principal amount in excess
of $10,000,000, in the aggregate, when due; or the default by the Borrower, CP
Limited, any of its Subsidiaries or either General Partner in the performance of
any term, provision or condition contained in any agreement, or any other event
shall occur or condition exist, which results in any such Indebtedness of the
Borrower, CP Limited, any of its Subsidiaries or either General Partner to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof (provided that the failure to pay
any such Indebtedness shall not constitute a Default so long as the Borrower, CP
Limited, its Subsidiaries or either General Partner, as the case may be, is
diligently contesting the payment of the same by appropriate legal proceedings
and the Borrower, CP Limited or its Subsidiaries or either General Partner, as
the case may be, have set aside, in a manner reasonably satisfactory to the
Bank, a sufficient reserve to repay such Indebtedness plus all accrued interest
thereon calculated at the default rate thereunder and costs of enforcement in
the event of an adverse outcome).
7.7 The Borrower, CP Limited, either General Partner or any Subsidiary
having a Market Value in excess of $10,000,000, shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it as a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.7, (vi) fail to contest in good faith any
-----------
appointment or proceeding described in Section 7.8 or (vii) admit in writing its
-----------
inability to pay its debts generally as they become due.
7.8 A receiver, trustee, examiner, liquidator or similar official shall be
appointed for the Borrower, CP Limited, either General Partner or any Subsidiary
having a Market Value in excess of $10,000,000, or for any Substantial Portion
of the Property of the Borrower, CP Limited, either General Partner or such
Subsidiary, or a proceeding described in Section 7.7 shall be instituted against
-----------
the Borrower, CP Limited, either General Partner or any such Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of ninety (90) consecutive days.
7.9 The Borrower, CP Limited, either General Partner or any of the
Borrower's or CP Limited's Subsidiaries shall fail within sixty (60) days to
pay, bond or otherwise discharge any judgments or orders for the payment of
money in an amount which, when added to all other judgments or orders
outstanding against Borrower or CP Limited or any Subsidiary would
-34-
exceed $10,000,000 in the aggregate, which have not been stayed on appeal or
otherwise appropriately contested in good faith.
7.10 The Borrower or CP Limited or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts then required to be paid to Multiemployer
Plans by the Borrower as withdrawal liability (determined as of the date of such
notification), exceeds $2,000,000 or requires payments exceeding $1,000,000 per
annum.
7.11 The Borrower or CP Limited or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower or CP Limited and
the other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans which are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by an
amount exceeding $1,000,000.
7.12 Failure of Borrower or CP Limited to remediate within the time period
permitted by law or governmental order, after all administrative hearings and
appeals have been concluded (or within a reasonable time in light of the nature
of the problem if no specific time period is so established), material
environmental problems related to Projects if (i) the affected Projects have an
aggregate book value in excess of $20,000,000 or (ii) the estimated costs of
remediation at all affected Projects, in the aggregate, exceed $2,000,000.
7.13 The occurrence of any "Default" as defined in any Loan Document or
the breach of any of the terms or provisions of any Loan Document, which default
or breach continues beyond any period of grace therein provided.
7.14 A Change in Control occurs.
7.15 Chateau Parent shall fail to (i) qualify as a real estate investment
trust under Sections 856 through 860 of the Code (unless the Bank shall have
otherwise consented thereto) or (ii) maintain its listing on the New York Stock
Exchange.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1 Acceleration. If any Default described in Section 7.7 or 7.8 occurs
------------ ------------------
with respect to the Borrower or CP Limited, the obligations of the Bank to make
Advances hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Bank. If any other Default occurs, the Bank, at any time prior to the date
that such Default has been fully cured, may terminate or suspend the obligations
of the Bank to make Advances hereunder, or declare the Obligations to be due and
payable, or both, whereupon (i) the Obligations shall become immediately due and
payable, without
-35-
presentment, demand, protest or notice of any kind, all of which the Borrower
and CP Limited hereby expressly waive and (ii) the Bank shall use its good faith
efforts to collect, including without limitation, by filing and diligently
pursuing such judicial action as it deems necessary and appropriate, all amounts
owed by the Borrower under the Loan Documents.
If, after acceleration of the maturity of the Obligations or
termination of the obligations of the Bank to make Advances hereunder as a
result of any Default (other than any Default as described in Section 7.7 or 7.8
------------------
with respect to the Borrower or CP Limited) and before any judgment or decree
for the payment of the Obligations due shall have been obtained or entered, the
Bank (in its sole discretion) shall, by notice to the Borrower and CP Limited,
rescind and annul such acceleration and/or termination.
8.2 Amendments. This Agreement and the documents related hereto may not
----------
be amended or modified, nor may any of their terms be modified or waived, except
by written instruments signed by the Bank and the other party or parties to such
document.
8.3 Preservation of Rights. No delay or omission of the Bank to exercise
----------------------
any right under the Loan Documents shall impair such right or be construed to be
a waiver of any Default or an acquiescence therein, and the making of an Advance
notwithstanding the existence of a Default or the inability of the Borrower to
satisfy the conditions precedent to such Advance shall not constitute any waiver
or acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Bank required pursuant to Section 8.2, and then only to the extent
-----------
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
the Bank until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1 Arbitration. The undersigned hereby agree that all controversies and
-----------
claims of any nature arising directly or indirectly out of any and all loan
transactions between them and any related agreements, instruments or documents,
shall at the written request of any party be submitted to binding arbitration
pursuant to the applicable rules of the American Arbitration Association. The
arbitration shall proceed in Denver, Colorado, shall be governed by Colorado law
and shall be conducted in accordance with the Commercial Arbitration Rule of
AAA. Judgment upon any award rendered by the arbitrator(s) may be entered in
any court having jurisdiction.
(i) A single arbitrator shall have the power to render a maximum
award of one hundred thousand dollars. When any party files a claim in excess of
this amount, the arbitration decision shall be made by the majority vote of
three arbitrators. No arbitrator shall have the power to restrain any act of any
party.
(ii) No provision of this Section 9.1 shall limit the right of any
party to exercise self- help remedies, to foreclose against any real or personal
property collateral, or to
-36-
obtain any provisional or ancillary remedies (including but not limited to
injunctive relief or the appointment of a receiver) from a court of competent
jurisdiction. At Bank's option, it may enforce its rights under a mortgage by
judicial foreclosure, and under a deed of trust either by exercise of power of
sale or by judicial foreclosure. The institution and maintenance of any remedy
permitted above shall not constitute a waiver of the right of submit any
controversy or claim to arbitration. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an
action brought by a party shall be applicable in any arbitration proceeding.
9.2 Survival of Representations. All representations and warranties of the
---------------------------
Borrower and CP Limited contained in this Agreement shall survive delivery of
the Note and the making of the Loan herein contemplated.
9.3 Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Bank shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.4 Taxes. Any taxes (excluding taxes on the overall net income of the
-----
Bank) or other similar assessments or charges made by any governmental or
revenue authority in respect of the Loan Documents shall be paid by the
Borrower, together with interest and penalties, if any.
9.5 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.6 Entire Agreement. The Loan Documents embody the entire agreement and
----------------
understanding among the Borrower, CP Limited, the Bank and supersede all prior
commitments, agreements and understandings among the Borrower, CP Limited and
the Bank relating to the subject matter thereof.
9.7 Expenses; Indemnification. The Borrower shall reimburse the Bank for
-------------------------
all reasonable fees and expenses for attorneys for the Bank paid or incurred by
the Bank in connection with the collection and enforcement of the Loan Documents
(including, without limitation, any workout). The Borrower and CP Limited
further agree to indemnify the Bank, its directors and officers against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all reasonable expenses of litigation or
preparation therefor whether or not the Bank is a party thereto) which the Bank
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the Projects, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan
hereunder, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification therefor.
The obligations of the Borrower and CP Limited under this Section 9.7 shall
survive the termination of this Agreement.
-37-
9.8 Accounting. Except as provided to the contrary herein, all accounting
----------
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP.
9.9 Severability of Provisions. Any provision in any Loan Document that is
--------------------------
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Bank. The relationship between the Borrower, on the
--------------------
one hand, and the Bank, on the other, shall be solely that of borrower and
lender. The Bank shall have no fiduciary responsibilities to the Borrower. The
Bank does not undertake responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
9.11 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF COLORADO, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.12 CONSENT TO JURISDICTION. THE BORROWER AND CP LIMITED HEREBY
-----------------------
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR COLORADO STATE COURT SITTING IN DENVER IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER AND CP LIMITED
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER OR CP LIMITED IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER OR CP LIMITED AGAINST THE LENDER OR ANY
AFFILIATE OF THE LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN DENVER, COLORADO.
9.13 WAIVER OF JURY TRIAL. THE BORROWER, CP LIMITED AND THE LENDER HEREBY
--------------------
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
-38-
ARTICLE X
SETOFF, RATABLE PAYMENTS
------------------------
10.1 Setoff. In addition to, and without limitation of, any rights of the
------
Bank under applicable law, if the Borrower or CP Limited becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by the Bank to
or for the credit or account of the Borrower and/or CP Limited may be offset and
applied toward the payment of the Obligations owing to the Bank at any time
prior to the date that such Default has been fully cured, whether or not the
Obligations, or any part hereof, shall then be due.
ARTICLE XI
BENEFIT OF AGREEMENT; PARTICIPATIONS
------------------------------------
11.1 Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Bank and their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents.
The Bank may at any time, without the consent of the Borrower or the Bank,
assign all or any portion of its rights under this Agreement and its Note to a
Federal Reserve Bank; provided, however, that no such assignment shall release
the transferor Bank from its obligations hereunder. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of the Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note.
11.2 Participations. Bank, at any time, shall have the right to sell,
--------------
assign, transfer, negotiate or grant participation interests in the Loan and in
any documents and instruments executed in connection therewith. Borrower
acknowledges and agrees that any such disposition shall give rise to a direct
obligation of Borrower to each such participant, so long as any enforcement
action shall be taken jointly among such participants. Bank is authorized to
furnish to any participant or prospective participant any information or
document that Bank may have or obtain regarding the Loan or the Loan Parties.
11.3 Dissemination of Information. The Borrower authorizes Bank to
----------------------------
disclose to any Participant or any other Person acquiring an interest in the
Loan Documents by operation of law (each a "Transferee") and any prospective
----------
Transferee any and all information in the Bank's possession concerning the
creditworthiness of the Borrower and its Subsidiaries, subject to Section 12.6.
------------
11.4 Confidentiality. The Bank agrees to take normal and reasonable
---------------
precautions and exercise due care to maintain the confidentiality of all
nonpublic information provided to them by the Borrower or by any other Person on
the Borrower's behalf in connection with the Loan Documents and agree and
undertake that neither they nor any of their Affiliates shall disclose any such
information for any purpose or in any manner other than pursuant to the terms
contemplated by the Loan Documents. The Bank may disclose such information (1)
at the request of any regulatory authority with jurisdiction over the Bank or in
connection with an
-39-
examination of such Person by any such authority, (2) pursuant to subpoena or
other process of a court having jurisdiction over the Bank, (3) when required to
do so in accordance with the provisions of any applicable law, (4) at the
express direction of any other governmental authority, with jurisdiction over
the Bank, of any State of the United States of America or of any other
jurisdiction in which such Person conducts its business, (5) to such Person's
independent auditors, attorneys and other professional advisors, (6) if such
information has become public other than through disclosure by such Person or
the Bank, and (7) in connection with any litigation involving such Person.
Notwithstanding the foregoing, the Borrower authorizes the Bank to disclose to
any prospective or actual Transferee such financial and other information in its
possession (i) which has been delivered to such Person pursuant to the Loan
Documents or which has been delivered to such Person by the Borrower prior to
entering into the Loan Documents, or (ii) which is reasonably necessary to
effectuate the purposes of this Agreement and the Loan Documents; provided that,
unless otherwise agreed by the Borrower, such Transferee shall agree to keep
such information confidential to the same extent required to the Bank, as
applicable, hereunder.
ARTICLE XII
NOTICES
-------
12.1 Giving Notice. All notices and other communications provided to any
-------------
party hereto under this Agreement or any other Loan Document shall be in writing
or by telex or by facsimile and addressed or delivered to such party at its
address set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
12.2 Change of Address. The Borrower, CP Limited, the Bank may each change
-----------------
the address for service of notice upon it by a notice in writing to the other
parties hereto.
ARTICLE XIII
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, CP Limited, and the Bank
and each party has notified the Bank by telex or telephone, that it has taken
such action.
-40-
IN WITNESS WHEREOF, the Borrower, CP Limited, and the Bank have executed
this Agreement as of the date first above written.
BORROWER:
N'TANDEM TRUST, an unincorporated California
Business Trust
By: /s/ Xxxx XxXxxxxx
_______________________________________________
Name: Xxxx XxXxxxxx
_____________________________________________
Title: Trustee
Address: 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
-41-
CP LIMITED:
CP LIMITED PARTNERSHIP, a Maryland limited
partnership
By: CHATEAU COMMUNITIES, INC., a Maryland
corporation, general partner
By: /s/ Xxxxxx Xxxxxxx
____________________________________
Name: Xxxxxx Xxxxxxx
__________________________________
Title: Executive Vice President
_________________________________
Address: 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
ROC COMMUNITIES, INC., a Maryland corporation,
general partner
By: /s/ Xxxxxx Xxxxxxx
____________________________________
Name: Xxxxxx Xxxxxxx
_________________________________
Title: Executive Vice President
__________________________________
Address: 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
-42-
The undersigned, Chateau Communities, Inc. and ROC Communities, Inc., which
are the sole general partners of CP Limited, for the benefit of the Bank under
this Agreement, hereby (i) accept and agree to the restrictions which the
Borrower and CP Limited have agreed to cause to be imposed on their actions and
activities under Section 6.4, 6.10, 6.11, 6.12, 6.22 and 6.23 of this Agreement
--- ---- ---- ---- ----- -----
and (ii) agree that, with respect to any interest either of them may directly or
indirectly hold in any entity which owns a Project or Projects that are included
in Unencumbered Assets, the undersigned shall sell or obtain secured financing
on such Project at the direction of the Borrower on such terms as may be
acceptable to the Borrower.
CHATEAU PARENT:
CHATEAU COMMUNITIES, INC., a Maryland corporation
By: /s/ Xxxxxx Xxxxxxx
_______________________________________________
Name: Xxxxxx Xxxxxxx
_____________________________________________
Title: Executive Vice President
____________________________________________
Address: 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
ROC:
ROC COMMUNITIES, INC., a Maryland corporation
By: /s/ Xxxxxx Xxxxxxx
_______________________________________________
Name: Xxxxxx Xxxxxxx
_____________________________________________
Title: Executive Vice President
____________________________________________
Address: 0000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Facsimile: 000-000-0000
-43-
U.S. BANK NATIONAL ASSOCIATION
/s/ Xxxx Xxxxxxx
By:__________________________________________
Xxxx Xxxxxxx
Name:________________________________________
Officer
Title:_______________________________________
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
phone: 303/000-0000
facsimile: 303/585-4198
Attention: Mr. Xxxxx Xxxxxx
-44-
EXHIBIT A
TO
CREDIT AGREEMENT
(Acquisition/Revolving Line of Credit)
ADVANCE REQUEST
U.S. BANK NATIONAL ASSOCIATION
EXHIBIT B
FORM OF OPINION OF COUNSEL
-2-
EXHIBIT C
MONEY TRANSFER INSTRUCTIONS
-3-
EXHIBIT E
---------
ENVIRONMENTAL INVESTIGATION SPECIFICATIONS AND PR
-------------------------------------------------
Phase I Environmental Site Assessments to be prepared in accordance with
the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process (ASTM Designation E1527-94), a summary of
which follows:
This ASTM practice is generally considered the industry standard for
conducting a Phase I Environmental Site Assessment (ESA). The purpose of
this standard is to "define good commercial and customary practice in the
Untied States of America for conducting an ESA of a parcel of commercial
real estate with respect to the range of contaminants within the scope of
the Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA) and petroleum products." The ASTM Phase I ESA is intended to
permit a user to satisfy one of the requirements to qualify for the
innocent landowner defense to CERCLA liability; that is, the practice that
constitutes "all appropriate inquiry into the previous ownership and uses
of the property consistent with good commercial or customary practices" as
defined in 42 USC 9601(35)(B).
The goal of the ASTM Phase I ESA is to identify "recognized environmental
conditions." Recognized environmental conditions means the presence or
likely presence of any hazardous substances or petroleum products on a
property under conditions that indicate an existing release, a past
release, or a material threat of a release of any hazardous substances or
petroleum products into structures on the property or into the ground,
groundwater, or surface water of the property. The term includes hazardous
substances or petroleum products even under conditions in compliance with
laws. The term is not intended to include de minimis conditions that
generally would not be the subject of an enforcement action if brought to
the attention of appropriate governmental agencies.
The ASTM standard indicates that a Phase I ESA should consist of four main
components: 1) Records Review; 2) Site Reconnaissance; 3) Interviews; and
4) Report. The purpose of the records review is to obtain and review
records that will help identify recognized environmental conditions in
connection with the property. The site reconnaissance involves physical
observation of the property's exterior and interior, as well as an
observation of adjoining properties. Interviews with previous and current
owners and occupants, and local government officials provides insight into
the presence or absence of recognized environmental conditions in
connection with the property. The final component of the ESA, the report,
contains the findings of the ESA and conclusions regarding the presence or
absence of recognized environmental conditions in connection with the
property. It includes documentation to support the analysis, Opinions, and
conclusions found in the report.
While the use of this practice is intended to constitute appropriate
inquiry for purposes of CERCLA's innocent landowner defense, it is not
intended that its use
-4-
be limited to that purpose. The ASTM standard is intended to be an approach
to conducting an inquiry designed to identify recognized environmental
conditions in connection with a property, and environmental site
assessments.
-5-
SCHEDULE 1
(See Sections 5.15 and 6.15(v))
--------------------------
CP LIMITED PARTNERSHIP LIENS
The Permitted Ground Leases and the following:
Property State # of Sites Type
-------- ----- ---------- ----
1. Atlanta Xxxxxxx GA Encumbered 75 F
2. Xxxxxxxxx WY Encumbered 118 F
3. Cas Xxxxx NV Encumbered 107 F
4. Casual Estates NY Encumbered 000 X
0. Xxxxxx Xxxxxx XX Encumbered 000 X
0. Xxxxxxxxxxx Xxxxxxx-Xxxxx Xxxxx XX Encumbered 000 X
0. Xxxxxxxxx XX Encumbered 237 F
8. Del Tura FL Encumbered 1,343 A
9. Eagle Point WA Encumbered 230 F
10. Eldorado Estates FL Encumbered 126 F
11. Ferrand Estates MI Encumbered 000 X
00. Xxxxxxxxx Xxxxx XX Encumbered 122 A
13. Hickory Xxxxx IN Encumbered 000 X
00. Xxxx Xxxx XX Encumbered 101 A
15. Xxxxx Terrace OR Encumbered 000 X
00. Xxxxxxxx Xxxxxxx IA Encumbered 172 F
17. Land O'Lakes FL Encumbered 177 A
18. Macomb MI Encumbered 1,533 F
19. Maple Grove ID Encumbered 270 F
20. Mariwood IN Encumbered 296 F
21. Marnelle GA Encumbered 000 X
00. Xxxxxxxxxxx XX Encumbered 000 X
00. Xxxxxx Xxxxxxx XX Encumbered 204 A
24. Mobet Xxxxxxx --
25. Mobiland FL Encumbered 214 F
26. The Homestead TX Encumbered 100 F
27. Xxxxx'x Point OH Encumbered 000 X
00. Xxxxxx Xxxxxx XX Encumbered 000 X
00. Xxx Xxxxx XX Encumbered 000 X
00. Xxx Xxxx XX Encumbered 000 X
00. Xxxxxxxx Xxxxxxx XX Encumbered 226 F
32. Xxxxxxxxx IN Encumbered 000 X
00. Xxxxxxxx Xxxxxxxx XX Encumbered 238 F
34. Riverview OR Encumbered 000 X
00. Xxxxxxx Xxxxx XX Encumbered 000 X
00. Xxxxxxx Xxxx XX Encumbered 000 X
-0-
Xxxxxxxx Xxxxx # of Sites Type
-------- ----- ---------- ----
37. Shadybrook NY Encumbered 89 F
38. Skyway IN Encumbered 000 X
00. Xxxxxxxxx Xxxxxxx XX Encumbered 000 X
00. Xxxxxxxxx XX Encumbered 000 X
00. Xxxxxxx Xxxxxxx XX Encumbered 315 F
42. Town & Country FL Encumbered 72 F
43. Twin Pines IN Encumbered 200 F
44. Xxxxx OH Encumbered 134 A
45. Whispering Pines FL Encumbered 397 F
46. Willo Arms OH Encumbered 000 X
00. Xxxxx Xxxxxxx XX Encumbered 262
48. Autumn Forest NC Encumbered 242
49. Woodlake NC Encumbered 293
50. Spring Brook MI Encumbered 389
51. Highlands MI Encumbered 596
52. Valley Vista MI Encumbered 137
-7-
SCHEDULE 2
----------
(See Section 5.9)
-----------
None
SCHEDULE 3
----------
(See Section 5.21)
------------
CP LIMITED PARTNERSHIP ENVIRONMENTAL MATTERS
(See Section 6.21)
------------
Certain of the Projects contain private sewer and water facilities,
including waste water treatment facilities. Local authorities have alleged that
the waste water treatment facilities at two Chateau Projects, Chateau Orion and
Chateau Cranberry, are not in compliance with current standards. In such
situations, such authorities have requested that such facilities be upgraded to
meet certain standards and/or become connected to public water and sewer
systems. Chateau do not consider the potential costs to be material.
Approximately 18 months ago fuel oil was discovered at the Twenty-Nine
Pines (CP Limited) Community in Minnesota and on the adjoining property. It was
subsequently learned that the community had a fuel oil underground storage tank
which supplied homes prior to the 1980's. Proposals for the clean-up are being
prepared. The State of Minnesota has a fund which should pay approximately 90%
of the clean-up costs. The State fund will not be responsible for legal costs
and any damages alleged by adjoining property owners. The estimated clean-up
costs are less than $300,000. Claims against the prior owner have been made.
