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EXHIBIT 99.1
CONTRIBUTION AGREEMENT
BY AND AMONG
BELCREST REALTY CORPORATION
AND
BELAIR REAL ESTATE CORPORATION
AND
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
AND
SUN COMMUNITIES, INC.
Dated: As of September 29, 1999
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "AGREEMENT") is made as of September
29, 1999 ("AGREEMENT DATE"), by and among BELCREST REALTY CORPORATION, a
Delaware corporation and BELAIR REAL ESTATE CORPORATION, a Delaware corporation
(the "CONTRIBUTORS"), and SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP, a
Michigan limited partnership (the "OPERATING PARTNERSHIP") and SUN COMMUNITIES,
INC., a Maryland corporation (the "COMPANY").
RECITALS
WHEREAS, Contributors desire to contribute to Operating Partnership
cash in return for Preference Units in Operating Partnership on the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following
terms shall have the meanings set forth below:
"AFFILIATE" means with respect to any Person, any other Person
controlled by, controlling or under common control with such Person.
For purposes hereof, "control" shall include the power to direct the
actions of a Person, regardless of whether the same shall involve an
ownership interest in such Person.
"AGREEMENT" has the meaning set forth in the initial paragraph
hereof.
"AGREEMENT DATE" has the meaning set forth in the initial
paragraph hereof.
"AGREEMENT OF LIMITED PARTNERSHIP" means the Second Amended
and Restated Limited Partnership Agreement of Sun Communities Operating
Limited Partnership, dated as of April 30, 1996, as amended by (i)
those certain amendments numbered one through one hundred two, and (ii)
the Amendment; and as further amended from time to time.
"AMENDMENT" means the One Hundred Third Amendment to the
Agreement of Limited Partnership, dated as of the date hereof,
substantially in the form attached hereto as EXHIBIT A.
"ARTICLES SUPPLEMENTARY" means the Articles Supplementary of
the Company
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substantially in the form attached hereto as EXHIBIT B.
"BELAIR" means Belair Real Estate Corporation.
"BELCREST" means Belcrest Realty Corporation.
"BROKER" has the meaning set forth in PARAGRAPH 10.
"BYLAWS" means the Bylaws of the Company, as amended from time
to time.
"CHARTER" means the Articles of Amendment and Restatement of
the Company, recorded on November 8, 1993, with the State of Maryland
Department of Assessments and Taxation (the "SMDAT"), as amended by (i)
that certain Articles of Amendment, recorded on June 20, 1997, with the
SMDAT, (ii) Articles Supplementary, recorded on June 2, 1998, with the
SMDAT, and (iii) the Articles Supplementary, and as further amended and
restated from time to time.
"CLOSING" has the meaning set forth in PARAGRAPH 6(A).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the initial paragraph
hereof.
"CONTRIBUTION AMOUNT" means $50,000,000 US$, such amount to be
contributed severally $15,000,000 US$ by Belair and $35,000,000 US$ by
Belcrest.
"CONTRIBUTORS" has the meaning set forth in the initial
paragraph hereof.
"CONTRIBUTORS' CLOSING DOCUMENTS" has the meaning set forth in
PARAGRAPH 6(C).
"ERISA" means the Employee Retirement Income Securities Act of
1974, as amended.
"EXCHANGE DATE" means, with respect to any Preference Unit,
the date on which the exchange of such Preference Unit for Preferred
Stock shall occur in accordance with the Agreement of Limited
Partnership.
"FINANCING AGREEMENTS" means collectively, that certain (i)
Indenture, dated as of April 24, 1996, by and among the Company, the
Operating Partnership and Bankers Trust Company, (ii) $25,500,000
Facility and Guaranty Agreement, dated as of December 10, 1998, by and
among the Company, the Operating Partnership, certain subsidiary
guarantors named therein, The First National Bank of Chicago and
certain
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other lenders named therein, and (iii) Amended and Restated Senior
Unsecured Line of Credit Agreement, dated as of July 1, 1999, by and
among the Company, the Operating Partnership, Xxxxxx Brothers Holdings
Inc., The First National Bank of Chicago, First Union National Bank,
Michigan National Bank, PNC Bank, Ohio, National Association and
Pacific Life Insurance Company.
"GAAP" means generally accepted accounting principles
consistently applied.
"GOVERNING DOCUMENTS" means, with respect to (i) a limited
partnership, such limited partnership's certificate of limited
partnership and the agreement of limited partnership, and any
amendments or modifications of any of the foregoing; (ii) a
corporation, such corporation's articles or certificate of
incorporation, by-laws and any applicable authorizing resolutions, and
any amendments or modifications of any of the foregoing; (iii) a
limited liability company, such limited liability company's articles or
certificate of organization, by-laws and operating agreement or
agreement of limited liability company, and any amendments or
modifications of any of the foregoing; and (iv) a trust, such trust's
declaration of trust and by-laws and any amendments or modifications of
any of the foregoing.
"MANAGER" means Boston Management and Research, a
Massachusetts business trust.
"OPERATING PARTNERSHIP" has the meaning set forth in the
initial paragraph hereof.
"OPERATING PARTNERSHIP'S CLOSING DOCUMENTS" has the meaning
set forth in PARAGRAPH 6(B).
"PARITY PREFERRED STOCK" has the meaning ascribed to such term
in the Articles Supplementary.
"PARTNER" has the meaning ascribed to such term in the
Agreement of Limited Partnership.
"PERSON" means a natural person, partnership (whether general
or limited), trust, estate, association, corporation, limited liability
company, unincorporated organization, custodian, nominee or any other
individual or entity in its own or representative capacity.
"PREFERENCE UNITS" shall have the meaning ascribed to "Series
A Preferred Units" in the Amendment.
"PREFERRED STOCK" means the Company's 9.125% Series A
Cumulative Redeemable Perpetual Preferred Stock upon terms and
provisions set forth in the ARTICLES
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SUPPLEMENTARY.
"PTP" means a "publicly traded partnership" within the meaning
of Section 7704 of the Code.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in
PARAGRAPH 6(B)(IV) hereof.
"REIT" has the meaning set forth in PARAGRAPH 8(G) hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" means with respect to any Person, any
corporation, partnership, limited liability company, joint venture or
other entity of which a majority of (i) voting power of the voting
equity securities or (ii) the outstanding equity interests, is owned,
directly or indirectly, by such Person.
"US$" means United States dollars, lawful money of the United
States of America.
2. CONTRIBUTION OF CASH. Subject to the terms and provisions of
this Agreement, Belcrest and Belair each hereby agrees to contribute to
Operating Partnership their portion of the Contribution Amount by wire transfer
of immediately available funds to an account designated by the Company on the
date of the Closing in consideration for Preference Units in Operating
Partnership. Subject to the terms and provisions of this Agreement, Operating
Partnership hereby agrees to accept the Contribution Amount and to issue to
Belair and Belcrest 600,000 and 1,400,000, respectively, Preference Units in
exchange therefor.
3. CONDITIONS TO CLOSING.
(a) Conditions to Operating Partnership's and Company's
Obligations. Operating Partnership's and Company's obligations under this
Agreement to accept the Contribution Amount, provide each Contributor with
Preference Units and otherwise consummate the transactions contemplated hereby
are subject to the satisfaction (or waiver in writing by Operating Partnership
and the Company) of the following conditions on or before the Closing:
(i) No Injunction. No temporary restraining order or
preliminary or permanent injunction of any court or
administrative agency of competent jurisdiction
prohibiting the consummation of the transactions
contemplated hereby shall be in effect.
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(ii) Accuracy of Representations and Warranties. The
representations and warranties of Contributors
contained in this Agreement shall be true and correct
in all material respects on the date of the Closing
with the same effect as though made on the date of
the Closing.
(iii) Performance of Agreement. Each Contributor shall have
performed, in all material respects, all of its
respective covenants, agreements and obligations
required by this Agreement to be performed or
complied with by it prior to or at the Closing,
including, without limitation, delivery of the
Contribution Amount.
(iv) Delivery of Closing Documents. Operating Partnership
and Company shall have received the Contributors'
Closing Documents.
If for any reason any of the conditions set forth in this PARAGRAPH
3(A) or elsewhere in this Agreement are not satisfied or waived by Operating
Partnership and Company at or prior to the Closing, then, at Operating
Partnership's or Company's option, this Agreement shall be terminated and
Operating Partnership, Company and Contributors shall be released from their
obligations under this Agreement and none of Operating Partnership, Company or
Contributors shall have any further liability hereunder.
(b) Conditions to Contributors' Obligations. Contributors'
obligations under this Agreement to deliver the Contribution Amount and
otherwise consummate the transactions contemplated hereby are subject to the
satisfaction (or waiver in writing by Contributors) of the following conditions
on or before the Closing:
(i) No Injunction. No temporary restraining order or
preliminary or permanent injunction or any court or
administrative agency of competent jurisdiction
prohibiting the consummation of the transactions
contemplated hereby shall be in effect.
(ii) Accuracy of Representations and Warranties. The
representations and warranties of Operating
Partnership and Company contained in this Agreement
shall be true and correct in all material respects on
the date of the Closing with the same effect as
though made on the date of the Closing.
(iii) Performance of Agreement. Operating Partnership and
Company shall have performed, in all material
respects, all of their respective covenants,
agreements and obligations required by this Agreement
to be performed or complied with by it prior to or at
the Closing.
(iv) Delivery of Closing Documents. Contributors shall
have received the
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Operating Partnership's Closing Documents.
If for any reason any of the conditions set forth in this PARAGRAPH
3(B) or elsewhere in this Agreement are not satisfied or waived by Contributors
at or prior to the Closing, then, at Contributors' option, this Agreement shall
be terminated and Contributors, Operating Partnership and Company shall be
released from their obligations under this Agreement and none of Contributors,
Operating Partnership or Company shall have any further liability hereunder.
4. COVENANTS.
(a) On the Exchange Date, the Company shall issue shares of
Preferred Stock in the Company in a number equal to the number of shares of
Preferred Stock into which the Preference Units are exchangeable pursuant to the
terms of the Agreement of Limited Partnership. Upon consummation of such
exchange in accordance with the terms of the Agreement of Limited Partnership,
and issuance in accordance with the Charter, such shares of Preferred Stock
shall be validly issued, fully paid and non-assessable.
(b) Operating Partnership covenants to notify holders of
Preference Units promptly (i) in the event it anticipates or realizes that the
value of its assets constituting "stock and securities" within the meaning of
Section 351(e)(1) of the Code will equal 10% or more of its total assets and
(ii) in the event it anticipates or realizes that there is a material increase
in such percentage of Operating Partnership's assets constituting "stock and
securities" if immediately preceding such material increase the percentage of
Operating Partnership's assets constituting "stock and securities" within the
meaning of Section 351(e)(1) of the Code equals 10% or more of the Operating
Partnership's total assets.
(c) Company agrees that it will notify holders of Preference Units
promptly in the event it becomes aware of any facts that will or likely will
cause Operating Partnership to become a PTP on or after January 1, 2000.
(d) Through the end of 1999, Operating Partnership: (i) shall
take all actions reasonably available to it under the Agreement of Limited
Partnership as presently in effect to avoid treatment as a PTP; and (ii) shall
at all times satisfy the private placement safe harbor of Notice 88-75 (1988-2
C.B. 386) taking into account any person treated as a partner within the meaning
of Notice 88-75 (including each person indirectly owning an interest through a
partnership, a grantor trust, or an S corporation) and substituting "400" for
"500". The Operating Partnership further (A) represents that it (i) was actively
engaged in an activity before December 4, 1995, (ii) did not add a substantial
new line of business after December 4, 1995 and (iii) has no plan or intention
to add a substantial new line of business and (B) covenants that it shall (i)
not add a substantial new line of business within the meaning of Section
1.7704-1(1)(3) prior to January 1, 2000 and (ii) shall promptly provide notice
to the holders of the Preference Units in the event that the Operating
Partnership plans or intends to add a substantial new line of business at any
time after January 1, 2000.
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(e) The Operating Partnership covenants that, for each taxable
year during which the Purchaser holds Preference Units, ninety percent (90%) or
more of the gross income of the Operating Partnership for such taxable year
shall constitute "qualifying income" within the meaning of Section 7704(d) of
the Code.
(f) Operating Partnership covenants that it shall deliver to
holders of Preference Units the following:
(i) as soon as available, but in no event later than
ninety (90) days following the end of each fiscal year of Operating
Partnership, a complete copy of Operating Partnership's audited
financial statements including a balance sheet, income statement and
cash flow statement for such fiscal year prepared and audited by an
independent certified public accountant in accordance with GAAP (which
requirement, if the Operating Partnership is required to file
disclosure statements with the SEC, shall be deemed to be satisfied
upon the delivery to holders of Preference Units of Operating
Partnership's Annual Report on Form 10-K, within five (5) business days
of its filing with the SEC); and
(ii) as soon as possible, but in no event later than
forty-five (45) days following the end of each fiscal quarter of
Operating Partnership, a complete copy of Operating Partnership's
unaudited quarterly financial statements including a balance sheet,
income statement and cash flow statement for such fiscal quarter
prepared in accordance with GAAP (except with respect to
footnotes)(which requirement, if the Operating Partnership is required
to file disclosure statements with the SEC, shall be deemed to be
satisfied upon the delivery to holders of Preference Units of Operating
Partnership's Quarterly Report on Form 10-Q, within five (5) business
days of its filing with the SEC); and
(iii) on a quarterly basis (as soon as possible, but in no
event later than sixty (60) days following the end of each fiscal
quarter of Operating Partnership) a reasonable good faith written
estimate (it being understood and agreed that such estimate shall be
prepared as if it were being prepared solely for the use of Company and
Operating Partnership and that such preparation shall not take into
account any use by, or benefit of, the Contributors) together with
reasonable supporting information of the percentage of Operating
Partnership's assets (by value) that are within the relevant categories
of Section 856(c)(4) of the Code.
(iv) on an annual basis (as soon as possible, but in no event
later than ninety (90) days following the end of each fiscal year of
Operating Partnership) a reasonable good faith written estimate (it
being understood and agreed that such estimate shall be prepared as if
it were being prepared solely for the use of Company and Operating
Partnership and that such preparation shall not take into account any
use by, or benefit of,
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the Contributors) together with reasonable supporting information of
the percentage of Operating Partnership's gross income that is derived
from sources enumerated in Section 856(c)(2) and (3), respectively, of
the Code.
(g) Provided that all other conditions to Operating Partnership's
and Company's obligations set forth in this Agreement have been satisfied or
properly waived, Operating Partnership covenants that it shall record
Contributors as the holders of the Preference Units on its books and records and
shall admit Contributors as limited partners to Operating Partnership on the
Closing Date.
(h) Operating Partnership shall not issue any Preference Units to
any Person other than Contributors and Company shall not issue any Preferred
Stock to any Person other than a holder of Preference Units upon exchange of
such Preference Units.
(i) Operating Partnership covenants and agrees for the benefit of
the holders of the Preference Units that, the income and assets of the Operating
Partnership will be such as would permit the Operating Partnership to satisfy
the income and assets requirements of Section 856 of the Code if the Operating
Partnership were a REIT.
(j) Upon request of any Contributor, from time to time (provided
that such request is not made more often than six times during any given
calendar year), Operating Partnership and Company agree to deliver a certificate
to such Contributor bringing down the representation and warranties made by
Operating Partnership and Company in PARAGRAPHS 8(D), 8(E), 8(F) and 8(G) to a
date requested by a Contributor to the extent, after due inquiry, Operating
Partnership and Company can make such representations and warranties as of such
date.
(k) The Company shall not undertake any action, including the
issuance of any securities, without the consent of the holders of the Preference
Units, if such action would require the consent of the holders of the Preferred
Stock if any shares of the Preferred Stock were outstanding at the time of such
action.
(l) The Company shall cause the Articles Supplementary to be filed
with the SMDAT and shall deliver within two (2) business days after Closing a
copy of the Articles Supplementary certified as filed with the SMDAT.
The covenants set forth in this PARAGRAPH 4 shall survive the Closing.
5. TRANSACTION COSTS. Except as otherwise specifically set forth
herein, each of the parties hereto shall bear its own costs and expenses with
respect to the transaction contemplated hereby.
6. CLOSING.
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(a) The closing of the transactions contemplated by this Agreement
shall be consummated on September 29, 1999 (the "CLOSING").
(b) At the Closing, Operating Partnership and Company shall
deliver to Contributors the following documents and the following other items
(the documents and other items described in this PARAGRAPH 6(B) being
collectively referred to herein as the "OPERATING PARTNERSHIP CLOSING
DOCUMENTS"):
(i) This Agreement duly executed and delivered by
Operating Partnership and Company;
(ii) The Amendment, duly executed and delivered by all
persons necessary to make such amendment binding on and enforceable
against all Partners in Operating Partnership;
(iii) The Articles Supplementary of the Company, duly
executed and delivered by the Company and in proper form for filing
with the SMDAT.
(iv) The Registration Rights Agreement, in the form set
forth on EXHIBIT C, duly executed and delivered by Company;
(v) A Certificate of the Secretary of Company
substantially in the form set forth on EXHIBIT D together with
completed exhibits attached thereto, executed by the secretary of the
Company and dated as of the date of the Closing;
(vi) An opinion of counsel to Company and Operating
Partnership substantially in the form set forth on EXHIBIT E;
(vii) Cross-Receipts, substantially in the form set forth
on EXHIBITS F-1 and F-2; and
(viii) Certificates representing the Preference Units for
each Contributor;
(ix) Written Consent of a majority of the Preferred OP
Unit (as defined in the Agreement of Limited Partnership) holders
(excluding the holders of the Preference Units) to the issuance of the
Preference Units; and
(x) Those other closing documents required to be executed
by it or as may be otherwise necessary or appropriate to consummate the
transaction contemplated hereby.
(c) At the Closing, Contributors shall deliver to Operating
Partnership and Company the following documents and the following other items
(the documents and other items described in this PARAGRAPH 6(C) being
collectively referred to herein as the "CONTRIBUTORS' CLOSING
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DOCUMENTS"):
(i) Counterparts of those documents listed in PARAGRAPH
6(B)(I), (II), (IV), and (VII), duly executed and delivered by
Contributors.
(ii) Those other closing documents required to be executed
by it or as may be otherwise necessary or appropriate to consummate the
transaction contemplated hereby.
7. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS. Contributors
make the following representations and warranties to Operating Partnership and
Company, all of which (except as otherwise designated) are true and correct in
all material respects on the Agreement Date and shall be true and correct in all
material respects as of the date of the Closing:
(a) Contributors are duly organized and validly existing
under the laws of the state of their organization and have been duly
authorized by all necessary and appropriate action to enter into this
Agreement and to consummate the transactions contemplated hereby. This
Agreement is a valid and binding obligation of Contributors,
enforceable against Contributors in accordance with its terms, except
insofar as enforceability may be affected by bankruptcy, insolvency or
similar laws affecting creditor's rights generally and the availability
of any particular equitable remedy.
(b) Neither the execution nor the delivery of this
Agreement nor the consummation of the transactions contemplated hereby
nor fulfillment of or compliance with the terms and conditions hereof
(a) conflict with or will result in a breach of any of the terms,
conditions or provisions of (i) the Governing Documents of Contributors
or (ii) any agreement, order, judgment, decree, arbitration award,
statute, regulation or instrument to which either Contributor is a
party or by which it or its assets are bound, or (b) constitutes or
will constitute a breach, violation or default under any of the
foregoing. No consent or approval, authorization, order, regulation or
qualification of any governmental entity or any other Person is
required for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Contributors.
(c) Contributors acknowledge that the Preference
Units have not been and will not be registered or qualified under the
Securities Act or any state securities laws and are offered in reliance
upon an exemption from registration under Regulation D of the
Securities Act and similar state law exceptions. The Preference Units
to be received by Contributors hereunder shall be held by Contributors
for investment purposes only for their own account, and not with a view
to or for sale in connection with any distribution of the Preference
Units, and Contributors acknowledge that the Preference Units cannot be
sold or otherwise disposed of by the holders thereof unless they are
subsequently registered under the Securities Act or pursuant to an
exemption therefrom; and the Preference Units may not be sold, assigned
or otherwise transferred except in compliance
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with the Agreement of Limited Partnership. Contributors hereby
acknowledge receipt of a copy of the Agreement of Limited Partnership,
as amended through the date hereof, and represent that they have
reviewed same and understand the provisions thereof which have a
bearing on the representations made in this PARAGRAPH 7(C).
(d) Contributors have no contract, understanding,
agreement or arrangement with any Person to sell, transfer or grant a
participation to such Person or any other Person, with respect to any
or all of the Preference Units they will receive in accordance with the
provisions hereof.
(e) Each Contributor is an "accredited investor" within
the meaning of Regulation D under the Securities Act and has knowledge
and experience in financial and business matters such that it is
capable of evaluating the merits and risks of receiving and owning the
Preference Units and Contributors are able to bear the economic risk of
such ownership and understands that an investment in Preference Units
involves substantial risks.
(f) Neither Contributor is an employee benefit plan
subject to ERISA or Section 4975 of the Code.
(g) In making this investment, Contributors are relying
upon the advice of their own personal, legal and tax advisors with
respect to the tax and other aspects of an investment in Operating
Partnership.
(h) There is no action, suit, proceeding or, to
Contributors' knowledge, currently threatened against Contributors that
questions the validity of this Agreement or the right of Contributors
to enter into this Agreement or to consummate the transactions
contemplated hereby.
(i) For such time as a Contributor holds an interest in
the Operating Partnership, such Contributor will be treated for federal
income tax purposes as either a real estate investment trust or a C
corporation (and not as an S corporation or a division of another
corporation, unless such other corporation complies with this covenant
and agreement).
(j) There has been made available to Contributors and
their respective advisors the opportunity to ask questions of, and
receive answers from, the Operating Partnership and the Company
concerning the terms and conditions of the investment in the Preference
Units and any other matters pertaining to the Operating Partnership
and/or the Company. Contributors have had an opportunity to consult
with counsel and other advisors about the investment in the Preference
Units and all material documents, records and books pertaining to such
investment have, upon request, been made available to Contributors and
their respective advisors.
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Contributors hereby expressly permit JAFFE, RAITT, HEUER &
XXXXX, P.C., as counsel to the Operating Partnership and the Company,
to rely upon the representations and warranties set forth above as if
such representations and warranties were made by Contributors directly
to JAFFE, RAITT, HEUER & XXXXX, P.C.
8. REPRESENTATIONS AND WARRANTIES OF OPERATING PARTNERSHIP AND
COMPANY. Operating Partnership and Company make the following representations
and warranties to Contributors and Manager, all of which (except as otherwise
designated) are true and correct in all material respects on the Agreement Date
and shall be true and correct in all material respects as of the date of the
Closing:
(a) Operating Partnership is duly organized and validly
existing under the laws of the state of its organization and is duly
registered and qualified to do business in each jurisdiction where such
registration or qualification is material to the transactions
contemplated hereby and has been duly authorized by all necessary and
appropriate action to enter into this Agreement, to issue, sell and
deliver the Preference Units and to consummate the transactions
contemplated hereby, and the individuals executing this Agreement on
behalf of Operating Partnership have been duly authorized by all
necessary and appropriate action on behalf of Operating Partnership.
This Agreement is a valid and binding obligation of Operating
Partnership, enforceable against Operating Partnership in accordance
with its terms, except insofar as enforceability may be affected by
bankruptcy, insolvency or similar laws affecting creditor's rights
generally and the availability of any particular equitable remedy.
(b) Company is duly organized and validly existing
under the laws of the state of its organization and is duly registered
and qualified to do business in each jurisdiction where such
registration or qualification is material to the transactions
contemplated hereby and has been duly authorized by all necessary and
appropriate action to enter into this Agreement, to issue and deliver,
upon exchange of the Preference Units in accordance with the Agreement
of Limited Partnership, the Preferred Stock and to consummate the
transactions contemplated hereby, and the individuals executing this
Agreement on behalf of Company have been duly authorized by all
necessary and appropriate action on behalf of Company. This Agreement
is a valid and binding obligation of Company, enforceable against
Company in accordance with its terms, except insofar as enforceability
may be affected by bankruptcy, insolvency or similar laws affecting
creditor's rights generally and the availability of any particular
equitable remedy.
(c) Neither the execution nor the delivery of this Agreement
nor the consummation of the transactions contemplated hereby nor
fulfillment of or compliance with the terms and conditions hereof (a)
conflict with or will result in a breach of any of the terms,
conditions or provisions of (i) the Governing Documents of Company or
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Operating Partnership or any of its general partners or (ii) any
agreement, order, judgment, decree, arbitration award, statute,
regulation or instrument to which Company or Operating Partnership is a
party or by which it or its assets are bound, or (b) constitutes or
will constitute a breach, violation or default under any of the
foregoing. No consent or approval, authorization, order, registration
or qualification of any governmental entity or any other Person is
required for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Operating
Partnership or Company, except for filings under state securities law
or "blue sky" laws (provided such would not have a material adverse
affect on the Company or the transaction contemplated by this
Agreement).
(d) Immediately following the issuance of the Preference
Units pursuant to this Agreement, less than 8% of the value of
Operating Partnership's assets will consist of "stock and securities"
within the meaning of Section 351(e)(1) of the Code and Operating
Partnership has no plan to increase the amount of its assets
constituting "stock and securities" to a percentage equal to or greater
than 10% (except for short-term cash equivalents and other short-term
assets arising from the temporary investment of stock or debt issuance
proceeds).
(e) Operating Partnership has not been and is not
currently a PTP.
(f) Neither the Company nor any Subsidiary of Company has
any present plan or intention, and neither the Company nor any
Subsidiary of Company has any actual knowledge of any present plan or
intention of any partner in Operating Partnership, to take any action
or actions that would or would likely result in Operating Partnership
becoming a PTP in the foreseeable future. Neither Company nor any
Subsidiary of Company has actual knowledge of facts that reasonably
would cause it to expect that Operating Partnership would or would
likely become a PTP in the foreseeable future.
(g) The Company has properly elected to be taxable as a
real estate investment trust (a "REIT") under and in accordance with
Sections 856 to 860 of the Code, currently qualifies for taxation as a
REIT and has no plan or intention or knowledge of facts that would
likely cause it to fail to qualify for taxation as a REIT in the
foreseeable future.
(h) The Preferred Stock issuable upon exchange of the
Preference Units in accordance with the Agreement of Limited
Partnership have been duly and validly reserved for issuance, and upon
issuance in accordance with this Agreement, the Agreement of Limited
Partnership and the Charter, shall be duly and validly issued, fully
paid and non-assessable. The Preference Units have been duly authorized
and upon contribution of the Contribution Amount to the Operating
Partnership will be validly issued, fully paid and non-assessable.
(i) Neither the issuance, sale or delivery of the
Preference Units nor, upon
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exchange, the issuance and delivery of the Preferred Stock, is subject
to any preemptive right of any Partner of Operating Partnership arising
under law or the Agreement of Limited Partnership or any stockholder of
the Company arising under applicable law or the Charter or Bylaws, or
to any contractual right of first refusal or other right in favor of
any Person. With the exception of the Charter and the Agreement of
Limited Partnership, there are no agreements or understandings in
effect restricting the voting rights, the distribution rights (except
with respect to the Financing Agreements) or any other rights of the
holders of the Preference Units, or upon exchange, the Preferred Stock.
(j) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Company or the Operating
Partnership, currently threatened against Operating Partnership or
Company that questions the validity of this Agreement or the right of
Operating Partnership or Company to enter into this Agreement, and to
consummate the transactions contemplated hereby, or that would
reasonably be expected to, either individually or in the aggregate,
have a material adverse affect on the business, capitalization,
operations, properties or condition (financially or otherwise) of
Operating Partnership or Company, or result in any change in the
current equity ownership of Operating Partnership or Company, nor is
Company or Operating Partnership aware that there is any basis for the
foregoing.
(k) Neither Operating Partnership nor Company is in
conflict with, or in default or violation of (i) any law, rule,
regulation, order, judgment or decree applicable to it or by which any
of its properties or assets is bound or affected, or (ii) any note,
bond, mortgage, indenture or obligation to which it is a party or by
which Operating Partnership or Company or any property or asset of
Company or Operating Partnership is bound or affected, except for any
such conflicts, defaults or violations that would not reasonably be
expected to, individually or in the aggregate, have a material adverse
effect on the business, operations, properties or condition
(financially or otherwise) of Operating Partnership or Company.
(l) Partnership and Company hereby consent to
any pledge and release of such pledge of the Preference Units subject
to and in accordance with the Agreement of Limited Partnership, and to
any pledge and release of such pledge of any Preferred Stock into which
such Preference Units are exchanged, to secure the obligations of
Contributors.
(m) Operating Partnership has no plan or present
intention of merging, consolidating, or selling or leasing all of its
assets as an entirety, where the resulting, surviving or transferee
entity is a corporation or otherwise not a pass-through entity.
Operating Partnership and Company hereby expressly permit Shearman &
Sterling, as counsel to Contributors and Manager, to rely upon the
representations and warranties set forth in this PARAGRAPH 8 as if such
representations and warranties were made by Operating Partnership
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and Company directly to Shearman & Sterling.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in PARAGRAPHS 7 and 8 shall survive the
Closing.
10. BROKERS. Each party represents and warrants to the other that
it has dealt with no broker, finder or other person (collectively, "BROKER")
with respect to this Agreement or the transactions contemplated hereby and that
no Broker is entitled to a commission as a result of this transaction, except
for Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Operating Partnership
is responsible for the commission to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation pursuant to a separate agreement. Each of (a) Operating Partnership
and Company, severally and not jointly, on the one hand, and (b) Contributors on
the other hand, agree to indemnify and hold harmless the other party against any
loss, liability, damage, expense or claim incurred by reason of any brokerage
commission or finder's fee alleged to be payable because of any act, omission or
statement of the indemnifying party. Such indemnity obligation shall be deemed
to include the payment of reasonable attorney's fees and court costs incurred in
defending any such claim. The provisions of this PARAGRAPH 10 shall survive the
Closing.
11. COMPLETE AGREEMENT. This Agreement represents the entire
agreement between Contributors, Operating Partnership and Company covering
everything agreed upon or understood in this transaction and all other prior
agreements, written or oral, including any prior subscription agreements or
letters, are merged into this Agreement. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof in effect between the parties.
No change or addition shall be made to this Agreement except by a written
agreement executed by Contributors, Operating Partnership and Company.
12. AUTHORIZED SIGNATORIES. The persons executing this Agreement
for and on behalf of Contributors, Operating Partnership and Company each
represent that they have the requisite authority to bind the entities on whose
behalf they are signing.
13. PARTIAL INVALIDITY. If any term, covenant or condition of this
Agreement is held to be invalid or unenforceable in any respect, such invalidity
or unenforceability shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
14. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be interpreted
and enforced according to the laws of the State of Michigan.
(b) Headings; Sections. All headings in this Agreement
are inserted for convenience only and do not form part of this
Agreement or limit, expand or otherwise
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alter the meaning of any provisions hereof.
(c) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
and all of which shall constitute one and the same agreement. Facsimile
signatures shall be deemed effective execution of this Agreement and
may be relied upon as such by the other party. In the event facsimile
signatures are delivered, originals of such signatures shall be
delivered to the other party within three (3) business days after
execution.
(d) No Benefit For Third Parties. The provisions of this
Agreement are intended to be for the sole benefit of the parties hereto
and their respective successors and permitted assigns, and none of the
provisions of this Agreement are intended to be, nor shall they be
construed to be, for the benefit of any third party.
(e) Rights and Obligations. The rights and obligations of
Contributors, Operating Partnership and Company shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
(f) Limitation of Liability. The liability of
Contributors hereunder shall be limited to the Contribution Amount.
15. NOTICES. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered, delivered by nationally recognized
overnight courier with proof of delivery thereof, sent by United States
registered or certified mail (postage prepaid, return receipt requested)
addressed as hereinafter provided or via telephonic facsimile transmission with
proof of delivery in the form of a facsimile transmission confirmation report.
Notice shall be sent and deemed given when (a) if personally delivered or via
nationally recognized overnight courier, then upon receipt by the receiving
party, or (b) if mailed, then three (3) days after being postmarked, or (c) if
sent via telephonic facsimile transmission, then at the time set forth in the
facsimile transmission confirmation report.
Any party listed below may change its address hereunder by notice to
the other party listed below. Until further notice, notice and other
communications hereunder shall be addressed to the parties listed below as
follows:
If to Contributors: Belcrest Realty Corporation and
Belair Real Estate Corporation
c/o Xxxxx Xxxxx Management
The Xxxxx Xxxxx Building
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxx
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Fax: (000) 000-0000
If to Operating
Partnership Sun Communities Operating Limited
or Company: Partnership
Xxxxx 000
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
16. PRESS RELEASES. Contributors, Operating Partnership and
Company each agrees that it will not issue any press release, advertisement or
other public communication with respect to this Agreement or transaction
contemplated therein without the prior consent of the other party hereto, except
to the extent such communication is required by applicable law or the rules of
the New York Stock Exchange; provided, however, that in such event, such party
shall deliver a copy of such proposed press release to the other party prior to
the publication thereof and shall grant the other party an opportunity to review
the same and shall make reasonable revisions to such proposed press release
requested by the other party.
(SIGNATURES ON NEXT PAGE)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day first written above.
CONTRIBUTORS:
BELCREST REALTY CORPORATION
By: /s/ Xxxxxxx X Xxxxx
------------------------------
Name: Xxxxxxx X Xxxxx
Title: Vice President
BELAIR REAL ESTATE CORPORATION
By: /s/ Xxxxxxx X Xxxxx
------------------------------
Name: Xxxxxxx X Xxxxx
Title: Vice President
(SIGNATURES CONTINUE ON NEXT PAGE)
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OPERATING PARTNERSHIP:
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: Sun Communities, Inc., its
general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
COMPANY:
SUN COMMUNITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
