Exhibit 10.9.1
APPENDIX I
DEFINITIONS
For all purposes of the Agreement, the following terms shall have the respective
meanings set forth below:
"Acquiring Person" means a "person" or "group of persons" within the
meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended.
"Addition Loan Documents" means the Security Instrument covering an
Additional Mortgaged Property and any other documents, instruments or
certificates required by Lender in connection with the addition of the
Additional Mortgaged Property to the Collateral Pool pursuant to Article
3.
"Addition Request" means a written request, substantially in the
form of Exhibit M to the Agreement, to add Additional Mortgaged Properties
to the Collateral Pool as set forth in Section 3.02(a).
"Additional Borrower" means the owner of an Additional Mortgaged
Property, which entity becomes a Borrower under the Agreement and the
applicable Loan Documents.
"Additional Collateral Due Diligence Fees" means the due diligence
fees paid by Borrower to Lender with respect to each Additional Mortgaged
Property.
"Additional Mortgaged Property" means each Manufactured Housing
Community owned by any Borrower or Additional Borrower (either in fee
simple or as tenant under a ground lease meeting all of the requirements
of the DUS Guide) and added to the Collateral Pool after the Initial
Closing Date pursuant to Article 3.
"Advance" means a Variable Advance (including a Rollover Variable
Advance) or a Fixed Advance.
"Advance Confirmation Instrument" means the written instrument,
substantially in the form of Exhibit K to the Agreement, issued by
Borrower to Lender to confirming Borrower's obligation to repay Variable
Advances pursuant to Section 2.02.
"Advance Request" means a written request, substantially in the form
of Exhibit L to the Agreement, for an Advance made pursuant to Section
2.04.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
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possession, directly or indirectly, of the power to direct or cause the
direction of the management (other than property management) and policies
of that Person, whether through the ownership of voting securities,
partnership interests or by contract or otherwise.
"Aggregate Debt Service Coverage Ratio" means, for any specified
date, the ratio (expressed as a percentage) of--
(a) the aggregate of the Net Operating Income for the preceding 12
month period for the Mortgaged Properties
to
(b) the Facility Debt Service on the specified date.
"Aggregate Loan to Value Ratio" means, for any specified date, the
ratio (expressed as a percentage) of--
(a) the Advances Outstanding on the specified date,
to
(b) the aggregate of the Valuations most recently obtained prior
to the specified date for all of the Mortgaged Properties.
"Agreement" means the Amended and Restated Master Credit Facility
Agreement, as it may be amended, supplemented or otherwise modified from
time to time, including all Recitals, Appendices and Exhibits to the
Agreement, each of which is hereby incorporated into the Agreement by this
reference.
"Allocable Facility Amount" means the portion of the Credit Facility
allocated to a particular Mortgaged Property by Lender in accordance with
the Agreement. The Allocable Facility Amount for each Mortgaged Property
shall equal the then current Aggregate Loan to Value Ratio multiplied by
the then current Valuation of such Mortgaged Property.
"Amortization Period" means the period of 30 years.
"Applicable Law" means (a) all applicable provisions of all
constitutions, statutes, rules, regulations and orders of all governmental
bodies, all Governmental Approvals and all orders, judgments and decrees
of all courts and arbitrators, (b) all zoning, building, environmental and
other laws, ordinances, rules, regulations and restrictions of any
Governmental Authority affecting the ownership, management, use,
operation, maintenance or repair of any Mortgaged Property, including the
Americans with Disabilities Act (if applicable), the Manufactured Home
Construction and Safety Standards Act of 1974, the Fair Housing Amendment
Act of 1988 and Hazardous
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Materials Laws (as defined in the Security Instrument), (c) any building
permits or any conditions, easements, rights-of-way, covenants,
restrictions of record or any recorded or unrecorded agreement affecting
or concerning any Mortgaged Property including planned development
permits, condominium declarations, and reciprocal easement and regulatory
agreements with any Governmental Authority, (d) all laws, ordinances,
rules and regulations, whether in the form of rent control, rent
stabilization or otherwise, that limit or impose conditions on the amount
of rent that may be collected from the units of any Mortgaged Property,
and (e) requirements of insurance companies or similar organizations,
affecting the operation or use of any Mortgaged Property or the
consummation of the transactions to be effected by the Agreement or any of
the other Loan Documents.
"Appraisal" means an appraisal of a Manufactured Housing Community
conforming to the requirements of Chapter 5 of Part III of the DUS Guide
and accepted by Lender.
"Appraised Value" means the value set forth in an Appraisal.
"Approved Acquiring Person" means any person, corporation, limited
partnership, limited liability company, limited liability limited
partnership, real estate investment trust or any other entity, or the
beneficial owner(s) of any of the foregoing who (a) has a net worth of at
least $250,000,000, (b) owns, directly or indirectly, manufactured housing
communities comprising at least a total of 15,000 manufactured home sites,
and (c) within the immediately preceding ten (10) year period has not been
the primary controlling party on a loan acquired in whole or in part by
Xxxxxx Xxx where the borrower (i) has defaulted on the loan or (ii) filed
a voluntary bankruptcy or (iii) contested a foreclosure or forfeiture
proceeding initiated by Xxxxxx Xxx or (iv) otherwise engaged in
adversarial litigation with Xxxxxx Xxx.
"Borrower" means, individually and collectively, Sun Secured
Financing LLC, a Michigan limited liability company, Aspen-Ft. Xxxxxxx
Limited Partnership, a Michigan limited partnership, Sun Secured Financing
Houston Limited Partnership, a Michigan limited partnership, Sun
Communities Finance, LLC, a Michigan limited liability company, Sun Xxxxx
Forest LLC, a Michigan limited liability company, Sun Saddle Oak LLC, a
Michigan limited liability company, and any Additional Borrower becoming a
party to the Agreement and any other Loan Documents, but excluding any
party which was a Borrower and any and all Mortgaged Properties owned by
such Borrower have been released from the Collateral Pool.
"Business Day" means a day on which Xxxxxx Xxx is open for business.
"Calendar Quarter" means, with respect to any year, any of the
following three month periods: (a) January-February-March; (b)
April-May-June; (c) July-August-September; and (d)
October-November-December.
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"Calendar Year" means the 12-month period from the first day of
January to and including the last day of December, and each 12-month
period thereafter.
"Cap" means an interest rate cap provided pursuant to, and
satisfying the requirements of, Article 16.
"Cap Documents" has the meaning set forth in Section 16.02.
"Cap Interest Rate" has the meaning set forth in Section 16.02.
"Cap Rate" means, for each Mortgaged Property, a capitalization rate
reasonably selected by Lender for use in determining the Valuations and
based on similar criteria as the most recent Appraisal of such Mortgage
Property as reasonably modified or supplemented by Xxxxxx, as disclosed to
Borrower from time to time. If the Borrower elects to challenge the Cap
Rate determined by Lender for any Mortgaged Property, the Borrower shall
notify Lender of such challenge in writing not more than five (5) Business
Days after Borrower is informed of the Cap Rate by Xxxxxx. Promptly upon
receipt of notice of such challenge, Lender shall order a study of
capitalization rates applicable to the relevant Mortgaged Property by an
appraiser reasonably acceptable to Lender (a "Cap Rate Study"). If the
Borrower and Xxxxxx accept the results of the Cap Rate Study, the
capitalization rate recommended by the Cap Rate Study shall be the Cap
Rate applicable to such Mortgaged Property until the next Valuation of
such Mortgaged Property. If either the Borrower or Lender does not accept
the Cap Rate Study, the objecting party shall notify the other party
within five (5) Business Days, whereupon the Lender shall promptly order
two additional Cap Rate Studies. The Cap Rate shall be the average
capitalization rate set forth in the two additional Cap Rate Studies. The
Borrower shall pay the cost of all Cap Rate Studies.
"Cap Security Agreement" means, with respect to a Cap, the Interest
Rate Cap Security, Pledge and Assignment Agreement between the Borrower
and the Lender, for the benefit of Lender, in the form attached as Exhibit
S to this Agreement as such agreement may be amended, modified,
supplemented or restated from time to time.
"Cash Equivalents" means:
(a) securities issued or fully guaranteed or insured by the United
States Government or any agency thereof and backed by the full
faith and credit of the United States having maturities of not
more than twelve (12) months from the date of acquisition.
(b) certificates of deposit, time deposits, demand deposits,
eurodollar time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each
case a term of not more than twelve (12) months, issued by any
commercial bank having membership in the FDIC, or by any U.S.
commercial lender (or any branch or agency of a non-U.S. bank
licensed to conduct business in the U.S.) having combined
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capital and surplus of not less than $100,000,000 whose
short-term securities are rated at least A-1 by Standard &
Poor's Corporation or P-1 by Xxxxx'x Investors Service, Inc.;
and
(c) commercial paper of an issuer rated at least A-1 by Standard &
Poor's Corporation or P-1 by Xxxxx'x Investors Service, Inc.
and in either case having a term of not more than twelve (12)
months.
"Change of Control" means the earliest to occur of: (a) the date on
which Sun or the OP ceases for any reason whatsoever to be the sole
general partner or managing member of any Borrower, either directly or
indirectly as the sole general partner or managing member of one or more
Affiliates who are members or partners of any Borrower, unless the
successor to Sun or the OP is an Approved Acquiring Person or an Affiliate
thereof, or (b) the date on which Sun or the OP, or any combination
thereof, shall cease for any reason to be the holder, directly or
indirectly, of at least 51% of the voting interest of any Borrower or to
own, directly or indirectly, at least 40% of the equity, profits or other
limited partnership interests or membership interests in, or Voting Equity
Capital (or any other Securities or ownership interests) of any Borrower,
unless in either case the successor to Sun or the OP is an Approved
Acquiring Person (other than an Approved Acquiring Person or an Affiliate
thereof), or (c) the date on which an Acquiring Person (other than an
Approved Acquiring Person or an Affiliate thereof) becomes (by
acquisition, consolidation or merger), directly or indirectly, the
beneficial owner of more than 49% of the total Voting Equity Capital (or
of any other Securities or ownership interest) of any Borrower, Sun or the
OP then outstanding.
"Chief Financial Officer" means the chief financial officer of Sun
or any other person with responsibility for any of the functions typically
performed in a corporation by the chief financial officer.
"Closing Date" means the Initial Closing Date and each date after
the Initial Closing Date on which the funding or other transaction
requested in a Request is required to take place.
"Collateral" means the Mortgaged Properties and other collateral
from time to time or at any time encumbered by the Security Instruments,
or any other property securing Borrower's obligations under the Loan
Documents.
"Collateral Pool" means all of the Collateral.
"Commitment" means, at any time, the sum of the Fixed Facility
Commitment and the Variable Facility Commitment.
"Commitment Amount" means the lesser of (a) the amount that would
result in an Aggregate Loan to Value Ratio of 75%, or (b) the amount that
would result in (i) an Aggregate Debt Service Coverage Ratio of 1.0 for
the portion of the Commitment that will be the Variable Facility
Commitment (using a prorated portion of the Net Operating
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Income and using the Facility Debt Service for only the Variable Facility
Commitment in making such determination of Debt Service Coverage Ratio),
provided that such amount shall not exceed 103% of the amount that would
result using the calculation set forth in (ii) below, and (ii) an
Aggregate Debt Service Coverage Ratio of 1.30 for the portion of the
Commitment that will be the Fixed Facility Commitment (using a prorated
portion of the Net Operating Income and using the Facility Debt Service
for only the Fixed Facility Commitment in making such determination of
Aggregate Debt Service Coverage Ratio).
"Complete Fixed Facility Termination" shall have the meaning set
forth in Section 5.02(a).
"Complete Variable Facility Termination" shall have the meaning set
forth in Section 5.02(a).
"Compliance Certificate" means a certificate of Borrower
substantially in the form of Exhibit F to the Agreement.
"Consolidated EBITDA" means, for any period, and without double
counting any item, the EBITDA for Sun and its Subsidiaries for such period
on a consolidated basis.
"Consolidated EBITDA to Interest Ratio" means, for any period of
determination, the ratio (expressed as a percentage) of--
(a) the excess of--
(i) the Consolidated EBITDA for the period, less
(ii) the Imputed Capital Expenditures for the period;
to
(b) the Consolidated Interest Expense for the period.
"Consolidated Interest Expense" means, for any period of
determination, and without double counting any item, the sum of the
Interest Expense for Sun for such period on a consolidated basis.
"Conversion Amendment" means the Master Credit Facility Conversion
Amendment, substantially in the form of Exhibit I to the Agreement,
reflecting the conversion of all or any portion of the Variable Facility
Commitment to the Fixed Facility Commitment as set forth in Section
1.08(b).
"Conversion Documents" means the Conversion Amendment, together with
an amendment to each Security Document and other applicable Loan
Documents, in form and substance reasonably satisfactory to Lender,
reflecting the change in the Fixed Facility Commitment and the Variable
Facility Commitment pursuant to Section 1.08.
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"Conversion Request" means a written request, substantially in the
form of Exhibit H to the Agreement, to convert all or any portion of the
Variable Facility Commitment to the Fixed Facility Commitment pursuant to
Section 1.08.
"Coupon Rate" means, with respect to a Variable Advance, the imputed
interest rate determined by Lender pursuant to Section 1.05(a) and, with
respect to a Fixed Advance, the interest rate determined by Lender
pursuant to Section 1.05(b).
"Coverage and LTV Tests" mean, for any specified date, each of the
following financial tests:
(a) The Aggregate Debt Service Coverage Ratio is not less
than 1.30:1.0.
(b) The Aggregate Loan to Value Ratio does not exceed 75%.
"Credit Facility" means the Fixed Facility and the Variable
Facility.
"Credit Facility Termination Documents" means the instruments
releasing the Security Instruments as lien on the Mortgaged Properties,
UCC-3 Termination Statements terminating the UCC-1 Financing Statements on
the Mortgaged Properties, and such other documents and instruments
necessary to evidence the release of the Collateral from any lien securing
the Obligations, and the Notes, all in connection with the termination of
the Agreement and the Credit Facility pursuant to Article 5.
"Credit Facility Termination Request" means a written request,
substantially in the form of Exhibit R to the Agreement, to terminate the
Agreement and the Credit Facility pursuant to Section 5.04(a).
"Debt Service Coverage Ratio" means -
(a) For any Mortgaged Property, for any specified date, the ratio
(expressed as a percentage) of --
(i) the aggregate of the Net Operating Income for the
preceding 12 month period for the subject Mortgaged
Property
to
(ii) the Facility Debt Service on the specified date,
assuming, for the purpose of calculating the Facility
Debt Service for this definition, that Advances
Outstanding shall be the Allocable Facility Amount for
the subject Mortgaged Property.
(b) For purposes of determining the Commitment Amount, the ratio
(expressed in decimal form) of --
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(i) the applicable portion of Net Operating Income for the
preceding 12 month period
to
(ii) the applicable Facility Debt Service, as described in
the definition of Commitment Amount.
"Discount" means, with respect to any Variable Advance, an amount
equal to the excess of --
(i) the face amount of the MBS backed by the Variable Advance,
over
(ii) the Price of the MBS backed by the Variable Advance.
"DUS Guide" means the Xxxxxx Xxx Multifamily Delegated Underwriting
and Servicing (DUS) Guide, as such Guide may be amended from time to time,
including exhibits to the DUS Guide and amendments in the form of Lender
Memos, Guide Updates and Guide Announcements (and, if such Guide is no
longer used by Xxxxxx Xxx, the term "DUS Guide" as used in the Agreement
means the Xxxxxx Xxx Multifamily Negotiated Transactions (NT) Guide, as
such Guide may be amended from time to time, including amendments in the
form of Lender Memos, Guide Updates and Guide Announcements). All
references to specific articles and sections of, and exhibits to, the DUS
Guide shall be deemed references to such articles, sections and exhibits
as they may be amended, modified, updated, superseded, supplemented or
replaced from time to time.
"DUS Guide Underwriting Requirements" means the overall underwriting
requirements for Manufactured Housing Communities as set forth in the DUS
Guide.
"EBITDA" means, for any period, the sum determined in accordance
with GAAP, of the following, for any Person on a consolidated basis--
(a) the net income (or net loss) of such Person during such
Period;
(b) all amounts treated as expenses for real estate depreciation,
Interest Expense and the amortization of intangibles of any kind to the
extent included in the determination of such net income (or loss); and
(c) all accrued taxes on or measured by income to the extent
included in the determination of such net income (or loss);
provided, however, that net income (or loss) shall be computed for
these purposes without giving effect to extraordinary losses or
extraordinary gains.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
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"Event of Default" means any event defined to be an "Event of
Default" under Article 11.
"Expansion" means an increase in the Commitment made in accordance
with Article 4.
"Expansion Loan Documents" means amendments to the Variable Facility
Note or the Fixed Facility Notes, as the case may be, increasing the
amount of such Note to the amount of the Commitment, as expanded in
accordance with Article 4 and amendments to the Security Instruments,
increasing the amount secured by such Security Instruments to the amount
of the Commitment.
"Expansion Request" means a written request, substantially in the
form of Exhibit O to the Agreement, to obtain an Expansion pursuant to
Section 4.02.
"Facility Debt Service" means -
(a) For use in determining the Commitment Amount on the Initial
Closing Date, the sum of the amount of interest and principal
amortization that would be payable during the 12 month period
immediately succeeding the Initial Closing Date, with respect
to the full amount of the initial Commitment, except that, for
these purposes:
(i) the initial amount of the Variable Facility Commitment
shall be deemed to require level monthly payments of
principal and interest (at an interest rate equal to (A)
the Three Month LIBOR rate plus (B) the Variable
Facility Fee plus (C) 300 basis points) in an amount
necessary to fully amortize the original principal
amount of the Variable Facility Commitment over the
Amortization Period, with such amortization deemed to
commence on the first day of the 12 month period; and
(ii) the initial amount of the Fixed Facility Commitment
shall be deemed to require level monthly payments of
principal and interest (at an interest rate equal to (A)
the base United States Treasury Index Rate for
securities having a maturity substantially similar to
the maturity of the Fixed Advance plus (B) the
anticipated investor spread (as determined by the
Lender) for Fixed Advances having similar
characteristics as the Fixed Advance to be made in
connection with the Fixed Facility Commitment plus (C)
the Fixed Facility Fee) in an amount necessary to fully
amortize the original principal amount of the Fixed
Facility Commitment over the Amortization Period, with
such amortization to commence on the first day of the 12
month period.
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The interest rates described in this clause (a)
determined as of the Initial Closing Date are
hereinafter referred to as the "Underwriting Rates."
(b) For use in determining the additional borrowing capacity
created by the addition of Additional Mortgaged Properties and
the amount of any Future Advance made pursuant to Section
2.06, the sum of:
(i) the amount of interest and principal amortization,
during the 12 month period immediately succeeding the
specified date, with respect to the Advances Outstanding
on the specified date and Advances to be obtained
relating to the Additional Mortgaged Properties, except
that, for these purposes:
(A) each Variable Advance Outstanding or to be
obtained relating to the Additional Mortgaged
Properties shall be deemed to require level
monthly payments of principal and interest at a
rate equal to the rate that would apply to such
Variable Advance if the Underwriting Rates were
being determined on the date of calculation, in an
amount necessary to fully amortize the original
principal amount of the Variable Advance over the
Amortization Period, with such amortization deemed
to commence on the first day of the 12 month
period; and
(B) each Fixed Advance Outstanding shall require level
monthly payments of principal and interest (at the
Coupon Rate for the Fixed Advance) in an amount
necessary to fully amortize the original principal
amount of the Fixed Advance over the Amortization
Period, with such amortization to commence on the
first day of the 12 month period; and
(C) each Fixed Advance to be obtained shall be deemed
to require level monthly payments of principal and
interest at a rate equal to the estimated Coupon
Rate for such Fixed Advance in an amount necessary
to fully amortize the original principal amount of
such Fixed Advance over the Amortization Period,
with such amortization deemed to commence on the
first day of the 12 month period; and
(ii) the amount of the Standby Fees, if any, payable to
Lender pursuant to Section 10.01 during such 12 month
period (assuming, for these purposes, that the Advances
Outstanding throughout the 12 month
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period are always equal to the amount of Advances
Outstanding on the specified date).
(c) For use in determining the Aggregate Debt Service Coverage
Ratio for purposes of determining Release Prices pursuant to
Section 3.04(c) of the Agreement, for purposes of determining
compliance with the Coverage and LTV Tests, and for other
ongoing monitoring purposes, as of any specified date, the sum
of:
(i) the amount of interest and principal amortization,
during the 12 month period immediately succeeding the
specified date, with respect to the Advances Outstanding
on the specified date, except that, for these purposes:
(A) each Variable Advance shall be deemed to require
level monthly payments of principal and interest
(at the Coupon Rate for such Variable Advance) in
an amount necessary to fully amortize the original
principal amount of the Variable Advance over the
Amortization Period, with such amortization deemed
to commence on the first day of the 12 month
period; and
(B) each Fixed Advance shall require level monthly
payments of principal and interest (at the Coupon
Rate for such Fixed Advance) in an amount
necessary to fully amortize the original principal
amount of the Fixed Advance over the Amortization
Period, with such amortization to commence on the
first day of the 12 month period; and
(ii) the amount of the Standby Fees, if any, payable to
Lender pursuant to Section 10.01 during such 12 month
period (assuming, for these purposes, that the Advances
Outstanding throughout the 12 month period are always
equal to the amount of Advances Outstanding on the
specified date).
"Facility Termination Document" means the Amendment of the Master
Credit Facility Agreement, substantially in the form of Exhibit Q to the
Agreement, evidencing the permanent reduction in the Facility Commitment
pursuant to Section 5.02.
"Facility Termination Fee" means, with respect to a reduction in the
Variable Facility Commitment pursuant to Article 5 (other than in
connection with the conversion of a Variable Advance to a Fixed Advance or
as otherwise provided in the Loan Documents), the sum of an amount equal
to the product obtained by multiplying
(1) the reduction in the Variable Facility Commitment, by
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(2) the Variable Facility Fee, by
(3) the present value factor calculated using the following
formula:
1 - (1 + r)(-n)/r
[r = Yield Rate
n = the number of years and any fraction thereof remaining
between the Closing Date for the reduction in the
Commitment and the date six (6) months prior to the
Variable Facility Termination Date]
The "Yield Rate" means the rate, determined as of the Initial Closing
Date, on the U.S. Treasury security having a maturity closest to the
Variable Facility Termination Date.
"Facility Termination Request" means a written request,
substantially in the form of Exhibit P to the Agreement, for a permanent
reduction in the Variable Facility Commitment or the Fixed Facility
Commitment pursuant to Section 5.02.
"Xxxxxx Xxx" means the federally-chartered and stockholder-owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, 12 U.S.C. Section 1716 et seq.
"Fees" means Additional Collateral Due Diligence Fee, Facility
Termination Fee, Fixed Facility Fee, Rate Preservation Fee, Standby Fee,
Substitution Fee, Variable Facility Fee any and all other fees specified
in the Agreement.
"Final Loss" shall mean, with respect to any Mortgaged Property, the
positive difference, if any, between (A) the Obligations unpaid at the
time of calculation and (B) the sum of the amounts realized from the sale
of the applicable REO Property or the value of the REO Property determined
as set forth below, together with Net Operating Income from the time the
applicable property becomes an REO property, as of the Final Loss Date.
"Final Loss Date" shall mean, with respect to any Mortgaged
Property, the later of the date the REO Property was sold to an unrelated
third party or, if the REO Property has not been sold for a period of
twelve (12) months following the date it became an REO Property, the value
of the REO Property determined as provided in the definition of REO
Property.
"First Anniversary" means the date that is one year after the
Initial Closing Date.
"Fixed Advance" means a loan made by Lender to Borrower under the
Fixed Facility Commitment.
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"Fixed Facility" means the agreement of Lender to make Fixed
Advances to Borrower pursuant to Section 1.01.
"Fixed Facility Availability Period" means the period beginning on
the Initial Closing Date and ending on the date 10 years after the Initial
Closing Date.
"Fixed Facility Commitment" means $177,362,500, plus such amount as
Borrower may elect to add to the Fixed Facility Commitment in accordance
with Section 1.08 and Article 4.
"Fixed Facility Fee" means (i) 48 basis points for a Fixed Advance
drawn from the Fixed Facility Commitment in effect during the period
ending on the First Anniversary (whenever such Fixed Advance is made) and
(ii) for any Fixed Advance drawn from any portion of the Fixed Facility
Commitment (excluding the Reserved Amount), increased under Article 4 or
converted under Section 1.08 from any portion of the Variable Commitment
after the period ending on the First Anniversary, the number of basis
points determined at the time of such increase by Lender as the Fixed
Facility Fee for such Fixed Advances (which shall be based on the amount
then being charged by Lender to other borrowers of comparable financial
condition as Borrower (taking into account the financial condition of Sun
to the extent and in a similar manner as the financial condition of Sun
was taken into account in the original underwriting of the Credit
Facility) on credit facilities secured by manufactured housing properties
having similar characteristics regarding leverage, geographic diversity,
recourse and other material terms as reasonably determined by Lender). In
the event the Rate Preservation Fee is being paid, there shall be no
change in the Fixed Facility Fee with respect to the portion of the Fixed
Facility Commitment on which the Rate Preservation Fee is being paid.
"Fixed Facility Note" means a promissory note, in the form attached
as Exhibit B-1 or B-2, as applicable, to the Agreement, which will be
issued by Borrower to Lender, concurrently with the funding of each Fixed
Advance, to evidence Borrower's obligation to repay the Fixed Advance.
"Fixed Facility Termination Date" means the date 15 years after the
Initial Closing Date.
"Future Advance" means an Advance made after the Initial Closing
Date.
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time, consistently applied.
"General Conditions" shall have the meaning set forth in Article 6.
"Geographical Diversification Requirements" means a requirement that
the Collateral Pool consist of not less than five (5) Mortgaged Properties
located in at least three (3) states and, upon any increase in the
Commitment pursuant to Article 4 of the
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Agreement, such requirements as to the geographical diversification of the
Collateral Pool as the Lender may determine at the time of such increase.
"Governmental Approval" means an authorization, permit, consent,
approval, license, registration or exemption from registration or filing
with, or report to, any Governmental Authority.
"Governmental Authority" means any court, board, agency, commission,
office or authority of any nature whatsoever for any governmental unit
(federal, state, county, district, municipal, city or otherwise) whether
now or hereafter in existence.
"Gross Revenues" means, for any specified period, with respect to
any Manufactured Housing Community, all income (including, without
limitation, community fees) in respect of such Manufactured Housing
Community as reflected on the certified operating statement for such
specified period as adjusted to exclude unusual income (e.g. temporary or
nonrecurring income), income not allowed under the DUS Guide as shown in
Section 403.02 of Part III (e.g. interest income, furniture income, etc.),
and the value of any unreflected concessions. Any type of income included
in Gross Revenues at the time of the initial underwriting of any Mortgaged
Property shall continue to be included in the calculation of Gross
Revenues thereafter.
"Guaranty" means that certain Guaranty to be executed by Xxx in the
form of Exhibit E to this Agreement.
"Hazardous Materials", with respect to any Mortgaged Property, shall
have the meaning given that term in the Security Instrument encumbering
the Mortgaged Property.
"Hazardous Materials Law", with respect to any Mortgaged Property,
shall have the meaning given that term in the Security Instrument
encumbering the Mortgaged Property.
"Hazardous Substance Activity" means any storage, holding,
existence, release, spill, leaking, pumping, pouring, injection, escaping,
deposit, disposal, dispersal, leaching, migration, use, treatment,
emission, discharge, generation, processing, abatement, removal,
disposition, handling or transportation of any Hazardous Materials from,
under, into or on any Mortgaged Property in violation of Hazardous
Materials Laws, including the discharge of any Hazardous Materials
emanating from any Mortgaged Property in violation of Hazardous Materials
Laws through the air, soil, surface water, groundwater or property and
also including the abandonment or disposal of any barrels, containers and
other receptacles containing any Hazardous Materials from or on any
Mortgaged Property in violation of Hazardous Materials Laws, in each case
whether sudden or nonsudden, accidental or nonaccidental.
"Impositions" means, with respect to any Mortgaged Property, all (1)
water and sewer charges which, if not paid, may result in a lien on all or
any part of the Mortgaged Property, (2) premiums for fire and other hazard
insurance, rent loss insurance and such
14
other insurance as Lender may require under any Security Instrument, (3)
Taxes, and (4) amounts for other charges and expenses which Lender at any
time reasonably deems necessary to protect the Mortgaged Property, to
prevent the imposition of liens on the Mortgaged Property, or otherwise to
protect Xxxxxx's interests.
"Imputed Capital Expenditures" means, for any four (4) consecutive
quarters, an amount equal to the average number of manufactured housing
sites owned by Sun during such period multiplied by Seventy-Five Dollars
($75.00) per manufactured housing site, and for any period of less than
four (4) consecutive quarters, an appropriate proration of such figure.
"Indebtedness" means, with respect to any Person, as of any
specified date, without duplication, all:
(a) indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than (i) current
trade liabilities incurred in the ordinary course of business and payable
in accordance with customary practices, and (ii) for construction of
improvements to property, if such Person has a non-contingent contract to
purchase such property, and (iii) for the purchase of manufactured homes,
in which case such Indebtedness may be secured by such homes);
(b) other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument;
(c) obligations of such Person under any lease of property,
real or personal, the obligations of the lessee in respect of which are
required by GAAP to be capitalized on a balance sheet of the lessee or to
be otherwise disclosed as such in a note to such balance sheet;
(d) obligations of such Person in respect of acceptances (as
defined in Article 3 of the Uniform Commercial Code of the District of
Columbia) issued or created for the account of such Person;
(e) liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become
liable for the payment of such liabilities; and
(f) as to any Person ("guaranteeing person"), any obligation
of (a) the guaranteeing person or (b) another Person (including any bank
under any letter of credit) to induce the creation of a primary obligation
(as defined below) with respect to which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in either
case guaranteeing, or in effect guaranteeing, any indebtedness, lease,
dividend or other obligation ("primary obligations") of any third person
("primary obligor") in any manner, whether directly or indirectly,
including any obligation of the guaranteeing person, whether or not
contingent, to (1) purchase any such primary obligation or any property
constituting direct or indirect security therefor, (2) advance or
15
supply funds for the purchase or payment of any such primary obligation or
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(3) 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 (4)
otherwise assure or hold harmless the owner of any such primary obligation
against loss in respect of the primary obligation, provided, however, that
the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
The amount of any Contingent Obligation of any guaranteeing person shall
be deemed to be the lesser of (i) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made and (ii) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Contingent Obligation, unless such primary obligation and
the maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such Contingent
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by Owner in good
faith.
"Initial Advance" means the Variable Advance Outstanding on the
Initial Closing Date in the amount of $152,637,500 and the Fixed Advance
Outstanding on the Initial Closing Date in the amount of $177,362,500.
"Initial Closing Date" means the date of the Agreement.
"Initial Mortgaged Properties" means the Manufactured Housing
Communities described on Exhibit A to the Agreement and which represent
the Manufactured Housing Communities which are made part of the Collateral
Pool on the Initial Closing Date.
"Initial Origination Fee" shall have the meaning set forth in
Section 1.02(a).
"Initial Security Instruments" means the Security Instruments
covering the Initial Mortgaged Properties.
"Initial Valuation" means, when used with reference to specified
Collateral, the Valuation initially performed for the Collateral as of the
date on which the Collateral was added to the Collateral Pool. The Initial
Valuation for each of the Initial Mortgaged Properties is as set forth in
Exhibit A to the Agreement.
"Insurance Policy" means, with respect to a Mortgaged Property, the
insurance coverage and insurance certificates evidencing such insurance
required to be maintained pursuant to the Security Instrument encumbering
the Mortgaged Property.
"Interest Expense" means, for any period, the sum of--
16
(a) gross interest expense for the period (including all
commissions, discounts, fees and other charges in connection with standby
letters of credit and similar instruments) for Sun; and
(b) the portion of the up-front costs and expenses for Rate
Contracts entered into by Sun (to the extent not included in gross
interest expense) fairly allocated to such Rate Contracts as expenses for
such period, reduced by interest income earned on Rate Contracts not
otherwise accounted for, as determined in accordance with GAAP;
(c) provided, that, all interest expense accrued by Sun during
such period, even if not payable on or before the Termination Date, shall
be included within "Interest Expense."
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended. Each reference to the Internal Revenue Code shall be deemed to
include (a) any successor internal revenue law and (b) the applicable
regulations whether final, temporary or proposed.
"Lease" means any lease, any sublease or subsublease, license,
concession or other agreement (whether written or oral and whether now or
hereafter in effect) pursuant to which any Person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in
any Mortgaged Property, and every modification, amendment or other
agreement relating to such lease, sublease, subsublease or other agreement
entered into in connection with such lease, sublease, subsublease or other
agreement, and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed and observed by the
other party thereto.
"Lender" shall have the meaning set forth in the first paragraph of
the Agreement, but shall refer to any replacement Lender if the initial
Lender is replaced pursuant to the terms of Section 13.04.
"Lien" means any mortgage, deed of trust, deed to secure debt,
security interest or other lien or encumbrance (including both consensual
and non-consensual liens and encumbrances).
"Liquidity" means, at any time, the amount of cash and Cash
Equivalents owned by a Person.
"Loan Documents" means the Agreement, the Notes, the Guaranty, the
Advance Confirmation Instruments, the Security Documents, all documents
executed by the Borrower or Sun pursuant to the General Conditions set
forth in Article 6 of the Agreement and any other documents executed by
the Borrower, Sun or the OP from time to time in connection with the
Agreement or the transactions contemplated by the Agreement.
17
"Loan to Value Ratio " means, for a Mortgaged Property, for any
specified date, the ratio (expressed as a percentage) of --
(a) the Allocable Facility Amount of the subject Mortgaged
Property on the specified date,
to
(b) the Valuation most recently obtained prior to the specified
date for the subject Mortgaged Property.
"Loan Year" means the 12-month (plus any partial month) period from
the first day of the first calendar month after the Initial Closing Date
to and including the last day of the twelfth calendar month after the
first anniversary of the Initial Closing Date, and each 12-month period
thereafter.
"Manufactured Housing Community" means a residential development
consisting of sites for manufactured homes, related amenities, utility
services, landscaping, roads and other infrastructure.
"Material Adverse Effect" means, with respect to any circumstance,
act, condition or event of whatever nature (including any adverse written
determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singly or in conjunction with any
other event or events, act or acts, condition or conditions, or
circumstance or circumstances, whether or not related, a material adverse
change in or a materially adverse effect upon any of (a) the business,
operations, property or condition (financial or otherwise) of the Borrower
or Sun, (b) the present or future ability of the Borrower or Sun to
perform the Obligations for which it is liable, (c) the validity,
priority, perfection or enforceability of the Agreement or any other Loan
Document or the rights or remedies of Lender under any Loan Document, or
(d) the value of, or Lender's ability to have recourse against, any
Mortgaged Property.
"MBS" means a mortgage-backed security issued by Xxxxxx Xxx which is
"backed" by an Advance and has an interest in the Notes and the Collateral
Pool securing the Notes, which interest permits the holder of the MBS to
participate in the Notes and the Collateral Pool to the extent of such
Advance.
"MBS Imputed Interest Rate" shall have the meaning set forth in
Section 1.05(a).
"MBS Issue Date" means the date on which an MBS is issued by Xxxxxx
Xxx.
"MBS Delivery Date" means the date on which an MBS is delivered by
Xxxxxx Xxx.
"Mortgaged Property and Mortgaged Properties" means, individually
and collectively, the Additional Mortgaged Properties, the Substitute
Mortgaged Properties
18
and the Initial Mortgaged Properties, but excluding each Release Property
from and after the date of its release from the Collateral Pool.
"Net Operating Income" means, for any specified period, with respect
to any Mortgaged Property, the Gross Revenues during such period less the
aggregate Operating Expenses during such period. If a Mortgaged Property
is not in the Collateral Pool for the entire specified period, the Net
Operating Income for the Mortgaged Property for the time within the
specified period during which the Mortgaged Property was in the Collateral
Pool shall be the Mortgaged Property's actual Gross Revenues for each full
Calendar Quarter the Mortgaged Property was part of the Collateral Pool
and the Mortgaged Property's pro forma net operating income determined by
Lender in accordance with the underwriting procedures set forth in Chapter
4 of Part III of the DUS Guide (Determination of Loan Amount) as modified
by Section 2 of Lender Memorandum 2001-02 issued by Xxxxxx Xxx relating to
manufactured housing for each full Calendar Quarter during the specified
period that the Mortgaged Property was not part of the Collateral Pool.
"Net Worth" means, as of any specified date, for any Person, the
excess of the Person's assets over the Person's liabilities, determined in
accordance with GAAP, on a consolidated basis, provided that all real
property shall be valued on an undepreciated basis.
"Note" means any Fixed Facility Note or the Variable Facility Note.
"Obligations" means the aggregate of the obligations of Borrower and
Sun under the Agreement and the other Loan Documents.
"OP" means Sun Communities Operating Limited Partnership, a Michigan
limited partnership.
"Operating Expenses" means, for any period, with respect to any
Manufactured Housing Community, all expenses in respect of the
Manufactured Housing Community, as determined by Lender in accordance with
the DUS Guide based on the certified operating statement for such
specified period as adjusted to provide for the following: (i) all
appropriate types of expenses, including a management fee of 4% or such
other amount as Lender may reasonably determine as prevailing at the time
of calculation in the market in which the Manufactured Housing Commitment
is located and deposits to the Replacement Reserves (whether funded or
not), are included in the total operating expense figure; (ii) upward
adjustments to individual line item expenses to reflect market norms or
actual costs and correct any unusually low expense items, which could not
be replicated by a different owner or manager (e.g., a market rate
management fee will be included regardless of whether or not a management
fee is charged, market rate payroll will be included regardless of whether
shared payroll provides for economies, etc.); and (iii) downward
adjustments to individual line item expenses to reflect unique or aberrant
costs (e.g., non-recurring capital costs, non-operating borrower expenses,
etc.).
19
"Organizational Certificate" means, collectively, certificates from
Borrower and Sun to Lender, in the form of Exhibits G-1 and G-2 to the
Agreement, certifying as to certain organizational matters with respect to
Borrower and Sun.
"Organizational Documents" means all certificates, instruments and
other documents pursuant to which an organization is organized or
operates, including but not limited to, (i) with respect to a corporation,
its articles of incorporation and bylaws, (ii) with respect to a limited
partnership, its limited partnership certificate and partnership
agreement, (iii) with respect to a general partnership or joint venture,
its partnership or joint venture agreement and (iv) with respect to a
limited liability company, its articles of organization and operating
agreement.
"Original Variable Advance" means the Variable Advance made pursuant
to the Original Agreement having an Outstanding principal balance of
$75,000,000 on the Initial Closing Date.
"Original Variable Facility Termination Date" means May 29, 2007,
unless extended pursuant to Section 1.07.
"Outstanding" means, when used in connection with promissory notes,
other debt instruments or Advances, for a specified date, promissory notes
or other debt instruments which have been issued, or Advances which have
been made, but have not been repaid in full as of the specified date.
"Outstanding Allocated Facility Amount" means the allocable facility
amount for any Mortgaged Property on the date such Mortgaged Property
became a part of the collateral pool minus a pro rata portion of all
principal payments made by Borrower pursuant to regularly scheduled
monthly amortization in respect of any Fixed Advance.
"Ownership Interests" means, with respect to any entity, any
ownership interests in the entity and any economic rights (such as a right
to distributions, net cash flow or net income) to which the owner of such
ownership interests is entitled.
"Pass-Through Rate" means the interest rate for a Fixed Advance as
determined by Lender (rounded to three places) as determined in accordance
with Section 2.01.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permits" means all permits and accreditations, or similar licenses
or approvals issued and/or required by an applicable Governmental
Authority or any Applicable Law in connection with the ownership, use,
occupancy, leasing, management, operation, repair, maintenance or
rehabilitation of any Mortgaged Property or any Borrower's business.
20
"Permitted Liens" means, with respect to a Mortgaged Property, (i)
the exceptions to title to the Mortgaged Property set forth in the Title
Insurance Policy for the Mortgaged Property which are approved by Lender,
(ii) the Security Instrument encumbering the Mortgaged Property, (iii) a
Lien imposed or created by Applicable Law, (iv) Liens reasonably required
to permit the development of property owned by an Affiliate of the
Borrower which is located adjacent to the Mortgaged Property, provided
such Liens do not have a Material Adverse Effect and (v) any other Liens
approved by Lender.
"Person" means an individual, an estate, a trust, a corporation, a
partnership, a limited liability company or any other organization or
entity (whether governmental or private).
"Potential Event of Default" means any event which, with the giving
of notice or the passage of time, or both, would constitute an Event of
Default.
"Price" means, with respect to an Advance, the proceeds of the sale
of the MBS backed by the Advance.
"Property" means any estate or interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Rate Contracts" means interest rate and currency swap agreements,
cap, floor and collar agreements, interest rate insurance, currency spot
and forward contracts and other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange
rates.
"Rate Form" means the completed and executed document from Borrower
to Lender pursuant to Section 2.01(b), substantially in the form of
Exhibit J to the Agreement, specifying the terms and conditions for the
requested Advance.
"Rate Preservation Fee" means for any month, an amount equal to the
product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by
(iii) the Reserved Amount. The Rate Preservation Fee shall be paid monthly
in arrears commencing on the first month after the First Anniversary for
so long as Borrower wishes to have a Reserved Amount, but shall no longer
be payable following an Expansion adding the Reserved Amount to the
Commitment.
"Rate Setting Date" shall have the meaning set forth in Section
2.01(b).
"Release Documents" mean instruments releasing the applicable
Security Instrument as a Lien on the Release Property, and UCC-3
Termination Statements terminating the UCC-1 Financing Statements, and
such other documents and instruments to evidence the release of the
Release Property from the Collateral Pool.
21
"Release Property" means the Mortgaged Property to be released
pursuant to Section 3.04.
"Release Price" shall have the meaning set forth in Section 3.04(c).
"Release Request" means a written request, substantially in the form
of Exhibit M to the Agreement, to obtain a release of Collateral from the
Collateral Pool pursuant to Section 3.04(a).
"Rent Roll" means, with respect to any Manufactured Housing
Community, a rent roll prepared and certified by the owner of the
Manufactured Housing Community, on Xxxxxx Xxx Form 4243, as set forth in
Exhibit III-3 of the DUS Guide as modified by Section 3.02 of Lender
Memorandum 2001-02 issued by Xxxxxx Xxx relating to manufactured housing,
or on another form approved by Lender and containing substantially the
same information as Form 4243 requires.
"REO Property" means a Mortgaged Property securing the Obligations
that was acquired by Lender or a designee of either by foreclosure or deed
in lieu of foreclosure. In the case of a foreclosure, the date the
property was acquired shall be deemed to occur at the expiration of the
applicable redemption period. The value of an REO Property held for twelve
(12) months following the expiration of the redemption period shall be
determined by an Appraisal.
"Replacement Reserve Agreement" means a Replacement Reserve and
Security Agreement, reasonably required by Lender, and completed in
accordance with the requirements of the DUS Guide.
"Request" means an Advance Request, an Addition Request, an
Expansion Request, a Substitution Request, a Release Request, a Conversion
Request, a Credit Facility Termination Request, or a Facility Termination
Request.
"Reserved Amount" means all or a portion of the amount by which
Borrower may increase the Commitment pursuant to Article 4, in an amount
designated in writing from time to time by the Borrower as the amount on
which the Fixed Facility Fee and the Variable Facility Fee shall not
increase in the event of an Expansion for so long as the Borrower timely
pays the Rate Preservation Fee on such amount.
"Rollover Variable Advance" means a Variable Advance made solely to
refinance an existing Variable Advance on the maturity date of such
Variable Advance.
"Security" means a "security" as set forth in Section 2(1) of the
Securities Act of 1933, as amended.
"Security Documents" means the Security Instruments, the Replacement
Reserve Agreements and any other documents executed by Xxxxxxxx and Sun
from time to time to secure any of Borrower's and Sun's obligations under
the Loan Documents.
22
"Security Instrument" means, for each Mortgaged Property, a separate
Multifamily Mortgage, Deed of Trust or Deed to Secure Debt, Assignment of
Leases and Rents and Security Agreement given by a Borrower to or for the
benefit of Lender to secure the obligations of Borrower under the Loan
Documents. With respect to each Mortgaged Property owned by a Borrower,
the Security Instrument shall be substantially in the form published by
Xxxxxx Xxx for use in the state in which the Mortgaged Property is
located. If the Collateral Pool includes any Mortgaged Properties located
in the State of California, "Security Instrument" shall include any
additional Multifamily Mortgage, Deed of Trust or Deed to Secure Debt,
Assignment of Leases and Rents and Security Agreement given by a Borrower
to or for the benefit of Lender to secure the obligations of Borrower
under the Loan Documents deemed desirable by Lender. The amount secured by
the Security Instrument shall be equal to the Commitment in effect from
time to time.
"Senior Management" means (i) the Chief Executive Officer, Chairman
of the Board, President, Chief Financial Officer and Chief Operating
Officer of Sun, and (ii) any other individuals with responsibility for any
of the significant functions typically performed in a corporation by the
officers described in clause (i).
"Single-Purpose" means, with respect to a Person which is any form
of partnership or corporation or limited liability company, that such
Person at all times from and after the Initial Closing Date (or, in the
case of an Additional Borrower, from and after the date such Additional
Borrower becomes a party to the Master Agreement):
(i) has been a duly formed and existing partnership, corporation
or limited liability company, as the case may be;
(ii) has been duly qualified in each jurisdiction in which such
qualification was at such time necessary for the conduct of
its business;
(iii) has complied with the provisions of its organizational
documents and the laws of its jurisdiction of formation in
all respects;
(iv) has observed all customary formalities regarding its
partnership or corporate existence, as the case may be;
(v) has accurately maintained its financial statements,
accounting records and other partnership or corporate
documents separate from those of any other Person;
(vi) has collected rents from the tenants of its Mortgaged
Property and deposited such rents in such Person's operating
account, before all such cash in such operating accounts are
transferred to a master operating account maintained by Sun,
the OP or another Affiliate;
23
(vii) has identified itself in all dealings with secured creditors
(other than trade creditors in the ordinary course of
business and creditors for the construction of improvements
to property on which such Person has a non-contingent
contract to purchase such property) under its own name and
as a separate and distinct entity;
(viii) is and has been adequately capitalized in light of its
contemplated business operations;
(ix) has not assumed, guaranteed or become obligated for the
liabilities of any other Person (except in connection with
the Credit Facility or the endorsement of negotiable
instruments in the ordinary course of business) or held out
its credit as being available to satisfy the obligations of
any other Person;
(x) has not acquired obligations or securities of any other
Person;
(xi) in relation to a Borrower, except for loans or advances made
in the ordinary course of business to Affiliates, has not
made loans or advances to any other Person;
(xii) has not entered into and was not a party to any transaction
with any Affiliate of such Person, except in the ordinary
course of business and on terms which are no less favorable
to such Person than would be obtained in a comparable
arm's-length transaction with an unrelated third Party;
(xiii) has not engaged in a non-exempt prohibited transaction
described in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code;
(xiv) shall not acquire any real or personal property other than
the Mortgaged Property and personal property related to the
operation and maintenance of the Mortgaged Property; and
(xv) shall not operate any business other than the management and
operation of the Mortgaged Property (in particular and
without limiting the foregoing, the Borrower is not and
shall not engage in the retail sale or financing of
Manufactured Homes, although this shall not prohibit any
Affiliate of Borrower from engaging in such sale or
financing. Borrower shall not rent Homes under Leases
providing that upon payment of the stipulated rent or a
nominal charge, the Borrower shall convey title to the Home
to the lessee, although this shall not prohibit any
Affiliate of Borrower from engaging in such practice).
Notwithstanding anything contained in the definition of
Single-Purpose to the contrary, whether express or implied, Xxxxxx
and Xxxxxxxx agree that the following operations and activities of
any and all Borrowers and their Affiliates
24
shall not be considered a violation of any obligation to maintain a
Single-Purpose: (i) preparing and distributing consolidated
financial statements which include the operation of the Borrowers
and their Mortgaged Properties with the operations of Sun, the OP
and/or other Affiliates; (ii) offering services to residents of the
Mortgaged Property through Affiliates or other third parties for
which fees and charges may be collected by such Borrower or the
Affiliate and paid to such Affiliate or third party, which may
include, without limitation, cable and internet services,
landscaping, snow removal, lease or sale of manufactured homes, and
child care; (iii) transferring all Gross Revenue, whether cash, cash
equivalents or similar assets to Sun, the OP or any other Affiliate
after collection thereof and depositing such Gross Revenue in the
operating bank account maintained for the Mortgaged Property; (iv)
having Sun, the OP or any Affiliate pay all payables, debts and
other liabilities arising from or in connection with the operation
of any Mortgaged Property from commingled funds; (v) using ancillary
assets in connection with the operation of the Mortgaged Properties
held in the name of Sun, the OP or any Affiliates, such as vehicles
and office and maintenance equipment; (vi) treating the Mortgaged
Properties for all purposes as part of and within the portfolio of
manufactured housing communities owned by the OP or any Affiliate,
including for marketing, promotion and providing information and
reports to the public or required by Applicable Law; and (vii)
allocating general overhead and administrative costs incurred by
Sun, the OP and/or other Affiliates to Borrowers in a fair and
equitable manner.
"Standby Fee" means, (A) for any month, an amount equal to the
product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by
(iii) the Unused Capacity for such month, and (B) for any period for which
the Standby Fee is redetermined pursuant to the terms of the Master
Agreement, the number of basis points per annum determined at the time of
such redetermination (which shall be based on the Standby Fee then being
charged by Xxxxxx to other borrowers of comparable financial condition as
Borrower (taking into account the financial condition of Sun to the extent
and in a similar manner as the financial condition of Sun was taken into
account in the original underwriting of the Credit Facility) on credit
facilities secured by manufactured housing properties having similar
characteristics regarding leverage, geographic diversity, recourse and
other material terms as reasonably determined by Lender).
"Subsidiary" means, when used with reference to a specified Person,
(i) any Person that, directly or indirectly, through one or more
intermediaries, is controlled by the specified Person, (ii) any Person of
which the specified Person is, directly or indirectly, the owner of more
than 50% of any voting class of Ownership Interests or (iii) any Person
(A) which is a partnership and (B) of which the specified Person is a
general partner and owns more than 50% of the partnership interests.
"Substitute Mortgaged Property" means each Manufactured Housing
Community owned by Borrower (either in fee simple or as tenant under a
ground lease meeting all of
25
the requirements of the DUS Guide) and added to the Collateral Pool after
the Initial Closing Date in connection with a substitution of Collateral
as permitted by Section 3.05.
"Substitution Fee" means, with respect to any substitution effected
in accordance with Section 3.05, a fee equal to 30 basis points multiplied
by the Allocable Facility Amount of the Substitute Mortgage Property added
to the Collateral Pool.
"Sun" means Sun Communities, Inc., a Maryland corporation.
"Surveys" means the as-built surveys of the Mortgaged Properties
prepared in accordance with the requirements of Part III, Section 113 of
the DUS Guide, or otherwise approved by Lender.
"Taxes" means all taxes, assessments, vault rentals and other
charges, if any, general, special or otherwise, including all assessments
for schools, public betterments and general or local improvements, which
are levied, assessed or imposed by any public authority or quasi-public
authority, and which, if not paid, will become a lien, on the Mortgaged
Properties.
"Term of this Agreement" shall be determined as provided in Section
17.10.
"Termination Date" means, at any time during which Fixed Advances
are Outstanding, the latest maturity date for any Fixed Advance
Outstanding, and, at any time during which Fixed Advances are not
Outstanding, the Variable Facility Termination Date.
"Three-Month LIBOR" means the London interbank offered rate for
three-month U.S. dollar deposits, as such rate is reported in The Wall
Street Journal. In the event that a rate is not published for Three-Month
LIBOR, then the nearest equivalent duration London interbank offered rate
for U.S. Dollar deposits shall be selected at Lender's reasonable
discretion. If the publication of Three-Month LIBOR is discontinued,
Lender shall determine such rate from another equivalent source selected
by Lender in its reasonable discretion.
"Title Company" means Lawyer's Title Insurance Company.
"Title Insurance Policies" means the mortgagee's policies of title
insurance issued by the Title Company from time to time relating to each
of the Security Instruments, conforming to the requirements of Part III,
Section 111 of the DUS Guide, together with such endorsements,
coinsurance, reinsurance and direct access agreements with respect to such
policies as Lender may, from time to time, consider necessary or
appropriate, whether or not required by the DUS Guide, including variable
credit endorsements, if available, and tie-in Endorsements, if available,
and with a limit of liability under the policy (subject to the limitations
contained in Sections 6(a)(i) and 6(a)(iii) of the Stipulations and
Conditions of the policy) equal to the Commitment.
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"Transfer" means --
(1) as used with respect to Ownership Interests in Borrower or Sun
means (i) a sale, assignment, pledge, transfer or other disposition of any
ownership interest in Borrower or Sun, or (ii) the issuance or other
creation of new ownership interests in Borrower or Sun or in any entity
that has a direct or indirect ownership interest in Borrower or Sun, or
(iii) a merger or consolidation of Borrower, as the case may be, into
another entity or of another entity into Borrower as the case may be, or
(iv) the reconstitution of Borrower from one type of entity to another
type of entity, or (v) the amendment, modification or any other change in
the governing instrument or instruments of Borrower or Sun which has the
effect of materially changing the relative powers, rights, privileges,
voting rights or economic interests of the ownership interests in Borrower
or Sun, in each case excluding (a) any Transfer to or from an Affiliate,
(b) sales and purchases of stock of Sun on any public stock exchange, (c)
private placements of ownership interests in Sun or any Affiliate that do
not result in a Change of Control, or (c) any conversion of any ownership
interest in the OP or an Affiliate to stock in Sun, provided that any
Transfer, sale, purchase or conversion does not otherwise conflict with or
violate the terms and conditions of this Agreement.
(2) as used with respect to ownership interests in a Mortgaged
Property means a sale, assignment, lease, pledge, transfer or other
disposition (whether voluntary or by operation of law) of, or the granting
or creating of a lien, encumbrance or security interest in, any estate,
rights, title or interest in a Mortgaged Property, or any portion thereof,
excluding the granting of easements, rights of way, licenses and similar
property matters reasonably necessary for the operation of a Mortgaged
Property. Transfer does not include a conveyance of a Mortgaged Property
at a judicial or non-judicial foreclosure sale under any security
instrument or the Mortgaged Property becoming part of a bankruptcy estate
by operation of law under the United States Bankruptcy Code.
"Unused Capacity" means, for any month, the sum of the daily average
during such month of the undrawn amount of the Commitment available under
Article 1 of the Agreement for the making of Advances, without regard to
any unclosed Requests or to the fact that a Request must satisfy
conditions precedent.
"Valuation" means, for any specified date, with respect to a
Manufactured Housing Community, (a) if an Appraisal of the Manufactured
Housing Community was more recently obtained than a Cap Rate for the
Manufactured Housing Community, the Appraised Value of such Manufactured
Housing Community, or (b) if a Cap Rate for the Manufactured Housing
Community was more recently obtained than an Appraisal of the Manufactured
Housing Community, the value derived by dividing--
(i) the Net Operating Income of such Manufactured Housing
Community, by
(ii) the most recent Cap Rate determined for the Mortgaged
Property.
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Notwithstanding the foregoing, any Valuation for a Manufactured Housing
Community calculated for a date occurring before the first anniversary of
the date on which the Manufactured Housing Community becomes a part of the
Collateral Pool shall equal the Appraised Value of such Manufactured
Housing Community, unless Lender determines that changed market or
property conditions warrant that the value be determined as set forth in
the preceding sentence.
"Variable Advance" means a loan made by Lender to Borrower under the
Variable Facility Commitment.
"Variable Facility" means the agreement of Lender to make Variable
Advances to Borrower pursuant to Section 1.01.
"Variable Facility Availability Period" means the period beginning
on the Initial Closing Date and ending on the 90th day before the Variable
Facility Termination Date.
"Variable Facility Commitment" means an aggregate amount of
$212,637,500, which shall be evidenced by the Variable Facility Note in
the form attached hereto as Exhibit C, plus such amount as Borrower may
elect to add to the Variable Facility Commitment in accordance with
Article 4, less such amount as Borrower may elect to convert from the
Variable Facility Commitment to the Fixed Facility Commitment in
accordance with Section 1.08, and less such amount by which Borrower may
elect to reduce the Variable Facility Commitment in accordance with
Article V.
"Variable Facility Fee" means (i) 58 basis points per annum for any
Variable Advance drawn from the Variable Facility Commitment initially
available under the Agreement or in effect as the result of an expansion
of the Variable Facility Commitment on or before the First Anniversary
(whether or not drawn by such date), (ii) for any Variable Advance drawn
from any portion of the Variable Facility Commitment increased under
Article 4 after the First Anniversary, the number of basis points per
annum determined at the time of such increase by Lender as the Variable
Facility Fee for such Variable Advance (which shall be based on the amount
then being charged by Lender to other borrowers of comparable financial
condition as Borrower (taking into account the financial condition of Sun
to the extent and in a similar manner as the financial condition of Sun
was taken into account in the original underwriting of the Credit
Facility) on credit facilities secured by manufactured housing properties
having similar characteristics regarding leverage, geographic diversity,
recourse and other material terms as reasonably determined by Lender), and
(iii) if the Variable Facility Termination Date is extended pursuant to
Section 1.07, for any Variable Advance drawn from any portion of the
Variable Commitment (excluding the Reserved Amount) after the original
Variable Facility Availability Period, the number of basis points per
annum determined by Lender as the Variable Facility Fee for such period,
which fee shall be set by Lender not less than 30 days prior to the
commencement of such period and shall be based on the amount then being
charged by Lender to other borrowers of comparable financial condition as
Borrower (taking into account the financial condition of Sun to the
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extent and in a similar manner as the financial condition of Sun was taken
into account in the original underwriting of the Credit Facility) on
credit facilities secured by manufactured housing properties having
similar characteristics regarding leverage, geographic diversity, recourse
and other material terms as reasonably determined by Lender. In the event
the Rate Preservation Fee is being paid, there shall be no change in the
Variable Facility Fee with respect to the portion of the Variable Facility
Commitment on which the Rate Preservation Fee is being paid.
"Variable Facility Note" means, individually and collectively,
promissory notes, each in the form attached as Exhibit C to the Agreement,
which have been issued by Borrower to Lender to evidence Borrower's
obligation to repay Variable Advances.
"Variable Facility Termination Date" means the date five years after
the Initial Closing Date unless extended pursuant to Section 1.07.
"Voting Equity Capital" means Securities, partnership or member
interests of any class or classes, the holders of which are ordinarily, in
the absence of contingencies, entitled to elect a majority of the board of
directors (or Persons performing similar functions).
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