Exhibit 10(h)
BUSINESS LOAN AGREEMENT
Agreement by and between NATIONAL CITY BANK OF THE MIDWEST, (herein termed
"Bank"), and UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II, A MICHIGAN
LIMITED PARTNERSHIP (herein termed "Borrower"). Borrower has requested certain
extensions of credit which will be evidenced by a promissory note(s) as follows:
COMMERCIAL NOTE: REVOLVING CREDIT IN THE AMOUNT OF ONE MILLION FIVE HUNDRED AND
00/100 DOLLARS ($1,500,000.00) DATED OCTOBER 19, 2005.
In consideration of the mutual promises set forth herein and the extension(s)
of credit as described above and subject to Borrower's satisfactory fulfillment
of all conditions precedent to the borrowing, Bank and Borrower
agree as follows:
ARTICLE I - DEFINITIONS
The following terms shall have the following meanings in this Agreement:
1.1 All Accounting terms not specifically defined herein shall have the
meaning of such terms as used in accordance with generally accepted
accounting principles. In the event of a dispute relative to the
meaning of an accounting term, the determination thereof by an
independent certified public accountant, chosen by the Borrower, and
acceptable to the Bank shall be controlling.
1.2 "INDEBTEDNESS" means and includes:
(a) All indebtedness and liabilities of whatsoever kind, nature
and description owed to Bank by Borrower, whether direct or
indirect, absolute or contingent, due or to become due or
whether now existing or hereafter arising, and howsoever
evidenced or acquired, and whether joint or several, and
including, costs and expenses described in Section 12.3 of
this Agreement and, without limitation,
(b) All future advances which the Bank at any time may, but shall
not be required to, make for the protection or preservation of
the Bank's rights and interests arising hereunder, including,
without limitation, advances for taxes, levies, assessments,
insurance, and reasonable attorneys' fees,
(c) All costs and expenses incurred by the Bank in connection with
enforcement of the documents evidencing or securing the
Indebtedness or incurred in the protection and preparation for
sale of any of its collateral including, without limitation,
attorneys' fees and court costs, and
(d) All obligations arising out of foreign exchange contracts
between the Borrower and the Bank or any bank or financial
institution which is an affiliate of NATIONAL CITY BANK OF THE
MIDWEST, FORMERLY KNOWN AS NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS, and all obligations arising out of the
issuance of a letter or letters of credit at the request of
the Borrower of the Bank or any bank or financial institution
which is an affiliate of NATIONAL CITY BANK OF THE MIDWEST,
FORMERLY KNOWN AS NATIONAL CITY BANK OF MICHIGAN/ILLINOIS.
1.3 "LOAN DOCUMENTS" means any document evidencing the Indebtedness, any
document securing the Indebtedness, any guarantee of the Indebtedness
and any document executed in connection with or referred to in any of
the foregoing.
1.4 "NOTE" shall mean any promissory note of the Borrower evidencing any
loan or advance or extension or renewal thereof made by the Bank to the
Borrower, under this Agreement.
1.5 "PERSON" shall mean and include an individual, partnership,
corporation, limited liability company, trust, unincorporated
organization, government or any department or agency thereof.
1.6 "RELATED PERSON" shall include, but shall not be confined to, any
Person related to Borrower by common control or ownership.
1.7 "SUBORDINATED DEBT" shall mean indebtedness of the Borrower owed to any
officer, employee, director, shareholder or Related Person which is
subordinated to all Indebtedness, of the Borrower to the Bank under the
terms and conditions approved in writing by the Bank.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
2.1 It is a duly organized, legally existing LIMITED PARTNERSHIP in good
standing under the laws of the State of Michigan and qualified to do
business in any other state in which it conducts its business.
2.2 It has the power and is duly authorized to enter into this Agreement
and to execute and deliver to the Bank, now and from time to time
hereafter, additional instruments, resolutions, agreements and other
instruments or documents relating to the borrowing of monies from the
Bank. It has, by proper action, authorized and empowered those persons
whose signatures appear on this Agreement, and any instruments,
documents and exhibits that have been delivered in connection herewith,
to execute the same for and on its behalf.
2.3 The execution by it of this Agreement or any other agreements,
instruments, or documents which may, from time to time hereafter, be
executed in respect hereto and delivered to Bank, shall not constitute
a breach of any provisions contained in its articles of incorporation
or bylaws, or if applicable, partnership agreement, or any agreements
to which it is now a party and that the performance by it of its
obligations hereunder or any agreements executed by it and delivered
hereunder shall not constitute an event of default under any other
agreement to which it is now a party.
2.4 The financial statements of the Borrower delivered to the Bank
accurately state the financial condition of the Borrower as of the
date of such statements. The Borrower has disclosed to the Bank in
writing all of its known material liabilities, direct or contingent.
None of the statements, representations or warranties (financial or
otherwise) furnished by the Borrower to the Bank in connection with
this Agreement contain any untrue statements, nor omit or will omit a
material fact necessary to make the statements contained therein or
herein, in light of the circumstances when made, not misleading. There
is no fact which the Borrower has not disclosed to the Bank in writing
which has a material adverse effect on the properties, business or
condition (financial or otherwise) of the Borrower, or of the ability
of the Borrower to fully perform its obligations under this Agreement.
2.5 The Borrower is in compliance with all known applicable requirements of
all governmental authorities (federal, state and local), including
without limitation, the payment of taxes, the filing of tax returns and
reports and is complying with all environmental laws, ordinances, rules
and regulations. The Borrower possesses such franchises, licenses,
permits, patents, copyrights, trademarks, and consents of appropriate
governmental bodies to own its property and as are necessary or useful
to carry on its ordinary course of business.
2.6 There is no litigation undisclosed to the Bank, legal or administrative
proceedings, investigations or other action of any nature, pending or,
to its knowledge, threatened against or affecting it, which involves
the possibility of any judgment or liability which may materially or
adversely affect any of the Borrower's property or its right to carry
on its business as now conducted. Details of all litigation, legal or
administrative proceedings, investigation or other action of similar
nature, pending or threatened against it, at any time during the term
of this Agreement, will be brought to the attention of Bank, in
writing, forthwith.
2.7 All of the funds lent to it pursuant to this Loan Agreement have been
or will be used to finance the purchase of individual manufactured home
units in Borrower-owned manufactured housing communities.
2.8 All representations and warranties in this Agreement and any agreement
given by Borrower to Bank pursuant to this Agreement are true and
correct and no material fact has been omitted.
2.9 If real estate or any interest therein has been mortgaged, conveyed, or
assigned by Borrower to Bank as security for payment of the
Indebtedness, Borrower has no knowledge of any violations or notices
of any violations of any federal or state law or any ordinance,
regulation or requirement of the state or governmental authority,
including but not limited to, any environmental law, ordinance or
regulation, which affects the mortgaged, conveyed, or assigned premises
or the use of such premises by the Borrower.
ARTICLE III - SECURITY
It is agreed that any security agreement, mortgage or other document
previously or hereafter executed by the Borrower in favor of Bank shall
secure repayment of all Indebtedness, whether or not presently
contemplated by the parties and that the security described above shall
secure repayment of the Indebtedness whether or not presently
contemplated by the parties and that a default in the terms of any
note, security agreement, mortgage or other agreement from Borrower to
Bank shall constitute a default of all notes, security agreements,
mortgages, and other agreements, and that Bank may, at its option,
proceed in exercising its rights thereunder in any order or manner it
may choose, the purpose of this Agreement being to cross-collateralize
all Indebtedness.
ARTICLE IV - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Indebtedness is
outstanding or so long as this Agreement is in effect, the Borrower
shall:
4.1 Maintain insurance against fire, theft and other casualty on its
insurable real and personal property to their full replacement costs
with companies acceptable to the Bank against liability on account of
damage to persons or property and as required under all applicable
Workmen's Compensation laws. Furthermore, Borrower shall maintain
insurance as may from time to time be reasonably requested by the
Bank, which insurance with respect to real property shall name the Bank
as "OTHER INSURED" under a standard loss-payable clause and with
respect to personal property shall include a separate lender's loss
payable clause insuring the Bank's security interest or lien in the
Borrower's property regardless of any act or neglect of the Borrower.
The Borrower shall deliver certified copies of all such insurance
policies to the Bank.
4.2 Maintain, preserve, and keep its buildings and properties and every
part thereof in good repair, working order, and condition and from
time to time make all necessary and proper repairs, renewals,
replacements, additions, betterments, and improvements thereto, so
that at all times the efficiency thereof shall be fully preserved and
maintained.
4.3 Duly pay and discharge or cause to be paid and discharged all taxes,
assessments, and other governmental charges imposed upon it and its
properties or any part thereof or upon the income or profits therefrom,
as well as all claims for labor, materials, or supplies, which if
unpaid could become a lien or charge upon its property, except such
items as are being in good faith appropriately contested and for which
the Borrower has provided adequate reserves.
4.4 Carry on and conduct its business in substantially the same manner and
in substantially the same fields as such business is now and has
previously been carried on, and maintain its legal existence, and
comply with all valid and applicable statutes, rules and regulations.
4.5 Maintain a standard, modern system of accounting in accordance with
generally accepted accounting principles (GAAP); deliver to Bank
financial reports in a form satisfactory to Bank as Bank may request
from time to time; permit the duly authorized representative(s) of Bank
at all reasonable times to examine and inspect the books and records of
Borrower or any related business entity of Borrower, and to make
abstracts and copies thereof, and to visit and inspect any of the
Borrower's property wherever same may be located.
4.6 Borrower shall comply with all applicable federal, state and local
laws, ordinances, rules and regulations, including, but not limited to,
all environmental laws, ordinances, rules and regulations and shall
keep any real property or interest therein mortgaged, conveyed, or
assigned to secure payment of the Indebtedness free and clear of any
liens imposed pursuant to such laws, ordinances, rules and regulations,
and deliver to Bank such information and reports in form satisfactory
to Bank as Bank may request from time to time to establish compliance
with such laws.
4.7 Borrower shall comply with all applicable federal, state and local
laws, ordinances, rules and regulations concerning wage payments,
minimum wages, overtime laws and payment of withholding taxes, and
deliver to Bank such reports and information in form satisfactory to
Bank as Bank may request from time to time to establish compliance with
such laws.
4.8 If real estate or any interest therein is mortgaged, conveyed or
assigned by the Borrower to the Bank as security for payment of the
Indebtedness, Borrower shall comply with all warranties, covenants and
representations of such mortgage, conveyance or assignment which
warranties, covenants and representations are incorporated by reference
herein in their entirety.
ARTICLE V - NEGATIVE COVENANTS
Borrower covenants and agrees that so long as any Indebtedness is
outstanding or so long as this Agreement is in effect, Borrower shall
not without prior written consent of Bank:
5.1 Incur indebtedness for borrowed money, other than to Bank, or act as
guarantor for any indebtedness of others, or lend money, EXCEPT FOR
PRIOR INDEBTEDNESS ACKNOWLEDGED BY BANK.
5.2 Mortgage, pledge, assign, hypothecate, encumber or grant a security
interest in any of its assets except to Bank nor sell, transfer or
assign any of its assets, properties or business except in the ordinary
course of business. For the purpose hereof sale of accounts receivable
or entering into capital leases of personal property, or both, shall be
deemed the incurring of indebtedness for borrowed money.
5.3 Invest in, organize or participate in the organization or in the
creation of any other business entity, or merge or consolidate with or
into any other entity.
5.4 If Borrower is a corporation, release, redeem, retire, purchase, or
otherwise acquire directly or indirectly any of its capital stock, or
make any change in its capital structure, or pay or declare any
dividends, in cash or other property, upon its capital stock.
ARTICLE VI - ADDITIONAL COVENANTS
6.1 FINANCIAL REPORTS. Borrower covenants in accordance with paragraph 4.5
that it will deliver to Bank:
(A) WITHIN SIXTY (60) DAYS AFTER EACH FISCAL QUARTER, A FINANCIAL
STATEMENT PREPARED ON THE 10-Q FORM AS SUBMITTED TO THE
SECURITIES AND EXCHANGE COMMISSION AND,
(B) WITHIN NINETY (90) DAYS AFTER EACH CALENDAR YEAR, A FINANCIAL
STATEMENT PREPARED ON THE 10-K FORM AS SUBMITTED TO THE
SECURITIES AND EXCHANGE COMMISSION AND
(C) WITHIN SIXTY (60) DAYS AFTER EACH FISCAL QUARTER AND FOR THE
CALENDAR YEAR END WITHIN NINETY (90) DAYS, A BORROWING BASE
REPORT.
ARTICLE VII - DEFAULT AND REMEDIES
7.1 The Borrower shall be in default hereunder upon the happening of any of
the following:
(a) The occurrence of a default under the terms of any Loan
Documents or any promissory note(s), security agreement(s),
mortgage(s) or other agreement(s) executed in connection
herewith, including any and all renewals, extensions or
modifications thereof; or
(b) Non-payment when due of any Indebtedness; or
(c) Non-performance of any covenant or agreement contained or
referred to herein, or contained in any other agreement with
Bank, whether now existing or hereafter arising; or
(d) If any warranty, representation or statement made or furnished
to Bank by or on behalf of Borrower, in connection with this
Agreement, or to induce Bank to make a loan to Borrower,
proves to have been false in any material respect when made
or furnished; or
(e) Death, dissolution, termination or existence, insolvency,
appointment of a receiver for any part of the property of,
assignment for the benefit of creditors by, or the
commencement of any proceeding under any bankruptcy or
insolvency laws by or against the Borrower or any endorser,
guarantor or surety for the Borrower.
7.2 Upon the occurrence of a default, described above, the Bank may at its
option, declare that principal and accrued interest thereon of all
Indebtedness to be immediately due and payable forthwith, without
presentation, demand, protest or notice of any kind, all of which are
hereby expressly waived. Bank shall have all the rights and remedies of
a Secured Party under the Uniform Commercial Code, as enacted in
Michigan.
7.3 Acceptance of payment or waiver of any default shall not operate as a
waiver of later defaults, nor of any other rights of the Bank.
ARTICLE VIII - SALE OF BORROWER
The entire amount of unpaid principal and accrued interest shall
become due and payable forthwith at the option of the Bank if MAJORITY
control of the Borrower shall be sold to any other person, firm or
corporation, whether for cash or by merger or consolidation, or if the
assets of the Borrower shall be sold or transferred to any other
person, firm or corporation. The Bank shall be the sole judge as to the
occurrence of the foregoing, which judgment shall be binding upon the
parties hereto.
ARTICLE IX - ADDITIONAL PROVISIONS
(If this Article is left blank, there are no additional provisions.)
ARTICLE X-NOTICES
Unless specifically provided otherwise, any notice for purposes of
this agreement or any other Loan Documents shall be given in writing
or by facsimile (fax) transmission and shall be addressed or delivered
to the respective addresses set forth below, or to such other address
as may have been previously designated by the intended recipient by
notice given in accordance with this Article. If transmitted by
facsimile or personal delivery, the notice shall be effective when
transmission is confirmed or when delivered, respectively. Mailed
notices shall be sufficient if sent by first-class mail, postage
prepaid, and the notice shall be deemed effective when sent. No
notice of change of address shall be effective except upon actual
receipt, and service of a notice required by any applicable statute
shall be considered complete when the requirements of that statute are
met. This Article shall not be construed in any way to affect or impair
any waiver of notice or demand provided in any Loan Documents or to
require giving of notice or demand to or upon any person in any
situation or for any reason.
BORROWER: UNIPROP MANUFACTURED HOUSING BANK: NATIONAL CITY BANK OF THE
COMMUNITIES INCOME FUND II, A MIDWEST, FORMERLY KNOWN AS
MICHIGAN LIMITED PARTNERSHIP NATIONAL CITY BANK OF
000 XXXXXX XXXXXX, XXXXX 000 XXXXXXXX/XXXXXXXX
XXXXXXXXXX, XX 00000 0000 XXXXX XXXXX
XXXXXXXXXX, XX 00000
ARTICLE XI - COMPLETE AGREEMENT
11.1 All documents and exhibits attached to this Agreement shall for all
purposes be considered a part of this Agreement and this Agreement
shall include all the provisions stated in said documents and exhibits.
In the event of a conflict between the terms used in this Agreement,
and the terms set forth in said documents or exhibits, the terms of
this Agreement shall govern.
11.2 This Agreement is a continuing agreement and shall continue in effect
notwithstanding that from time to time, no Indebtedness may exist. This
Agreement may be terminated by receipt by Bank of written notice of
termination from Borrower or by Bank mailing by first class mail a
written notice of termination to Borrower, and in either of such
events, this Agreement shall continue as to any Indebtedness then
existing and as to any and all renewals, extensions or modifications
thereof made after such event.
11.3 This Agreement and the Loan Documents may be executed in several
counter-parts, each of which shall be an original and all of which
shall together constitute one and the same agreement.
11.4 Any appraisals of the Borrower's property obtained in connection with
an extension of credit or proposed extension of credit from the Bank to
the Borrower, are for the sole benefit of the Bank and do not
constitute a representation of value of such property by the Bank to
the Borrower.
11.5 Nothing contained in this Agreement or any agreement given pursuant
hereto shall be deemed or construed as creating a partnership or a
joint venture between the Bank and any other person or cause the Bank
to be responsible in any way for the debts or obligations of the
Borrower or any other person.
11.6 This Agreement is personal to the parties hereto and is for their sole
benefit and is not made for the express or implied benefit of any other
person or entity.
11.7 This Agreement, together with any exhibits and other documents and
instruments mentioned herein, constitutes the entire agreement between
the Bank and the Borrower. Any and all prior, contemporaneous, oral or
written agreements, understandings, statements, customs or practices
between the Bank and the Borrower pertaining to the transactions
contemplated herein are merged herein. No party has made any
representations, warranties or inducements, express or implied, to any
other party, except as expressly set forth herein.
11.8 Neither this Loan Agreement nor any document attached hereto, nor any
provision hereof, may be modified, waived, discharged or terminated
orally, but only by an instrument signed by Borrower and Bank.
ARTICLE XII-MISCELLANEOUS PROVISIONS
12.1 A determination that any provision of this Agreement is unenforceable
or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any
provision of this Agreement to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
12.2 This Agreement, and its validity, enforcement and interpretation, shall
be governed by the laws of the State of Michigan (without regard to any
conflict of laws principles) and applicable United States federal law.
12.3 Without limitation of any Loan Documents and to the extent not
prohibited by applicable laws, Borrower shall pay when due, and
reimburse to Bank on demand, and indemnify Bank from, all out-of-pocket
fees, costs, and expenses paid or incurred by Bank in connection with
the negotiation, preparation and execution of this Agreement and the
other Loan Documents (and any amendments, approvals, consents, waivers
and releases requested, required, proposed or done from time to time),
or in connection with the disbursement, administration or collection of
the loan or the enforcement of the obligations or the exercise of any
right or remedy of Bank, including fees and expenses of Bank's counsel;
appraisal, re-appraisal and survey costs; title insurance charges and
premiums; title search or examination costs, including abstracts,
abstractors' certificates and uniform commercial code searches;
judgment and tax lien searches for Borrower and each guarantor of the
Indebtedness; fees and costs of environmental investigations and site
assessments; recordation taxes, documentary stamp taxes, transfer taxes
and mortgage taxes; filing and recording fees, and loan brokerage fees.
Borrower shall pay all costs and expenses incurred by Bank, including
attorneys' fees, if the obligations or any part thereof are sought to
be collected by or through an attorney at law, whether or not involving
probate, appellate, administrative or bankruptcy proceedings. Borrower
shall pay all costs and expenses of complying with the Loan Documents.
Borrower's obligations under this Section shall survive the delivery of
the Loan Documents, the making of advances, the payment in full of the
obligations, the release or termination of the Loan Documents, the
foreclosure of any lien or conveyance in lieu of foreclosure, any
bankruptcy or other debtor relief proceeding, and any other event
whatsoever.
12.4 Borrower hereby irrevocably submits generally and unconditionally for
itself and in respect of its property to the jurisdiction of any state
court, or any United States federal court, sitting in the State of
Michigan and to the jurisdiction of any state court or any United
States federal court, sitting in the state in which any of the
collateral for the Indebtedness is located, over any suit, action or
proceeding arising out of or relating to this Agreement or the
Indebtedness. Borrower hereby irrevocably waives, to the fullest extent
permitted by law, any objection that Borrower may now or hereafter have
to the laying of venue in any such court and any claim that any such
court is an inconvenient forum. Borrower hereby agrees and consents
that, in addition to any methods of service or process provided for
under applicable law, all service of process in any such suit, action
or proceeding in any state court, or any United States federal court,
sitting in the State of Michigan may be made by certified or registered
mail, return receipt requested, directed to Borrower at its address for
notice stated in the Loan Documents, or at a subsequent address of
which Bank received actual notice from Borrower in accordance with the
Loan Documents, and service so made shall be complete five (5) days
after the same shall have been so mailed. Nothing herein shall affect
the right of Bank to serve process in any manner permitted by law or
limit the right of Lender to bring proceedings against Borrower in any
other court or jurisdiction.
12.5 Borrower will, on request of Bank, promptly correct any defect, error
or omission in any Loan Document; execute, acknowledge, deliver,
procure, record or file such further instruments and do such further
acts deemed necessary, desirable or proper by Bank to carry out the
purposes of the Loan Documents and to
identify and subject to the liens and security interest of the Loan
Documents any property intended to be covered thereby, including any
renewals, additions, substitutions, replacements, or appurtenances to
said property; execute, acknowledge, deliver, procure, file or record
any document or instrument deemed necessary, desirable, or proper by
Bank to protect the liens or the security interest under the Loan
Documents against the rights or interests of third persons; and provide
such certificates, documents, reports, information, affidavits and
other instruments and do such further acts deemed necessary, desirable
or proper by Bank to comply with the requirements of any agency having
jurisdiction over Bank. The Borrower authorizes the Bank to correct and
cure obvious errors and omissions in the Agreement and in any Loan
Document.
12.6 NOT APPLICABLE TO DEMAND FACILITIES. Notwithstanding anything contained
in this Agreement to the contrary, this Agreement shall not apply to
any loan or other credit facility made or extended by Bank to Borrower
which is payable on demand, whether now outstanding or hereafter
arising.
THE UNDERSIGNED AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR
HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY
AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THE INDEBTEDNESS.
Executed this 19th day of OCTOBER, 2005
BANK: NATIONAL CITY BANK OF THE BORROWER: UNIPROP MANUFACTURED HOUSING
MIDWEST, FORMERLY KNOWN AS NATIONAL COMMUNITIES INCOME FUND II,
CITY BANK OF MICHIGAN/ILLINOIS A MICHIGAN LIMITED PARTNERSHIP
BY: /s/ Xxxxx X. Xxxxxxxxxx BY: GENESIS ASSOCIATES LIMITED PARTNERSHIP
----------------------- ITS: GENERAL PARTNER
XXXXX X. XXXXXXXXXX
ITS: Vice President BY: GP GENESIS CORP.
----------------------- ITS: GENERAL PARTNER
BY: /s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx
ITS: President
FEDERAL TAX I.D. NO.: 00-0000000
