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EXHIBIT 10.12
DETACHABLE WARRANT AGREEMENT
This DETACHABLE WARRANT AGREEMENT (the "Agreement") is made and entered
into as of September 30, 1997 by and between Sun Communities, Inc., a Maryland
corporation ("Sun"), and Xxxxxxx Financial Services Corporation, a Michigan
corporation ("the Company").
WHEREAS, on the date hereof, pursuant to that certain Subordinated Loan
Agreement, of even date hereof, by and among Sun, as lender, and the Company
(the "Loan Agreement"), Sun has agreed to provide the Company with a
subordinated debt facility of up to $10,000,000, which indebtedness shall be
subordinate to all senior debt of the Company.
WHEREAS, Sun is acquiring from the Company warrants in the form attached
as Exhibit A hereto (the "Detachable Warrants"), representing the right to
purchase from the Company Warrant Shares on the terms and conditions set forth
in the Detachable Warrants.
WHEREAS, the Detachable Warrants are being issued as an inducement and
partial consideration for Sun to enter into the Subordinated Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Closing.
A. Closing. The closing of the issuance of the
Detachable Warrants to Sun (the "Closing") shall take place
simultaneously with the closing of the loan transaction
contemplated by the Loan Agreement. The date of such Closing
is hereinafter referred to as the "Closing Date."
B. Transactions on Closing Date. At the Closing, the
Company shall deliver to Sun the duly issued Detachable
Warrants.
2. Representations and Warranties of The Company. The Company
represents and warrants to Sun as follows:
A. Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Michigan.
B. Authority Relative to this Agreement. The Company
has all requisite corporate power and authority to enter into
and perform this Agreement and to issue and deliver the
Detachable Warrants to Sun. The execution, delivery and
performance by the Company of this Agreement, including the
issuance and delivery of the Detachable Warrants to Sun, have
been duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed and
delivered by the Company and is a legal, valid and binding
obligation of the Company and is enforceable against the
Company in accordance with its terms.
C. No Conflict or Violation. The execution and
delivery of this Agreement by the Company, the performance by
the Company of its terms and the issuance and delivery of the
Detachable Warrants to Sun do not, and on the Closing Date
will not, conflict with or result in a violation of (i) the
Articles of Incorporation or Bylaws of the Company, or (ii)
any agreement, instrument, law, rule, regulation, order, writ,
judgment or decree to which
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the Company is a party or is subject, except for such
conflicts and violations which will not, in the aggregate,
have a material adverse effect on the business, operations,
assets or condition (financial or otherwise) of the Company
and will not deprive Sun of any material benefit under this
Agreement.
D. Validity of Issuance. The Detachable Warrants to
be issued to Sun pursuant to this Agreement and the Warrant
Shares (as defined in the Detachable Warrants) issued upon
exercise of the Detachable Warrants will, when issued, be duly
and validly issued, fully paid and nonassessable (assuming in
the case of the Warrant Shares, payment of the exercise price
is made in accordance with the terms of the Detachable
Warrants).
E. Capital Structure. As of the Closing, the
authorized capital stock of the Company consists of (i)
10,000,000 shares of Common Stock, of which 1,000,000 shares
will be issued and outstanding (1,150,000 if the
over-allotment option is exercised in full); and (ii)
10,000,000 shares of Preferred Stock, of which none will be
issued and outstanding.
3. Representations and Warranties of Sun. Sun hereby represents
and warrants to the Company as follows:
A. Investment Intent. Sun is acquiring the
Detachable Warrants, and if the Detachable Warrants are
exercised, the Warrant Shares, for investment solely for its
own account and not with a view to, or for resale in
connection with, the distribution or other disposition
thereof. Sun agrees and acknowledges that it will not,
directly or indirectly, offer, transfer or sell the Detachable
Warrants or any Warrant Shares, or solicit any offers to
purchase or acquire the Detachable Warrants or any Warrant
Shares, unless the transfer or sale is (i) pursuant to an
effective registration statement under the Securities Act of
1933, as amended, and the rules and regulations thereunder
(the "Securities Act") and has been registered under any
applicable state securities or "blue sky" laws or (ii)
pursuant to an exemption from registration under the
Securities Act and applicable state securities or "blue sky"
laws.
B. Legends. Sun acknowledges that the Detachable
Warrants and each Warrant Share will contain a legend
substantially to the following effect:
THE DETACHABLE WARRANTS AND THE WARRANT SHARES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
Upon reasonable request of the Company in connection with any transfer of
the Detachable Warrants or the Warrant Shares (other than a transfer pursuant
to a public offering registered under the Securities Act, pursuant to Rule 144
or Rule 144A promulgated under the Securities Act (or any similar rules then in
effect), or to an affiliate of Sun), Sun will deliver, if requested by the
Company, an opinion of counsel knowledgeable in securities laws reasonably
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satisfactory to the Company to the effect that such transfer may be effected
without registration under the Securities Act. The Company agrees to issue
certificates evidencing the Warrant Shares that do not contain such legend upon
receipt of an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to the effect that such legend no longer applies
to the Warrant Shares.
C. Additional Investment Representations. Sun is an
"accredited investor" as such term is defined in Rule 501
promulgated under the Securities Act.
4. Miscellaneous
A. Notices. All notices and other communications
provided for herein shall be dated and in writing and shall be
deemed to have been duly given (i) when delivered, if
delivered personally, sent by registered or certified mail,
return receipt requested and postage prepaid, or sent via
nationally recognized overnight courier or via facsimile with
confirmation of receipt and (ii) when received if delivered
otherwise, to the party to whom it is directed:
Company:
Xxxxxxx Financial Services Corporation
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Jaffe, Raitt, Heuer & Xxxxx, P.C.
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Sugar
Facsimile No.: (000) 000-0000
Sun:
Sun Communities, Inc.
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
or to such other address as either party hereto shall have specified by notice
in writing to the others.
B. Assignment. This Agreement and all the
provisions hereof shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors
and permitted assigns, except that neither this Agreement nor
any rights or obligations hereunder shall be assigned by the
Company without the prior written consent of Sun.
C. Amendment. This Agreement may be amended only by
a written instrument signed by the Company and Sun.
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D. Waiver. Any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of
the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions herein. Any agreement
on the part of a party hereto to any such extension or waiver
shall be valid as to such party if set forth in an instrument
in writing signed by such party.
E. Severability. In the event that any one or more
of the provisions hereof, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in any way
impaired, it being intended that all rights, powers and
privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
F. Applicable Law. The corporate law of the State of
Michigan shall govern all issues and questions concerning the
relative rights of Sun and the Company. In addition, all other
issues and questions concerning the construction,
validity, interpretation and enforceability of this Agreement
and the exhibits and schedules hereto shall be governed by and
construed in accordance with the laws of the State of
Michigan, without giving effect to any choice of law or
conflict of law provisions that would cause the application of
the laws of any jurisdiction other than the State of Michigan.
G. Expenses. All reasonable fees and expenses
incurred by Sun in connection with the preparation of this
Agreement and the transactions referred to herein, including
the reasonable fees of Sun's counsel, shall be paid by the
Company, whether or not the issuance of the Detachable
Warrants, the execution and delivery of the Loan Agreement or
any other transaction contemplated hereby is consummated.
H. Counterparts. This Agreement may be executed in
two or more counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
I. Descriptive Headings. The headings in this
Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning of the terms contained
herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Detachable Warrant
Agreement to be signed and attested by its duly authorized officers and to be
dated as of the date hereof.
XXXXXXX FINANCIAL SERVICES CORPORATION
By:
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Xxxxxxx X. Xxxxxxxx
Its: President
SUN COMMUNITIES, INC.
By:
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Xxxx X. Xxxxxxxx
Its: President
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