ITEM 99.4
[_________] NON-INVESTMENT LOAN
Third Amended and Restated Non-Investment Loan Agreement
THIS THIRD AMENDED AND RESTATED NON-INVESTMENT LOAN AGREEMENT, dated as
of August 2, 2001, is entered into between [ ], in his individual capacity, (the
"Borrower"), and CWS COMMUNITIES LP, a Delaware limited partnership (the
"Lender").
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
W I T N E S S E T H
WHEREAS, the Borrower and [ ] Trust, a [ ] trust (the "Trust"), jointly
and severally (the Borrower and the Trust collectively, referred to as, the
"Original Borrowers"), and Lender have entered into that certain Loan Agreement,
dated March 4, 1998, as amended by that certain First Amended and Restated Loan
Agreement dated as of March 16, 1999, between Original Borrowers and Lender, and
that certain Second Amended and Restated Loan Agreement dated as of June 24,
1999, between Original Borrowers and Lender (collectively, the "Original Loan
Agreement");
WHEREAS, pursuant to the Original Loan Agreement, Lender loaned
$2,500,000 to the Original Borrowers as evidenced by, among other things, (i)
that certain Promissory Note dated March 16, 1999 (the "Mar. 99 $0.5m Note"),
made by Original Borrowers in favor of Lender in the original principal amount
of $500,000; (ii) that certain Promissory Note dated June 14, 1999 (the "Jun. 99
$0.5m Note"), made by Original Borrowers in favor of Lender in the original
principal amount of $500,000; (iii) that certain Promissory Note dated December
15, 1999 (the "Dec. 99 $0.5m Note"), made by Original Borrowers in favor of
Lender in the original principal amount of $500,000; and (iv) that certain
Promissory Note dated September 26, 2000 (the "Sept. 00 $1m Note"), made by
Original Borrowers in favor of Lender in the original principal amount of
$1,000,000;
WHEREAS, Lender is a party to that certain Agreement and Plan of Merger
dated as of June 6, 2001 (the "Merger Agreement"), among Chateau Communities,
Inc., a Maryland corporation ("CPJ"), CP Limited Partnership, a Maryland limited
partnership ("Chateau OP"), certain merger subsidiaries named therein, CWS
Communities Trust, a Maryland real estate investment trust ("CWS"), Lender, and
Security Capital Manufactured Housing Incorporated, a Delaware corporation.
Pursuant to the terms of the Merger Agreement, Lender will be acquired through
merger by and become a wholly owned subsidiary of Chateau OP;
WHEREAS, in connection with the Merger Agreement, Original Borrowers are
party to that certain CP Limited Partnership Election and Subscription Agreement
for Units of Limited Partner Interests dated as of June 6, 2000 (the
"Subscription Agreement"), among Original Borrowers, CPJ and Chateau OP,
whereby, among other things, Original Borrowers consented to certain
modifications to the Original Loan Agreement;
WHEREAS, the parties desire to amend and restate the provisions of the
Original Loan Agreement to, among other things, (i) provide for the release of
the Trust as a borrower under the Agreement in exchange for the reaffirmation by
the Trust of its obligations under the Pledge Agreement; and (ii) modify certain
of the terms in accordance with the Subscription Agreement; and
WHEREAS, except as expressly provided herein, it is the intention of
Original Borrowers and Lender that this Agreement and the execution and delivery
of any substituted promissory notes not effect a novation of the obligations of
Original Borrowers to the Lender under the Original Loan Agreement but merely a
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restatement and, where applicable, a substitution of the terms governing and
evidencing such obligations hereafter.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the Original Loan Agreement is amended and restated
to read in its entirety, and the parties agree, as follows:
1. Definitions.
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated for purposes of
this Agreement (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Agreement" means this Third Amended and Restated Non-Investment Loan
Agreement, including all exhibits and schedules hereto, as the same may be
amended, modified or supplemented from time to time.
"Agreement of Limited Partnership" means that certain Amended and
Restated Agreement of Limited Partnership of Chateau OP, as the same may be
amended, modified or supplemented from time to time.
"Borrower" - see Preamble.
"Business Day" means any day other than a Saturday, Sunday or legal
holiday on which banks are authorized or required to be closed in Chicago,
Illinois.
"Chateau OP" - see Preamble.
"Collateral" has the meaning given to such term in the Pledge
Agreement.
"Contribution Agreement" means that certain Contribution Agreement
relating to the formation and capitalization of CWS dated March 6, 1998, among
Security Capital U.S. Realty, a Luxembourg corporation, Security Capital
Holdings SA, a Luxembourg corporation, [ ], a [ ] corporation, Lender and
certain other entities and individuals.
"Code" means the Internal Revenue Code of 1986 and any successor
statute of similar import, together with the regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Covered Securities" means any securities included within the
Collateral and any Other Qualifying Securities.
"CPJ" - see Preamble.
"CPJ Shares" - means the common stock, $0.01 par value, of CPJ.
"Current Fair Market Value" shall mean as of a date,:
(i) with respect to a Unit, the product of (a) the Fair Market Value
of one (1) CPJ Share as of such date and (b) the number (or
fraction) of CPJ Shares into which
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such Unit is then exchangeable or redeemable under the Agreement
of Limited Partnership;
(ii) with respect to a CPJ Share, the Fair Market Value of one (1) CPJ
Share;
(iii) with respect to cash, the value of such cash; and
(iv) with respect to other assets with readily available market
values, such market values as determined in good faith by the
Board of Directors of CPJ.
"CWS" - see Preamble.
"Dec. 99 $0.5m Note" - see Preamble.
"Default" means any event or condition which, with the lapse of time
or giving of notice to the Borrower or both, would constitute an Event of
Default.
"Event of Default" means any of the events described in Section 6.1.
"Fair Market Value" means on any day as to one (1) CPJ Share, the
closing sales price of such security as listed on the NYSE averaged over a
period of 21 business days consisting of the day as of which "Fair Market Value"
is being determined and the 20 consecutive business days prior to such day (the
term "business day" as used in this sentence means any day on which the NYSE is
open for trading). If the day of determination of Fair Market Value is other
than a business day, Fair Market Value shall be determined as of the business
day immediately preceding such day as if it were the day of determination of
Fair Market Value. If at any time such security is not listed on the NYSE then,
if there has been a sale of such security for an aggregate amount exceeding $1
million to Persons who are not Affiliates of CPJ within ninety (90) days prior
to such time, the price per security in the most recent such sale shall be
deemed to be the Fair Market Value hereunder. In all other cases, the "Fair
Market Value" shall be the fair value thereof as determined in accordance with
the following procedure:
(a) Each of the Lender and the Borrower shall select a
nationally-recognized firm that is experienced in valuing similar
securities within ten (10) days after the applicable Payment Date or
other date hereunder. If either Lender or the Borrower shall fail to
designate such firm within said ten (10) day period, then such firm
shall be appointed by the office of the American Arbitration
Association or its successor located closest to Chicago, Illinois.
(b) Within twenty (20) days after their selection, each of the
two firms selected under paragraph (a) above shall submit a report of
its valuation as of the applicable payment or other date of the CPJ
Shares to the Borrower and Lender. Each firm's valuation shall value
the CPJ Shares based upon its opinion of the likely purchase price
thereof in an arm's length transaction involving a willing buyer and a
willing seller, with neither under undue compulsion to buy or sell,
assuming for such purpose that the CPJ Shares were being sold by CPJ
in an original issuance. Each firm's valuation shall also be based
upon the assumption that the CPJ Shares being valued are freely
transferable without registration under the Securities Act of 1933, as
amended. Such valuation shall not apply any "minority discount."
(c) If the higher of the two valuations described in paragraph
(b) above is no more than ten percent (10%) higher than the lower
valuation, then, for purposes of this Agreement, the Fair Market Value
as of the applicable payment or other date of the CPJ Shares shall be
deemed to be the average of the two valuations.
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(d) If the higher of the two valuations described in paragraph
(b) above is more than ten percent (10%) higher than the lower
valuation, then the two valuation firms selected under paragraph (a)
above shall select a third nationally-recognized firm that is
experienced in valuing similar securities within five (5) days after
the delivery of the valuation reports described in paragraph (b)
above. If the two valuation firms shall fail to select a third
valuation firm within such time period, then the third valuation firm
shall be appointed by the office of the American Arbitration
Association located closest to Chicago, Illinois. Such third valuation
firm shall deliver its report on the value of the CPJ Shares within
twenty (20) days after its selection. For purposes of this Agreement,
the Fair Market Value of the CPJ Shares as of the applicable Payment
Date or other date shall be deemed to be the average of the two
valuations (of the three valuations prepared) that are closest to each
other.
The costs of determining Fair Market Value shall be shared equally by
Borrower and Lender.
"First Renewal Term" has the meaning given in Section 2.3.
"Initial Fair Market Value" initially shall be twenty-seven and 17/100
dollars ($27.17) per Unit or CPJ Share. The Initial Fair Market Value of such
Unit or CPJ Share shall be adjusted appropriately by the Board of Directors of
CPJ to take into account any of the following to the extent occurring after the
date hereof: any stock/unit split, stock/unit dividend or other similar
adjustment to the capital structure of Chateau OP or CPJ. If CPJ or Chateau OP
shall be a party to any transaction (including without limitation a merger,
consolidation, statutory share exchange, self tender offer for all or
substantially all of the Covered Securities, sale of all or substantially all of
the assets of CPJ or Chateau OP or recapitalization of the Covered Securities)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which all or substantially all of such Covered Securities
are converted into the right to receive stock, securities or other property
(including cash or any combination thereof) of another Person (collectively,
"Successor Property") then, for purposes of the Agreement, the aggregate Initial
Fair Market Value of such Successor Property shall be the aggregate Initial Fair
Market Value of the relevant Covered Securities immediately prior to such
conversion, which if the context permits, shall be expressed on an appropriate
per unit or per share basis. The preceding sentence shall similarly apply to
successive Transactions.
"Jun. 99 $0.5m Note" - see Preamble.
"Lender" - see Preamble.
"Loan" means the indebtedness evidenced by the Notes.
"Loan Documents" means this Agreement, the Notes, the Pledge
Agreement, the Option Agreement, that certain letter dated the date hereof
addressed to and acknowledged and agreed to by Original Borrowers from CPJ,
Chateau OP and Lender, any security agreement with respect to Collateral
securing the Loan and any other documents or instruments required to be entered
into under any of the foregoing. The Loan Documents do not include the
Contribution Agreement or any "Related Documents" (as defined therein) other
than the Loan Documents identified above.
"Loan Reduction Collateral" shall mean, with respect to any
application of Split Collateral under Section 4.1(b), that portion of Split
Collateral that, when applied as a payment under the Loan in accordance with
Section 4.1(b), will result in the Loan-to-Value Ratio immediately after the
application of Split Collateral under Section 4.1(b) (giving effect to the
Return Split Collateral, if any, to be received by Borrower in connection with
the application of such Split Collateral under Sections 4.1(b)) to equal the
Loan-to-Value Ratio immediately prior to such application of Split Collateral;
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provided, however, that with respect to any Split Collateral, the Loan Reduction
Collateral will always comprise all of the Split Collateral if (i) the
Loan-to-Value Ratio before the application of such Split Collateral was greater
than 1.0; or (ii) after applying all of the Split Collateral as a payment under
the Loan, the Loan-to-Value Ratio is greater than the ratio that existed
immediately prior to such application.
"Loan-to-Value Ratio" shall mean at a particular time a fraction, the
numerator of which is the outstanding principal, interest and other amounts due
under the Loan at such time, and the denominator of which is the Current Fair
Market Value of the Collateral at such time.
"Mar. 99 $0.5m Note" - see Preamble.
"Merger Agreement" - see Preamble.
"NYSE" means the New York Stock Exchange or a national securities
exchange (including the NASDAQ Stock Market) on which the CPJ Shares are listed.
"Note 1 - Non-Investment Loan" means the Amended and Restated
Promissory Note 1 - Non-Investment Loan executed pursuant to this Agreement,
substantially in the form set forth as Exhibit A-1 attached hereto, as the same
amends and restates the Mar. 99 $0.5m Note and as such promissory note may be
amended, modified or supplemented from time to time.
"Note 2 - Non-Investment Loan" means the Amended and Restated
Promissory Note 2 - Non-Investment Loan executed pursuant to this Agreement,
substantially in the form set forth as Exhibit A-2 attached hereto, as the same
amends and restates the Jun. 99 $0.5m Note and as such promissory note may be
amended, modified or supplemented from time to time.
"Note 3 - Non-Investment Loan" means the Amended and Restated
Promissory Note 3 - Non-Investment Loan executed pursuant to this Agreement,
substantially in the form set forth as Exhibit A-3 attached hereto, as the same
amends and restates the Dec. 99 $0.5m Note and as such promissory note may be
amended, modified or supplemented from time to time.
"Note 4 - Non-Investment Loan" means the Amended and Restated
Promissory Note 4 - Non-Investment Loan executed pursuant to this Agreement,
substantially in the form set forth as Exhibit A-4 attached hereto, as the same
amends and restates the Sep. 00 $1m Note and as such promissory note may be
amended, modified or supplemented from time to time.
"Notes" means collectively, Note 1 - Non-Investment Loan, Note 2 -
Non-Investment Loan, Note 3 - Non-Investment Loan and Note 4 - Non-Investment
Loan, and the term "Note" shall mean Note 1 - Non-Investment Loan, Note 2 -
Non-Investment Loan, Note 3 - Non-Investment Loan or Note 4 - Non-Investment
Loan.
"Original Borrowers" - see Preamble.
"Original Loan Agreement" - see Preamble.
"Optionee" has the meaning given to such term in the Other Loan
Agreement.
"Other Loan" has the meaning set forth in Section 4.3.
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"Other Loan Agreement" has the meaning set forth in Section 4.3.
"Other Qualifying Securities" means any Units or CPJ Shares that are
not included in the Collateral.
"Payment Date" shall mean the date of any payment under Sections 4.1
or 4.2 hereof. For purposes of clarity, in the case of Split Collateral, Payment
Date shall mean the date such Collateral is requested to be split as
contemplated in Section 4.1(a).
"Person" means an individual, partnership, corporation, limited
liability company, trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"Pledge Agreement" means that certain Non-Investment Pledge Agreement
II dated as of March 16, 1999, made by Original Borrowers in favor of Lender, as
amended by First Amendment to Non-Investment Pledge Agreement dated as of June
14, 1999, between Original Borrowers and Lender, Second Amendment to
Non-Investment Pledge Agreement dated as of December 15, 1999, between Original
Borrowers and Lender, and Third Amendment to Non-Investment Pledge Agreement
dated as of September 26, 2000, as amended and restated by the Amended and
Restated Non-Investment Pledge Agreement executed by the Original Borrowers and
Lender substantially in the form of Exhibit B attached hereto with appropriate
insertions, as such pledge agreement may be amended, modified or supplemented
from time to time.
"Prentice Hall" has the meaning set forth in Section 7.10.
"Renewal Term(s)" has the meaning given in Section 2.3.
"Return Split Collateral" shall mean, with respect to a particular
application of Split Collateral under Section 4.1(b), that portion of such Split
Collateral remaining after application by the Lender of the Loan Reduction
Collateral to amounts outstanding under the Loan.
"Second Renewal Term" has the meaning given in Section 2.3.
"Sept. 00 $1m Note" - see Preamble.
"Split Collateral" shall have the meaning given to it in Section
4.1(a).
"Successor Property " - contained in the definition of Initial Fair
Market Value.
"Subscription Agreement " - see Preamble.
"Transaction" - contained in the definition of Initial Fair Market
Value.
"Treasury Yield" has the meaning given in Section 3.2.
"Trust" - see Preamble.
"Units" means common units of limited partner interest in Chateau OP.
2. Release of the Trust and Certain Loan Terms.
2.1 Release of the Trust and Execution of Pledge Agreement. Lender
hereby releases the Trust from its obligation to repay the Loan to Lender. In
exchange for such release by Lender, the Trust hereby agrees to execute and
deliver the Pledge Agreement.
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2.2 The Notes; Maturity. Contemporaneously herewith, (i) Lender has
returned to Original Borrowers the original Mar. 99 $0.5m Note, Jun. 99 $0.5m
Note, Dec. 99 $0.5m Note and Sept. 00 $1m Note each marked "cancelled"; and (ii)
Borrower has executed Note 1 - Non-Investment Loan, Note 2 - Non-Investment
Loan, Note 3 - Non-Investment Loan and Note 4 - Non-Investment Loan, which,
subject to Section 2.3, shall be due and payable in full on March 16, 2009, June
14, 2009, December 15, 2009 and September 26, 2010, respectively.
2.3 Renewal Terms. Borrower may, at its option, extend the maturity
date of each or all of Note 1- Non-Investment Loan, Note 2 -Non-Investment Loan,
Note 3 - Non-Investment Loan and Note 4 - Non-Investment Loan for one ten (10)
year term ("First Renewal Term") and one five (5) year term ("Second Renewal
Term"; collectively, with the First Renewal Term, the "Renewal Terms", and each
a "Renewal Term"), respectively, provided that,:
(i) Lender shall have received written notice of Borrower's
intention to extend the then current maturity date of the applicable
Note no later than three (3) months prior to the then current maturity
date of the applicable Note;
(ii) no Event of Default exists on the date of the notice given
by Borrower in paragraph (i) above and on the commencement date of the
Renewal Term; and
(iii)Borrower shall have properly exercised its option to extend
the then current maturity date of the applicable note made by Borrower
pursuant to the Other Loan such that the applicable Note remains
co-terminus with such note.
The foregoing notwithstanding, in the event of the death of Borrower, the then
current term (other than the Second Renewal Term) shall be extended or
shortened, as applicable, so that it ends four (4) years after such death.
2.4 No Advances. Lender shall not be required to advance any
additional funds to Borrower hereunder.
3. Interest.
3.1 Initial Term Interest.
(i) The unpaid principal amount of the indebtedness evidenced by the
Notes shall bear interest in accordance with the following
schedule:
NOTE 1 - NON-INVESTMENT LOAN
----------------------------
Period Interest Rate
------ -------------
The date hereof - March 15, 2002 6.50%
March 16, 2002 - March 15, 2003 6.75%
March 16, 2003 - March 15, 2004 7.00%
March 16, 2004 - March 15, 2005 7.25%
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March 16, 2005 - March 16, 2009 7.50%
Renewal Term(s) As set forth in Section 3.2
NOTE 2 - NON-INVESTMENT LOAN
----------------------------
Period Interest Rate
------ -------------
The date hereof - June 13, 2002 6.50%
June 14, 2002 - June 13, 2003 6.75%
June 14, 2003 - June 13, 2004 7.00%
June 14, 2004 - June 13, 2005 7.25%
June 14, 2005 - June 14, 2009 7.50%
Renewal Term(s) As set forth in Section 3.2
NOTE 3 - NON-INVESTMENT LOAN
----------------------------
Period Interest Rate
------ -------------
The date hereof - December 14, 2001 6.25%
December 15, 2001 - December 14, 2002 6.50%
December 15, 2002 - December 14, 2003 6.75%
December 15, 2003 - December 14, 2004 7.00%
December 15, 2005 - December 14, 2006 7.25%
December 15, 2006 - December 15, 2009 7.50%
Renewal Term(s) As set forth in Section 3.2
NOTE 4 - NON-INVESTMENT LOAN
----------------------------
Period Interest Rate
------ -------------
The date hereof - September 25, 2001 6.25%
September 26, 2001 - September 25, 2002 6.50%
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September 26, 2002 - September 25, 2003 6.75%
September 26, 2003 - September 25, 2004 7.00%
September 26, 2004 - September 25, 2005 7.25%
September 26, 2005 - September 26, 2010 7.50%
Renewal Term(s) As set forth in Section 3.2
(ii)Accrued interest for each calendar quarter shall be payable
quarterly on the last day of such calendar quarter and on the maturity
date of the Notes. After the maturity date of the applicable Note,
accrued interest shall be payable on demand.
3.2 Renewal Terms. The annual interest rate charged on the unpaid
principal balance and overdue and unpaid interest during each Renewal Term shall
be the Treasury Yield plus one hundred fifty (150) basis points, not to exceed a
maximum annual rate of nine percent (9%). "Treasury Yield" means the yield of
U.S. Treasury Issues as quoted on the date immediately preceding the
commencement of the applicable Renewal Term (or if not quoted on such date then
the most recent date on which such rate is quoted) in The Wall Street Journal as
maturing on the closest date to the tenth (10th) anniversary after the
commencement date of the applicable Renewal Term. Should more than one U.S.
Treasury Issue be quoted as maturing on the closest date to the tenth (10th)
anniversary of the commencement date of the applicable Renewal Term, then the
yield of the issue selling closest to par will be used in the calculation. If
The Wall Street Journal is not then in publication, then another national
publication acceptable to Lender (and reasonably acceptable to Borrower) will be
utilized. Borrower may elect in the renewal notice given to Lender pursuant to
Section 2.3, that the Treasury Yield be reset at the beginning of each
anniversary of the commencement date of the applicable Renewal Term in the
manner provided above, with the applicable maturity of the U.S. Treasury Issues
being the date closest to the tenth (10th) anniversary of such anniversary date
of the commencement date.
3.3 Method of Calculating Interest. Interest on the unpaid principal
amount of the Loan shall accrue from and including the date of the initial
advance of the Loan, but not including, the date the Loan is paid. Interest
shall be calculated on the basis of a year consisting of 365 days and shall be
paid for actual days elapsed in any partial-year period.
4. Payments, Prepayments and Setoff; Release of Collateral.
4.1 Payment.
(a) All payments hereunder (including payments with respect to
the Notes) shall be made without setoff or counterclaim and shall be made
to the Lender in immediately available funds prior to 12:30 p.m., Chicago
time, on the date due at c/o Falcon Farms, 0000 000xx Xxxxxx Xxxxx, Xxxx
Xxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X.
Xxxxx, or at such other place as may be designated by the Lender to the
Borrower in writing. Any payments received after such time shall be
deemed received on the next Business Day. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a date other
than a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall be included in the
calculation of interest. Payment may be made (1) in cash; (2) by
transferring to Lender Other Qualifying Securities; or (3) with respect
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to principal payments only (and not interest payments and other amounts
due hereunder), by requesting that the Collateral, or a portion thereof
(any such Collateral being used for such purpose being hereinafter
referred to as the "Split Collateral"), be split among payment under the
Loan and, if applicable, the Borrower, all as provided in Section 4.1(b)
below. If payment is made by transfer of Other Qualifying Securities then
Lender will credit, first against the accrued interest and then
outstanding principal balance of the Loan, the Current Fair Market Value
of such Other Qualifying Securities on the date Borrower first tenders
such Other Qualifying Securities to Lender as payment under the Loan.
(b) (i) In the event that the Borrower makes the request with
respect to Split Collateral as provided in Section 4.1(a) above, Lender
and Borrower agree that Lender will retain the Loan Reduction Collateral
as payment under the Loan and credit against the outstanding principal
balance of the Loan, the Current Fair Market Value of the Loan Reduction
Collateral as of the applicable Payment Date.
(ii) Borrower and Lender agree that any Split Collateral
shall contain securities and property that is not a security (such as
cash) in the same relative proportions as such securities and property
are included in the Collateral. Subject to the foregoing, the Borrower
shall be permitted to select the portions of the Collateral that shall
constitute Split Collateral.
(iii) After such time that the Lender has made the credit set
forth in Section 4.1(b)(i) with respect to the applicable Split
Collateral, then the Lender shall cause the applicable Return Split
Collateral to be delivered to Borrower.
(iv) All transfers of the Loan Reduction Collateral shall be
by instrument that effectively transfers to Lender, the CPJ Shares or the
Units, free and clear in all cases of all liens, security interests and
claims other than the Pledge Agreement.
4.2 Prepayment. The Borrower may prepay, in the manner described in
Section 4.1, all or any portion of the principal amount of the Loan together
with any unpaid interest thereon, at his option at any time, without penalty;
provided, however, that Borrower shall not be entitled to make a prepayment with
respect to the Loan unless it simultaneously therewith makes a prepayment of the
loan (the "Other Loan") made under the that certain Third Amended and Restated
Investment Loan Agreement dated as of the date hereof (the "Other Loan
Agreement"), between Lender and Borrower in an amount equal to three times the
amount of the prepayment to be made under the Loan.
4.3 Return of Collateral in Connection with Cash Payments. In the
event that Borrower makes a prepayment of a portion of the Loan in cash other
than as contemplated by Section 5(c) of the Pledge Agreement, then Lender will,
return a portion of the Collateral to Borrower that has an Initial Fair Market
Value equal to the principal amount of the Loan which has been so prepaid. All
returns of Collateral under this Section 4.3(a) shall include securities and
property that is not a security (such as cash) in the same relative proportions
as such securities and property are included in the Collateral. Subject to the
limitations contained herein, the Borrower may determine the composition of the
Collateral to be returned under this Section 4.3.
4.4 Return of Collateral After Maturity and Other Events. The Lender
will return any remaining Collateral to the Borrower after the occurrence of all
of the following: (i) maturity of the Loan, and (ii) the payment of all amounts
due hereunder (including the application of all Collateral to payment of such
amounts as permitted by the Loan Documents). The Lender shall not be required to
return any Collateral to the Borrower prior to satisfaction of all requirements
of the immediately preceding sentence, except to the extent required by Sections
4.1(b) or 4.3 hereof.
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4.5 Applications of Payments. Notwithstanding anything to the contrary
contained in this Agreement, all payments of principal and interest under the
Loan and the Other Loan shall be applied in a 25/75 ratio to outstanding amounts
of principal and interest under the Loan and the Other Loan, respectively,
regardless of how Borrower directs that such payments be applied. If Borrower
desires to make any payment under the Loan with Loan Reduction Collateral, he
may do so only if he makes a prepayment under the Other Loan with collateral (as
the term "Collateral" is defined under the Other Loan Agreement) with a Current
Fair Market Value equal to three (3) times the Current Fair Market Value of the
applicable Loan Reduction Collateral and otherwise consisting of the same
proportionate quantities of securities and other property as the applicable
Split Collateral.
4.6 Substitute Collateral. The Borrower shall, with the consent of the
Lender and Optionee, be permitted to substitute for portions of the Collateral
("Replaced Collateral") securities ("Substitute Collateral") consisting of CPJ
Shares or Units that have a Current Fair Market Value as of the date of
substitution equal to that of the Replaced Collateral. In connection with any
such substitution, the Borrower shall deliver such Substitute Collateral to the
Lender shall make such representations and warranties, shall execute such
documents and make such deliveries to evidence such Substitute Collateral, and
shall provide such evidence of unencumbered title to the Substitute Collateral
and the perfection of the Lender's security interest therein, as the Lender
shall request. If the Borrower has complied with the terms of this paragraph,
then the Lender's and the Optionee's consent to such substitution shall not be
unreasonably withheld. From and after the date of any such substitution, the
Substitute Collateral shall constitute Collateral for all purposes of the Loan
Documents and the Replaced Collateral will be promptly returned to Borrower.
5. Warranties. The Borrower warrants that on the date hereof:
5.1 Authorization. The execution, delivery and performance by the
Borrower of this Agreement, the Notes and the other Loan Documents and the
borrowing hereunder (i) are within the right, power, authority and capacity of
the Borrower and (ii) do not and will not require any consent or approval of any
governmental agency or authority or any other Person.
5.2 No Conflicts. The execution, delivery and performance by the
Borrower of this Agreement, the Notes and the other Loan Documents do not
conflict with any agreement binding upon the Borrower or the Collateral or any
court or administrative order or decree applicable to the Borrower.
5.3 Validity and Binding Effect. This Agreement is, and the Notes and
the other Loan Documents when duly executed and delivered will be, legal, valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
5.4 No Default. No Event of Default or Default has occurred and is
continuing.
5.5 Regulation G. The Borrower is not engaged in the business of
purchasing or selling "margin stock," as defined in Regulation G of the Federal
Reserve Board, or extending credit to others for the purpose of purchasing or
carrying margin stock, and no part of the proceeds of the Loan will be used to
purchase or carry any margin stock or for any other purpose, in each case in a
manner which would violate any of the margin regulations of the Federal Reserve
Board.
5.6 Solvency. Prior to and after giving effect to the Agreement, (i)
the Borrower's assets will exceed his liabilities and (ii) the Borrower will be
solvent, will be able to pay his debts as they mature, will own cash and
11
property with fair saleable value greater than the amount required to pay his
debts and on-going obligations.
6. Events of Default and Remedies.
6.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
(a) Non-Payment on the Notes. Default in the payment when due of
any principal of or interest on the Notes and the continuance of such
default for more than ten (10) days after the Lender has provided
Borrower notice of the failure to make such payment when due.
(b) Agreements. Default in the performance of any of the Original
Borrower's agreements set forth in any of the Loan Documents (and not
constituting an Event of Default under any of the other subsections of
this Section 6.1) and continuance of such default for sixty (60) days
after notice thereof to the respective Original Borrower from the Lender.
(c) Warranty. Any warranty made by the Original Borrowers in any
of the Loan Documents is untrue in any material respect when made or
deemed made, in each case, for sixty (60) days after notice thereof to
the Borrower from the Lender.
(d) Invalidity of Note. Any Note shall cease to be in full force
and effect with respect to the Borrower or the Borrower shall fail
(subject to any applicable grace period) to comply with or to perform any
applicable provision of any Loan Document to be performed by Borrower, or
the Borrower shall contest in any manner the validity, binding nature or
enforceability of any Loan Document, and continuance of such default for
sixty (60) days after notice thereof to the Borrower from the Lender.
(e) Bankruptcy of Borrower. The bankruptcy of the Borrower (for
purposes of this Loan Agreement, the bankruptcy of the Borrower shall be
deemed to have occurred upon the expiration of sixty (60) days following
the happening of any of the following: (i) the filing of an application
by the Borrower for, or a consent to, the appointment of a trustee of his
assets; (ii) the filing by the Borrower of a voluntary petition in
bankruptcy or the filing by the Borrower of a pleading in any court of
record admitting in writing his inability to pay his debts as they come
due; (iii) the making by the Borrower of a general assignment for the
benefit of creditors; (iv) the filing by the Borrower of an answer
admitting the material allegations of, or his consenting to, or
defaulting in answering, a bankruptcy petition filed against him in any
bankruptcy proceeding; or (v) the entry of an order, judgment or decree
by any court of competent jurisdiction adjudicating the Borrower a
bankrupt or appointing a trustee of his assets).
6.2 Remedies. Subject to Section 7.2, if any Event of Default
described in Section 6.1 shall have occurred and be continuing, in addition to
any other remedies available under applicable law, the Lender may take any and
all actions permitted by the Loan Documents and the Lender, upon notice to the
Borrower, may declare the Notes to be due and payable, whereupon the Notes shall
become immediately due and payable.
7. General.
7.1 Waiver and Amendments. No failure or delay on the part of the
Lender or the holder of the Notes in the exercise of any power or right, and no
course of dealing between the Borrower and the Lender or the holder of the
12
Notes, shall operate as a waiver of such power or right, nor shall any single or
partial exercise of any power or right preclude other or further exercise
thereof or the exercise of any other power or right. The remedies provided for
herein are cumulative and not exclusive of any remedies which may be available
to the Lender or the holder of the Notes at law or in equity. No notice to or
demand on the Borrower not required hereunder or under the Notes shall in any
event entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the right of the Lender or the
holder of the Notes to any other or further action in any circumstances without
notice or demand. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by the
Lender. Any waiver of any provision of this Agreement or the Notes, and any
consent to any departure by the Borrower from the terms of any provision of this
Agreement or the Notes, shall be effective only in the specific instance and for
the specific purpose for which given.
7.2 Non-Recourse. Nothing herein contained shall be deemed to cause
the Borrower personally to be liable to pay any principal outstanding on the
Notes, and the Lender shall not seek any personal or deficiency judgment with
respect to any amount of the Notes, and the sole remedy of the Lender with
respect to the payment of the Notes shall be against the Collateral securing the
Notes and the income from, and other proceeds of, such Collateral; provided,
however, that the foregoing shall not in any way affect the personal liability
of the Borrower for: (a) payment of any interest on the Notes; (b) payment of
any principal on the Notes solely to the extent and only to the extent of fifty
percent (50%) of the amount, if any, by which the outstanding principal balance
of the Loan at maturity (however such maturity occurs) exceeds the Current Fair
Market Value, determined as of such maturity date, of the Collateral then
subject to the Pledge Agreement; or (c) recover any expenses and other amounts
due and owing to the Lender under Section 7.4, but only to the extent such
expenses result from any successful action taken by Lender to enforce its rights
under (a) or (b) above or this clause (c) or clause (d) below, or (d) Borrower's
share of the costs incurred in determining the Fair Market Value of any
securities, as provided in the definition of Fair Market Value.
7.3 Notices. Except as otherwise expressly provided herein, any notice
hereunder to the Borrower or the Lender shall be in writing (including
telegraphic or facsimile communication) and shall be given to the Borrower or
the Lender at his or its address or facsimile number set forth on the signature
pages hereof or at such other address or facsimile number as the Borrower or the
Lender may, by written notice, designate as his or its address or facsimile
number for purposes of notice hereunder. Copies of notices to Borrower shall be
sent to O'Melveny & Xxxxx LLP, 000 Xxxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx
00000-0000, Attn: Xxxxxxx X. Xxxxxx, Esq. Copies of notices to Lender shall be
sent to: Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxx X. Xxxxxxxxx, Esq. All such notices shall be deemed to be
given when transmitted by facsimile, personally delivered or, in the case of a
mailed notice, when sent by registered or certified mail, postage prepaid, in
each case addressed as specified in this Section 7.3.
7.4 Expenses. Subject to Section 7.2, the Borrower agrees to pay the
Lender upon demand for all expenses, including reasonable fees of attorneys for
the Lender and other legal expenses and costs of collection, incurred by the
Lender in connection with the successful enforcement of the Borrower's
obligations hereunder or under the Notes or under any Loan Document.
7.5 Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited,
invalidated or unenforceable in any jurisdiction then such provision shall, as
to such jurisdiction, be ineffective to the extent of such prohibition,
invalidity or unenforceability without invalidating the remaining provisions
13
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
7.6 Law. THIS AGREEMENT AND THE NOTES SHALL BE CONTRACTS MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. BY EXECUTING THIS
AGREEMENT, BORROWER ACKNOWLEDGES THAT HE UNDERSTANDS THE EFFECT OF THE
APPLICATION OF ILLINOIS LAW TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
BORROWER ACKNOWLEDGES THAT, AFTER BEING ADVISED BY HIS COUNSEL, HE HAS FREELY
CONSENTED TO THE APPLICATION OF ILLINOIS LAW.
7.7 Successors. This Agreement shall be binding upon the Borrower, and
the Lender and their respective heirs, representatives, successors and assigns,
and shall inure to the benefit of the Borrower and the Lender and the successors
and assigns of the Lender. Except as required by applicable law, the Borrower
shall not assign his rights or duties hereunder without the prior written
consent of the Lender; provided, that upon Borrower's death, Borrower's estate
shall succeed to Borrower's rights, obligations and agreements hereunder
(Borrower hereby agreeing to cause the same Persons to succeed in the same
proportions to this Agreement and the other Loan Documents and the Other Loan
Agreement and Loan Documents (as defined in the Other Loan Agreement) and
provided further, that Borrower may assign his rights, obligations and
agreements hereunder to members of his family and to trusts formed and
maintained at all times after assignment for the benefit of members of his
family (it being understood and agreed in such case that Borrower shall remain
liable for all obligations under Section 7.2 hereunder and that Borrower shall
assign all rights under the Other Loan and the Loan Documents (as defined in the
Other Loan Agreement) to the same assignee). The Borrower shall provide the
Lender with prior written notice of any such assignment.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been received by
the Lender, this Agreement shall become effective as of the date hereof.
7.9 No Presumption Against Drafter; Interpretation. All of the parties
hereto have jointly participated in the negotiation and drafting of this
Agreement. In the event of an ambiguity or if a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by all of the parties hereto and no presumptions or burdens of proof shall arise
favoring any party by virtue of the authorship of any of the provisions of this
Agreement. The use of the masculine, feminine or neuter gender herein shall not
limit any provision of the Loan Documents. Without limiting the foregoing, the
word "his" shall be deemed to refer also, where possible, to "her" and "its" and
the word "he" shall be deemed to refer also, wherever possible, to "she" and
"it", including in all such cases in connection with references to the Borrower.
7.10 Entire Understanding. Notwithstanding anything to the contrary or
contained in the Subscription Agreement, this Agreement sets forth the entire
agreement and understanding of the parties hereto in respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is not intended to
confer upon any other person any rights or remedies hereunder. There have been
no representations or statements, oral or written, that have been relied on by
any party hereto, except those expressly set forth in this Agreement.
7.11 Agent for Service of Process. In connection with any action by
Lender for enforcement of any provision of this Agreement or any provision of
any other Loan Document, Borrower has appointed The Prentice Hall Corporation
14
System, Inc. ("Prentice Hall") or any successor firm thereto, located in
Chicago, Illinois, as his agent for service of process by executing the
instrument attached hereto as Exhibit D. The foregoing appointment shall be
deemed to be coupled with an interest and shall be irrevocable. If Prentice Hall
ceases to exist and has no successors, then Borrower will execute similar
substitute documents with a substitute agent as reasonably requested by Lender.
7.12 Arbitration, Forum Selection and Consent to Jurisdiction. EACH OF
THE BORROWER AND LENDER AGREES THAT ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT BETWEEN SUCH PARTIES, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS
LOCATED IN XXXX COUNTY, ILLINOIS, OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS. NOTWITHSTANDING THE FOREGOING, ANY CONTORVERSY OR
CLAIM BETWEEN OR AMONG THE PARTIES ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS SHALL AT THE REQUEST OF ANY PARTY BE DETERMINED BY ARBITRATION. THE
ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION AND SHALL BE CONDUCTED IN SPRINGFIELD,
ILLINOIS. THE ARBITRATOR(S) SHALL BE RETIRED FEDERAL DISTRICT COURT JUDGES. THE
ARBITRATOR(S) SHALL GIVE EFFECT TO STATUTES OF LIMITATION IN DETERMINING ANY
CLAIM. ANY CONTROVERSY CONCERNING WHETHER AN ISSUE IS ARBITRABLE SHALL BE
DETERMINED BY THE ARBITRATOR(S). ANY PARTY TO THIS AGREEMENT MAY BRING AN
ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF
ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION. JUDGMENT UPON THE ARBITRATION AWARD SHALL BE
ENTERED EXCLUSIVELY IN ANY COURT OF THE STATE OF ILLINOIS LOCATED IN XXXX
COUNTY, ILLINOIS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS. THE AWARD SHALL BE CONCLUSIVE AND BINDING, SUBJECT TO
CHALLENGE ONLY ON ONE OR MORE OF THE FOLLOWING GROUNDS: (I) THE AWARD WAS
PROCURED BY CORRUPTION, FRAUD OR OTHER UNDUE MEANS; (II) THERE WAS CORRUPTION IN
ANY OF THE ARBITRATORS; (III) THE RIGHTS OF THE APPEALING PARTY WERE
SUBSTANTIALLY PREJUDICED BY MISCONDUCT OF A NEUTRAL ARBITRATOR; (IV) THE
ARBITRATORS EXCEEDED THEIR POWERS AND THE AWARD CANNOT BE CORRECTED WITHOUT
AFFECTING THE MERITS OF THE DECISION UPON THE CONTROVERSY SUBMITTED; (V) THE
RIGHTS OF THE APPEALING PARTY WERE SUBSTANTIALLY PREJUDICED BY THE REFUSAL OF
THE ARBITRATORS TO POSTPONE ANY HEARING UPON SUFFICIENT CAUSE BEING SHOWN
THEREFOR OR BY THE REFUSAL OF THE ARBITRATORS TO HEAR EVIDENCE MATERIAL TO THE
CONTROVERSY OR BY OTHER CONDUCT OF ANY ARBITRATOR CONTRARY TO THE ARBITRATION
RULES; (VI) ANY OTHER GROUNDS WHICH PERMIT APPEAL UNDER THE ARBITRATION RULES;
OR (VII) BASED UPON THE ARBITRATOR'S INCORRECT APPLICATION OF ILLINOIS STATUTORY
OR COMMON LAW. THE VALIDITY AND ENFORCEABILITY OF AN ARBITRATION DECISION IS TO
BE DETERMINED EXCLUSIVELY BY THE ILLINOIS COURTS PURSUANT TO THE PROVISIONS
HEREOF. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO LIMIT THE RIGHT OF LENDER
(A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SET-OFF, OR (B)
TO FORECLOSE AGAINST ANY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL
OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF OR THE
APPOINTMENT OF A RECEIVER. LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE
UPON SUCH COLLATERAL, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE,
DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO
THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, THE LENDER SHALL NOT BE ENTITLED
15
TO EXERCISE SELF-HELP REMEDIES OR FORECLOSE UPON THE COLLATERAL UNTIL IT HAS
FIRST ATTEMPTED TO APPLY THE COLLATERAL TO PAYMENTS UNDER THE LOAN AS PERMITTED
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND WAS NOT ABLE PROMPTLY TO
SO APPLY THE COLLATERAL AT SUCH TIME OR TIMES AS PERMITTED UNDER THE LOAN
DOCUMENTS, REGARDLESS OF THE REASON THEREFOR (FOR PURPOSES OF CLARITY, IF ANY
ARBITRATOR OR JUDGE RENDERS OR FAILS TO RENDER ANY PRELIMINARY OR OTHER DECISION
OR BORROWER OR ANY OTHER PERSON TAKES ANY ACTION THE EFFECT OF WHICH IS TO
PREVENT OR DELAY EXERCISE OF ANY RIGHT OF LENDER TO THE COLLATERAL, THEN LENDER
SHALL THEREUPON BE ENTITLED TO EXERCISE SELF-HELP REMEDIES OR FORECLOSE UPON THE
COLLATERAL). NEITHER THE EXERCISE OF SELF-HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES
SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN
ANY SUCH ACTION TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES. EACH OF THE BORROWER AND LENDER HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS IN
CONNECTION WITH ANY LITIGATION HEREUNDER, INCLUDING THE ENTERING OF ANY JUDGMENT
UPON AN ARBITRATION AWARD. EACH OF THE BORROWER AND LENDER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[The remainder of this page has been intentionally left blank]
16
IN WITNESS WHEREOF, this Third Amended and Restated Non-Investment Loan
Agreement has been duly executed and delivered as of the day and year first
written above.
BORROWER:
----------------------------------
[____________]
Address: [____________]
[____________]
[____________]
THE TRUST:
[________________________________]
By:
------------------------------
[__________], Trustee
Address: [____________]
[____________]
[____________]
17
LENDER:
CWS COMMUNITIES LP,
a Delaware limited partnership
By: Second Merger Sub, LLC,
its general partner
By:
-------------------------------------
Name:
Title:
Address: c/o Falcon Farms
0000 000xx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and
Xx. Xxxx X. Xxxxx, Xx.
With a copy to:
c/o Chateau Communities, Inc.
0000 X. Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and
Xx. Xxxx X. Xxxxx, Xx.
18
EXHIBIT A-1
FORM OF NOTE 1 - NON-INVESTMENT LOAN
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.
THIS NOTE AMENDS AND RESTATES THAT CERTAIN PROMISSORY NOTE DATED MARCH 16, 1999,
MADE BY [____________] AND [____________________________________ IN FAVOR OF CWS
COMMUNITIES LP IN THE ORIGINAL PRINCIPAL AMOUNT OF $500,000
PAYMENT OF THIS NOTE IS NON-RECOURSE TO THE BORROWER EXCEPT AS PROVIDED
IN THE LOAN AGREEMENT REFERRED TO HEREIN.
AMENDED AND RESTATED PROMISSORY NOTE 1 - NON-INVESTMENT LOAN
$500,000
Due: March 16, 2009
Chicago, Illinois: August 2, 2001
FOR VALUE RECEIVED, the undersigned, [ ], in his individual capacity (the
"Borrower"), promises to pay to the order of CWS Communities LP, a Delaware
limited partnership, (the "Lender"), the principal sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000), payable in full on March 16, 2009, unless extended as
specified in the Loan Agreement (as defined herein).
The Borrower further promises to pay interest on the unpaid principal
amount of this Amended and Restated Promissory Note 1 - Non-Investment Loan
(this "Note") from the date hereof until the Note is paid in full, payable at
the rates and at the times as contemplated in the Loan Agreement. In addition,
on or before October 1, 2001, Borrower promises to pay any accrued and unpaid
interest under the Mar. 99 $0.5m Note, the Jun. 99 $0.5m Note, the Dec. 99 $0.5m
Note and the Sept. 00 $1m Note.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
the Lender's office at c/o Falcon Farms, 0000 000xx Xxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx, or at
such other place as may be designated by the Lender to the Borrower in writing.
This Note is one of the notes referred to in, and is subject to all the
terms and conditions of, and evidences indebtedness incurred under, the Third
Amended and Restated Non-Investment Loan Agreement, dated as of the date hereof
(and, if amended, modified or supplemented, all amendments, modifications and
supplements thereto) (the "Loan Agreement"), between the Borrower and the
Lender, to which Loan Agreement reference is made for a statement of the terms
and provisions thereof including Section 7.2 thereof, and those under which such
indebtedness may be declared to be immediately due and payable. Without limiting
the foregoing, there shall be no payment and subsequent reborrowing under this
Note.
This Note is secured by the personal property described in the Pledge
Agreement, to which reference is made for a description of the collateral
provided thereby and the rights of the Lender and the Original Borrowers in
respect of such collateral.
A-1-1
Without limiting the applicability of any particular provision of the
Loan Agreement to this Note, it is understood that this Note, together with that
certain Amended and Restated Promissory Note 2 - Non-Investment Loan, Amended
and Restated Promissory Note 3 - Non-Investment Loan and Amended and Restated
Promissory Note 4 - Non-Investment Loan issued under the Loan Agreement, is
subject to the provisions of Section 7.2 of the Loan Agreement.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
* * * * *
A-1-2
This Note is made under and governed by the internal laws of the State of
Illinois.
BORROWER:
-------------------------------------
[____________]
Address: [____________]
[____________]
[____________]
X-0-0
XXXXXXX X-0
XXXX XX XXXX 0 - XXX-XXXXXXXXXX LOAN
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.
THIS NOTE AMENDS AND RESTATES THAT CERTAIN PROMISSORY NOTE DATED JUNE 14,
1999, MADE BY [______________] AND [___________________________] IN FAVOR OF CWS
COMMUNITIES LP IN THE ORIGINAL PRINCIPAL AMOUNT OF $500,000
PAYMENT OF THIS NOTE IS NON-RECOURSE TO THE BORROWER EXCEPT AS PROVIDED
IN THE LOAN AGREEMENT REFERRED TO HEREIN.
AMENDED AND RESTATED PROMISSORY NOTE 2 - NON-INVESTMENT LOAN
$500,000
Due: June 14, 2009
Chicago, Illinois: August 2, 2001
FOR VALUE RECEIVED, the undersigned, [ ], in his individual capacity (the
"Borrower"), promises to pay to the order of CWS Communities LP, a Delaware
limited partnership, (the "Lender"), the principal sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000), payable in full on June 14, 2009, unless extended as
specified in the Loan Agreement (as defined herein).
The Borrower further promises to pay interest on the unpaid principal
amount of this Amended and Restated Promissory Note 2 - Non-Investment Loan
(this "Note") from the date hereof until the Note is paid in full, payable at
the rates and at the times as contemplated in the Loan Agreement. In addition,
on or before October 1, 2001, Borrower promises to pay any accrued and unpaid
interest under the Mar. 99 $0.5m Note, the Jun. 99 $0.5m Note, the Dec. 99 $0.5m
Note and the Sept. 00 $1m Note.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
the Lender's office at c/o Falcon Farms, 0000 000xx Xxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx, or at
such other place as may be designated by the Lender to the Borrower in writing.
This Note is one of the notes referred to in, and is subject to all the
terms and conditions of, and evidences indebtedness incurred under, the Third
Amended and Restated Non-Investment Loan Agreement, dated as of the date hereof
(and, if amended, modified or supplemented, all amendments, modifications and
supplements thereto) (the "Loan Agreement"), between the Borrower and the
Lender, to which Loan Agreement reference is made for a statement of the terms
and provisions thereof including Section 7.2 thereof, and those under which such
indebtedness may be declared to be immediately due and payable. Without limiting
the foregoing, there shall be no payment and subsequent reborrowing under this
Note.
A-2-1
This Note is secured by the personal property described in the Pledge
Agreement, to which reference is made for a description of the collateral
provided thereby and the rights of the Lender and the Original Borrowers in
respect of such collateral.
Without limiting the applicability of any particular provision of the
Loan Agreement to this Note, it is understood that this Note, together with that
certain Amended and Restated Promissory Note 1 - Non-Investment Loan, Amended
and Restated Promissory Note 3 - Non-Investment Loan and Amended and Restated
Promissory Note 4 - Non-Investment Loan issued under the Loan Agreement, is
subject to the provisions of Section 7.2 of the Loan Agreement.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
* * * * *
A-2-2
This Note is made under and governed by the internal laws of the State of
Illinois.
BORROWER:
-------------------------------------
[____________]
Address: [____________]
[____________]
[____________]
X-0-0
XXXXXXX X-0
XXXX XX XXXX 0 - XXX-XXXXXXXXXX LOAN
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.
THIS NOTE AMENDS AND RESTATES THAT CERTAIN PROMISSORY NOTE DATED
DECEMBER 15, 1999, MADE BY [__________] AND [_____________________] IN FAVOR OF
CWS COMMUNITIES LP IN THE ORIGINAL PRINCIPAL AMOUNT OF $500,000
PAYMENT OF THIS NOTE IS NON-RECOURSE TO THE BORROWER EXCEPT AS PROVIDED
IN THE LOAN AGREEMENT REFERRED TO HEREIN.
AMENDED AND RESTATED PROMISSORY NOTE 3 - NON-INVESTMENT LOAN
$500,000
Due: December 15, 2009
Chicago, Illinois: August 2, 2001
FOR VALUE RECEIVED, the undersigned, [ ], in his individual capacity (the
"Borrower"), promises to pay to the order of CWS Communities LP, a Delaware
limited partnership, (the "Lender"), the principal sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000), payable in full on December 15, 2009, unless extended as
specified in the Loan Agreement (as defined herein).
The Borrower further promises to pay interest on the unpaid principal
amount of this Amended and Restated Promissory Note 3 - Non-Investment Loan
(this "Note") from the date hereof until the Note is paid in full, payable at
the rates and at the times as contemplated in the Loan Agreement. In addition,
on or before October 1, 2001, Borrower promises to pay any accrued and unpaid
interest under the Mar. 99 $0.5m Note, the Jun. 99 $0.5m Note, the Dec. 99 $0.5m
Note and the Sept. 00 $1m Note.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
the Lender's office at c/o Falcon Farms, 0000 000xx Xxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx, or at
such other place as may be designated by the Lender to the Borrower in writing.
This Note is one of the notes referred to in, and is subject to all the
terms and conditions of, and evidences indebtedness incurred under, the Third
Amended and Restated Non-Investment Loan Agreement, dated as of the date hereof
(and, if amended, modified or supplemented, all amendments, modifications and
supplements thereto) (the "Loan Agreement"), between the Borrower and the
Lender, to which Loan Agreement reference is made for a statement of the terms
and provisions thereof including Section 7.2 thereof, and those under which such
indebtedness may be declared to be immediately due and payable. Without limiting
the foregoing, there shall be no payment and subsequent reborrowing under this
Note.
This Note is secured by the personal property described in the Pledge
Agreement, to which reference is made for a description of the collateral
provided thereby and the rights of the Lender and the Original Borrowers in
respect of such collateral.
A-3-1
Without limiting the applicability of any particular provision of the
Loan Agreement to this Note, it is understood that this Note, together with that
certain Amended and Restated Promissory Note 1 - Non-Investment Loan, Amended
and Restated Promissory Note 2 - Non-Investment Loan and Amended and Restated
Promissory Note 4 - Non-Investment Loan issued under the Loan Agreement, are
subject to the provisions of Section 7.2 of the Loan Agreement.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
* * * * *
A-3-2
This Note is made under and governed by the internal laws of the State of
Illinois.
BORROWER:
-------------------------------------
[____________]
Address: [____________]
[____________]
[____________]
X-0-0
XXXXXXX X-0
XXXX XX XXXX 0 - XXX-XXXXXXXXXX LOAN
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.
THIS NOTE AMENDS AND RESTATES THAT CERTAIN PROMISSORY NOTE DATED
SEPTEMBER 26, 2000, MADE BY [___________] AND [___________________] IN FAVOR OF
CWS COMMUNITIES LP IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,000,000
PAYMENT OF THIS NOTE IS NON-RECOURSE TO THE BORROWER EXCEPT AS PROVIDED
IN THE LOAN AGREEMENT REFERRED TO HEREIN.
AMENDED AND RESTATED PROMISSORY NOTE 4 - NON-INVESTMENT LOAN
$1,000,000
Due: September 26,2010
Chicago, Illinois: August 2, 2001
FOR VALUE RECEIVED, the undersigned, [ ], in his individual capacity (the
"Borrower"), promises to pay to the order of CWS Communities LP, a Delaware
limited partnership, (the "Lender"), the principal sum of ONE MILLION DOLLARS
($1,000,000), payable in full on September 26, 2010, unless extended as
specified in the Loan Agreement (as defined herein).
The Borrower further promises to pay interest on the unpaid principal
amount of this Amended and Restated Promissory Note 4 - Non-Investment Loan
(this "Note") from the date hereof until the Note is paid in full, payable at
the rates and at the times as contemplated in the Loan Agreement. In addition,
on or before October 1, 2001, Borrower promises to pay any accrued and unpaid
interest under the Mar. 99 $0.5m Note, the Jun. 99 $0.5m Note, the Dec. 99 $0.5m
Note and the Sept. 00 $1m Note.
All payments of principal and interest under this Note shall be made in
lawful money of the United States of America in immediately available funds at
the Lender's office at c/o Falcon Farms, 0000 000xx Xxxxxx Xxxxx, Xxxx Xxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx, or at
such other place as may be designated by the Lender to the Borrower in writing.
This Note is one of the notes referred to in, and is subject to all the
terms and conditions of, and evidences indebtedness incurred under, the Third
Amended and Restated Non-Investment Loan Agreement, dated as of the date hereof
(and, if amended, modified or supplemented, all amendments, modifications and
supplements thereto) (the "Loan Agreement"), between the Borrower and the
Lender, to which Loan Agreement reference is made for a statement of the terms
and provisions thereof including Section 7.2 thereof, and those under which such
indebtedness may be declared to be immediately due and payable. Without limiting
the foregoing, there shall be no payment and subsequent reborrowing under this
Note.
This Note is secured by the personal property described in the Pledge
Agreement, to which reference is made for a description of the collateral
provided thereby and the rights of the Lender and the Original Borrowers in
respect of such collateral.
A-4-1
Without limiting the applicability of any particular provision of the
Loan Agreement to this Note, it is understood that this Note, together with that
certain Amended and Restated Promissory Note 1 - Non-Investment Loan, Amended
and Restated Promissory Note 2 - Non-Investment Loan and Amended and Restated
Promissory Note 3 - Non-Investment Loan issued under the Loan Agreement, are
subject to the provisions of Section 7.2 of the Loan Agreement.
All parties hereto, whether as makers, endorsers or otherwise, severally
waive presentment, demand, protest and notice of dishonor in connection with
this Note.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
* * * * *
A-4-2
This Note is made under and governed by the internal laws of the State of
Illinois.
BORROWER:
-------------------------------------
[____________]
Address: [____________]
[____________]
[____________]
A-4-3
EXHIBIT B
FORM OF AMENDED AND RESTATED NON-INVESTMENT PLEDGE AGREEMENT
THIS AMENDED AND RESTATED NON-INVESTMENT PLEDGE AGREEMENT (this
"Agreement"), dated as of August 2, 2001 is between [ ] and [ ] (the "Trust"),
jointly and severally (Borrower and the Trust hereinafter collectively referred
to as, the "Pledgor") and CWS Communities LP, a Delaware registered limited
partnership (the "Lender").
W I T N E S S E T H:
WHEREAS, the Pledgor and Lender have entered into that certain Loan
Agreement, dated March 4, 1998, as amended by that certain First Amended and
Restated Loan Agreement dated as of March 16, 1999, between Pledgor and Lender,
and that certain Second Amended and Restated Loan Agreement dated as of June 24,
1999, between Pledgor and Lender (collectively, the "Original Loan Agreement");
WHEREAS, pursuant to the Original Loan Agreement, Lender loaned
$2,500,000 to the Pledgor as evidenced by, among other things, (i) that certain
Promissory Note dated March 16, 1999, made by Pledgor in favor of Lender in the
original principal amount of $500,000; (ii) that certain Promissory Note dated
June 14, 1999, made by Pledgor in favor of Lender in the original principal
amount of $500,000; (iii) that certain Promissory Note dated December 15, 1999,
made by Pledgor in favor of Lender in the original principal amount of $500,000;
and (iv) that certain Promissory Note dated September 26, 2000, made by Pledgor
in favor of Lender in the original principal amount of $1,000,000;
WHEREAS, as security for the Loan, among other things, Pledgor executed
that certain Non-Investment Pledge Agreement dated as of March 16, 1999, made by
Pledgor in favor of Lender, as amended by First Amendment to Non-Investment
Pledge Agreement dated as of June 14, 1999, between Pledgor and Lender, Second
Amendment to Non-Investment Pledge Agreement dated as of December 15, 1999,
between Pledgor and Lender, and Third Amendment to Non-Investment Pledge
Agreement dated as of September 26, 2000 (collectively, the "Original Pledge
Agreement");
WHEREAS, Lender is a party to that certain Agreement and Plan of Merger
dated as of June 6, 2001 (the "Merger Agreement"), among CPJ, Chateau OP,
certain merger subsidiaries named therein, CWS, Lender, and Security Capital
Manufactured Housing Incorporated, a Delaware corporation. Pursuant to the terms
of the Merger Agreement, Lender will be acquired through merger by and become a
wholly owned subsidiary of Chateau OP;
WHEREAS, in connection with the Merger Agreement, Pledgor is a party to
that certain CP Limited Partnership Election and Subscription Agreement for
Units of Limited Partner Interests dated as of June 6, 2000 (the "Subscription
Agreement"), among Pledgor, CPJ and Chateau OP, whereby, among other things,
Pledgor consented to certain modifications to the Original Loan Agreement and
the Original Pledge Agreement;
WHEREAS, the parties desire to amend and restate the provisions of the
Original Pledge Agreement to, among other things, (i) provide for the
reaffirmation by Pledgor of its obligations thereunder; and (ii) modify certain
of the terms in accordance with the Subscription Agreement. In exchange for the
same, contemporaneously herewith, Lender has released the Trust as a borrower
under the Loan Agreement;
B-1
NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Pledgor under or in
connection with the Loan Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
2. Definitions. When used herein, the following terms have the following
meanings (such meanings to be applicable to both the singular and plural forms
of such terms):
"Borrower" - see Preamble.
"Chateau OP" has the meaning assigned to such term in the Loan
Agreement.
"Collateral" - see Section 2.
"CPJ" has the meaning assigned to such term in the Loan Agreement.
"CPJ Shares" has the meaning assigned to such term in the Loan
Agreement.
"CWS" has the meaning assigned to such term in the Loan Agreement.
"Default" has the meaning assigned to such term in the Loan Agreement.
"Event of Default" means an Event of Default under Section 7 of the
Loan Agreement.
"Excess Portion" has the meaning set forth in Section 5(c).
"Issuer" means the issuer of the partnership interests representing
all of the Collateral.
"Liabilities" means all obligations (monetary or otherwise) of the
Pledgor and each other Person (other than the Lender) obligated under, or
otherwise a party to, any Loan Document, howsoever created, arising or
evidenced, whether direct or indirect, primary or secondary, joint or several,
absolute or contingent, now or hereafter existing, or due or to become due,
which arise under or in connection with the Loan Agreement, the Notes, this
Agreement, any other Loan Document or any document or instrument executed in
connection therewith.
"Lender" - see Preamble.
"Loan" has the meaning assigned to such term in the Loan Agreement.
"Loan Document" has the meaning assigned to such term in the Loan
Agreement.
"Merger Agreement" - see Preamble.
"Notes" has the meaning assigned to such term in the Loan Agreement.
"Original Loan Agreement" - see Preamble.
"Original Pledge Agreement" - see Preamble.
"Person" has the meaning assigned to such term in the Loan Agreement.
"Pledgor" - see Preamble.
B-2
"Subscription Agreement" - see Preamble.
"Trust" has the meaning assigned to such term in the Loan Agreement.
"Units" has the meaning assigned to such term in the Loan Agreement.
"Withheld Distributions" has the meaning set forth in Section 5 B.
2. Pledge. As security for the payment and performance of the Notes, the
Pledgor hereby pledges to the Lender, and grants to the Lender a continuing
security interest in, all of the following, whether now or hereafter existing or
acquired:
A. All of the CPJ Shares and the Units described in Schedule A hereto,
all of the certificates and/or instruments representing or evidencing
such CPJ Shares or Units, and all cash, securities (including and CPJ
Shares or Units), interest, distributions, dividends, rights and other
property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
CPJ Shares or Units;
B. All other Units or CPJ Shares hereafter delivered to the Lender in
substitution for or in addition to any of the foregoing, all certificates
and instruments representing or evidencing such CPJ Shares or Units, and
all cash, securities, interest, distributions, dividends, rights and
other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for such CPJ Shares or
Units; and
C. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Collateral."
The Pledgor agrees to deliver to the Lender, promptly upon receipt and in
due form for transfer (i.e., endorsed in blank or accompanied by stock or bond
powers or other similar endorsement executed in blank), any Collateral which may
at any time or from time to time be in or come into the possession or control of
the Pledgor; and prior to the delivery thereof to the Lender, such Collateral
shall be held by the Pledgor separate and apart from his other property and in
express trust for the Lender.
3. Warranties; Further Assurances. The Pledgor warrants to the Lender
that:
(a) For each entry on Schedule A hereto, each Person listed as a
"Pledgor" on such schedule is (or at the time of any future delivery, pledge,
assignment or transfer thereof will be) the lawful, legal and equitable owner of
all of the Collateral listed opposite to such Person's name on Schedule A free
and clear of all liens, security interests and encumbrances of every description
whatsoever other than the security interest created hereunder, with full right,
power, authority and capacity to pledge the Collateral to the Lender hereunder;
(b) the pledge and delivery of the Collateral pursuant to this
Agreement will create a valid, perfected, first priority security interest in
the Collateral in favor of the Lender;
(c) all documentary, stamp or other taxes or fees owing in connection
with the transfer and/or pledge of the Collateral hereto have been paid in full
and will hereafter be paid by the Pledgor as such become due and payable;
B-3
(d) the execution, delivery and performance by the Pledgor of this
Agreement is within the right, power, authority and capacity of the Pledgor and
does not and will not require any consent or approval of any governmental agency
or authority or any other Person;
(e) the execution, delivery and performance by the Pledgor of this
Agreement does not conflict with any agreement binding upon the Pledgor or the
Collateral or any court or administrative order or decree applicable to the
Pledgor;
(f) this Agreement is, when duly executed and delivered legal, valid
and binding obligations of the Pledgor, enforceable against the Pledgor in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies;
(g) no Event of Default or Default has occurred and is continuing;
and
(h) prior to and after giving effect to the Pledge Agreement, (i)
each Pledgor's assets will exceed its liabilities and (ii) each Pledgor will be
solvent, will be able to pay its debts as they mature, and will own cash and
property with fair saleable value greater than the amount required to pay its
debts and on-going obligations.
So long as any of the Liabilities shall be outstanding, the Pledgor (i)
shall not, without the express prior written consent of the Lender, sell,
assign, exchange, pledge or otherwise transfer, encumber, or grant any option,
warrant or other right to purchase the securities which are pledged hereunder,
or otherwise diminish or impair any of his rights in, to or under any of the
Collateral; (ii) shall execute such Uniform Commercial Code financing statements
and other documents (and pay the costs of filing and recording or re-filing and
re-recording the same in all public offices reasonably deemed necessary or
appropriate by the Lender) and do such other acts and things, all as the Lender
may from time to time reasonably request, to establish and maintain a valid,
perfected, first priority security interest in the Collateral (free of all other
liens, claims and rights of third parties whatsoever) to secure the performance
and payment of the Liabilities; and (iii) will execute and deliver to the Lender
such stock powers and similar documents relating to the Collateral, satisfactory
in form and substance to the Lender, as the Lender may reasonably request;
provided, however, that upon approval of documents reasonably satisfactory to
the Lender to protect in full its interest in the Collateral, including receipt
of a pledge agreement signed by the transferee as to the Collateral in form and
substance satisfactory to the Lender, the Pledgor may transfer any or all of the
Collateral, subject to the pledge of this Agreement, to Borrower's parents,
lineal descendants (including those through adoption) or spouse of Borrower or
to a trust for the benefit of Borrower, any of his parents, lineal descendants
(including those through adoption) or his spouse.
4. Holding in Name of Lender. The Lender may from time to time after the
occurrence and during the continuance of an Event of Default, upon notice to the
Pledgor, take all or any of the following actions: (a) transfer all or any part
of the Collateral into the name of the Lender or any nominee or sub-agent for
the Lender, as long as it discloses that such Collateral is subject to the lien
and security interest hereunder, (b) appoint one or more sub-agents or nominees
for the purpose of retaining physical possession of the Collateral, (c) notify
the parties obligated on any of the Collateral to make payment to the Lender of
any amounts due or to become due thereunder, (d) endorse any checks, drafts or
other writings in the name of the Pledgor to allow collection of the Collateral,
(e) enforce collection of any of the Collateral by suit or otherwise, and (f)
take control of any proceeds of the Collateral (provided, that Lender shall not
be permitted to take control of any dividends paid with respect to the
Collateral prior to the occurrence of such Event of Default).
B-4
5. Voting Rights, Dividends, etc.
(a) Notwithstanding certain provisions of Section 2 or Section 4 hereof,
so long as the Lender has not properly given the notice referred to in paragraph
(b) below:
A. The Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers and stock purchase or subscription rights
(but any such exercise by the Pledgor of stock purchase or subscription
rights may be made only from funds of the Pledgor not comprising part of
the Collateral) relating or pertaining to the Collateral or any part
thereof for any purpose.
B. The Pledgor shall be entitled to receive and retain any and all
lawful distributions or dividends payable in respect of the Collateral
resulting from property operations (as opposed to sales, financings or
other capital events) which are paid by any Issuer, but (i) all
distributions resulting from sales, financings and other capital events
("Withheld Distributions") shall be handled as described in Section 5(c)
below, and (ii) all dividends and distributions in respect of the
Collateral or any part thereof made in partnership interests or shares of
stock of the Issuer, whether resulting from a subdivision, combination or
reclassification of Collateral or any part thereof or received in
exchange for Collateral or any part thereof or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Issuer
may be a party or otherwise or as a result of any exercise of any stock
purchase or subscription right to the extent consideration is not paid in
connection with such exercise, shall be and become part of the Collateral
hereunder and, if received by the Pledgor, shall be forthwith delivered
to the Lender in due form for transfer (i.e., endorsed in blank or
accompanied by stock or bond powers executed in blank or other similar
endorsement) to be held for the purposes of this Agreement.
C. The Lender shall execute and deliver, or cause to be executed and
delivered, to the Pledgor, all such proxies, powers of attorney, dividend
orders and other instruments as the Pledgor may request for the purpose
of enabling the Pledgor to exercise the rights and powers which it is
entitled to exercise pursuant to clause (A) above and to receive the
distributions or dividends which it is authorized to retain pursuant to
clause (B) above.
(b) Upon notice from the Lender during the existence of an Event of
Default, and so long as the same shall be continuing, all rights and powers
which the Pledgor is entitled to exercise pursuant to Section 5(a)(A) hereof,
and all rights of the Pledgor to receive and retain distributions or dividends
pursuant to Section 5(a)(B) hereof, shall forthwith cease, and all such rights
and powers shall thereupon become vested in the Lender which shall have, during
the continuance of such Event of Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends. Any and all money
and other property paid over to or received by the Lender pursuant to this
paragraph (b) shall be retained by the Lender as additional Collateral hereunder
and applied in accordance with the provisions hereof, except that, to the extent
such amounts are cash or cash equivalents, they shall be promptly applied to any
amounts owing under the Notes.
(c) Withheld Distributions shall be handled as described in this Section
5(c). The Excess Portion shall be paid to Pledgor. The Withheld Distributions
that are not disposed under the preceding sentence shall, if Pledgor tenders
substitute Collateral that is reasonably acceptable to Lender, be paid to
Pledgor; provided, that if such substitute Collateral is not reasonably
acceptable to Lender, then such Withheld Distributions shall be applied as
prepayments under the Loan. For purposes of determining whether proposed
substitute Collateral is acceptable to Lender for purposes of this Section 5(c),
CPJ Shares or Units shall be deemed to be an acceptable form of Collateral.
B-5
The "Excess Portion" means, with respect to any distributions and
dividends, the portion thereof, if any, resulting from proceeds from asset
dispositions or non-recourse financings in excess of the original cost of the
underlying asset and capitalized improvements thereto (determined under
generally accepted accounting principles, without reduction for depreciation).
The Excess Portion for each Withheld Distribution shall be determined by CPJ and
approved in good faith by its Board of Directors. Upon such approval, Pledgor
shall accept such determination and the same shall be deemed final, unless there
is manifest error or the approval by the Board of Directors of CPJ was not done
in good faith.
6. Event of Default; Remedies. Whenever an Event of Default shall exist,
upon notice to the Pledgor, the Lender may exercise from time to time any rights
and remedies available to it under the Uniform Commercial Code as in effect in
Illinois or otherwise available to it. Notwithstanding the foregoing, the Lender
shall not be entitled to exercise self-help remedies or foreclose upon the
Collateral until it has first attempted to apply the Collateral to payments
under the Loan as permitted under this Agreement and the other Loan Documents
and was not able promptly to so apply the Collateral at such time or times as
permitted under the Loan Documents, regardless of the reason therefor (for
purposes of clarity, if any arbitrator or judge renders or fails to render any
preliminary or other decision or Pledgor or any other Person takes any action
the effect of which is to prevent or delay exercise of any right of Lender to
the Collateral, then Lender shall thereupon be entitled to exercise self-help
remedies or foreclose upon the Collateral). Any proceeds of any of the
Collateral may be applied by the Lender to the payment of expenses in connection
with the Collateral, including, without limitation, reasonable attorneys' fees
and legal expenses, and any balance of such proceeds may be applied by the
Lender toward the payment of such of the Liabilities, and in such order of
application, as the Lender may from time to time elect (and, after payment in
full of all Liabilities, any excess shall be delivered to the Pledgor or as a
court of competent jurisdiction shall direct).
The Lender is hereby authorized to comply with any limitation or
restriction in connection with any sale of Collateral as it may be advised by
counsel is necessary in order to (a) avoid any violation of applicable law
(including, without limitation, compliance with such procedures as may restrict
the number of prospective bidders and purchasers and/or further restrict such
prospective bidders or purchasers to persons or entities who will represent and
agree that they are purchasing for their own account for investment and not with
a view to the distribution or resale of such Collateral) or (b) obtain any
required approval of the sale or of the purchase by any governmental regulatory
authority or official, and the Pledgor agrees that such compliance shall not
result in such sale being considered or deemed not to have been made in a
commercially reasonable manner and that the Lender shall not be liable or
accountable to the Pledgor for any discount allowed by reason of the fact that
such Collateral is sold in compliance with any such limitation or restriction.
Notwithstanding anything in this Pledge Agreement to the contrary, the
Lender's exercise of the remedies permitted by this Pledge Agreement shall in no
event result in recourse to the Borrower for any amounts in excess of those
permitted by Section 7.2 of the Loan Agreement.
7. General.
The Lender and Pledgor shall provide notices to the other in the
manner prescribed by the Loan Agreement.
The Trust shall:
(i) preserve, or cause to be preserved, and keep in full force
and effect their entity status, rights and privileges under
the laws of the state of their formation;
B-6
(ii) not (nor shall any general partner, managing member or
trustee therein) wind up, liquidate, dissolve, reorganize,
merge, or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of all or
substantially all of their assets, or acquire all or
substantially all of the assets of the business of any
Person; and
(iii)shall conduct business only in each of their own names and
shall not change their name, identity, or organizational
structure, or the location of their chief executive office
or principal place of business;
unless, in each case, The Trust (a) shall have obtained the prior
written consent of Lender to such change or transaction listed in
(ii), which consent shall not be unreasonably withheld, and (b)
shall have taken all actions as necessary to file or amend any
financing statement or continuation statement to assure
perfection and continuation of perfection of security interests
under the Loan Documents.
Borrower shall:
(i) not change his name or identity, unless he (a) shall have
obtained the prior written consent of Lender to such change,
which consent shall not be unreasonably withheld, and (b)
shall have taken all actions as necessary to file or amend
any financing statement or continuation statement to assure
perfection and continuation of perfection of security
interests under the Loan Documents.
(ii) not change the location of his residence, unless he (a)
shall have provided Lender with thirty (30) days prior
written notice of such change, and (b) shall have taken all
actions as necessary to file or amend any financing
statement or continuation statement to assure perfection and
continuation of perfection of security interests under the
Loan Documents.
The Pledgor agrees to pay all expenses (including, without limitation,
reasonable attorney's fees and legal expenses) paid or incurred by the Lender in
successfully enforcing this Agreement against the Pledgor.
No delay on the part of the Lender in exercising any right, power or
remedy shall operate as a waiver thereof, and no single or partial exercise of
any such right, power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement shall be effective unless the same shall be in writing and signed and
delivered by the Lender, and then such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
This Agreement shall remain in full force and effect until the Notes have
been paid in full. If at any time all or any part of any payment theretofore
applied by the Lender to the Notes is or must be rescinded or returned by the
Lender for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of the Pledgor), such liability shall, for the
purposes of this Agreement, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by the Lender, and this Agreement shall continue to be
effective or be reinstated, as the case may be, as to such liability, all as
though such application by the Lender had not been made.
B-7
All obligations of the Pledgor and all rights, powers and remedies of the
Lender expressed herein are in addition to all other rights, powers and remedies
possessed by them, including, without limitation, those provided by applicable
law or in any other written instrument or agreement relating to any of the
Liabilities or any security therefor.
This Agreement shall be construed in accordance with and governed by the
internal laws of the State of Illinois.
Wherever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
The use of the masculine, feminine or neuter gender herein shall not
limit any provision of the Loan Documents. Without limiting the foregoing, the
word "his" shall be deemed to refer also, where possible, to "her" and "its" and
the word "he" shall be deemed to refer also, wherever possible, to "she" and
"it", including in all such cases in connection with references to the Borrower.
Section captions used in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
This Agreement shall be binding upon the Pledgor and the Lender and their
respective heirs, representatives, successors and assigns, and shall inure to
the benefit of the Pledgor and the Lender and the successors and assigns of the
Lender. Except as required by applicable law, the Pledgor shall not assign its
rights or duties hereunder without the prior written consent of Lender.
This Agreement may be executed in any number of the deemed an original
but all such counterparts shall together constitute but one and the same
Agreement.
At the option of the Lender, this Agreement, or a carbon, photographic or
other reproduction of this Agreement or of any Uniform Commercial Code financing
statement covering the Collateral or any portion thereof, shall be sufficient as
a Uniform Commercial Code financing statement and may be filed as such.
Notwithstanding anything to the contrary or contained in the Subscription
Agreement, this Agreement sets forth the entire agreement and understanding of
the parties hereto in respect to the transactions contemplated hereby and
supersedes all prior agreements, arrangements and understandings relating to the
subject matter hereof and is not intended to confer upon any other person any
rights or remedies hereunder. There have been no representations or statements,
oral or written, that have been relied on by any party hereto, except those
expressly set forth in this Agreement.
If the Pledgor is comprised of more than one Person, such Persons shall
be jointly and severally liable for all obligations of Pledgor hereunder;
provided, however, that the heirs of [ ] shall not be jointly and severally
liable hereunder to the extent they succeed to the rights and obligations
hereunder upon the death of [ ].
EACH PLEDGOR AND LENDER AGREES THAT SECTION 7.12 OF THE LOAN AGREEMENT
SHALL APPLY TO THIS AGREEMENT.
B-8
IN WITNESS WHEREOF, this Amended and Restated Non-Investment Pledge
Agreement has been duly executed and delivered as of the day and year first
written above.
PLEDGOR:
--------------------------------------
[___________]
Address: [___________]
[___________]
[___________]
[____________________________________]
By:
----------------------------------
[___________], Trustee
Address: [___________]
[___________]
[___________]
B-9
LENDER:
CWS COMMUNITIES LP,
a Delaware limited partnership
By: Second Merger Sub, LLC,
its general partner
By:
--------------------------------------
Name:
Title:
Address: c/o Falcon Farms
0000 000xx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and
Xx. Xxxx X. Xxxxx, Xx.
With a copy to:
c/o Chateau Communities, Inc.
0000 X. Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and
Xx. Xxxx X. Xxxxx, Xx.
B-10
SCHEDULE A
TO PLEDGE AGREEMENT
UNITS
Pledgor No.
---------------------------------------------
---------------------------------------------
The Trust 26,855
---------------------------------------------
Borrower 15,232
---------------------------------------------
---------------------------------------------
Total 42,087
CPJ SHARES
Pledgor Certificate No. No. and Class
------------------------- ------------------------- --------------------------
------------------------- ------------------------- --------------------------
------------------------- ------------------------- --------------------------
------------------------- ------------------------- --------------------------
B-11
EXHIBIT D
FORM OF RENEWABLE APPOINTMENT OF AGENT AGREEMENT
RENEWABLE APPOINTMENT OF AGENT AGREEMENT
This Renewable Appointment of Agent Agreement ("Appointment") shall be effective
as of the Effective Date (which is defined along with other capitalized terms of
this Appointment in Appendix A which is attached hereto and made a part hereof
by this reference).
For one dollar and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
1. The Appointing Party hereby appoints Corporation Services Company
("CSC") as its agent for receipt of legal process in connection with any legal
action or proceeding under the Agreement (s) Covered Herein in the court of the
state in which the Corporation Service Company Address is located and in the
Federal Courts of the United States whose jurisdiction covers such location. It
is agreed that the Requestor may serve notice and service of process at CSC's
address designated in Appendix A, Section 1. By its signature below and upon
receipt of the Initial Annual Fee, CSC accepts such appointment.
2. CSC shall follow commercially reasonable procedures in receiving and
forwarding legal process to the Appointing Party. In the event legal process is
returned to CSC as undeliverable, CSC will return the legal process to the
sender. The Appointing Party and Requestors shall immediately inform CSC in
writing of a change in their address.
3. CSC SHALL NOT BE RESPONSIBLE FOR THE FAILURE OF THE APPOINTING PARTY
TO ACCEPT DELIVERY OF LEGAL PROCESS NOR FOR THE FAILURE OF THE APPOINTING PARTY
OR ANY REQUESTOR TO PROVIDE WRITTEN NOTICE OF A CHANGE OF ADDRESS. THE
APPOINTING PARTY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS CSC FROM AND
AGAINST ANY AND ALL CLAIMS, DAMAGES, LIABILITIES AND CAUSES OF ACTION (INCLUDING
REASONABLE ATTORNEYS' FEES AND COSTS) IMPOSED UPON, INCURRED BY OR ASSERTED
AGAINST CSC, DIRECTLY OR INDIRECTLY, RELATING TO OR ARISING OUT OF THIS
APPOINTMENT; PROVIDED, HOWEVER, THAT THIS INDEMNIFICATION SHALL NOT EXTEND TO
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF CSC. THIS PARAGRAPH WILL SURVIVE THE
TERMINATION OF THIS APPOINTMENT.
4. The Billing Party shall pay CSC the Initial Annual Fee promptly upon
the execution of this Agreement. On each anniversary date of the Effective Date
or at the Appointing Party's renewal billing date, the Billing Party shall pay
CSC the Annual Fee in full to renew the Appointment for the upcoming twelve
month period (or through the Termination Date if such should come sooner). This
Agreement shall automatically terminate if the Initial Annual Fee or any Annual
Fee is not received within 30 days of CSC's issuance of an invoice but shall
otherwise be irrevocable. Except for failure to make timely payment of the
Annual Fees, each of Appointing Party and CSC agrees that it shall not terminate
this Agreement without the prior written consent of the Requestor. No fees paid
under this Agreement are refundable, in whole or in part, for any reason.
D-1
5. This Appointment may be signed in counterparts each of which shall
constitute an original and all of which together shall constitute an original.
This Appointment shall be governed by and construed in accordance with the laws
of the State of Delaware without reference to its principles of conflict of
laws. Any action or other legal proceeding against CSC arising under or
pertaining to this Agreement may be brought only in the courts of the State of
Delaware.
-------------------------------
[____________]
[_____________________________]
By:
----------------------------
[____________], Trustee
Corporation Service Company
-------------------------------
Name:
Title:
D-2
Renewable Appointment of Agent Agreement
Appendix A
Page 1
Initial: Appointing Parties_____ CSC ____
1. "The Xxxxxxxx-Xxxx Corporation System, Inc." (as may change from time to time
by written notice to the Appointing Party and Requestors):
00 Xxxxx XxXxxxx
Xxxxxxx, XX 00000
2. Agreement(s) Covered Herein:
All documents are dated as of August 2, 2001
a)Third Amended and Restated Non-Investment Loan Agreement between
[____________] and CWS Communities LP (the "Loan Agreement");
b)Amended and Restated Non-Investment Pledge Agreement among
[_________________________-], and CWS Communities LP;
c)Amended and Restated Promissory Note 1 - Non-Investment Loan made by
[______________] in favor of CWS Communities LP, in the principal
amount of $500,000;
d)Amended and Restated Promissory Note 2 - Non-Investment Loan made by
[______________] in favor of CWS Communities LP, in the principal
amount of $500,000;
e)Amended and Restated Promissory Note 3 - Non-Investment Loan made by
[______________] in favor of CWS Communities LP, in the principal
amount of $500,000;
f)Amended and Restated Promissory Note 4 - Non-Investment Loan made by
[______________] in favor of CWS Communities LP, in the principal
amount of $1,000,000; and
g)All other Loan Documents (as such term is defined in the Loan
Agreement).
3. Appointing Parties:
1. [____________]
[____________]
[____________]
2. [____________]
[____________]
[____________]
D-3
4. Billing Party:
CWS Communities LP
c/o Chateau Communities, Inc.
0000 X. Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx
5. Requestors:
1. CWS Communities LP
c/o Falcon Farms
0000 000xx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx
With a copy to:
c/o Chateau Communities, Inc.
0000 X. Xxxxxxxx Xxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxxx and Xx. Xxxx X. Xxxxx
D-4
