EXHIBIT 10.64
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
as Issuer
$150,000,000
5.75% SENIOR NOTES DUE 2010
PURCHASE AGREEMENT
April 8, 2003
XXXXXX BROTHERS INC.
X.X. XXXXXXX & SONS, INC.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Sun Communities Operating Limited Partnership, a Michigan limited
partnership (the "Issuer"), the sole general partner of which is Sun
Communities, Inc., a Maryland corporation (the "General Partner"), proposes to
issue and sell to Xxxxxx Brothers Inc. and X.X. Xxxxxxx & Sons, Inc. (together,
the "Initial Purchasers"), upon the terms and conditions set forth in this
agreement ("Agreement"), $150,000,000 of the Issuer's 5.75% Senior Notes due
April 15, 2010 (the "Notes"). The Notes will have terms and provisions which are
summarized in the Offering Memorandum dated as of the date hereof. The Notes are
to be issued pursuant to an indenture (the "Indenture"), dated as of April 24,
1996 and supplemented August 20, 1997, among the Issuer, the General Partner and
Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), as trustee
(the "Trustee"). This is to confirm the agreement concerning the purchase of the
Notes from the Issuer by the Initial Purchasers. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Indenture.
Proceeds from the offering of the Notes will be used to (a) repay in
full a secured term loan held by an affiliate of Xxxxxx Brothers, Inc., (b)
repay in full unsecured notes of the Issuer which are due May 1, 2003 and (c)
reduce the outstanding balance under the Issuer's unsecured line of credit. The
remaining net proceeds, after payment of the total indebtedness, will be used
for general working capital of the Issuer.
The Notes will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements under the Securities Act of
1933, as amended (the "Securities Act"). The Issuer has prepared a preliminary
offering memorandum, dated April 7, 2003 (the "Preliminary Offering
Memorandum"), and has prepared a final offering
memorandum, dated April 8, 2003 (the "Offering Memorandum"), setting forth
information regarding the Issuer and the Notes. Any references herein to the
Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to
include all documents incorporated by reference therein and all amendments and
supplements thereto. The Issuer hereby confirms that it has authorized the use
of the Preliminary Offering Memorandum and the Offering Memorandum in connection
with the offering and resale of the Notes by the Initial Purchasers.
You have advised the Issuer that you will make offers (the "Exempt
Resales") of the Notes purchased by you hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely (i) to persons whom you
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QIBs") and (ii) to a limited number of persons
whom you reasonably believe to be "institutional accredited investors" as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act ("IAIs") (the persons specified in clauses (i) and (ii) being collectively
referred to herein as the "Eligible Purchasers").
Holders (including subsequent transferees) of the Notes will have the
registration rights described in the Offering Memorandum, which will be set
forth in the registration rights agreement related thereto (the "Registration
Rights Agreement"), to be dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, for so long as such Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement).
Pursuant to the Registration Rights Agreement, the Issuer will agree to
file with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein, (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") relating to the
Issuer's new 5.75% Senior Notes due April 15, 2010 (the "Exchange Notes") to be
offered in exchange for the Notes (such offer to exchange being referred to as
the "Exchange Offer") and, if necessary, (ii) a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement" and, together with the Exchange Offer Registration Statement, the
"Registration Statements") relating to the resale by certain holders of the
Notes and to use its best efforts to cause such Registration Statements to be
declared and remain effective and usable for the periods specified in the
Registration Rights Agreement and to consummate the Exchange Offer.
This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
Documents."
1. Representations, Warranties and Agreements of the Issuer. The
Issuer represents, warrants and agrees that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum with respect to the Notes have been prepared by the Issuer for use by
the Initial Purchasers in connection with the Exempt Resales. No order or decree
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum (or any supplement or amendment thereto), or any order asserting that
the transactions contemplated by this Agreement are subject
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to the registration requirements of the Securities Act has been issued and no
proceeding for that purpose has commenced or is pending or, to the knowledge of
the Issuer, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum, as of their respective dates, and the Offering Memorandum as of the
Closing Date (together with any supplement or amendment thereto), did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary, in order to make the statements, in light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Issuer in writing
by or on behalf of any Initial Purchaser expressly for use therein.
(c) The market-related data and estimates included in the
Preliminary Offering Memorandum and the Offering Memorandum (or any supplement
or amendment thereto) are based on or derived from sources which the Issuer
believes to be reliable and accurate.
(d) The Issuer is a limited partnership duly formed and existing
under and by virtue of the laws of the State of Michigan and is in good standing
with the Department of Consumer and Industry Services of the State of Michigan
with partnership power to own, lease and operate its properties, to conduct the
business in which it is engaged or proposes to engage as described in the
Offering Memorandum and to enter into and perform its obligations under this
Agreement. The Issuer is duly qualified or registered as a foreign partnership
and is in good standing in each jurisdiction in which such qualification or
registration is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
be registered or to be in good standing in such other jurisdiction would not
result in a material adverse effect on the consolidated financial position,
results of operation, business or prospects of the Issuer and its subsidiaries,
taken as a whole (a "Material Adverse Effect"). The General Partner is the sole
general partner of the Issuer and, immediately after the Closing Date will be
the sole general partner of the Issuer and will own approximately 88% of all
outstanding common units of partnership interest of the Issuer.
(e) Each of the subsidiaries (as defined in Section 15 hereof) of
the Issuer has been duly organized and is a validly existing partnership,
limited liability company or corporation in good standing under the laws of its
jurisdiction of organization or incorporation, as applicable, and in each other
jurisdiction in which qualification or registration is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or be registered or to be in good
standing in such other jurisdiction would not result in a Material Adverse
Effect. Each subsidiary has all power and authority necessary to own or hold its
respective properties and to conduct the businesses in which it is engaged; and
none of the subsidiaries (other than Sun Home Services, Inc., Sun Communities
Finance, LLC, Sun Communities Funding LP, Sun Communities Texas LP, Sun Secured
Financing LLC, Sunchamp LLC and Origen Financial L.L.C.) is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and Regulations.
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(f) All of the issued partnership interests (the "Partnership
Interests") of the Issuer have been duly and validly authorized and issued and
are fully paid and, with respect to the Partnership Interests owned by the
General Partner are owned directly by the General Partner, free and clear of all
liens, encumbrances, equities or claims; all outstanding Partnership Interests
have been offered and sold in compliance with all applicable laws (including,
without limitation, federal and state securities laws); and all of the issued
partnership or membership interests, as the case may be, of each subsidiary of
the Issuer have been duly and validly authorized and issued and are fully paid
and, other than with respect to Sun Home Services, Inc., Sunchamp LLC and Origen
Financial L.L.C., are owned directly or indirectly by the Issuer and/or the
General Partner, free and clear of all liens, encumbrances, equities or claims.
(g) The second amended and restated agreement of limited
partnership of the Issuer (the "Partnership Agreement") has been duly
authorized, executed and delivered by the General Partner on behalf of the
Issuer and constitutes a valid and binding agreement of the Issuer, enforceable
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law); and the
execution, delivery and performance of the Partnership Agreement and each
amendment thereto did not at the time of execution and delivery constitute a
breach of, or default under any material contract, lease or other instrument to
which the Issuer was a party or by which its properties have been bound or any
law, administrative regulation or administrative or court decree in force at the
time. The Partnership Agreement conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(h) The Issuer has all requisite partnership power and authority
to execute, deliver and perform its obligations under the Operative Documents.
(i) This Agreement has been duly authorized, executed and
delivered by the Issuer.
(j) The Indenture has been duly and validly authorized, executed
and delivered by the Issuer and constitutes a valid and binding agreement of the
Issuer, enforceable against the Issuer in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law). The Indenture conforms in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "TIA"), and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder. The Indenture conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(k) The Notes have been duly and validly authorized by the Issuer
and when duly executed by the Issuer in accordance with the terms of the
Indenture and, assuming due authentication of the Notes by the Trustee, upon
delivery to the Initial Purchasers against payment therefor in accordance with
the terms hereof, will have been validly issued and
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delivered, and will constitute valid and binding obligations of the Issuer,
will be in the form contemplated by, and entitled to the benefits of, the
Indenture, and enforceable against the Issuer in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law). The Notes will conform in all material
respects to the description thereof contained in the Offering Memorandum. Such
Notes will be senior unsecured obligations of the Issuer and rank on a parity
with all existing and future senior unsecured indebtedness of the Issuer.
(l) The Exchange Notes have been duly and validly authorized by
the Issuer and if and when duly issued and authenticated in accordance with the
terms of the Indenture and delivered in accordance with the Exchange Offer
provided for in the Registration Rights Agreement, will constitute valid and
binding obligations of the Issuer entitled to the benefits of the Indenture, and
will be enforceable against the Issuer in accordance with their terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law). Such Exchange Notes will be senior unsecured obligations
of the Issuer and will rank on a parity with all existing and future senior
unsecured indebtedness of the Issuer.
(m) The Registration Rights Agreement has been duly authorized by
the Issuer and, when executed by the Issuer in accordance with the terms hereof,
will be validly executed and delivered and (assuming the due execution and
delivery thereof by the Initial Purchasers) will be a valid and binding
agreement of the Issuer, enforceable against the Issuer in accordance with its
terms, subject to the effects of bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law). The Registration Rights Agreement will
conform in all material respects to the description thereof contained in the
Offering Memorandum.
(n) Neither the Issuer nor any of its subsidiaries is (i) in
violation of its charter, by-laws, certificate of limited partnership, articles
of organization, operating agreement or partnership agreement, as the case may
be, (ii) in default, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its properties or assets is subject or (iii) in violation of
any law, ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject or has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business
except, in the case of clauses (ii) and (iii) for such defaults, violations or
failures to obtain that would not, singly or in the aggregate, have a Material
Adverse Effect.
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(o) The execution, delivery and performance of this Agreement and
the other Operative Documents by the Issuer, compliance by the Issuer with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument listed as an exhibit to the Issuer's
annual report on Form 10-K for the fiscal year ended December 31, 2002 filed
with the Commission (which includes all material contracts to which the Issuer
is a party) and to which the Issuer or any of its subsidiaries is a party or by
which the Issuer or any of its subsidiaries is bound or to which any of the
property or assets of the Issuer or any of its subsidiaries is subject, (ii)
result in any violation of the provisions of the certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational document of the Issuer or any of its
subsidiaries, (iii) result in the violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Issuer or any of its subsidiaries or any of their respective properties,
assets or businesses, (iv) result in the imposition of or creation of (or the
obligation to create or impose) a lien, encumbrance, equity or claim under, any
agreement or instrument listed as an exhibit to the Issuer's annual report on
Form 10-K for the fiscal year ended December 31, 2002 filed with the Commission
(which includes all material contracts to which the Issuer is a party) and to
which the Issuer or any of its subsidiaries is a party or by which the Issuer or
any of its subsidiaries or any of their respective property is bound, or (v)
result in the termination, suspension or revocation of any Authorization (as
defined below) of the Issuer or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization except where
such termination, suspension or revocation would not have a Material Adverse
Effect.
(p) Except (A) as have been obtained by the Closing Date and (B)
as may be required in connection with the registration of the Exchange Notes
under the Securities Act, qualification of the Indenture under the TIA and
compliance with the securities and Blue Sky laws of various jurisdictions, no
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement and the other Operative Documents by
the Issuer, compliance by the Issuer with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and thereby.
(q) Except as described in the Offering Memorandum, there are no
legal or governmental proceedings pending or to the knowledge of the Issuer
threatened to which the Issuer, any of its subsidiaries or the General Partner
is or to the knowledge of the Issuer could be a party or of which any property
or assets of the Issuer, any of its subsidiaries or the General Partner is or
could be the subject which, if determined adversely to the Issuer, any of its
subsidiaries or the General Partner, would, singly or in the aggregate, have a
Material Adverse Effect; and to the best of the Issuer's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(r) Except as disclosed in the Offering Memorandum, and except as
would not, singly or in the aggregate, have a Material Adverse Effect: (i) the
Issuer and its subsidiaries (and to the Issuer's knowledge, any of its
predecessors in interest) have complied with all
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Environmental Laws; (ii) there has been no storage, disposal, generation,
manufacture, refinement, transportation, handling, Release or treatment of
Hazardous Substances by the Issuer or any of its subsidiaries (or, to the
knowledge of the Issuer or any of its predecessors in interest or any other
person) at, upon, under or from any of the property now or previously owned,
operated or leased by the Issuer or its subsidiaries, which could require any
Remediation under any Environmental Law; (iii) neither the Issuer nor any of its
subsidiaries (or, to the knowledge of the Issuer, any of its predecessors in
interest) has arranged, by contract, agreement or otherwise, for the
transportation, treatment or disposal of Hazardous Materials; and (iv) there are
no underground storage tanks located on or in any of the properties owned or
leased by the Issuer or any of its subsidiaries. The term "Release" means any
presence, spill, discharge, leak, leaching, emission, injection, migration,
escape, placement, dumping or release of any kind or into the environment. The
term "Hazardous Material" means "hazardous wastes," "toxic wastes," "hazardous
substances," "oil" and "medical wastes" "toxic mold" or any other substance or
material that is listed, regulated or defined in any Environmental Law. The term
"Environmental Law" means any applicable local, state, federal and foreign laws
or regulations with respect to protection of human health and safety, natural
resources, or the environment.
(s) The Issuer and its subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Issuer or any of its subsidiaries would have any liability;
neither the Issuer nor any of its subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Issuer or any of its subsidiaries would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification, except for such noncompliance,
reportable events, liabilities or failures to qualify that would not result in a
Material Adverse Effect.
(t) Each of the Issuer and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect, and each of the Issuer and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or
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results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the Issuer or any
of its subsidiaries; except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction would not, singly or in the aggregate, have a Material
Adverse Effect.
(u) (i) The Issuer and its subsidiaries have good and marketable
title in fee simple to all real property and own all personal property purported
to be owned by them, in each case free and clear of all liens, encumbrances and
defects, except such as are described in the Offering Memorandum, or such as
would not have a Material Adverse Effect (except for such real property,
buildings and personal property as are described in subparagraph (ii) below);
and (ii) all real property, buildings and personal property held under lease by
the Issuer and its subsidiaries are held by them under valid, existing and
enforceable leases, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Offering Memorandum, and such as
would not have a Material Adverse Effect.
(v) The Issuer and its subsidiaries own, possess or can acquire on
reasonable terms, adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights and licenses necessary for the conduct of
their respective businesses, and have no reason to believe that the conduct of
their respective business will conflict with, and have not received any notice
of any claim of conflict with, any such rights of others, which conflict (if the
subject of an unfavorable decision, ruling or finding), would result in a
Material Adverse Effect.
(w) PricewaterhouseCoopers LLP, who have certified the financial
statements included in the Preliminary Offering Memorandum and the Offering
Memorandum, whose report appears therein and who have delivered the initial
letter referred to in Section 7(f) hereof, are independent public accountants
under Rule 101 of the American Institute of Certified Public Accountants' Code
of Professional Conduct and its interpretations and rulings thereunder.
(x) The historical financial statements (including the related
notes) included in the Preliminary Offering Memorandum and the Offering
Memorandum (and any amendment or supplement thereto) present fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles of the
United States applied on a consistent basis throughout the periods involved and
all adjustments necessary for a fair presentation of results for such periods
have been made; and the financial and statistical information and data set forth
in the Offering Memorandum (and any amendment or supplement thereto) present
fairly the information and data shown therein and have been prepared on a basis
consistent with such financial statements and the books and records of the
respective entities presented therein.
(y) Neither the Issuer nor any of its subsidiaries is and, after
giving effect to offering and sale of the Notes and the application of the net
proceeds thereof as described in the
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Offering Memorandum, will be an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission thereunder.
(z) Except as described in the Offering Memorandum, there are no
contracts, agreements or understandings between the Issuer and any person
granting such person the right to require the Issuer to file a registration
statement under the Securities Act with respect to any securities of the Issuer
owned or to be owned by such person or to require the Issuer to include such
securities in the securities registered pursuant to the Registration Statements
or in any securities being registered pursuant to any other registration
statement filed by the Issuer under the Securities Act.
(aa) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i)
has imposed (or has informed the Issuer that it is considering imposing) any
condition (financial or otherwise) on the Issuer's retaining any rating assigned
to the Issuer, any securities of the Issuer or (ii) has indicated to the Issuer
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Issuer or any securities of the Issuer.
(bb) Since the date of the latest audited financial statements
included in the Offering Memorandum and except as disclosed in the Offering
Memorandum, (i) there has been no material adverse change in the financial
condition, results of operations, business or prospects of the Issuer, any of
its subsidiaries or the General Partner, whether or not arising in the ordinary
course of business, (ii) no material casualty loss or material condemnation or
other adverse event with respect to any business or property of the Issuer or
any of its subsidiaries has occurred, (iii) there have been no transactions or
acquisitions entered into by the Issuer or any of its subsidiaries other than
those in the ordinary course of business, which are material with respect to the
Issuer and its subsidiaries taken as a whole, (iv) there have been no material
liabilities or obligations, direct or contingent, incurred by the Issuer or any
of its subsidiaries, other than liabilities and obligations which were incurred
in the ordinary course of business, (v) there has been no dividend or
distribution of any kind declared, paid or made by the Issuer with respect to
its Partnership Interests, other than quarterly dividend distributions made in
the ordinary course of business (vi) there has been no material change in the
Partnership Interests of the Issuer, or any increase in the indebtedness of the
Issuer or any of its subsidiaries and (vii) there have been no securities issued
or granted by the Issuer or any of its subsidiaries.
(cc) There is (i) no material unfair labor practice complaint
pending against the Issuer or any of its subsidiaries nor, to the best knowledge
of the Issuer, threatened against any of them before the National Labor
Relations Board or any state or local labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Issuer or any of its
subsidiaries or, to the best knowledge of the Issuer, threatened against any of
them, and (ii) no material strike, labor dispute, slowdown or stoppage pending
against the Issuer or any of its subsidiaries
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nor, to the best knowledge of the Issuer, threatened against the Issuer or any
of its subsidiaries which in any case would have a Material Adverse Effect.
(dd) Each of the Issuer and its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(ee) The Issuer and its subsidiaries have filed all federal, state
and local income and franchise tax returns required to be filed through the date
hereof and have paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Issuer or any of its subsidiaries which has had (nor
does the Issuer have any knowledge of any tax deficiency which, individually or
in the aggregate, if determined adversely to the Issuer or any of its
subsidiaries, would have) a Material Adverse Effect.
(ff) The General Partner is organized in conformity with the
requirements for qualification as a real estate investment trust under the Code,
and its present and contemplated method of operation does and will enable it to
meet the requirements for taxation as a real estate investment trust ("REIT")
under the Code and the General Partner has elected to be taxed as a REIT under
the Code commencing with the year ended December 31, 1994.
(gg) The Issuer and each of its subsidiaries that is a partnership
are properly classified as partnerships, and not as corporations or as
associations taxable as corporations, for federal income tax purposes for the
period including the taxable year of the Issuer and each of its subsidiaries
that is a partnership ended December 31, 1994 (or, if later, the first taxable
year of such partnership) through the date hereof, or, in the case of such
subsidiaries that have terminated, through the date of termination of such
subsidiaries.
(hh) When the Notes are issued and delivered pursuant to this
Agreement, such Notes are eligible for resale pursuant to Rule 144A under the
Securities Act and will not be of the same class (within the meaning of Rule
144A under the Securities Act) as securities of the Issuer that are listed on a
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or that are quoted in a
United States automated inter-dealer quotation system.
(ii) Assuming (i) that your representations and warranties in
Section 2 are true, (ii) compliance by you with your covenants set forth in
Section 2, and (iii) that the representations of the IAIs set forth in the IAI
letters are true, the purchase of the Notes by the Initial Purchasers pursuant
hereto and the resale of the Notes pursuant to Exempt Resales are exempt from
the registration requirements of the Securities Act. No form of general
solicitation or general advertising (within the meaning of Rule 502(c) of the
Securities Act) was used by the Issuer or any of its representatives (other than
you, as to whom the Issuer makes no representation) in connection with the offer
and sale of the Notes, including, but not
10
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(jj) The Indenture has been qualified under the TIA.
(kk) Each certificate signed by any officer of the General Partner
on behalf of the Issuer and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and warranty by
the Issuer to each Initial Purchaser as to the matters covered thereby.
(ll) Except as described in the Offering Memorandum, the Issuer
and each of its subsidiaries carry, or are covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is customary for
companies engaged in similar businesses in similar industries in similar
geographic locations.
(mm) The statements set forth in the Offering Memorandum under the
captions "Description of the Notes", "Exchange Offer; Registration Rights" and
"Certain Transactions" insofar as they describe the terms of the agreements and
securities referred to therein, are accurate and fairly present in all material
respects the information required to be shown.
(nn) The Issuer and its subsidiaries are currently in substantial
compliance with all presently applicable provisions of the Americans with
Disabilities Act and no failure of the Issuer or any of its subsidiaries to
comply with all presently applicable provisions of the Americans with
Disabilities Act, individually or in the aggregate, would result in a Material
Adverse Effect.
2. Subsequent Offers and Resales of the Notes.
(a) Each of the Initial Purchasers and the Issuer hereby establishes
and agrees to observe the following procedures in connection with the sale of
the Notes:
(i) Offers and sales of the Notes shall only be made (A) to
persons whom the offeror or seller reasonably believes to be QIBs or
(B) to a limited number of IAIs.
(ii) No general solicitation or general advertising (within the
meaning of Rule 502(c) under the Securities Act) will be used in the
United States in connection with the offering or sale of the Notes.
(iii) In the case of a non-bank Eligible Purchaser of a Note
acting as a fiduciary for one or more third parties, each third party
shall, in the judgment of the applicable Initial Purchaser, be an IAI
or a QIB.
(iv) Each Initial Purchaser will take reasonable steps to inform,
and cause each of its affiliates to take reasonable steps to inform,
persons acquiring Notes from such Initial Purchaser or affiliate, as
the case may be, that the Notes (A) have not been
11
and will not be registered under the Securities Act, (B) are being sold
to them without registration under the Securities Act in reliance on
Rule 144A or in accordance with another exemption from registration
under the Securities Act, as the case may be and (C) may not be
offered, sold or otherwise transferred except (1) to the Issuer or (2)
inside the United States in accordance with (x) Rule 144A to a person
whom the seller reasonably believes is a QIB that is purchasing such
Notes for its own account or the account of a QIB to whom notice is
given that the offer, sale or transfer is being made in reliance on
Rule 144A or (y) pursuant to another available exemption from
registration under the Securities Act.
(v) No sale of the Notes to any one IAI will be for less than U.S.
$100,000 and for any other Eligible Purchaser will be for less than
U.S. $1,000 principal amount and no Note will be issued in a smaller
principal amount, as applicable. If the Eligible Purchaser is a
non-bank fiduciary acting on behalf of others, each person for whom it
is acting must purchase at least U.S. $1,000 or U.S. $100,000 principal
amount of the Notes, as applicable.
(vi) The transfer restrictions and the other provisions set forth
in the Offering Memorandum under the heading "Notice to Investors,"
including the legend required thereby, shall apply to the Notes except
as otherwise agreed by the Issuer and the Initial Purchasers.
(b) The Issuer covenants with each Initial Purchaser as follows:
(i) The Issuer agrees that it will not and will cause its
affiliates not to, directly or indirectly, solicit any offer to
buy, sell or make any offer or sale of, or otherwise negotiate in
respect of, securities of the Issuer of any class if, as a result
of the doctrine of "integration" referred to in Rule 502 under the
Securities Act, such offer or sale would render invalid (for the
purpose of (i) the sale of the Notes by the Issuer to the Initial
Purchasers, (ii) the resale of the Notes by the Initial Purchasers
to Eligible Purchasers or (iii) the resale of the Notes by such
Eligible Purchasers to others) the exemption from the registration
requirements of the Securities Act provided by Section 4(2)
thereof or by Rule 144A thereunder or otherwise.
(ii) The Issuer agrees that, in order to render the Notes
eligible for resale pursuant to Rule 144A under the Securities
Act, while any of the Notes remain outstanding, it will make
available, upon request, to any holder of Notes or prospective
purchasers of Notes the information specified in Rule 144A(d)(4),
unless the Issuer furnishes information to the SEC pursuant to
Section 13 or 15(d) of the Exchange Act.
(iii) Until the expiration of two years after the original
issuance of the Notes, the Issuer will not, and will cause its
affiliates not to, resell any Notes which are "restricted
securities" (as such term is defined under Rule 144(a)(3) under
the Securities Act), whether as beneficial owner or otherwise
(except as
12
agent acting as a securities broker on behalf of and for the account of
customers in the ordinary course of business in unsolicited broker's
transactions).
(c) Each Initial Purchaser, severally and not jointly, represents and
warrants to, and agrees with, the Issuer that it is a QIB within the meaning of
Rule 144A under the Securities Act.
(d) Each Initial Purchaser understands that the Notes have not been
and will not be registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except pursuant to an exemption from the registration requirements of
the Securities Act. Each Initial Purchaser severally represents and agrees that,
except as permitted by Section 2(a) above, it has offered and sold Notes and
will offer and sell Notes (i) as part of its distribution at any time, only in
accordance with Rule 144A under the Securities Act or another applicable
exemption from the registration requirements of the Securities Act.
3. Purchase of the Notes by the Initial Purchasers.
The Issuer hereby agrees to sell to the several Initial
Purchasers, and each Initial Purchaser, on the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, severally and not jointly, agrees to purchase at the price set forth
in Schedule B attached hereto, the aggregate principal amount of Notes set forth
in Schedule A opposite the name of such Initial Purchaser.
4. Delivery of the Notes and Payment Therefor.
(a) Delivery to the Initial Purchasers of and payment for the
Notes shall be made at the office of Xxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000-0000, at 9:00 A.M., Eastern standard time, on April
11, 2003 or at such other time on the same or such other date, not later than
April 30, 2003, as shall be designated in writing by the Initial Purchasers (the
"Closing Date") in person or via overnight courier or facsimile by agreement
between the Initial Purchasers and the Issuer. The place and method of closing
for the Notes and the Closing Date may be varied by agreement between the
Initial Purchasers and the Issuer.
(b) The Notes will be delivered to the Initial Purchasers against
payment of the purchase price therefor in immediately available funds. The Notes
will be evidenced by one or more securities in global form (the "Global Notes")
and/or by additional definitive securities, and will be registered, in the case
of the Global Note, in the name of Cede & Co. as nominee of The Depository Trust
Company ("DTC"), and in the other cases, in such names and in such denominations
as Xxxxxx Brothers Inc. on behalf of the Initial Purchasers shall request prior
to 9:30 A. M., Eastern standard time, on the second business day preceding the
Closing Date. The Notes to be delivered to Xxxxxx Brothers Inc. on behalf of the
Initial Purchasers shall be made available to the Initial Purchasers in New York
City for inspection and packaging not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
13
(c) Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchasers hereunder.
5. Further Agreements of the Issuer. The Issuer agrees with each
Initial Purchaser as follows:
(a) The Issuer will advise each Initial Purchaser immediately and
confirm such advice in writing, of (i) the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of any Notes for offering or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose by the Commission
or any state securities commission or other regulatory authority, and (ii) the
happening of any event that makes any statement of a material fact made in the
Offering Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Issuer shall use its best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
shall issue any stop order suspending the qualification or exemption of any
Notes under any state securities or Blue Sky laws, the Issuer shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) The Issuer, as promptly as possible, will furnish to each
Initial Purchaser, without charge, as of the date of the Offering Memorandum,
such number of copies of the Offering Memorandum, and any amendments or
supplements thereto, as such Initial Purchaser may reasonably request.
(c) The Issuer will not make any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum of which the Initial
Purchasers or their counsel shall not previously have been advised and to which
they shall reasonably object after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Issuer shall have delivered or will deliver to each Initial Purchaser, without
charge, in such quantities as such Initial Purchaser shall have requested or may
hereafter reasonably request, copies of the Preliminary Offering Memorandum.
(e) The Issuer consents to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Notes are offered
by the Initial Purchasers and by dealers, prior to the date of the Offering
Memorandum, of each Preliminary Offering Memorandum so furnished by them. The
Issuer consents to the use of the Offering Memorandum in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Notes are offered
by the Initial Purchasers and by all dealers to whom Notes may be sold, in
connection with the offering and sale of the Notes.
14
(f) If, at any time prior to completion of the distribution of the
Notes by the Initial Purchasers to Eligible Purchasers, any event shall occur
that in the reasonable judgment of the Issuer or in the reasonable judgment of
Xxxxxx Brothers Inc. on behalf of the Initial Purchasers should be set forth in
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if, in the
opinion of counsel to the Initial Purchasers, it is necessary to supplement or
amend the Offering Memorandum in order to comply with any law, the Issuer will,
subject to Section 5(c), forthwith prepare at its own expense an appropriate
supplement or amendment thereto (in form and substance reasonably satisfactory
to counsel for the Initial Purchasers), so that, as so amended or supplemented,
the Offering Memorandum will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time it is delivered to
an Eligible Purchaser, not misleading, and will expeditiously furnish at its own
expense to each Initial Purchaser and dealer a reasonable number of copies
thereof.
(g) The Issuer will cooperate with the Initial Purchasers and with
their counsel in connection with the qualification of the Notes for offering and
sale by the Initial Purchasers and by dealers under the securities or Blue Sky
laws of such jurisdictions as the Initial Purchasers may designate and will file
such consents to service of process or other documents necessary or appropriate
in order to effect such qualification; provided that in no event shall the
Issuer be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Notes, in any jurisdiction where it is not now so subject.
(h) So long as any of the Notes are outstanding, the Issuer will
furnish to the Initial Purchasers (A) as soon as available, a copy of each
report of the Issuer mailed to Issuer's unitholders generally or filed with any
stock exchange or regulatory body and (B) from time to time such other
information concerning the Issuer as the Initial Purchasers may reasonably
request.
(i) The Issuer will apply the net proceeds from the sale of the
Notes to be sold by it hereunder in accordance with the description set forth in
the Offering Memorandum under the caption "Use of Proceeds."
(j) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Issuer has not taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Notes to facilitate the sale or resale of the Notes. Except as permitted by
the Securities Act, the Issuer will not distribute any offering material in
connection with the Exempt Resales.
(k) The Issuer will use its best efforts to permit the Notes to be
eligible for clearance and settlement through DTC.
15
(l) From and after the Closing Date, so long as any of the Notes
are outstanding and are "restricted securities" within the meaning of the Rule
144(a)(3) under the Securities Act or, if earlier, until two years after the
Closing Date, but only during any period in which the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, the Issuer will furnish to holders of
the Notes and prospective purchasers of Notes designated by such holders, upon
request of such holders or such prospective purchasers, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit
compliance with Rule 144A in connection with resales of the Notes.
(m) The Issuer agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Securities Act) that would be integrated with the sale of the Notes in a
manner that would require the registration under the Securities Act of the sale
to the Initial Purchasers or the Eligible Purchasers of the Notes.
(n) The Issuer agrees to comply with all the terms and conditions
of the Registration Rights Agreement, the Indenture and all agreements set forth
in the representation letter of the Issuer to DTC relating to the approval of
the Notes by DTC for "book entry" transfer.
(o) The Issuer agrees to cause the Exchange Offer to be made in
the appropriate form, as contemplated by the Registration Rights Agreement, to
permit registration of the Exchange Notes to be offered in exchange for the
Notes and to comply with all applicable federal and state securities laws in
connection with such Exchange Offer.
(p) The Issuer agrees that prior to any registration of the
Exchange Notes pursuant to the Registration Rights Agreement, or at such earlier
time as may be required, the Indenture shall be qualified under the 1939 Act and
any necessary supplemental indentures will be entered into in connection
therewith.
(q) The Issuer will not voluntarily claim, and will resist
actively all attempts to claim, the benefit of any usury laws against holders of
the Notes.
(r) The Issuer will do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchasers'
obligations hereunder to purchase the Notes.
(s) The Issuer shall take all reasonable action necessary to
enable Standard & Poors, a division of The McGraw Hill Companies, Inc. ("S&P")
and Xxxxx'x Investors Service, Inc. ("Xxxxx'x") to provide their respective
investment-grade credit ratings of the Notes.
6. Expenses. The Issuer agrees to pay all costs, expenses, fees and
taxes incident to and in connection with: (i) the preparation, printing, filing
and distribution of the Preliminary Offering Memorandum and the Offering
Memorandum (including, without limitation, financial statements and exhibits)
and all amendments and supplements thereto (but not, however, legal fees and
expenses of Initial Purchasers' counsel incurred in connection therewith), (ii)
the
16
preparation, printing (including, without limitation, word processing and
duplication costs) and delivery of this Agreement, the other Operative
Documents, all Blue Sky Memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection wherewith
and with the Exempt Resales (but not, however, legal fees and expenses of
Initial Purchasers' counsel incurred in connection with any of the foregoing
other than reasonable fees of such counsel plus reasonable disbursements
incurred in connection with the preparation, printing and delivery of such Blue
Sky Memoranda), (iii) the authorization, issuance, sale and delivery by the
Issuer of the Notes, (iv) the qualification of the Notes for offer and sale
under the securities or Blue Sky laws of the several states (including, without
limitation, the reasonable fees and disbursements of Initial Purchasers' counsel
relating to such registration or qualification), (v) furnishing such copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for use in
connection with the Exempt Resales, (vi) the preparation of certificates for the
Notes (including, without limitation, printing and engraving thereof), (vii) the
fees, disbursements and expenses of the Issuer's counsel and accountants, (viii)
all fees and expenses (including fees and expenses of Issuer's counsel) of the
Issuer in connection with approval of the Notes by DTC for "book-entry"
transfer, (ix) any fees charged by securities rating services for rating the
Notes and (x) the performance by the Issuer of their other obligations under
this Agreement.
7. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties of the Issuer contained
herein, to the performance by the Issuer of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Offering Memorandum shall have been printed and copies
made available to you not later than 6:00 p.m., Eastern standard time, on the
business day following the date of this Agreement, or at such later date and
time as you may approve in writing.
(b) The Initial Purchasers shall not have discovered and disclosed
to the Issuer on or prior to the Closing Date that the Offering Memorandum or
any amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of Xxxxx & Xxxxxxx L.L.P., counsel for the Initial
Purchasers, is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All partnership proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the other Operative
Documents and the Offering Memorandum, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Initial Purchasers, and
the Issuer shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d) Jaffe, Raitt, Heuer & Xxxxx, P.C. shall have furnished to the
Initial Purchasers, its written opinion (based on the assumptions and subject to
the exclusions
17
contained therein), as counsel to the Issuer, addressed to the Initial
Purchasers and dated the Closing Date, substantially as to the matters set forth
in Exhibit A hereto.
(e) The Initial Purchasers shall have received from Xxxxx &
Xxxxxxx L.L.P., counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the Notes, the
Offering Memorandum and other related matters as the Initial Purchasers may
reasonably require, and the Issuer shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the Initial
Purchasers shall have received from PricewaterhouseCoopers LLP a letter, in form
and substance satisfactory to the Initial Purchasers, addressed to the Initial
Purchasers and dated the date hereof (i) confirming that they are independent
public accountants under Rule 101 of the American Institute of Certified Public
Accountants' Code of Professional Conduct and its interpretations and rulings
thereunder and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information (including any
pro forma financial information) and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(g) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "initial letter"), the
Issuer shall have furnished to the Initial Purchasers a letter (the "bring-down
letter") of such accountants, addressed to the Initial Purchasers and dated the
Closing Date (i) confirming that they are independent public accountants under
Rule 101 of the American Institute of Certified Public Accountants' Code of
Professional Conduct and its interpretations and rulings thereunder, (ii)
stating, as of the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial information
(including any pro forma financial information) and other matters covered by the
initial letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(h) The Issuer shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of the chief executive officer, president
or a vice president of the General Partner on its behalf and the chief financial
officer of the General Partner stating that:
(A) The representations, warranties and agreements of the
Issuer in Section 1 are true and correct as of the Closing Date; the Issuer has
complied with all its agreements contained herein; and the conditions set forth
in Sections 7(i) and 7(k) have been fulfilled; and
18
(B) They have carefully examined the Offering Memorandum and,
in their opinion (a) as of its date, the Offering Memorandum did not include any
untrue statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (b) since the date of such Offering Memorandum no event has occurred
which should have been set forth in a supplement or amendment to the Offering
Memorandum and (c) except as reflected in or contemplated by the Offering
Memorandum, there shall not have been since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the financial condition or in the results of operations, business affairs or
business prospects of the Issuer and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (other
than changes relating to the economy in general or the Issuer's industry in
general and not specifically related to the Issuer).
(i) Neither the Issuer nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Memorandum (i) any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Memorandum or (ii)
since such date there shall not have been any change in the capital stock,
Partnership Interests or long-term debt of the Issuer or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, business prospects, management, financial
position, stockholders' or unitholders' equity, as applicable, or results of
operations of the Issuer and its subsidiaries, otherwise than as set forth or
contemplated in the Offering Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of Xxxxxx Brothers Inc. on
behalf of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the delivery of the Notes being
delivered on the Closing Date on the terms and in the manner contemplated in the
Offering Memorandum.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Issuer on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, or there shall have been a material disruption in
the settlement of securities which, in the judgment of Xxxxxx Brothers Inc. on
behalf of the Initial Purchasers, make it inadvisable or impractical to proceed
with the offering or delivery of the Notes, (ii) a banking moratorium shall have
been declared by federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation of
hostilities involving the United States, there shall have been a declaration of
a national emergency or war by the United States or an act of terrorism shall
have occurred which, in the judgment of Xxxxxx Brothers Inc. on behalf of the
Initial Purchasers, make it inadvisable or impracticable to proceed with the
offering or delivery of the Notes, or (iv) there shall have occurred such a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be
19
such) as to make it, in the judgment of Xxxxxx Brothers Inc. on behalf of the
Initial Purchasers, impracticable or inadvisable to market the Notes or to
enforce contracts for the sale of the Notes in the manner contemplated in the
Offering Memorandum.
(k) On the Closing Date, the Notes shall be rated at least BBB
by S&P and Baa2 by Xxxxx'x and the Issuer shall have delivered to the Initial
Purchasers a letter dated on or before the Closing Date from each such rating
agency, or other evidence satisfactory to the Initial Purchasers, confirming
that the Notes have such ratings; and subsequent to the execution and delivery
of this Agreement (i) no downgrading shall have occurred in the rating accorded
debt securities of the Issuer by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) of the Rules and Regulations and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Issuer's debt securities.
(l) The Issuer shall have furnished a Secretary's Certificate
in form and substance satisfactory to the Initial Purchasers.
(m) On the Closing Date, the Registration Rights Agreement
shall have been fully executed and delivered by the Issuer.
(n) Xxxxx & Xxxxxxx L.L.P. shall have been furnished with such
other documents and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Agreement and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(o) All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) The Issuer agrees to indemnify and hold harmless each
Initial Purchaser, its officers and employees and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Notes), to which
any Initial Purchaser, such officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or (B) in any blue sky application or other document
prepared or executed by the Issuer (or based upon any written information
furnished by the Issuer) specifically for the purpose of qualifying any or all
of the Notes under the securities laws of any state or other
20
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in the Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Initial Purchaser in connection with, or relating in any manner
to, the Notes or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that the
Issuer shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by any Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse any
Initial Purchaser and each such officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by any Initial
Purchaser, such officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Issuer shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Offering Memorandum, or in any such amendment or supplement, or in
any Blue Sky Application, in reliance upon and in conformity with information
concerning any Initial Purchaser furnished in writing to the Issuer by or on
behalf of any Initial Purchaser specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Issuer
may otherwise have to any Initial Purchaser or to any officer, employee or
controlling person of such Initial Purchaser.
(b) Each Initial Purchaser severally agrees to indemnify and
hold harmless the Issuer, its officers and employees, each of its directors, and
each person, if any, who controls the Issuer within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, or any
action in respect thereof, to which the Issuer or any such director, officer or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment or
supplement thereto, or in any Blue Sky Application any material fact required to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning any Initial Purchaser furnished
to the Issuer by or on behalf of such Initial Purchaser specifically for
inclusion therein, and shall reimburse the Issuer and any such director, officer
or controlling person for any legal or other expenses reasonably incurred by the
Issuer or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.
21
The foregoing indemnity agreement is in addition to any liability which each
Initial Purchaser may otherwise have to the Issuer or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel, it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to one local counsel) at
any time for all such indemnified parties, which firm shall be designated in
writing by the Initial Purchasers, if the indemnified parties under this Section
8 consist of the Initial Purchasers or any of their officers, employees or
controlling persons, or by the Issuer, if the indemnified parties under this
Section 8 consist of the Issuer or any of its directors, officers, employees or
controlling persons. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld or delayed), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
22
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with the
consent of the indemnifying party or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Issuer, on the one hand, and the Initial Purchasers, on the
other, from the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer, on the one hand, and the
Initial Purchasers, on the other, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Issuer, on the one hand, and the Initial Purchasers, on
the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes purchased
under this Agreement (before deducting expenses) received by the Issuer, on the
one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Notes purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement, in each case as set forth on the cover page of the
Offering Memorandum. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Issuer or the Initial Purchasers, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Issuer and the Initial Purchasers agree that it would
not be just and equitable if contributions pursuant to this Section 8(d) were to
be determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), the Initial Purchasers
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Notes purchased by it were resold to the Eligible
Purchasers exceeds the amount of any damages which the Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
23
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Initial Purchasers' respective obligations to
contribute pursuant to Section 8(d) are several in proportion to the principal
amount of Notes set forth opposite their respective names in Schedule A hereto
and not joint.
9. Defaulting Initial Purchasers.
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the Notes which
the defaulting Initial Purchaser agreed but failed to purchase on the Closing
Date in the respective proportions which the amount of Notes set opposite the
name of each remaining non-defaulting Initial Purchaser in Schedule A hereto
bears to the total amount of Notes set opposite the names of all the remaining
non-defaulting Initial Purchasers in Schedule A hereto; provided, however, that
the remaining non-defaulting Initial Purchasers shall not be obligated to
purchase any of the Notes on the Closing Date if the total amount of Notes which
the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase on such date exceeds 9.09% of the total principal amount of Notes to be
purchased on the Closing Date, and any remaining non-defaulting Initial
Purchaser shall not be obligated to purchase more than 110% of the amount of
Notes which it agreed to purchase on the Closing Date pursuant to the terms of
Section 4. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchasers shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all the Notes to
be purchased on the Closing Date. If the remaining Initial Purchasers do not
elect to purchase the Notes which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase on the Closing Date, this Agreement
shall terminate without liability on the part of any non-defaulting Initial
Purchaser or the Issuer, except that the Issuer will continue to be liable for
the payment of expenses to the extent set forth in Sections 8 and 11. As used in
this Agreement, the term "Initial Purchaser" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule A hereto who, pursuant to this Section 9, purchases Notes which a
defaulting Initial Purchaser agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Issuer for damages caused by its
default. If other Initial Purchasers are obligated or agree to purchase the
Notes of a defaulting or withdrawing Initial Purchaser, either Xxxxxx Brothers
Inc. or the Issuer may postpone the Closing Date for up to seven full business
days in order to effect any changes that in the opinion of counsel for the
Issuer or counsel for the Initial Purchasers may be necessary in the Offering
Memorandum or in any other document or arrangement.
10. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by Xxxxxx Brothers Inc. on behalf of the Initial Purchasers by
notice given to and received by the Issuer prior to delivery of and payment for
the Notes if, prior to that time, any of the events described in Sections 7(i)
or 7(j) shall have occurred, or if the conditions in Section 7(k) shall fail to
have been met, or if the Initial Purchasers shall decline to purchase the
24
Notes for any reason permitted under this Agreement. Such termination shall be
without liability of any party to any other party except as provided in Section
6 and 10 and except that Section 1, 8 and 14 shall survive any such termination
and remain in full force and effect.
11. Reimbursement of Initial Purchasers' Expenses. If the Issuer shall
fail to tender the Notes for delivery to the Initial Purchasers by reason of any
failure, refusal or inability on the part of the Issuer to perform any agreement
on its part to be performed, or because any other condition of the obligations
hereunder required to be fulfilled by the Issuer is not fulfilled other than the
conditions set forth in Section 7(j), the Issuer will reimburse the Initial
Purchasers for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase of the Notes, and upon demand the
Issuer shall pay the full amount thereof to the Initial Purchasers. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Initial Purchasers, the Issuer shall not be obligated to reimburse any
such Initial Purchaser on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Debt Capital Markets, Real Estate
Group (Fax: 000-000-0000), with a copy to Xxxxxx Brothers, Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Office of the General Counsel (Fax:
000-000-0000) and Xxxxx & Xxxxxxx L.L.P., 000 Xxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000-0000, Attention: J. Xxxxxx Xxxxxxx, Xx. & Xxxxxx X. Xxxx
(Fax: 000-000-0000) ; and
(b) if to the Issuer, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Issuer set forth in the
Offering Memorandum, Attention: Xxxxxxx Xxxxxxxx (Fax: 000-000-0000), with a
copy to Jaffe, Raitt, Heuer & Xxxxx, P.C., Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx (Fax: 000-000-0000).
Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Issuer shall be entitled to act
and rely upon any request, consent, notice or agreement given by Xxxxxx Brothers
Inc. on behalf of the Initial Purchasers.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuer
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Issuer contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control each Initial Purchaser within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the Initial
Purchasers contained in Section 8(c) of this Agreement shall be deemed to be for
the benefit of directors of the Issuer and any person controlling the Issuer
within the meaning of Section 15 of the Securities Act.
25
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Issuer and each of the Initial Purchasers contained in
this Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations of the Commission
under the Securities Act.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York without regard to principles of conflicts
of laws.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "Specified Courts"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
(Signature Page Follows)
26
If the foregoing correctly sets forth the agreement between the Issuer
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: Sun Communities, Inc., its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer,
Executive Vice President, Secretary and Treasurer
Accepted on behalf of all Initial Purchasers:
XXXXXX BROTHERS INC.
By: /s/ Xxxxx Xxxxx
------------------------
Authorized Representative
27
SCHEDULE A
PRINCIPAL AMOUNT
NAME OF INITIAL PURCHASER NOTES
Xxxxxx Brothers Inc. $131,250,000
X.X. Xxxxxxx & Sons, Inc. $18,750,000
Total $150,000,000
=============
1
SCHEDULE B
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
$150,000,000 5.75% SENIOR NOTES DUE 2010
1. The initial offering price of the 5.75% Senior Notes due April 15,
2010 shall be 99.521% of the principal amount thereof, plus accrued interest, if
any, from the date of issuance.
2. The purchase price to be paid by the Initial Purchasers for the
5.75% Senior Notes due April 15, 2010 shall be 98.921% of the principal amount
thereof.
3. The interest rate on the 5.75% Senior Notes due April 15, 2010 shall
be 5.834% per annum.
2
EXHIBIT A
OPINION MATTERS
JAFFE, RAITT, HEUER & XXXXX, P.C.
1. Each of the limited liability companies and corporations on Schedule A-I
hereto (collectively, the "Subsidiaries") has been duly formed or
incorporated and is validly existing under the laws of the State of
Michigan. Each of the Subsidiaries is in good standing under the laws of
the State of Michigan. Each Subsidiary that is a Michigan limited liability
company has the limited liability company power and authority to conduct
its business as described in the Offering Memorandum. Each Subsidiary that
is a Michigan corporation has the corporate power and authority to conduct
its business as described in the Offering Memorandum. All of the equity
interests in each Subsidiary have been duly and validly authorized and
issued.
2. Other than with respect to Sunchamp LLC, Sun Home Services, Inc. and Origen
Financial, L.L.C. all of the issued equity interests of each of the
Subsidiaries are owned, directly or indirectly, either by the Issuer or Sun
Communities, Inc. ("Sun Communities") and are, to our knowledge, owned by
the Issuer or Sun Communities, free and clear of all liens, encumbrances,
equities or claims.
3. The Indenture has been duly authorized, executed and delivered by the
Issuer and, assuming due authorization, execution and delivery thereof by
the trustee, constitutes a valid and binding obligation of the Issuer, and
is enforceable against the Issuer in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by the Issuer and conform in all
material respects to the description thereof contained in the Offering
Memorandum. The Notes, when issued and authenticated in the manner provided
for in the Indenture and delivered against payment of the consideration
therefore in accordance with this Agreement, will constitute valid and
binding obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity
or at law).
5. Assuming due authorization of the Exchange Notes by the Issuer, when, as
and if (i) the Exchange Offer Registration Statement shall have become
effective pursuant to the provisions of the Securities Act, (ii) the
Indenture shall have been qualified pursuant to the provisions of the Trust
Indenture Act of 1939, as amended, (iii) the Notes being exchanged for
Exchange Notes shall have been validly tendered to the Issuer, (iv) the
Exchange Notes shall have been duly executed, authenticated and issued in
accordance with the provisions of
1
the Indenture and duly delivered to the purchasers thereof in exchange for
the Notes, and (v) any legally required consents, approvals, authorizations
or other order of the Securities and Exchange Commission or any other
regulatory authorities have been obtained, the Exchange Notes will
constitute valid and binding obligations of the Issuer, enforceable against
the Issuer in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in
equity or at law).
6. Assuming the accuracy of your representations and warranties contained in
Section 2 of the Agreement, no registration of the Notes under the
Securities Act, and no qualification of the Indenture under the Trust
Indenture Act, is required for the purchase of the Notes by you or the
initial resale of the Notes by you, in each case, in the manner
contemplated by the Purchase Agreement and the Offering Memorandum. We
express no opinion, however, as to when or under what circumstances any
Notes initially sold by you may be reoffered or resold.
7. The Purchase Agreement and the Registration Rights Agreement have been duly
authorized, executed and delivered by the Issuer. Assuming due
authorization, execution and delivery by the Issuer and the other parties
thereto other than the Issuer, the Registration Rights Agreement
constitutes a valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and general equitable principles (whether considered in a proceeding in
equity or at law).
8. The issuance and sale of the Notes being delivered on the Closing Date by
the Issuer, the execution, delivery and performance of the Purchase
Agreement and the other Operative Documents by the Issuer and the
compliance by the Issuer with all provisions thereof as of the Closing Date
do not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under or violate, (a) any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument listed as an exhibit to the Issuer's annual report on Form 10-K
for the fiscal year ended December 31, 2002 filed with the Commission
(which, to the knowledge of such counsel, includes all material contracts
to which the Issuer is a party), (b) the certificate of limited partnership
or partnership agreement of the Issuer, or the limited liability company
operating agreement or certificate of incorporation or by-laws, as
applicable, of any of its Subsidiaries, or (c) any federal or Michigan
statute, law, rule or regulation or, to the knowledge of such counsel, any
judgment, order, writ or decree of any U.S. federal or Michigan state court
or governmental agency or body having jurisdiction over the Issuer or any
of its Subsidiaries or any of their properties or assets.
9. Other than as set forth in the Offering Memorandum, there are no legal or
governmental proceedings pending to which the Issuer or any of its
Subsidiaries is a party or of which any property or assets of the Issuer or
any of its Subsidiaries is the subject which, if determined adversely to
the Issuer or any of its Subsidiaries, would have a Material Adverse
Effect; and,
2
to our knowledge, no such proceedings are threatened or contemplated by
Michigan governmental authorities or threatened by others.
10. The information in the Offering Memorandum under the headings "Description
of the Notes," "Exchange Offer; Registration Rights" and "Certain
Transactions", only in so far as they describe the terms of the agreements
and securities referred to therein, are accurate and fairly present in all
material respects the information required to be shown.
11. The Issuer and each of its subsidiaries that is a partnership are properly
classified as partnerships, and not as corporations or as associations
taxable as corporations, for federal income tax purposes for the period
including the taxable year of the Issuer and each of its subsidiaries ended
December 31, 1994 (or, if later, the first taxable year of such
partnership) through the date hereof, or, in the case of such subsidiaries
that have terminated, through the date of termination of such subsidiaries.
12. Commencing with its taxable year ended December 31, 1994, the General
Partner has been organized and has operated in conformity with the
requirements for qualification as a REIT under the Internal Revenue Code of
1986, as amended, for each of its taxable years ending December 31, 1994,
through December 31, 2002, and the current and proposed organization and
method of operation of the General Partner will enable it to continue to
meet the requirements for qualification and taxation as a REIT for its
taxable year ended December 31, 2003, and thereafter.
13. The statements contained in the Offering Memorandum under the headings
"Risk Factors - Tax Risks" and "Certain U.S. Federal Tax Considerations,"
insofar as they describe federal statutes, rules and regulations or legal
conclusions with respect thereto, are correct in all material respects.
14. The Issuer was not required to obtain any consent, approval, authorization
or order of a federal or Michigan governmental agency for the execution,
delivery and performance as of the Closing Date by the Issuer of the
Purchase Agreement, the Indenture or the Registration Rights Agreement, as
applicable, or the issuance, delivery and sale of the Notes being issued
and sold by the Issuer under the Purchase Agreement except for any such
consent, approval, authorization or order which may be required under
federal securities laws (certain matters with respect to which are
addressed elsewhere in the opinion) and the so-called "Blue Sky" or
securities laws of any states (as to which we express no opinion).
15. The Issuer is not and, upon sale of the Notes to be issued and sold in
accordance with the Purchase Agreement and the application of the net
proceeds to the Issuer of such sale as described in the Offering Memorandum
under the caption "Use of Proceeds," will not be an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
16. In giving the opinion required by Section 7(d) of this Agreement, counsel
shall additionally state that, while such counsel has not undertaken to
determine independently, and does not assume any responsibility for the
accuracy, completeness, or fairness of the statements in the
3
Offering Memorandum (except as otherwise expressly provided elsewhere in
this opinion), no facts have come to their attention which cause such
counsel to believe that the Offering Memorandum, as of its date, contained
or contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided that in making the foregoing statements (which shall not
constitute an opinion), such counsel need not express any views as to the
financial statements and supporting schedules and other financial
information and data included in or incorporated by reference in or omitted
from the Offering Memorandum.
4
SCHEDULE A-I
SIGNIFICANT SUBSIDIARIES OF
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
NAME JURISDICTIONS
Sun Home Services, Inc. MI
Origen Financial L.L.C. MI
Sun Communities Finance, LLC MI
Sun Communities Funding LP MI
Sun Secured Financing LLC MI
Sunchamp LLC MI
5
