EXHIBIT 4.1
MHC Operating Limited Partnership
c/o Manufactured Home Communities, Inc.
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to that certain Purchase Contract dated as of January
22, 2004, as modified by a letter agreement dated March 5, 2004, and by an
Amendment to Purchase Contract dated as of April 21, 2004 (as so modified the
"Purchase Agreement") by and between the undersigned Monte Vista, LLC and MHC
Operating Limited Partnership ("MHC"), a limited partnership formed under the
Illinois Revised Uniform Limited Partnership Act, of which MHC Trust, a Maryland
real estate investment trust, is the sole general partner (the "General
Partner"). Pursuant to the Purchase Agreement, the undersigned is contributing
the "Property" as defined in the Purchase Contract (the "Contributed Assets") to
MHC. MHC intends to operate in accordance with the Second Amended and Restated
Partnership Agreement dated as of March 15, 1996 (as amended from time to time
in accordance with the terms thereof, the "Partnership Agreement").
The undersigned has been furnished certain publicly filed documents
(collectively, the "Information Statement") of Manufactured Home Communities,
Inc., a Maryland corporation ("Parent"), which are being provided in connection
with the offering (the "Offering") of partnership interests ("OP Units") in MHC.
The OP Units are to be issued in exchange for the contribution to MHC of the
Contributed Assets.
Section 1.
1.1 Subscription. The undersigned hereby subscribes for OP Units as
indicated on the counterpart signature page hereof. In respect of this
subscription, the undersigned herewith delivers to MHC (i) two executed original
signature pages of this Subscription Agreement, and (ii) a fully completed
Investor Information Sheet, Account Information Sheet, and Accredited Investor
Questionnaire, attached as EXHIBITS A, B AND C, respectively.
1.2 Acceptance or Rejection of Subscription. MHC reserves the right to
reject this subscription, in whole but not in part, in the sole discretion of
MHC, if MHC determines that the offer or sale of OP Units to the undersigned
will be made under circumstances that would cause the exemption referred to in
Section 2.3(a) below to be lost. In the event such a determination is made, the
undersigned acknowledges and agrees that MHC may reject this subscription even
if it accepts other subscriptions by other investors. With respect to persons
being offered OP Units, if MHC rejects this subscription pursuant to this
Section 1.2, the undersigned understands and agrees that he will receive cash in
lieu of OP Units and neither the General Partner nor MHC shall have any further
obligation hereunder. Subject to the foregoing and compliance by the undersigned
with all of the terms and provisions hereof, this subscription will be accepted
by MHC if the "Closing" occurs under the Offering.
1.3 Issuance of OP Units. MHC agrees (i) to issue at the Closing a
certificate to the undersigned whereby MHC shall represent and warrant that the
OP Units issued to the undersigned at such Closing are duly authorized and duly
issued and (ii) that the OP Units issued at such Closing to the undersigned
shall be certificated.
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Section 2.
2.1 Investor Representations and Warranties. The undersigned hereby
acknowledges, represents and warrants to, and agrees with MHC as follows, which
acknowledgments will be true and correct as of the closing of the transaction
whereby MHC acquires the Contributed Assets (the "Closing Date"):
(a) Authorization. This Subscription Agreement constitutes a valid
and legally binding obligation on the part of the undersigned, enforceable in
accordance with its terms except as affected by (i) bankruptcy law, and (ii)
equitable principles. The undersigned represents that he, she or it has full
power and authority to enter into this Subscription Agreement.
(b) Accredited Investor; No Advertisement or Solicitation:
(i) The undersigned is an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), and further represents and
warrants that the information provided by the undersigned in the
Accredited Investor Questionnaire attached as Exhibit C is true and
correct as of the date hereof.
(ii) The undersigned acknowledges that the offer and sale of
the OP Units to him, her or it has not been accomplished by any form of
general solicitation or general advertising, including, but not limited
to, (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media, or broadcast over
television or radio and (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.
(c) Restrictions on Transfer.
(i) The undersigned understands and acknowledges that the OP
Units have not been registered under the Securities Act, by reason of a
specific exemption from the registration provisions thereof which
exemption depends upon, among other things, the bona fide nature of the
investment intent of the undersigned as expressed herein and the other
representations of the undersigned set forth herein.
(ii) The undersigned understands and acknowledges that none of
the OP Units or the securities into which OP Units may be exchanged have
been registered under the Securities Act or registered or qualified under
the securities laws of any state and none may be sold, transferred,
assigned, pledged or hypothecated absent an effective registration thereof
under such Securities Act or an opinion of counsel, which opinion is
satisfactory in form and substance to MHC and its counsel, to the effect
that such registration is not required under said Securities Act or such
states or that such transaction complies with the rules promulgated by the
Securities and Exchange Commission under said Securities Act or such
states. The undersigned understands and acknowledges that he, she or it
must bear the economic risks of this investment resulting from such
limitations.
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(iii) The undersigned understands and acknowledges that the
sale, transfer or other disposition of the OP Units is further restricted
by the provisions of this Agreement, the Partnership Agreement and that
certain Registration Rights and Lock-Up Agreement (the "Registration
Rights Agreement") dated as of the date hereof between the undersigned,
MHC and the General Partner.
(iv) In accordance with the Partnership Agreement, OP Units
may be exchanged for common shares of Parent, $.01 par value per Share
("Common Shares"). Common Shares also will not have been registered under
the Securities Act (unless the Common Shares are registered pursuant to
the terms of the Registration Rights Agreement or if Parent otherwise
elects to register the Common Shares) and the General Partner and Parent
will also rely upon the representations of the undersigned as to
investment intent and otherwise with respect to the issuance of any Common
Shares. The restrictions referred to as being applicable to unregistered
OP Units in paragraphs (a) through (c) of this Section 2 will also apply
to any unregistered Common Shares.
(v) The undersigned is aware of the provisions of Rule 144
promulgated under the Securities Act, pursuant to which the undersigned
may be able to sell Common Shares, subject to certain exceptions, one year
after they receive such Common Shares so long as certain current public
information is available about the issuer, the sale is through a broker in
an unsolicited "broker's transaction" and that the undersigned does not
sell, in any three-month period, more than the greater of 1% of the
outstanding Common Shares or the average weekly trading volume of Common
Shares for the four-week period preceding the sale. The undersigned
generally will be able to sell the Common Shares without regard to any
volume or other limitations discussed above beginning two years after they
receive the Common Shares, unless they are affiliates of the Company
(i.e., a person controlling, controlled by or under common control with
the Company). Affiliates of the Company will continue to be subject to the
volume limitations on unregistered sales following the expiration of the
two-year period. The one and two-year periods are measured from the date
Common Shares are received, not from the date OP Units are received. The
preceding description is a general summary of the restrictions of Rule
144, and the undersigned should consult with his or her own legal advisor
to ensure compliance with all of the requirements of applicable federal
and state securities laws and regulations. In this connection, the
undersigned understands Rule 144 may or may not be available for the
resale of the OP Units and the undersigned should consult an attorney with
regard to the availability of Rule 144. Common Shares are subject to the
reporting requirements under the Securities Exchange Act of 1934 and upon
notice of issuance have been listed for trading on the New York Stock
Exchange. The undersigned further understands and acknowledges that, with
respect to Common Shares, while the General Partner believes that Parent
satisfies the conditions of Rule 144 on the date it accepts this
subscription, there can be no assurance that it will meet such conditions
one year following the issuance of Common Shares (the first date when
sales under this rule would be permitted). In the event not all of the
requirements of Rule 144 are met, registration under the Securities Act or
some other registration exemption will be required for any disposition of
Common Shares. The undersigned understands that although Rule 144 is not
exclusive, the Securities and Exchange Commission (the "Commission") has
expressed its opinion that persons proposing to sell restricted
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securities received in an offering other than a registered offering or
pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such
offers or sales that such persons and the brokers who participate in the
transactions do so at their own risk.
(d) Disclosure of Information. The undersigned and/or the
undersigned's purchaser representative or personal advisor, as the case may be:
(i) has been furnished the Information Statement and any
documents which may have been made available upon request, has carefully
read the public documents constituting the Information Statement and
understands and has evaluated the risks of an investment in the OP Units,
and has relied solely (except as indicated in subsections (ii) and (iii)
below) on the information contained in the public documents constituting
the Information Statement;
(ii) has been provided an opportunity to obtain any additional
information requested concerning the OP Units, MHC, the General Partner
and Parent;
(iii) has been given the opportunity to ask questions of, and
receive answers from, the General Partner and MHC concerning the terms and
conditions of this subscription, the Partnership Agreement, and other
matters pertaining to this investment, and has been given the opportunity
to obtain such additional information necessary to verify the accuracy of
the information contained in the public documents constituting the
Information Statement or that which was otherwise provided in order for
him, her or it to evaluate the merits and risks of an investment in MHC to
the extent the General Partner or MHC possesses such information or can
acquire it without unreasonable effort or expense, and has not been
furnished any other offering literature or prospectus on which they are
entitled to rely except as mentioned herein or in the public documents
constituting the Information Statement; and
(iv) has determined that the OP Units are a suitable
investment for him, her or it and that at this time he, she or it could
bear the economic risk of the investment.
(e) Investment Experience. The undersigned represents that he, she
or it has such knowledge and experience in financial and business matters as to
be capable of evaluating alone, or together with his, her or its purchaser
representative or personal advisor, the merits and risks of an investment in the
OP Units and protecting his, her or its own interests in connection with the
investment and has obtained, in his, her or its judgment, alone, or together
with his, her or its purchaser representative or personal advisor sufficient
information from the General Partner or MHC to evaluate the merits and risks of
an investment in the OP Units. The undersigned has not utilized any person as
his, her or its purchaser representative or professional advisor in connection
with evaluating such risks and merits. The undersigned acknowledges that he, she
or it has the financial ability to bear the economic risk of his, her or its
investment in MHC (including his, her or its possible loss), has adequate means
for providing for his, her or its current needs and personal contingencies and
has no need for liquidity with respect to the investment in MHC. If other than
an individual, the undersigned also represents it has not been organized solely
for the purpose of acquiring the OP Units.
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(f) Purchase Entirely for Own Account. This Subscription Agreement
is made with the undersigned solely in reliance upon his, her or its
representation to MHC, which by the undersigned's execution of this Subscription
Agreement he, she or it hereby confirms, that the OP Units to be received by the
undersigned will be acquired for investment for the undersigned's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that he, she or it has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Subscription Agreement, the undersigned further represents that he, she or
it does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the OP Units.
(g) Further Limitations on Disposition. Without in any way limiting
the representations set forth above, the undersigned further agrees not to (A)
make any disposition of all or any portion of the OP Units owned by the
undersigned, except for the exchange of OP Units for Common Shares:
(i) unless and until there is then in effect a registration
statement under the Securities Act covering such proposed disposition and
such disposition is made in accordance with such registration statement;
(ii) unless and until (A) the undersigned shall have notified
MHC of the proposed disposition and shall have furnished MHC with a
detailed statement of the circumstances surrounding the proposed
disposition and (B) if requested by MHC, the undersigned shall have
furnished MHC with an opinion of securities counsel, satisfactory to MHC
and its counsel, that such disposition will not require registration of
such securities under the Securities Act; or
(B) sell, transfer or otherwise dispose of any OP Units to any person or
entity whom the General Partner determines in its sole discretion, is not an
"accredited investor" within the meaning of Regulation D of the Securities Act.
(h) Legends. To the extent applicable, any certificate issued in
respect of any OP Units or Common Shares issued in exchange for OP Units, shall
be endorsed with the legends substantially in the form set forth below, and the
undersigned covenants that, except to the extent such restrictions are waived by
MHC, the undersigned shall not transfer any OP Units or Common Shares received
in exchange therefor without complying with the restrictions on transfer
described in such legends:
(i) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATES AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY IN FORM AND
SUBSTANCE TO THE PARTNERSHIP, AND ITS COUNSEL, TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER SAID
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ACT OR SUCH STATES OR THAT SUCH TRANSACTION COMPLIES WITH THE RULES
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER SAID ACT
OR SUCH STATES."
(ii) "THE SECURITIES HEREBY REPRESENTED ARE SUBJECT TO, AND
MAY NOT BE TRANSFERRED WITHOUT COMPLYING WITH, CERTAIN RESTRICTIONS
ON TRANSFER CONTAINED IN THE PARTNERSHIP AGREEMENT. A COPY OF SAID
AGREEMENT MAY BE INSPECTED AT THE OFFICES OF THE PARTNERSHIP."
(iii) Any legend required by any applicable state securities
law, or the several agreements for the acquisition of the
Contributed Assets by MHC to be entered into between the General
Partner, MHC, and the undersigned at or about the Closing Date.
(i) Investor Awareness. The undersigned acknowledges, agrees and is
aware that:
(i) MHC's financial and operating history is limited to the
period since March 3, 1993;
(ii) no federal or state agency has passed upon the OP Units
or the Common Shares or made any finding or determination as to the
fairness of this investment;
(iii) there are substantial risks of loss of investment
incidental to the purchase of the OP Units;
(iv) the investment in MHC or the Common Shares is an illiquid
investment and the undersigned must bear the economic risk of investment
in the OP Units, or the Common Shares for an indefinite period of time;
(v) this Agreement and the Partnership Agreement contain
substantial restrictions on transferability of the OP Units and Common
Shares;
(vi) neither the General Partner, MHC, nor any of their
affiliates or representatives has provided the undersigned with any
investment, tax, legal, regulatory or accounting advice with respect to
the investment in or ownership of OP Units or Common Shares; and
(vii) the representations, warranties, agreements,
undertakings and acknowledgments made by the undersigned in this
Subscription Agreement (including without limitation the exhibits thereto)
are made with the intent that they be relied upon by MHC and the General
Partner in determining the undersigned's suitability as a purchaser of the
OP Units, and shall survive its admission as a limited partner in MHC. In
addition, the undersigned undertakes to notify the General Partner
immediately of any change in any representation, warranty or other
information relating to the undersigned set forth herein.
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Section 3.
3.1 Modification. Neither this Subscription Agreement nor any provisions
hereof shall be waived, modified, discharged or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
3.2 Notices. All notices, payments, demands or other communications given
hereunder shall be deemed to have been duly given and received (i) upon personal
delivery or (ii) in the case of notices sent within, and for delivery within,
the United States, as of the date shown on the return receipt after mailing by
registered or certified mail, return receipt requested, postage prepaid, or
(iii) the second succeeding business day after deposit with Federal Express or
other equivalent air courier delivery service, unless the notice is held or
retained by the customs service, in which case the date shall be the fifth
succeeding business day after such deposit, and addressed as follows:
If to the undersigned:
MONTE VISTA, LLC
c/o Homefree Village Resorts
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, President
With a copy to:
Xxxxxxx XxXxxxxxx
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If to MHC or General Partner:
c/o Manufactured Home Communities, Inc.
Suite 000
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
With a copy to:
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Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
3.3 Binding Effect. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns. If the undersigned is more than one person, the obligation of
the undersigned shall be joint and several and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his heirs, executors, administrators
and successors.
3.4 Entire Agreement. This Subscription Agreement, the Registration Rights
Agreement and the Partnership Agreement, contain the entire agreement of the
parties with respect to this subscription, and there are no representations,
covenants or other agreements except as stated or referred to herein or therein.
3.5 Assignability. This Subscription Agreement is not transferable or
assignable by the undersigned, except that the Subscription Agreement may be
assigned to any bona fide pledgee of OP Units pursuant to any transfer of such
OP Units to the pledgee pursuant to foreclosure, transfer-in-lieu of
foreclosure, or otherwise, and subsequent transfer of such OP Units following or
in connection with any such transfer to the pledgee or foreclosure or
transfer-in-lieu thereof.
3.6 Applicable Law. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.
3.7 Gender. All pronouns contained herein and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the parties hereto may require.
3.8 Counterparts. This Subscription Agreement may be executed through the
use of separate signature pages or in counterparts, and each of such
counterparts shall, for all purposes, constitute one agreement binding on the
parties hereto, notwithstanding that the parties hereto are not signatories to
the same counterpart.
3.9 Further Assurances. The undersigned will, from time to time, execute
and deliver to the General Partner or MHC all such other and further instruments
and documents and take or cause to be taken all such other and further action as
the General Partner or MHC may reasonably request in order to effect the
transactions contemplated by this Agreement.
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MHC OPERATING LIMITED PARTNERSHIP
SUBSCRIPTION AGREEMENT
COUNTERPART SIGNATURE PAGE
The undersigned, desiring to enter into this Subscription Agreement for
the subscription of the number of OP Units indicated below, hereby agrees to all
of the terms and provisions of this Subscription Agreement and agrees to be
bound by all such terms and provisions.
The undersigned has executed this Subscription Agreement as of the 13th
day of May, 2004.
With respect to OP Units:
Number of OP Units being Subscribed: 1,058,721 The Number of OP Units determined
in accordance with the Purchase
Contract.
MONTE VISTA, LLC, an Arizona
limited liability company
By: Homefree Village Resorts, Inc.
Manager of Monte Vista, LLC
By: /s/ Xxxxx X. Xxxxxxx, Xx.
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Name: Xxxxx X. Xxxxxxx, Xx.
Title: President
Agreed and Accepted this 13 day of May, 2004.
MHC OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: MHC TRUST, a Maryland real estate
investment trust, its General Partner
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
