LOAN AGREEMENT Dated as of March 1, 2011 Between THE ENTITIES SET FORTH ON SCHEDULE I ATTACHED HERETO, collectively, as Borrower and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Lender

 

 

 

Dated as of March 1, 2011

 

 

Between

 

 

 

 

collectively, as Borrower

 

and

 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Lender

 

ARTICLE I - DEFINITIONS; PRINCIPLES OF CONSTRUCTION...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  1

 

Section 1.1

Definitions..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

1

 

Section 1.2

Principles of Construction..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

27

 

ARTICLE II - GENERAL TERMS..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  27

 

Section 2.1

Loan Commitment; Disbursement to Borrower.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

27

 

Section 2.2

Interest Rate......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

27

 

Section 2.3

Loan Payment....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

28

 

Section 2.4

Prepayments......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

29

 

Section 2.5

[Intentionally Omitted]....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

30

 

Section 2.6

Release of Property..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

30

 

Section 2.7

Lockbox Account/Cash Management...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

32

 

ARTICLE III - CONDITIONS PRECEDENT........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  35

 

Section 3.1

Conditions Precedent to Closing..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

35

 

ARTICLE IV - REPRESENTATIONS AND WARRANTIES............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  35

 

Section 4.1

Borrower Representations.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

35

 

Section 4.2

Survival of Representations...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

45

 

ARTICLE V - BORROWER COVENANTS..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  45

 

Section 5.1

Affirmative Covenants....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

45

 

Section 5.2

Negative Covenants.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

56

 

ARTICLE VI - INSURANCE; CASUALTY; CONDEMNATION....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................   61

 

Section 6.1

Insurance..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

61

 

Section 6.2

Casualty............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

66

 

Section 6.3

Condemnation..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

66

 

Section 6.4

Restoration. .....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

67

 

ARTICLE VII - RESERVE FUNDS........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  70

 

Section 7.1

Required Repairs............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

70

 

Section 7.2

Tax and Insurance Escrow Fund...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

71

 

Section 7.3

Replacements and Replacement Reserve...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

71

 

Section 7.4

............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

77

 

Section 7.5

Excess Cash Flow Reserve Fund..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

77

 

Section 7.6

Reserve Funds, Generally.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

77

 

 

Section 8.1

Event of Default.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

78

 

Section 8.2

Remedies........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

78

 

Section 8.3

Remedies Cumulative; Waivers.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

80

 

ARTICLE IX - SPECIAL PROVISIONS............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 82

 

Section 9.1

Securitization...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

82

 

Section 9.2

[Intentionally Omitted]................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

82

 

Section 9.3

Exculpation...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

84

 

Section 9.4

Matters Concerning Manager..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

86

 

Section 9.5

Servicer........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

86

 

ARTICLE X - MISCELLANEOUS...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................  87

 

Section 10.1

Survival.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

87

 

Section 10.2

Lender’s Discretion....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

87

 

Section 10.3

Governing Law.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

87

 

Section 10.4

Modification, Waiver in Writing..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

89

 

Section 10.5

Delay Not a Waiver.....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

89

 

Section 10.6

Notices..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

89

 

Section 10.7

Trial by Jury................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.8

Headings.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.9

Severability..................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.10

Preferences.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.11

Waiver of Notice.........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.12

Remedies of Borrower...............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

91

 

Section 10.13

Expenses; Indemnity...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

92

 

Section 10.14

Schedules Incorporated.............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

93

 

Section 10.15

Offsets, Counterclaims and Defenses....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

93

 

Section 10.16

No Joint Venture or Partnership; No Third Party Beneficiaries.....................................................................................................................................................................................................................................................................................................................................................................................................................................................

93

 

Section 10.17

Publicity......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

94

 

Section 10.18

Waiver of Marshalling of Assets............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

94

 

Section 10.19

Waiver of Counterclaim............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

94

 

Section 10.20

Conflict; Construction of Documents; Reliance...................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

94

 

Section 10.21

Brokers and Financial Advisors..............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

95

 

 

Section 10.22

Prior Agreements......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

95

 

Section 10.23

Joint and Several Liability........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

95

 

Section 10.24

Certain Additional Rights of Lender (VCOC)......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

95

 

Section 10.25

Contributions and Waivers......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

96

 

Section 10.26

Lender’s Right to Unwind Cross-Collateralization/Cross-Default.................................................................................................................................................................................................................................................................................................................................................................................................................................................

99

 

 

 

THIS LOAN AGREEMENT, dated as of March 1, 2011 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), between JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America, having an address at 383 Madison Avenue, New York, New York 10179 (“Lender”) and THE ENTITIES SET FORTH ON SCHEDULE I ATTACHED HERETO, each having an address at c/o Sun Communities, Inc., 27777 Franklin Road, Suite 200, Southfield, Michigan 48034 (each, an “Individual Borrower” and, collectively, “Borrower”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower desires to obtain the Loan (as hereinafter defined) from Lender; and

 

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined).

 

NOW THEREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Agreement, the parties hereto hereby covenant, agree, represent and warrant as follows:

 

 

Section 1.1 Definitions.  For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly indicates a contrary intent:

 

“Accrual Period” shall mean the period commencing on and including the first (1st) day of each calendar month during the term of the Loan and ending on and including the final calendar date of such calendar month; however, the initial Accrual Period shall commence on and include the Closing Date and shall end on and include the final calendar date of the calendar month in which the Closing Date occurs.

 

“Additional Insolvency Opinion” shall mean any subsequent Insolvency Opinion.

 

“Adjusted Release Amount” shall mean, for each Individual Property, the sum of (a) the Release Amount for such Individual Property and either (b) fifteen percent (15%) of the Release Amount for such Individual Property (excluding the Pheasant Ridge Property and the Siesta Bay Property) released pursuant to Section 2.6.2 hereof or (c) twenty percent (20%) of the Release Amount for the Pheasant Ridge Property and the Siesta Property released pursuant to Section 2.6.2 hereof.

 

“Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person.

 

“Affiliated Manager” shall mean any Manager in which Borrower, Principal, or Guarantor has, directly or indirectly, any legal, beneficial or economic interest.

 

“Agent” shall mean Wells Fargo Bank, N.A., or any successor Eligible Institution acting as Agent under the Cash Management Agreement.

 

“Annual Budget” shall mean the operating budget, including all planned Capital Expenditures, for each Individual Property prepared by Borrower in accordance with Section 5.1.11.(d) hereof for the applicable Fiscal Year or other period.

 

“Approved Annual Budget” shall have the meaning set forth in Section 5.1.11(d) hereof.

 

“Assignment of Management Agreement” shall mean with respect to each Individual Property, that certain Assignment of Management Agreement and Subordination of Management Fees dated as of the Closing Date among Lender, the related Individual Borrower and Manager, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of any Individual Property.

 

“Bankruptcy Action” shall mean with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; provided, however, if such Person does not collude with, or otherwise assist or solicit or cause to be solicited petitioning creditors or any involuntary petition against such Person, then such involuntary petition shall not be considered a Bankruptcy Action if it shall be dismissed within thirty (30) days after filing; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of any Individual Property; or (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code, 11 U.S.C. §101, et seq., as the same may be amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency law.

 

“Bankruptcy Trigger Event” shall mean a Bankruptcy Action shall have occurred with respect to Borrower or Manager.

 

“Borrower” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

 

“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which national banks in New York, New York, or the place of business of the trustee under a Securitization (or, if no Securitization has occurred, Lender), or any Servicer or the financial institution that maintains any collection account for or on behalf of any Servicer or any Reserve Funds or the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business.

 

“Capital Expenditures” shall mean, for any period, the amount expended for items capitalized under GAAP (including expenditures for building improvements or major repairs, leasing commissions and tenant improvements).

 

“Cash Management Account” shall have the meaning set forth in Section 2.7.2 hereof.

 

“Cash Management Agreement” shall mean a Cash Management Agreement dated as of the date hereof, by and among Borrower, Manager, Lender and Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Cash Sweep Event” shall mean the occurrence of: (a) an Event of Default; (b) a Bankruptcy Trigger Event; or (c) a DSCR Trigger Event.

 

“Cash Sweep Event Cure” shall mean (a) if the Cash Sweep Event is caused solely by the occurrence of a DSCR Trigger Event, the achievement of a Debt Service Coverage Ratio of 1.20 to 1.00 or greater for two (2) consecutive calendar quarters based upon the trailing two (2) calendar quarter period immediately preceding the date of determination (a “DSCR Cure Event”), (b) if the Cash Sweep Event is caused by an Event of Default, the acceptance by Lender of a cure of such Event of Default (which cure Lender is not obligated to accept and may reject or accept in its sole and absolute discretion), or (c) if the Cash Sweep Event is caused by a Bankruptcy Action of Manager, if Borrower replaces the Manager with a Qualified Manager under a Replacement Management Agreement or the dismissal of any such Bankruptcy Action without any adverse consequences to the Loan or any Individual Property; provided, however, that, such Cash Sweep Event Cure set forth in this definition shall be subject to the following conditions, (i) no Event of Default shall have occurred and be continuing under this Agreement or any of the other Loan Documents, (ii) a Cash Sweep Event Cure may occur no more than a total of five (5) times in the aggregate during the term of the Loan, and (iii) Borrower shall have paid all of Lender’s reasonable expenses incurred in connection with such Cash Sweep Event Cure including, reasonable attorney’s fees and expenses.  Borrower shall have no right to cure a Cash Sweep Event caused by a Bankruptcy Action of Borrower.

 

“Cash Sweep Period” shall mean each period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier of (a) the Payment Date next occurring following the related Cash Sweep Event Cure, or (b) until payment in full of all principal and interest on the Loan and all other amounts payable under the Loan Documents in accordance with the terms and provisions of the Loan Documents.

 

“Casualty” shall have the meaning set forth in Section 6.2 hereof.

 

“Casualty Consultant” shall have the meaning set forth in Section 6.4(b)(iii) hereof.

 

“Casualty Retainage” shall have the meaning set forth in Section 6.4(b)(iv) hereof.

 

“Closing Date” shall mean the date of the funding of the Loan.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

 

“Condemnation” shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of any Individual Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting such Individual Property or any part thereof.

 

“Condemnation Proceeds” shall have the meaning set forth in Section 6.4(b).

 

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a Person, whether through ownership of voting securities, by contract or otherwise.  “Controlled” and “Controlling” shall have correlative meanings.

 

“Debt” shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums (including any Yield Maintenance Premium and any Yield Maintenance Default Premium) due to Lender in respect of the Loan under the Note, this Agreement, each Mortgage or any other Loan Document.

 

“Debt Service” shall mean, with respect to any particular period of time, the scheduled principal and interest payments due under this Agreement and the Note.

 

“Debt Service Coverage Ratio” shall mean a ratio for the applicable period in which:

 

 

(b) the denominator is the aggregate amount of Debt Service for such period.

 

“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

 

“Default Rate” shall mean, with respect to the Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above the Interest Rate.

 

“Disclosure Documents” shall have the meaning set forth in Section 9.1.1(b) hereof.

 

“DSCR Trigger Event” shall mean, that as of the date of determination, the Debt Service Coverage Ratio based on the trailing three (3) month period immediately preceding the date of such determination is less than 1.15 to 1.00.

 

“Eligible Account” shall mean a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000.00 and subject to supervision or examination by federal and state authority.  An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

 

“Eligible Institution” shall mean JPMorgan Chase Bank, National Association or a depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by Moody’s).

 

“Embargoed Person” shall mean any person, entity or government subject to trade restrictions under U.S. law, including, but not limited to, The USA PATRIOT Act (including the anti-terrorism provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder including those related to Specially Designated Nationals and Specially Designated Global Terrorists, with the result that the investment in Borrower, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan made by the Lender is in violation of law.

 

“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Environmental Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances, relating to liability for or costs of Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs of other actual or threatened danger to human health or the environment.

 

Environmental Law includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues:  the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act.  Environmental Law also includes, but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law:  conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the Property; requiring notification or disclosure of Releases of Hazardous Substances or other environmental condition of the Property to any governmental authority or other Person, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity related to Hazardous Substances; relating to nuisance, trespass or other causes of action related to Hazardous Substances and the Property; or relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or use of the Property involving Hazardous Substances.

 

“Environmental Liens” shall have the meaning set forth in Section 5.1.19 hereof.

 

“Environmental Report” shall have the meaning set forth in Section 4.1.37 hereof.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

 

“Event of Default” shall have the meaning set forth in Section 8.1(a) hereof.

 

“Excess Cash Flow” shall have the meaning set forth in the Cash Management Agreement.

 

“Excess Cash Flow Reserve Account” shall have the meaning set forth in Section 7.5 hereof.

 

“Excess Cash Flow Reserve Fund” shall have the meaning set forth in Section 7.5 hereof.

 

“Extraordinary Expense” shall have the meaning set forth in Section 5.1.11(e) hereof.

 

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.

 

“Fitch” shall mean Fitch, Inc.

 

“GAAP” shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial report.

 

“GL Deductible Difference” shall have the meaning set forth in Section 6.1(g) hereof.

 

“Governmental Authority” shall mean any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (foreign, federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

 

“Gross Income from Operations” shall mean, during any period, all sustainable income as reported on the financial statements delivered by Borrower in accordance with this Agreement, computed in accordance with GAAP, derived from the ownership and operation of the Properties from whatever source during such period, including, but not limited to, (i) Rents from Tenants that are in occupancy and paying rent without right of offset or credit, (ii) utility charges, (iii) escalations, (iv) forfeited security deposits used to pay the rent following the expiration or termination of a Lease, (v) interest on credit accounts, (vi) service fees or charges, (vii) license fees, (viii) parking fees, (ix) rent concessions or credits, (x) income from vending machines, (xi) business interruption or other loss of income or rental insurance proceeds, (xii) other required pass-throughs and (xii) interest on Reserve Accounts, if any, but excluding (i) Rents from Tenants during a free-rent period, or Tenants that are included in any Bankruptcy Action, (ii) sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (iii) refunds and uncollectible accounts, (iv) sales of furniture, fixtures and equipment, (v) Insurance Proceeds (other than business interruption or other loss of income or rental insurance), (vi) Awards, (vii) unforfeited security deposits and forfeited security deposits to the extent not used to pay the rent following the expiration or termination of a Lease, (viii) utility and other similar deposits and (ix) any disbursements to any Individual Borrower from the Reserve Funds, if any.  Gross income shall not be diminished as a result of the Mortgages or the creation of any intervening estate or interest in the Properties or any part thereof.

 

“Guarantor” shall mean Sun Communities Operating Limited Partnership, a Michigan limited partnership.

 

“Guaranty” shall mean that certain Guaranty Agreement, dated as of the date hereof, executed and delivered by Guarantor in connection with the Loan to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Hard Lockbox Event” shall mean the occurrence of any of the following events:  (i) if any Individual Property is not managed by Manager or a Qualified Manager; or (ii) if there shall be an assumption of the Loan pursuant to Section 5.2.10(e) hereof.

 

“Hazardous Substances” include but are not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment, including but not limited to petroleum and

 

petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter and airborne pathogens (naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and customarily used or stored in similar properties for the purpose of cleaning or other maintenance or operations and otherwise in compliance with all Environmental Laws.

 

“Improvements” shall have the meaning set forth in the granting clause of the related Mortgage with respect to each Individual Property; provided, however, Improvements shall not include manufactured homes, mobile homes or recreational vehicles not owned by Borrower.

 

“Indebtedness” of a Person, at a particular date, shall mean the sum (without duplication) at such date of (a) all indebtedness or liability of such Person (including, without limitation, amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b) obligations evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities; (f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure a creditor against loss; and (g) obligations secured by any Liens, whether or not the obligations have been assumed (other than the Permitted Encumbrances).

 

“Indemnified Liabilities” shall have the meaning set forth in Section 10.13(b) hereof.

 

“Indemnified Parties” shall mean Lender and, its designee, (whether or not it is the Lender), any Affiliate of Lender that has filed any registration statement relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other co underwriters, co placement agents or co initial purchasers of Securities issued in the Securitization, and each of their respective officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who Controls any such Person within the meaning of Section 15 of the Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of 1934 as amended, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created by the Mortgage is or will have been recorded, any Person who may hold or acquire or will have held a full or partial interest in the Loan secured hereby (including, but not limited to, investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including, but not limited to, any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including, but not limited to any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business).

 

“Independent Director” shall mean a natural Person who (a) is not at the time of initial appointment, or at any time while serving in such capacity, and is not, and has never been, and will not while serving as Independent Director be: (i) a stockholder, director (with the exception of serving as the Independent Director of Borrower), officer, employee, partner, member (other than a “special member” or “springing member”), manager, attorney or counsel of Borrower, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor, other than a holder of interests in a nationally recognized “mutual fund”, or other nationally recognized professionally managed fund of stocks, bonds, options, commodities, money market securities or other investments that pools the assets of individuals and/or organizations and is registered (if required) with the Securities and Exchange Commission, which may hold shares of Manager, a publicly traded real estate investment trust; (ii) a customer, supplier or other person who derives any of its purchases or revenues from its activities with Borrower or Guarantor, equity owners of Borrower or Guarantor or any Affiliate of Borrower or Guarantor; (iii) a Person Controlling or under common Control with any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person; or (iv) a member of the immediate family of any such stockholder, director, officer, employee, partner, member, manager, attorney, counsel, equity owner, customer, supplier or other Person and (b) has (i) prior experience as an independent director or independent manager for a corporation, a trust or limited liability company whose charter documents required the unanimous consent of all independent directors or independent managers thereof before such corporation, trust or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more nationally-recognized companies that provides, inter alia, professional independent directors or independent managers in the ordinary course of their respective business to issuers of securitization or structured finance instruments, agreements or securities or lenders originating commercial real estate loans for inclusion in securitization or structured finance instruments, agreements or securities (a “Professional Independent Director”) and is at all times during his or her service as an Independent Director of Borrower an employee of such a company or companies.  A natural Person who satisfies the foregoing definition except for being (or having been) the independent director or independent manager of a “special purpose entity” affiliated with Borrower (provided such affiliate does not or did not own a direct or indirect equity interest in an Borrower) shall not be disqualified from serving as an Independent Director, provided that such natural Person satisfies all other criteria set forth above and that the fees such individual earns from serving as independent director or independent manager of affiliates of Borrower or in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year.  A natural Person who satisfies the foregoing definition other than subparagraph (a)(ii) shall not be disqualified from serving as an Independent Director of Borrower if such individual is a Professional Independent Director and such individual complies with the requirements of the previous sentence.

 

“Insolvency Opinion” shall mean that certain non-consolidation opinion letter dated the date hereof delivered by Jaffe Raitt Heuer & Weiss, P.C. in connection with the Loan.

 

“Individual Borrower” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

 

“Individual Property” shall mean each parcel of real property, the Improvements thereon and all personal property owned by an Individual Borrower and encumbered by a Mortgage, together with all rights pertaining to such property and Improvements, as more particularly described in the granting clauses of the related Mortgage and referred to therein as the “Property”.

 

“Individual Property Release Yield Maintenance Premium” shall mean an amount equal to the greater of (a) one percent (1%) of the Adjusted Release Amount for the Individual Property and (b) the excess, if any, of (i) the sum of the present values of all then-scheduled payments of principal and interest under the Loan with respect to a principal amount equal to the Adjusted Release Amount for the Individual Property, assuming that all scheduled payments are made timely and that the remaining outstanding principal and interest on the Loan with respect to a principal amount equal to the Adjusted Release Amount for the Individual Property is paid on the Permitted Par Prepayment Date (with each such payment and assumed payment discounted to its present value at the date of prepayment at the rate which, when compounded monthly, is equivalent to the Prepayment Rate when compounded semi-annually and deducting from the sum of such present values any short-term interest paid from the date of prepayment to the next succeeding Payment Date in the event that such payment is not made on a Payment Date), over (ii) the principal amount equal to the Adjusted Release Amount for the Individual Property.

 

“Insurance Premiums” shall have the meaning set forth in Section 6.1(b) hereof.

 

“Insurance Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

 

“Interest Rate” shall mean a rate of five and 837/1000 percent (5.837%) per annum.

 

“Lease” shall mean any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in or at the Property by or on behalf of Borrower, and (a) every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and (b) every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto; provided, however, “Lease” shall not include any lease or sublease to a Person of a manufactured home, mobile home or recreational vehicle not owned by Borrower.

 

“Legal Requirements” shall mean, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting any Individual Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to an Individual Borrower, at any time in force affecting an Individual Borrower, the Individual Property or any part thereof, including, without

 

 

“Lender” shall have the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

 

“Letter of Credit” shall have the meaning set forth in Section 7.3.6 hereof.

 

“Lien” shall mean, with respect to each Individual Property, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting any Individual Borrower or any Individual Property, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

 

“Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement.

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, each Mortgage, the Environmental Indemnity, the Assignment of Management Agreement, the Guaranty, the Lockbox Agreement, the Cash Management Agreement, and all other documents executed and/or delivered in connection with the Loan.

 

“Loan to Value Ratio” shall mean, as of the date of its calculation, the ratio of (i) the sum of the outstanding principal amount of the Loan as of the date of such calculation to (ii) the fair market value of the Properties, as determined, in Lender’s sole discretion, by any commercially reasonable method permitted to a REMIC Trust.

 

“Lockbox Account” shall have the meaning set forth in Section 2.7.1 hereof.

 

“Lockbox Agreement” shall mean that certain Deposit Account Control Agreement dated the date hereof among Borrower, Lender, Manager and Lockbox Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to funds deposited in the Lockbox Account.

 

“Lockbox Bank” shall mean the clearing bank which establishes, maintains and holds the Lockbox Account, which shall be an Eligible Institution.

 

“Management Agreement” shall mean, collectively, each Community Operations Agreement entered into by and between each Individual Borrower and Manager, pursuant to which Manager is to provide management and other services with respect to the Individual Property, or, if the context requires, a Qualified Manager who is managing the Individual Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.

 

“Manager” shall mean Sun or, if the context requires, a Qualified Manager who is managing any Individual Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.

 

“Material Action” means, with respect to any Person, to file any insolvency or reorganization case or proceeding, to institute proceedings to have such Person be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against such Person, to file a petition seeking, or consent to, reorganization or relief with respect to such Person under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Person or a substantial part of its property, to make any assignment for the benefit of creditors of such Person, to admit in writing such Person’s inability to pay its debts generally as they become due, or to take action in furtherance of any of the foregoing.

 

“Maturity Date” shall mean March 1, 2021, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

 

“Maximum Legal Rate” shall mean the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

 

“Monthly Debt Service Payment Amount” shall mean a constant monthly payment of $677,478.04.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgage” or “Mortgages” shall mean with respect to each Individual Property, that certain first priority Deed of Trust, Assignment of Leases and Rents and Security Agreement and/or Mortgage, Assignment of Leases and Rents and Security Agreement, dated as of the Closing Date, executed and delivered by the related Individual Borrower to (or for the benefit of) Lender, as security for the Loan and encumbering the related Individual Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Net Operating Income” shall mean the amount obtained by subtracting Operating Expenses from Gross Income from Operations.

 

“Net Proceeds” shall have the meaning set forth in Section 6.4(b) hereof.

 

“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.4(b)(vi) hereof.

 

“Notice of Non-Extension” shall have the meaning set forth in Section 7.3.6 hereof.

 

“Note” shall mean that certain Promissory Note, dated the date hereof, in the principal amount of $115,000,000.00, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“O&M Program” shall have the meaning set forth in Section 5.1.19 hereof.

 

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by an authorized officer of Borrower or the general partner, managing member or sole member of Borrower, as applicable.

 

“Operating Expenses” shall mean the total of all expenditures, computed in accordance with GAAP, of whatever kind relating to the operation, maintenance and management of the Properties that are incurred on a regular monthly or other periodic basis, including without limitation, bad debt, utilities, ordinary repairs and maintenance, insurance, license fees, property taxes and assessments, advertising expenses, management fees, payroll and related taxes, computer processing charges, operational equipment or other lease payments as approved by Lender, and other similar costs, but excluding non-cash items (e.g., depreciation and amortization), Debt Service, Capital Expenditures and contributions to the Reserve Funds.

 

“Other Charges” shall mean all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including, without limitation, vault charges and license fees for the use of vaults, chutes and similar areas adjoining any Individual Property, now or hereafter levied or assessed or imposed against such Individual Property or any part thereof.

 

“Other Obligations” shall have the meaning as set forth in the Mortgage.

 

“Payment Date” shall mean the first (1st) day of each calendar month during the term of the Loan.

 

“Permitted Encumbrances” shall mean, with respect to an Individual Property, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in each Title Insurance Policy relating to such Individual Property or any part thereof, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent, and (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion, which Permitted Encumbrances in the aggregate do not materially adversely affect the value or use of the applicable Individual Property or Borrower’s ability to repay the Loan.

 

“Permitted Investments” shall mean any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including those issued by Servicer, the trustee under any Securitization or any of their respective Affiliates, payable on demand or having a maturity date not later than the Business Day immediately prior to the first Payment Date following the date of acquiring such investment and meeting one of the appropriate standards set forth below:

 

 

(ii) Federal Housing Administration debentures;

 

 

 

 

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 assigned to the Securities); provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

 

 

 

 

(ix) any other security, obligation or investment which has been approved as a Permitted Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced

        by a written confirmation that the designation of such security, obligation or investment as a Permitted Investment will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities by such Rating Agency;

 

provided, however, that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive only interest payments or (B) the right to receive principal and interest payments on such obligation or security are derived from an underlying investment that provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment.

 

“Permitted Par Prepayment Date” shall mean the Payment Date which is three (3) months prior to the Maturity Date.

 

“Permitted Prepayment Date” shall mean the second (2nd) anniversary of the first Payment Date.

 

“Permitted Transfer” shall mean any of the following:

 

(a)           any Transfer, directly as a result of the death of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto;

 

(b)           any Transfer, directly as a result of the legal incapacity of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled thereto;

 

(c)           any Transfer, issuance or redemption of shares of stock of Sun by any Person (including a Restricted Party), or any Transfer, issuance or redemption by any Person (including a Restricted Party) of the stock, membership interests, partnership interests or other ownership interests of any shareholder, partner, member, manager or trust who is a direct or indirect legal or beneficial owner of any shares of stock of Sun; or

 

(d)           any Transfer, issuance or redemption of the limited partnership interests of Guarantor by any Person (including a Restricted Party) or any Transfer, issuance or redemption of the stock, membership interests, partnership interests or other ownership interests of any shareholder, partner, member, manager or trust who is a direct or indirect legal or beneficial owner of a limited partnership interest in Guarantor.

 

“Person” shall mean any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

 

“Personal Property” shall have the meaning set forth in the granting clause of the Mortgage with respect to each Individual Property.

 

 

“Policies” shall have the meaning specified in Section 6.1(b) hereof.

 

“Policy” shall have the meaning specified in Section 6.1(b) hereof.

 

“Prepayment Rate” shall mean the bond equivalent yield (in the secondary market) on the United States Treasury Security that as of the Prepayment Rate Determination Date has a remaining term to maturity closest to, but not exceeding, the remaining term to the Permitted Par Prepayment Date as most recently published in “Statistical Release H.15 (519), Selected Interest Rates,” or any successor publication, published by the Board of Governors of the Federal Reserve System, or on the basis of such other publication or statistical guide as Lender may reasonably select.

 

“Prepayment Rate Determination Date” shall mean the date which is five (5) Business Days prior to the date that such prepayment shall be applied in accordance with the terms and provisions of Section 2.4.1 hereof.

 

“Principal” shall mean the Special Purpose Entity that is the general partner of an Individual Borrower, if such Individual  Borrower is a limited partnership, or managing member of an Individual Borrower, if such Individual Borrower is a limited liability company.

 

“Property” or “Properties” shall mean, collectively, each and every Individual Property which is subject to the terms of this Agreement.

 

“Provided Information” shall mean any and all financial and other information provided at any time prepared by, or on behalf of, Borrower, Principal, Guarantor and/or Manager.

 

“Qualified Manager” shall mean either (a) Manager; (b) Guarantor or (c) in the reasonable judgment of Lender, a reputable and experienced management organization (which may be an Affiliate of Borrower) possessing experience in managing properties similar in size, scope, use and value as the applicable Individual Property, provided, that, if required by Lender, Borrower shall have obtained (i) prior written confirmation from the applicable Rating Agencies that management of such Individual Property by such entity will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities or any class thereof and (ii) if such entity is an Affiliate of Borrower, an Additional Insolvency Opinion.

 

“Rating Agencies” shall mean each of S&P, Moody’s, Fitch, and Realpoint or any other nationally recognized statistical rating agency which has been approved by Lender and designated by Lender to assign a rating to the Securities.

 

“Realpoint” shall mean Realpoint, LLC, a Pennsylvania limited liability company.

 

“Related Entities” shall have the meaning set forth in Section 5.2.10(e) hereof.

 

 

“Release Amount” shall mean for an Individual Property the amount set forth on Schedule III hereto.

 

“Release Debt Service Coverage Ratio” shall mean the product of 1.44 multiplied by a fraction of which (a) the numerator is the sum of the Release Amounts of all Properties subject to the Liens of the Mortgages (including the Individual Property to be released), and (b) the denominator is the sum of the then-current outstanding principal amount of the Loan.

 

“Remediation” includes but is not limited to any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance, any actions to prevent, cure or mitigate any Release of any Hazardous Substance, any action to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances.

 

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note or a portion thereof.

 

“Rents” shall mean, with respect to each Individual Property, all rents (including percentage rents), rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, all other amounts payable to Borrower as rent under any Lease or other agreement relating to the Property, including, without limitation, charges for electricity, oil, gas, water, steam, heat, ventilation, air-conditioning and any other energy, telecommunication, telephone, utility or similar items or time use charges, HVAC equipment charges, sprinkler charges, escalation charges, license fees, maintenance fees, charges for Taxes, operating expenses or other reimbursables payable to any Individual Borrower (or to the Manager for the account of such Individual Borrower) under any Lease, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower from any and all sources arising from or attributable to the Individual Property; provided, however, “Rents” shall not include rents from any lease or sublease of a manufactured home, mobile home or recreational vehicle not owned by Borrower.

 

“Replacement Management Agreement” shall mean, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same form and substance as the Management Agreement, or (ii) a management agreement with a Qualified Manager, which management agreement shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), Lender, at its option, may require that Borrower shall have obtained prior written confirmation from the applicable Rating Agencies that such

 

 

“Replacement Reserve Account” shall have the meaning set forth in Section 7.3.1 hereof.

 

“Replacement Reserve Fund” shall have the meaning set forth in Section 7.3.1 hereof.

 

“Replacement Reserve Monthly Deposit” shall have the meaning set forth in Section 7.3.1 hereof.

 

“Replacements” shall have the meaning set forth in Section 7.3.1 hereof.

 

“Required Repairs” shall have the meaning set forth in Section 7.1.1 hereof.

 

“Reserve Funds” shall mean, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Excess Cash Flow Reserve Fund and any other escrow fund established by the Loan Documents.

 

“Restoration” shall mean the repair and restoration of an Individual Property after a Casualty or Condemnation as nearly as possible to the condition the Individual Property was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.

 

“Restricted Party” shall mean collectively, (a) Borrower, Principal, any Guarantor, and any Affiliated Manager and (b) any shareholder, partner, member, non-member manager, any direct or indirect legal or beneficial owner of, Borrower, Principal, any Guarantor, any Affiliated Manager or any non-member manager.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

 

“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial interest, whether direct or indirect.

 

“Securities” shall have the meaning set forth in Section 9.1 hereof.

 

“Securitization” shall have the meaning set forth in Section 9.1 hereof.

 

“Servicer” shall have the meaning set forth in Section 9.5 hereof.

 

“Severed Loan Documents” shall have the meaning set forth in Section 8.2(c) hereof.

 

 

 

“Special Purpose Entity” shall mean a corporation, limited partnership or limited liability company that, since the date of its formation and at all times on and after the date thereof, has complied with and shall at all times comply with the following requirements unless it has received either prior consent to do otherwise from Lender or a permitted administrative agent thereof, or, while the Loan is securitized, confirmation from each of the applicable Rating Agencies that such noncompliance would not result in the requalification, withdrawal, or downgrade of the ratings of any Securities or any class thereof:

 

 

 

(iii) has not owned and shall not own any real property other than, in the case of any Individual Borrower, the Individual Property;

 

 

 

 

 

 

 

 

 

 

  

(xiii) has not failed and shall not fail to correct any known misunderstanding regarding the separate identity of such entity and has not identified and shall not identify itself as a division of any other Person;

 

 

(xv) has maintained and shall maintain its own records, books, resolutions and agreements;

 

 

(xvii) has held and shall hold its assets in its own name;

 

 

 

(xxi) has observed and shall observe all partnership, corporate or limited liability company formalities, as applicable;

 

 

 

 

(xxvii) has maintained and used and shall maintain and use separate stationery, invoices and checks bearing its name and not bearing the name of any other entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;

 

(xxviii) has not pledged and shall not pledge its assets to or for the benefit of any other Person other than with respect to loans secured by the Property and no such pledge remains outstanding except to Lender to secure the Loan;

 

(xxix) has held itself out and identified itself and shall hold itself out and identify itself as a separate and distinct entity under its own name or in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of any other Person;

 

(xxx) has maintained and shall maintain its assets in such a manner that it shall not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

 

(xxxi) has not made and shall not make loans to any Person and has not held and shall not hold evidence of indebtedness issued by any other Person or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common ownership with such entity);

 

(xxxii) has not identified and shall not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and has not identified itself and shall not identify itself as a division of any other Person;

 

(xxxiii) other than the Management Agreement and capital contributions and distributions permitted under the terms of its organizational documents, has not entered into or been a party to, and shall not enter into or be a party to, any transaction with any of its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which are commercially reasonable terms comparable to those of an arm’s-length transaction with an unrelated third party;

 

 

(xxxvii) has not formed, acquired or held and shall not form, acquire or hold any subsidiary, except that a Principal may acquire and hold its interest in Borrower;

 

(xxxviii) has complied and shall comply with all of the terms and provisions contained in its organizational documents.

 

(xxxvix) has conducted and shall conduct its business so that each of the assumptions made about it and each of the facts stated about it in the Insolvency Opinion are true;

 

(xl) except for Manager, has not permitted and shall not permit any Affiliate or constituent party independent access to its bank accounts; and

 

(xli) is, has always been and shall continue to be duly formed, validly existing, and in good standing in the state of its incorporation or formation and in all other jurisdictions where it is qualified to do business.

 

“State” shall mean, with respect to an Individual Property, the State or Commonwealth in which such Individual Property or any part thereof is located.

 

“Sun” shall mean Sun Communities, Inc., a Maryland corporation.

 

“Survey” shall mean a survey of the Individual Property prepared by a surveyor licensed in the State and satisfactory to Lender and the company or companies issuing the Title Insurance Policy, and containing a certification of such surveyor satisfactory to Lender.

 

“Tax and Insurance Escrow Fund” shall have the meaning set forth in Section 7.2 hereof.

 

“Taxes” shall mean all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against any Individual Property or part thereof.

 

“Tenant” means the lessee of all or a portion of an Individual Property under a Lease.

 

“Tenant Direction Letters” shall have the meaning set forth in the Cash Management Agreement.

 

“Threshold Amount” shall have the meaning set forth in Section 5.1.21 hereof.

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.

 

 

SUN SIESTA BAY LLC, a Michigan limited liability company

By:

SUN QRS POOL 13, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN PHEASANT RIDGE LIMITED PARTNERSHIP, a Michigan limited partnership

By:

SUN QRS POOL 2, INC., a Michigan corporation, its General Partner

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN/YORK L.L.C., a Michigan limited liability company

By:

SUN QRS POOL 2, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN RICHMOND LLC, a Michigan limited liability company

By:

SUN QRS POOL 2, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN GROVES LLC, a Michigan limited liability company

By:

SUN QRS POOL 2, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN LAKE JULIANA LLC, a Michigan limited liability company

By:

SUN QRS POOL 4, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN LAKE SAN MARINO LLC, a Michigan limited liability company

By:

SUN QRS POOL 4, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

    SUN CANDLELIGHT VILLAGE LLC, a Michigan limited liability company

By:

SUN QRS POOL 13, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

 

SUN SOUTHFORK LLC, a Michigan limited liability company

By:

SUN QRS POOL 4, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN FOUR SEASONS LLC, a Michigan limited liability company

By:

SUN QRS POOL 4, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

SUN LAFAYETTE PLACE LLC, a Michigan limited liability company

By:

SUN QRS POOL 4, INC., a Michigan corporation, its Manager

By:              /s/ Jonathan M. Colman                                                      

Name:  Jonathan M. Colman

Title:  Executive Vice President

    JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America

 

           By:           /s/ Steven Hantz                                           

           Name:  Steven Hantz

          Title:   Executive Director

 

 

 

SCHEDULE I

 

BORROWER

 

 

 

 

 

SCHEDULE II

 

 

REQUIRED REPAIRS - DEADLINES FOR COMPLETION

 

 

 

 

 

 

SCHEDULE III

 

RELEASE AMOUNTS

 

			Individual Property		Release Amount
	1.		Creekwood Meadows 4231 East Bristol Road (a/k/a 3440 Creekside Boulevard) Burton, Michigan		$	3,600,000.00
	2.		Groves Resort 16175 John Morris Road Ft. Myers, Florida		$	7,040,000.00
	3.		Pheasant Ridge 209 Longwood Court, West Lancaster, Pennsylvania		$	24,010,000.00
	4.		Richmond Place 36401 Division Road Richmond, Michigan		$	1,740,000.00
	5.		Four Seasons 1350 C.R. 3 Elkhart, Indiana		$	4,592,000.00
	6.		Lafayette Place 21155 Warner Avenue Warren, Michigan		$	2,385,000.00
	7.		Lake Juliana 166 Juliana Boulevard Auburndale, Florida		$	9,145,000.00
	8.		Lake San Marino 1000 Wiggins Pass Road Naples, Florida		$	10,800,000.00
	9.		South Fork 1301 North Scott Avenue Belton, Missouri		$	7,945,000.00
	10.		Candlelight Village 4 Candlelight Drive Sauk Village, Illinois		$	8,323,000.00
	11.		Siesta Bay 19333 Summerline Road Ft. Myers, Florida		$	35,420,000.00

SCHEDULE IV

ORGANIZATIONAL CHART

 

 

SCHEDULE V

RENT ROLLS

EXHIBIT A

ASBESTOS OPERATIONS AND MAINTENANCE PLAN

SCHEDULE 4.1.20

INSURANCE CLAIMS

NONE