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EXHIBIT 10.1
PARTICIPANTS SUPPORT AGREEMENT
THIS PARTICIPANTS SUPPORT AGREEMENT (this "Agreement") is made and entered
into on the 30th day of September, 1997, but is effective as of July 1, 1997
(the "Effective Date") by and between SUN COMMUNITIES, INC., a Maryland
corporation ("Sun"), and ▇▇▇▇▇▇▇ FINANCIAL SERVICES CORPORATION, a Michigan
corporation (the "Company").
A. The Company currently is in the business of financing purchases of new
and previously owned manufactured homes and refinancing of loans secured by
manufactured homes. The Company makes conventional loans under installment
loan agreements secured by manufactured homes ("Contracts"). Sun owns and/or
operates manufactured home communities in the Midwest and Southeast United
States (the "Sun Communities").
B. The Company desires to provide financing for residents and potential
residents of Sun Communities (the "Borrowers"), and Sun desires to make the
Company's financing available on a preferred basis to Borrowers at Sun
Communities and to provide other support in accordance with the terms and
subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
below, the adequacy and receipt of which are hereby acknowledged, the parties
agree as follows:
1. LOAN ORIGINATION/APPLICATION. Sun shall market the Company as a
preferred financing source to Borrowers by displaying the Company's name, signs
and logos at Sun Communities; supplying Borrowers with loan applications from
the Company; responding to queries regarding loan applications by directing
such queries to the Company as a preferred source; reviewing applications for
loans from the Company; assisting in the processing of applications by the
Company; closing loans made by the Company; and assisting in following up on
post-closing loan issues and documentation (collectively, the "Contract
Origination Services"). Sun shall be entitled to receive a customary closing
fee from Borrowers for each of the Company's Contracts closed by Sun.
2. LOAN SUPPORT SERVICES. Upon the Company's request and as permitted by
law, Sun shall provide, or cause to be provided, the following services
(collectively, the "Contract Support Services") to the Company with respect to
the Contracts secured by manufactured homes located in Sun Communities: (a)
provide the Company with information concerning the location and condition of
manufactured homes securing Contracts; (b) maintain, store and refurbish
repossessed manufactured homes; and (c) sell or rent repossessed manufactured
homes.
3. COMPENSATION. In consideration for the services to be provided by Sun
under this Agreement, Sun shall receive an annual fee of 0.43% of the average
loan balance under Contracts originated by Sun. The annual fee shall be paid
on or before January 31 of each year during the term hereof in respect of the
period ended on the preceding December 31. Sun will be eligible to receive up
to 330,000 options to purchase shares of the Company's common stock (the
"Participants Options"), provided Sun satisfies certain requirements described
below. Sun will be entitled to receive customary site rents and brokerage fees
in connection with the resale of foreclosed homes.
4. PARTICIPANTS OPTIONS. The Company has granted 330,000 Participants
Options to purchase common stock in the Company ("Common Stock") to Sun in
consideration of this Agreement. The Participants Options will vest if, and
only if, Sun is a party to and in compliance with the terms of this Agreement
on the vesting date and on December 31st of the previous year.
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The Participants Options generally shall contain the following terms and shall
be in the form attached as Exhibit A:
a) The Participants Options will vest in eight equal
annual amounts, each consisting of 41,250 Participants
Options, on January 31 in 2001 through 2008, and may be
exercised at any time after vesting until expiration ten years
after the date of vesting;
b) Each Participants Option vesting on January 31, 2001, 2002 and
2003 will entitle the holder to purchase one share of Common
Stock for a purchase price of $10;
c) Each Participants Option vesting on January 31, 2004, 2005 and
2006 will entitle the holder to Purchase one share of Common
Stock for a purchase price of $12;
d) Each Participants Option vesting on January 31, 2007 and 2008
will entitle the holder to purchase one share of Common Stock
for a purchase price of $14; and
e) The Participants Options will have anti-dilution provisions
which will adjust the number and purchase price of shares of
Common Stock subject to purchase upon exercise of a
Participants Option in the event of certain types of
recapitalization or reclassification transactions of the
Common Stock.
5. THE TERM. The initial term of this Agreement shall be three (3)
years from the date hereof, and shall be automatically extended for successive
one year periods thereafter unless either party gives written notice to the
other party not less than sixty (60) days prior to the end of any such initial
or subsequent term of its intention to terminate the Agreement as of the last
day of such initial or subsequent term, or unless terminated earlier by either
party in accordance with Section 6.
6. EARLY TERMINATION. In the event that the Company fails to make
timely payment of all fees and other payments due to Sun hereunder and such
failure to make payment is not cured within twenty-five (25) business days
after the date such payment is due, Sun may terminate this Agreement by giving
the Company notice of termination which termination by Sun shall become
effective ten (10) days from the date of such notice. In the event that Sun
fails to observe and perform in any material respect any of its duties and
obligations under this Agreement which failure has material effect on the
Company's business and continues unremedied for a period of thirty (30) days
after the date on which notice of such failure shall have been given by the
Company to Sun, the Company may terminate this Agreement by giving Sun notice
of termination which termination by the Company shall become effective ten (10)
days from the date of such notice. Notwithstanding any of the foregoing to the
contrary, Sun shall have the right to terminate this Agreement, after
expiration of the initial term hereof, upon thirty days' written notice to the
Company upon the undertaking and completion by Sun, or its successor, whether
in one transaction or a series of transactions, of (a) the sale, lease,
transfer or other disposition of all or substantially all of Sun's assets, or
(b) other significant financing or refinancing, reorganization,
recapitalization, merger, share exchange or any other significant business
combination permitted under applicable law.
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7. ENTIRE AGREEMENT. This Agreement sets forth all of the covenants,
agreements, stipulations, promises, conditions and understandings between Sun
and the Company concerning the Contract Origination Services and the Contract
Support Services and the terms hereof, and there are no covenants, agreements,
stipulations, promises, conditions or understanding, either oral or written,
between them other than set forth herein.
8. CHOICE OF LAW. This Agreement is being entered into and executed in
the State of Michigan, and all questions with respect to the construction of
this Agreement and the rights and liabilities of the parties shall be
determined in accordance with the provisions of the laws of the State of
Michigan, without regard to principles of conflicts of laws.
9. GENERAL PROVISIONS.
a) This Agreement shall bind and inure to the benefit of the
respective successors and assigns of the parties; provided,
however, that neither party may assign this Agreement or any
rights hereunder without the prior written consent of the
other and any prohibited assignment shall be absolutely void.
b) Section headings and numbers have been set forth herein for
convenience only.
c) Each provision of this Agreement shall be severable from every
other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
d) This Agreement can be changed or amended only in writing
signed by the parties hereto.
e) Nothing contained in this Agreement shall be construed to be
or create a partnership or joint venture between the parties
hereto, their respective successors or assigns.
10. NOTICES. All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage prepaid and, if mailed, shall be deemed to be received for
purposes of this Agreement five (5) business days after mailing by the sender.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 11, notice, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at the following addresses:
If to Sun: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Jaffe, Raitt, Heuer & ▇▇▇▇▇,
Professional Corporation
Suite 2400
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▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a Copy to: ▇▇▇▇▇ Sugar
Jaffe, Raitt, Heuer & ▇▇▇▇▇,
Professional Corporation
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date and year first above written.
SUN COMMUNITIES, INC., a Maryland
corporation
By: ____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇▇▇▇ FINANCIAL SERVICES
CORPORATION, a Michigan corporation
By:______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
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