EXHIBIT 10.61
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT ("Agreement") is entered into as of
February 28, 2002, by and between SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
("Lender"), and WOODWARD HOLDING, LLC ("Participant").
RECITALS
A. Lender has provided to Origen Financial, Inc. ("Origen Inc.") and
Origen Financial, L.L.C. ("Origen LLC" and together with Origen Inc., the
"Borrowers") a line of credit facility in the amount of $17,500,000 (the "Line
of Credit") pursuant to the terms and conditions of a certain Amended and
Restated Subordinated Loan Agreement dated February 1, 2002, (the "Loan
Agreement"). All capitalized terms not otherwise defined in this Agreement shall
have the meanings ascribed to such terms in the Loan Agreement.
B. Advances under the Line of Credit are evidenced by a Second Amended
Promissory Note dated as of February 1, 2002 (the, "Line of Credit Note")
executed and delivered by the Borrowers. The payment and performance of the Line
of Credit Note is secured by substantially all assets of the Borrowers (the,
"Collateral") as described in and evidenced by (i) a certain Amended and
Restated Security Agreement between Origen Inc. and Lender dated February 1,
2002, (ii) a certain Security Agreement between Origen LLC and Lender dated
February 1, 2002, (iii) a certain Amended and Restated Limited Liability Company
Interest Security and Pledge Agreement between Origen Inc. and Lender dated
February 1, 2002, (iv) a certain Limited Liability Company Interest Security and
Pledge Agreement between Origen LLC and Lender dated February 1, 2002, and (v) a
certain Amended and Restated Stock Pledge Agreement between Origen LLC and
Lender dated February 1, 2002 (collectively, the "Collateral Documents"). The
payment and performance of the Line of Credit Note is guaranteed by Bingham
Financial Services Corporation as evidenced by an Amended and Restated Guaranty
dated February 1, 2002 ("Guaranty"). The Loan Agreement, Line of Credit Note,
Collateral Documents and Guaranty together with all other documents, agreements
and instruments executed in connection therewith, are collectively referred to
as the "Line of Credit Loan Documents."
C. Lender has agreed to sell and Participant has agreed to purchase a
participation in the Line of Credit on the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings herein contained, Lender and Participant hereby agree as follows:
1. Participation. Subject to the terms and conditions of this
Agreement, Lender hereby sells and agrees to sell and Participant hereby
purchases and agrees to purchase (a "Participation") an undivided fifty percent
(50%) interest (subject to adjustment in accordance with Section 3 below, the
"Participation Percentage") in the Line of Credit. For purposes of this
Agreement, the "Participation Loan" shall mean the Line of Credit (including any
amounts outstanding on the date hereof and any Committed Advances (as defined
below) made hereafter),
together with any Future Advances (as defined in Section 3) in which each of
Lender and Participant from time to time acquire and hold an interest pursuant
to Section 3, and the "Loan Documents" shall mean all documents, agreements and
instruments executed in connection with the Participation Loan, including,
without limitation, the Line of Credit Loan Documents. The parties acknowledge
and agree that the committed lending limit under the Line of Credit is
$17,500,000.00 (the "Committed Amount"). The interest of Participant under this
Agreement shall include but not be limited to (a) participation in (i) the
currently outstanding amounts under the Line of Credit, including the right to
receive payments of principal and interest payable under the Line of Credit
Note, and (ii) participation in any advances made under the Line of Credit up to
the Committed Amount thereunder ("Committed Advances"), and (b) the right to (i)
receive a pro rata portion of the commitment fee paid and payable by Borrowers
with respect to the Line of Credit, (ii) purchase, at its option, interests in
Future Advances pursuant to Section 3, (iii) receive the proceeds received upon
the disposition of the Collateral, and (iv) the benefits and burdens arising
from the Loan Documents as each of the Loan Documents are amended by Lender
(either individually or collectively) subsequent to the date hereof in
accordance with the terms of this Agreement, all for the pro rata account and
risk of Participant to the extent of its Participation Percentage. Participant's
right to receive its Participation Percentage in the interest, however, shall be
limited to interest which accrues and is paid on or after the date Participant
pays Lender for its Participation in the Line of Credit. This Agreement
constitutes a nonrecourse sale of a Participation equal to the Participation
Percentage and shall not be construed as a loan by Participant to Lender or as a
sale of securities by Lender to Participant or as creating any other
relationship.
2. Payment of Purchase Price. No later than two business days after the
execution of this Agreement, Participant shall pay Lender the sum of
$8,405,785.64 for the purchase of its undivided Participation in the Line of
Credit. The foregoing purchase price represents Participant's Participation
Percentage in the current outstanding principal balance under the Line of Credit
Note less Participant's Participation Percentage in origination fees of $150,000
paid by Borrowers prior to the date hereof with respect to the Committed Amount.
Lender shall give Participant prompt written notice of any Committed Advance to
be made on the Line of Credit. Participant shall deliver immediately available
funds to Lender no later than five (5) business days after Lender funds the
Committed Advance (or such other date, as mutually agreed by Lender and
Participant) in an amount equal to fifty percent (50%) of the total amount of
the Committed Advance paid by Lender. Participant shall remit the purchase price
for its Participation in the Line of Credit (including any Committed Advance) by
wire transfer, in accordance with the following wire instructions:
Bank: Bank One - Michigan
ABA #072000326
For Credit to Sun Operating Communities Operating Limited Partnership
Account #1530503
Participant's Participation under this Agreement with respect to the
Committed Amount under the Line of Credit Note or any Committed Advances shall
be effective as of the day the purchase price for such Participation interest is
received by Lender. The obligation of Participant
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to provide Lender with the purchase price of Participant's Participation in any
Committed Advance is irrevocable and shall be absolute and unconditional under
any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment that Participant may have or have had against Lender.
3. Future Advances.
a. If either Lender or Participant (an "Advancing Party"),
desires to loan money to Borrowers after the date hereof (in addition to, and
exclusive of, any Committed Advances), whether effected by amending the Line of
Credit Loan Documents or entering into new loan documents with the Borrowers, (a
"Future Advance"), the Advancing Party shall send the other party to this
Agreement (the "Other Party") a notice of the amount and other terms of the
Future Advance; provided, however, that an Advancing Party shall not be required
to deliver such notice to the Other Party until such time as all Future Advances
made by such Advancing Party hereunder, in the aggregate, equal or exceed
$1,000,000.00. The Other Party shall then have the right (but not the
obligation) to purchase up to a 50% participation interest in the Future
Advance. If the Other Party does not respond to the Advancing Party's notice
within five (5) business days after the Other Party's receipt of such notice (or
such other date, as mutually agreed by the Advancing Party and the Other Party),
the Other Party shall be deemed to have declined to purchase a participation
interest in the Future Advance. If the Other Party wishes to purchase up to a
50% participation interest in the Future Advance, the Other Party shall deliver
immediately available funds to the Advancing Party no later than five (5)
business days after the Advancing Party funds the Future Advance (or such other
date, as mutually agreed by the Advancing Party and the Other Party) in an
amount equal to the product of (i) the percentage interest purchased by the
Other Party in the Future Advance, multiplied by (ii) the total amount of the
Future Advance. Any participation in a Future Advance by an Other Party shall be
effective as of the day the purchase price for such participation interest is
received by the Advancing Party. To the extent an origination fee shall be
payable by Borrowers in connection with any Future Advance, the Advancing Party
shall remit to or give a credit for a portion of such origination fee to the
extent of the Other Party's percentage interest in the total amount of the
Future Advance. If an Other Party purchases a participation interest in any
Future Advance, the Participant's Participation Percentage in the Participation
Loan shall be adjusted so that it is equal to (i) the total dollar amount of the
Participant's advances under the Participation Loan (without giving effect to
credits for or receipt of any origination fees), divided by (ii) the total
principal amount of the Participation Loan.
b. If the Other Party does not purchase a participation
interest in the Future Advance or such Future Advance is not yet offered to the
Other Party in accordance with Section 3.a. above, then the entire amount of the
Future Advance shall be a "Non-Participation Loan."
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c. All indebtedness owing from Borrowers to an Advancing Party
under a Non-Participation Loan shall at all times be wholly subordinate and
junior in right to payment in full of the Participation Loan and all Senior Debt
(as defined in the Loan Agreement). The Advancing Party agrees to enter into a
subordination agreement reasonably acceptable to the Other Party effecting such
subordination upon the making of a Non-Participation Loan.
d. All indebtedness owing from Borrowers to an Advancing Party
under a Non-Participation Loan shall be evidenced by a note other than the note
or notes evidencing indebtedness owing under the Participation Loan. If a
Non-Participation Loan is made by Participant, the parties agree to enter into a
mutually acceptable intercreditor agreement on terms substantially in accordance
with this Agreement.
e. If an affiliate of Lender or Participant is the lender of
record with respect to any advance constituting any part of the Participation
Loan or a Non-Participation Loan, the parties agree to enter into (and to cause
their respective affiliates, as the case may be, to enter into) a mutually
acceptable intercreditor agreement on terms substantially in accordance with
this Agreement.
4. Certificate of Participation. No participation certificate shall be
issued by Lender to Participant as this Agreement alone shall evidence the
participation interest in the Participation Loan.
5. Receipt of Documents.
a. By entering into this Agreement, Participant acknowledges
that it has received and is satisfied with and hereby approves the form and
substance of the Line of Credit Loan Documents including any exhibits thereto.
b. Participant acknowledges that it has received the same
information regarding the Borrowers as has the Lender. Participant waives any
right to require Lender to furnish or make available to the Participant any of
the Lender's internal credit analysis of the Borrowers. Any such analysis was
prepared solely for internal purposes and the Participant acknowledges and
agrees that it is not and would not be entitled to rely thereon in making its
credit decision.
6. Application of Payments. Promptly upon receipt by Lender of any
payment of principal or interest on the Participation Loan, Lender shall remit
to Participant its share thereof (after deducting any amount due from
Participant to Lender under this Agreement) determined in accordance with
Section 1 of this Agreement.
7. Reports, Notice of Default, etc. Lender shall promptly furnish to
Participant copies of all reports and financial statements received from
Borrowers pursuant to the Loan Documents. Lender shall have no responsibility to
Participant for any errors or omissions in any such reports, financial
statements or other information and shall not otherwise be liable to
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Participant for failing to comply with the provisions of this Section, unless
such failure is due to Lender's gross negligence or willful misconduct.
Lender shall promptly notify Participant of the occurrence of any Event
of Default, as defined in the Loan Documents, of which the officer of Lender
responsible for the Loan has actual knowledge. Similarly, Participant will
promptly notify Lender of the occurrence of any Event of Default under the Loan
Documents of which the officer of Participant responsible for administration of
Participant's interest has actual knowledge. Failure to give any notice required
under this Section shall not result in any liability of the Lender to the
Participant, or of the Participant to the Lender, or relieve the Lender or the
Participant, as the case may be, from any of their obligations hereunder.
8. Loan Documents. Lender shall hold all Loan Documents delivered in
connection with the Participation Loan for the benefit of itself and Participant
in accordance with their respective proportionate shares. Lender shall at all
times keep proper books of account and records at its principal office
reflecting Participant's proportionate share in the Participation Loan, which
records shall be accessible for inspection by Participant at all reasonable
times during business hours and upon reasonable notice to Lender.
9. Servicing of Participation Loan; Management and Enforcement of Loan
Documents. Lender shall be responsible for the normal routine servicing of loan
advances and payments under the Participation Loan on behalf of itself and
Participant in accordance with the terms of this Agreement. However, so long as
Participant has any outstanding Participation interest in the Participation
Loan, Lender and Participant shall jointly manage and enforce the terms of the
Loan Documents. Specifically, without the prior written consent of Participant,
Lender shall not (i) agree to any amendment or modification of any of the Loan
Documents of any kind or nature, (ii) waive any condition or provision of the
Loan Documents, (iii) declare any Event of Default or enforce any remedy under
the Loan Agreement or provided by law or in equity (whether such Event of
Default arises in whole or in part from any Non-Participation Loan), or (iv)
release any Collateral securing the Participation Loan.
10. Collection After Maturity. If Lender liquidates Collateral or
receives a payment after maturity of the Participation Loan, by acceleration or
otherwise, and whether pursuant to a demand for payment or as a result of legal
proceedings against Borrowers or through payment by or action against any other
person in any way liable for the indebtedness evidenced by the Loan Documents,
or from any source whatsoever, such payment shall be applied in the following
order:
a. To the unreimbursed costs and expenses, including
attorney's fees, incurred by Lender or Participant, in effecting such recovery
or in enforcing any right or remedy under the Loan Documents or in realizing
upon the Collateral;
b. To accrued interest payable under the Participation Loan,
of which the portion due to Participant shall be paid to Participant;
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c. To the unpaid principal amount of the Participation Loan,
of which the portion due to Participant shall be paid to Participant; and
d. To the unpaid principal, interest and origination fees
payable with respect to any Non-Participation Loan.
The foregoing notwithstanding, it is expressly understood that if any
loss (including any un-reimbursed expenses in connection with the Loan
Documents) is sustained with respect to the Participation Loan, that portion of
the total loss which is equal to Participant's Participation Percentage shall be
borne by Participant with the balance of the loss being borne by Lender.
11. Adjustments to Payments.
a. If (i) Lender shall pay an amount to Participant pursuant
hereto in the belief or expectation that a related payment has been or will be
received or collected in connection with the Participation Loan, and (ii) such
related payment is not received or collected by Lender, then Participant will,
within three (3) business days of demand by Lender, return such amount to
Lender, together with interest thereon at the overnight Federal Funds Rate. The
Federal Funds Rate shall be the weighted average of the rates on overnight
Federal Funds transactions, with members of the Federal Reserve System only,
arranged by federal funds brokers, as published as of such day by the Federal
Reserve Bank of New York.
b. Notwithstanding anything to the contrary contained herein,
if Lender determines at any time that any amount received or collected by Lender
with respect to the Participation Loan must be returned to Borrowers or paid to
any other person or entity pursuant to any insolvency law or sharing clause or
otherwise, then Lender will not be required to distribute any portion thereof to
Participant and, Participant will, within three (3) business days of demand by
Lender, repay any portion thereof that Lender shall have distributed to
Participant, together with interest thereon at such rate(s), if any, as Lender
shall be required to pay to Borrowers or such other person or entity with
respect thereto.
c. If Participant shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of its Participation in excess of its Participation Percentage of
payments on account of the Participation Loan, Participant shall promptly remit
such excess to Lender.
12. No Recourse; Limitation of Lender's Liability. Lender's only
obligation to Participant with respect to any payment of principal or of
interest on the Participation Loan or for any fees or other amounts payable by
Borrowers under any of the Loan Documents shall be to remit to Participant its
share of any such payment if, when, and as received by Lender. Neither Lender
nor Participant shall have any recourse against the other as a result of
Borrowers' failure to make any payment due under the Participation Loan or for
any fee or other amounts payable by Borrowers under the Loan Documents. Neither
Lender nor Participant shall have any responsibility with respect to any
representations, warranties or statements made by Borrowers in the Loan
Documents. All losses, including but not limited to those resulting from the
foregoing
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matters, shall be borne by the parties in proportion of their respective
proportionate shares of the Participation Loan.
Although Lender will exercise the same care in administering the
Participation Loan as if the Participation Loan were made entirely for Lender's
own account, Lender shall have no liability to Participant for any loss except
for any actual loss suffered by Participant due to Lender's own gross negligence
or willful misconduct.
Without limiting the foregoing, Lender shall be fully protected in
relying upon any certificate, document or other communication which appears to
it to be genuine and to have been signed or presented by the proper person or
persons and upon the advice of legal counsel, independent accountants and other
appropriate experts (including those retained by Borrowers), and shall not be
required to make any inquiry concerning the performance by Borrowers of their
obligations under or compliance by Borrowers with the terms and conditions of
any of the Loan Documents. Except as otherwise expressly set forth herein,
Lender shall not be deemed to be a trustee or fiduciary for Participant in
connection with this participation, the Line of Credit or any Loan Documents,
and has no duties to Participant.
13. Reimbursement and Indemnification.
a. Except as otherwise provided in this Agreement, each of Lender and
Participant (the "Indemnifying Party") shall reimburse the other party (the
"Indemnified Party") immediately on demand for its proportion of all
out-of-pocket expenses, including reasonable attorney's fees, incurred by the
Indemnified Party in connection with the making, managing, or collection of the
Participation Loan or Collateral or any portion thereof, to the extent not
recovered from Borrowers, and shall indemnify and hold the Indemnified Party
harmless from and against the Indemnifying Party's proportion of the amount of
any costs, expenses (including reasonable attorneys' fees and disbursements),
claims, damages, actions, losses or liabilities, that the Indemnified Party may
suffer or incur in connection with this Agreement or any of the Loan Documents,
or the transactions contemplated hereby or thereby, or any action taken or
omitted to be taken by the Indemnifying Party hereunder or thereunder
(collectively, the "Liabilities"). Notwithstanding the foregoing, however, the
Indemnifying Party shall have no obligation to reimburse the Indemnified Party
for any of the Indemnified Party's fees or costs incurred in connection with
this Agreement. In the event that the Indemnified Party recovers any such
amounts from Borrowers after the Indemnifying Party has reimbursed the
Indemnified Party for its proportion of any or all such Liabilities, the
Indemnified Party shall return to the Indemnifying Party its proportion of the
amounts recovered from Borrowers. Notwithstanding anything else set forth in
this Agreement, the obligations and indemnities under this Paragraph shall
survive the payment in full of the Participation Loan and termination of the
Loan Documents and this Agreement.
b. In the event that the Indemnifying Party does not, on the date on
which the Indemnifying Party is advised by the Indemnified Party of the payment
by the Indemnified Party of any of the foregoing Liabilities, pay the
Indemnified Party in the amount of its proportionate share of Liabilities, the
Indemnifying Party shall pay the Indemnified Party, for each day until
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the date of delivery to the Indemnified Party of such amount in immediately
available funds, interest on its proportionate share of the Liabilities at a
rate equal to the overnight Federal Funds Rate.
14. Other Relationships with Borrowers.
a. Each of Lender and Participant may accept deposits from,
make loans or otherwise extend credit to Borrowers (in compliance with Section
3), and generally engage in any kind of financial services business with
Borrowers, or any affiliate of Borrowers, and receive payment on such loans or
extensions of credit (subject to Section 3) and otherwise act with respect
thereto fully and without accountability to the other party to this Agreement in
the same manner as if the Participation did not exist and the transactions
described herein were not in effect.
b. No Other Party shall have any interest in any collateral
(other than the Collateral) to support any Non-Participation Loans made by an
Advancing Party to or for the account of Borrowers. Any payment by Borrowers to
an Advancing Party under any Non-Participation Loans (whether voluntary,
involuntary, through the exercise of an right of setoff or otherwise) shall be
applied first in reduction of amounts outstanding under the Participation Loan.
c. No Advancing Party shall have any obligation to make any
claim against, or assert any lien upon or right of setoff against, any property
held by such party as security for a Non-Participation Loan which does not
constitute Collateral security for the Participation Loan.
15. Lender's Warranties. Lender represents and warrants that:
a. It has not heretofore sold, assigned or otherwise disposed
of any interest in the Line of Credit.
b. It has full power and authority to enter into and perform
this Agreement and the officer(s) of Lender signing the Agreement on behalf of
Participant have been duly authorized to do so.
c. It will remain in possession of the original Loan Documents
or duplicate original copies of the Loan Documents.
d. The principal amount outstanding as of the date of this
Agreement under the Line of Credit Note is $16,961,571.28.
e. Lender's officer responsible for the Line of Credit is not
aware of the existence of any Event of Default as defined in the Loan Documents
as of the date of this Agreement.
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Participant and Lender agree that Lender has not made and shall not at
any time be deemed to have made any further representation or warranty, express
or implied, with respect to (i) the due execution, authenticity, legality,
accuracy, completeness, validity or enforceability of any of the Loan Documents,
(ii) the financial condition or creditworthiness or insolvency of Borrowers or
any other entity which may have liability for the Participation Loan, or the
collectibility of the Participation Loan, or (iii) any other matter having any
relation to the Participation, the Participation Loan or the Loan Documents.
16. Participant's Warranties. Participant represents, warrants and
acknowledges that:
a. It has full power and authority to enter into and perform
this Agreement and the officers of Participant signing the Agreement on behalf
of Participant have been duly authorized to do so.
b. It has reviewed and approved the form and substance of each
of the Line of Credit Loan Documents.
c. Its decision to purchase this Participation and any future
decisions it makes with respect to its Participation in the Participation Loan
was based and will be based solely on its own independent evaluation of the
Participation Loan, the creditworthiness of Borrowers and any other entity which
may have liability for the Participation Loan, and its own investigation of the
legality, sufficiency, and enforceability of the Loan Documents, and of the
risks involved in the transactions contemplated in the Loan Documents and it is
not and will not rely on Lender with respect thereto.
17. Assignment Upon Certain Events. Lender hereby assigns and transfers
to Participant all right, title and interest of Lender, if any, in and to
Participant's Participation interest in the Participation Loan; provided,
however, that, notwithstanding anything to the contrary herein, such assignment
shall become effective only upon the occurrence of an Assignment Event (as
defined below). An "Assignment Event" shall have occurred if (a) Lender ceases
doing business or Lender's existence is terminated by sale, dissolution, merger
or otherwise, (b) any assignment is made for the benefit of Lender's creditors,
(c) any receiver of Lender is appointed, (d) any insolvency, liquidation or
reorganization proceeding under the U.S. Bankruptcy Code or otherwise shall be
filed by or against Lender, or (e) an event of default shall have occurred
under, and the payment of any indebtedness of Lender shall have been accelerated
under, the terms of any loan agreement pursuant to which Lender has incurred
debt. Upon an Assignment Event, Lender shall execute and deliver or cause to be
executed and delivered such further instruments of conveyance, assignment and
transfer and shall take such other action as Participant may reasonably request
to give effect to the foregoing assignment.
18. Termination. This Agreement shall terminate upon the complete
payment of all amounts due and satisfaction of all obligations of the Borrowers
under the Participation Loan.
19. Notices. All notices, demands, consents, approvals and other
communications hereunder (collectively, "notices") shall be in writing or by
facsimile transmission and delivered
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to the parties at their respective addresses set forth below, and the same shall
be deemed to have been given or made when delivered by courier or if made by
facsimile transaction, upon receipt of the answer back code of the designed
party after transmission to the designated party or if made by mail, then three
days after having been deposited in the United States mail, postage prepaid by
registered or certified mail.
Participant: Woodward Holding, LLC
2300 Harmon Road
Auburn Hills, MI 48326
Attn: Paul Halpern
Telephone: (248) 340-2264
Facsimile: (248) 340-2258
With a copy to: Woodward Holding, LLC
2300 Harmon Road
Auburn Hills, MI 48326
Attn: Alan L. Schlang
Telephone: (248) 340-2170
Facsimile: (248) 340-2175
Lender: Sun Communities Operating Limited Partnership
31700 Middlebelt Road, Suite 145
Farmington Hills, Michigan 48334
Attn: Gary A. Shiffman
Telephone: (248) 932-3100
Facsimile: (248) 932-3072
With a copy to: Jaffe, Raitt, Heuer & Weiss, P.C.
One Woodward Avenue, Suite 2400
Detroit, MI 48226
Attn: Matthew Murphy
Telephone: (313) 961-8380
Facsimile: (313) 961-8358
20. Assignments; Successors and Assigns. Participant warrants and
represents to Lender that its Participation in the Participation Loan is being
purchased for its own account and not for the purpose or intent of resale.
Participant hereby acknowledges that in reliance upon the foregoing warranty and
representation of Participant, Lender has not registered this loan participation
under the Federal Securities Act of 1933 (as amended) or under any state or
local laws. Except as otherwise permitted in this Agreement, neither Lender nor
Participant shall sell, pledge, assign or otherwise transfer all or a portion of
its interest in the Participation Loan or any of its rights or obligations under
this Agreement without the prior written consent of the other party. Subject to
the foregoing, all provisions contained in this Agreement or related hereto
shall inure to the benefit of and shall be binding upon the respective permitted
successors and assigns of Lender and Participant.
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21. No Partnership; No Trust. Neither the execution of this Agreement,
nor any agreement to share in the profits or losses arising as a result of the
Participation created hereby, is intended to be or to create, nor will be
construed to be or create, a partnership, joint venture or other joint
enterprise between Lender and Participant.
Neither the execution of this Agreement, nor Lender's holding the Loan
Documents in its own name, nor the servicing of the Participation Loan by
Lender, nor any other right, duty, or obligation of Lender under or pursuant to
any Loan Document or this Agreement, is intended to be or to create, nor will be
a constructive trust or other fiduciary relationship between Lender and
Participant. Notwithstanding the foregoing, (a) Lender and Participant agree
that any payment relating to a purchase of a participation interest by either
party to this Agreement received by the other party pursuant to Section 2 or 3
shall not be deemed to be the property of the receiving party and shall be held
in trust by the receiving party for the benefit of the purchasing party until
either (i) advanced by the receiving party under an advance request or (ii)
applied by the receiving party as reimbursement for an advance made by the
receiving party prior to receipt by the receiving party of an amount equal to
the purchasing party's participation percentage in such advance, and (b) Lender
agrees that a pro rata portion (based on the Participant's Participation
Percentage) of (i) any proceeds of Collateral received by Lender, and (ii) any
payments of principal, interest, penalties, fees or costs received by Lender
with respect to the Participation Loan, shall not be deemed to be the property
of Lender and shall be held in trust by Lender for the benefit of Participant
until remitted to Participant in accordance with this Agreement.
22. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
23. Captions. The Paragraph captions in this Agreement have been
inserted solely for ease of reference, and are not a part of this Agreement.
24. Entire Agreement. This Agreement embodies the entire agreement and
understanding between Lender and Participant and supersedes any and all prior
agreements and understandings with respect to the subject matter hereof. This
Agreement may not be amended or in any manner modified unless such amendment or
modification is in writing and signed by both parties. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument. If any provision hereof
would be invalid under applicable law, then such provision shall be deemed to be
modified to the extent necessary to render it valid, while most nearly
preserving its original intent; no provision hereof shall be affected by another
provision being held invalid.
25. Dispute Resolution. Any and all disputes, controversies or claims
arising out of or related in any way to this Agreement shall be resolved as
provided in this Section 24; provided, however, that either party may seek a
preliminary injunction or other provisional judicial relief if, in its judgment,
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite any such action, the parties will continue to participate in good
faith in the
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procedures set forth in this Section 24. The parties shall meet promptly to make
a good faith effort to resolve any dispute arising under this Agreement. If the
good faith attempts to resolve the dispute are unsuccessful, the parties shall
submit such dispute to arbitration. All such arbitration proceedings shall be
held in the Detroit, Michigan metropolitan area and shall be conducted under the
rules of the American Arbitration Association (the "Rules"). A single arbitrator
(the "Arbitrator") mutually agreeable to the parties shall preside over such
proceedings and shall make all decisions with respect to the resolution of the
dispute, controversy or claim between the parties. In the event the parties are
unable to agree on the Arbitrator within fifteen (15) days after either party
has filed for arbitration in accordance with the Rules, they shall select a
truly neutral arbitrator in accordance with the Rules for the selection of
neutral arbitrators, who shall be the "Arbitrator" for the purposes of this
Section 24. The decision of the Arbitrator shall be final and binding on the
parties, and a judgment may be entered in a court of competent jurisdiction in
order to enforce the Arbitrator's award. The parties shall be entitled to
reasonable levels of discovery (as determined by the Arbitrator in his or her
sole and absolute discretion) in accordance with the Federal Rules of Civil
Procedure. The parties also hereby acknowledge that it is their intent to
expedite the resolution of the dispute, controversy or claim in question, and
that the Arbitrator shall schedule the timing of the hearing consistent with
that intent. During the course of the proceedings, all fees to be paid to the
Arbitrator, and all expenses incurred by the Arbitrator in connection with the
arbitration, shall be borne equally by the parties. However, the Arbitrator
shall award all costs, expenses and fees, including without limitation the
Arbitrator's costs, expenses and fees and the prevailing party's reasonable
attorneys' fees, to the party prevailing in the Arbitration as part of any
award.
[signature page attached]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
"LENDER"
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP, a Michigan limited partnership
By: Sun Communities, Inc., a Maryland
corporation
Its: General Partner
By: /s/ Gary A. Shiffman
-------------------------------
Its: Chief Executive Officer
-------------------------------
"PARTICIPANT"
Woodward Holding, LLC
By: /s/ Paul A. Halpern
-------------------------------------------
Its: Manager
-----------------------------------------
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