Sun Communities,
Inc.
DOCS ® Financing Facility
Shares of Common Stock, $.01 par
value
SALES AGREEMENT
August 27, 2009
*DOCS® is a
registered service mark of Brinson Patrick Securities
Corporation.
THIS SALES AGREEMENT (this “Agreement”) dated as of
August 27, 2009 between Brinson Patrick Securities Corporation,
having its principal office at 1515 Broadway, 11
th Floor, New York, New York, 10036 (the
“Sales Manager”) and Sun Communities, Inc., a
corporation organized and existing under the laws of the State of
Maryland (the “Company”).
WHEREAS , the Company desires to issue and sell through
the Sales Manager shares of its common stock, par value $.01 per
share (such shares referred to herein as the “Common
Stock”), on the terms set forth in Article II
hereof.
IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Sales Manager agree as
follows:
ARTICLE I
REPRESENTATIONS AND
WARRANTIES
OF THE COMPANY
1.1 For purposes of
this Agreement, unless the context requires to the contrary, the
term “Company” shall also include all significant
subsidiaries (as defined in Section 1-02 of Regulation S-X) of the
Company. The Company represents and warrants to, and
agrees with, the Sales Manager that:
(a) The Company meets
the requirements for use of Form S-3 under the Securities Act of
1933, as amended (the “Act”), and the rules and
regulations thereunder (“Rules and Regulations”), and
the Company is eligible to use Form S-3 for the transactions
contemplated by this
Agreement. A. registration statement on Form
S-3 (No. 333-158623) with respect to, among other securities, the
Common Stock has been prepared by the Company in conformity with
the requirements of the Act and the Rules and Regulations, has been
filed with the Securities and Exchange Commission (the
“Commission”) and has been declared effective by the
Commission. No stop order suspending the effectiveness
of such registration statement has been issued, and no proceeding
for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission. Additionally, the
Company has filed a Prospectus Supplement naming the Sales Manager
as sales manager and setting forth certain information regarding
the sales to be made through the Sales Manager. Each
such registration statement, as it may have heretofore been or
(only to the extent (i) filed and declared effective by the
Commission after the date hereof and (ii) a prospectus supplement
forming a part of such registration statement and relating to the
Common Stock to be offered and sold pursuant to this Agreement
having been filed pursuant to Rule 424 under the Act) may hereafter
be filed, as amended, is referred to herein as the
“Registration Statement,” and the final form of
prospectus included in the Registration Statement, as amended or
supplemented from time to time relating to the Common Stock, is
referred to herein as the “Prospectus.” Any
reference herein to the Registration Statement, the Prospectus, or
any amendment or supplement thereto shall be deemed to refer to and
include the documents incorporated (or deemed to be incorporated)
by reference therein, and any reference herein to the terms
“amend,” “amendment” or
“supplement” with respect to the Registration Statement
or Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission
deemed to be incorporated by reference therein.
(b) Each part of the
Registration Statement, when such part became or becomes effective,
and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and at each Settlement
Date (as hereinafter defined), conformed or will conform in all
material respects with the requirements of the Act and the Rules
and Regulations; each part of the Registration Statement, when such
part became or becomes effective, did not or will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with
the Commission and at each Settlement Date, did not or will not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements
in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of the Sales Manager, specifically for use in the
Registration Statement, the Prospectus or any amendment or
supplement thereto.
(c) The documents
incorporated by reference in the Registration Statement or the
Prospectus, or any amendment or supplement thereto, when they
became or become effective under the Act or were or are filed with
the Commission under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as the case may be,
conformed or will conform in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder.
(d) The financial
statements of the Company, together with the related schedules and
notes thereto, set forth or included or incorporated by reference
in the Registration Statement and Prospectus, fairly present the
financial condition of the Company as of the dates indicated and
the results of operations, changes in financial position,
stockholders’ equity, and cash flows for the periods therein
specified, in conformity with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise stated therein). The summary and
selected financial and statistical data included or incorporated by
reference in the Registration Statement and the Prospectus fairly
present the information shown therein and, to the extent based upon
or derived from the financial statements, have been compiled on a
basis consistent with the financial statements presented
therein. In addition, any pro forma financial statements
of the Company, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the
Prospectus, present fairly the information shown therein, have been
prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have
been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to
therein. Furthermore, all financial statements required
by Rule 3-14 of Regulation S-X (“Rule 3-14”), if any,
have been included or incorporated by reference in the Registration
Statement and the Prospectus and any such financial statements are
in conformity with the requirements of
Rule 3-14. No other financial statements are
required to be set forth or incorporated by reference in the
Registration Statement or the Prospectus under the Rules and the
Regulations.
(e) Grant Thornton
LLP, which has expressed their opinion with respect to the
financial statements and the supporting schedules included or
incorporated by reference in the Registration Statement are and,
during the periods covered by their reports, were independent
registered public accounting firm with respect to the Company
within the meaning of the Act and the applicable rules and
regulations thereunder adopted by the Commission and the Public
Company Accounting Oversight Board (United States).
(f) The Company has
been duly organized and is validly existing as a corporation in
good standing under the laws of the State of
Maryland. Other than as disclosed in the Registration
Statement, the Company has no subsidiaries and does not control,
directly or indirectly, any corporation, partnership, limited
liability company, joint venture, association or other business
organization. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the
character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification
necessary (including every jurisdiction in which it owns or leases
property), except for such jurisdictions where the failure to so
qualify would not have a Material Adverse Effect on the
Company. For purposes of this Agreement, “Material
Adverse Effect” means any adverse effect on the business,
operations, prospects, properties or financial condition of the
Company that is (either alone or together with all other adverse
effects) material to the Company and its subsidiaries, taken as a
whole, and any material adverse effect on the issuance and sale of
Common Stock by the Company contemplated under this
Agreement. Each of the Company’s subsidiaries is
validly existing as a corporation, limited liability company or
partnership, as applicable, in its respective jurisdiction of
formation, except where failure to maintain such existence would
not have a Material Adverse Effect. Schedule 1.1(f)
hereto identifies each of the Company’s subsidiaries that is
a significant subsidiary (as defined in Section 1-02 of Regulation
S-X) of the Company (each, a “Significant
Subsidiary”). All of the issued and outstanding
capital stock, limited liability company interests or partnership
interests, as applicable, of each Significant Subsidiary has been
duly authorized and validly issued, and, if applicable, is fully
paid and nonassessable and (except as otherwise disclosed or
incorporated by reference in the Registration Statement and the
Prospectus) is owned by the Company, directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. Except as disclosed or incorporated by
reference in the Registration Statement and the Prospectus, the
Company does not own, lease or license any material asset or
property or conduct any business outside the United States of
America. The Company and each of its Significant
Subsidiaries has all requisite corporate, partnership or limited
liability company power and authority, as applicable, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental orders or
regulatory bodies or any other person or entity, to own, lease,
license and operate its assets and properties and conduct its
business as now being conducted and as described or incorporated by
reference in the Registration Statement and the Prospectus; except
for such authorizations, approvals, consents, orders, licenses,
certificates and permits the absence of which would not have a
Material Adverse Effect; and no such authorization, approval,
consent, order, license, certificate or permit contains a
materially burdensome restriction other than as disclosed or
incorporated by reference in the Registration Statement and the
Prospectus.
(g) The Company is the
sole general partner of Sun Communities Operating Limited
Partnership (the “Operating Partnership”) and such
general partner interest is duly authorized by the Agreement of
Limited Partnership of the Operating Partnership dated April 30,
1996, as may be amended or restated from time to time (the
“Partnership Agreement”) and was validly issued to the
Company; and the Company owns such general partner interest free
and clear of all liens, encumbrances, security interests, equities,
charges or claims (except for such liens, encumbrances, security
interests, equities, charges or claims as are not, individually or
in the aggregate, material to such ownership or as described in the
Registration Statement or the Prospectus).
(h) The Operating
Partnership owns 100% of the outstanding capital stock of Sun Home
Services, Inc. (“Home Services”).
(i) Home Services is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Michigan. Home Services
is duly licensed or qualified to do business and is in good
standing as a foreign corporation in all jurisdictions in which the
nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification
necessary (except where the failure to be so licensed or qualified
would not have a Material Adverse Effect on the Company or Home
Services, or subject the Company or the shareholders of the Company
to any material liability or disability).
(j) The Operating
Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of
Michigan. The Operating Partnership is duly licensed or
qualified to do business and is in good standing as a foreign
limited partnership in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary
(except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on the Company or the Operating
Partnership, or subject the Company or the shareholders of the
Company to any material liability or disability).
(k) The Company has
good title to each of the items of personal property which are
reflected in the financial statements referred to in Section 1.1(d)
or are referred to in the Registration Statement and the Prospectus
or any document incorporated by reference therein as being owned by
the Company and valid and enforceable leasehold interests in each
of the items of real and personal property which are referred to in
the Registration Statement and the Prospectus or any document
incorporated by reference therein as being leased by the Company,
in each case free and clear of all liens, encumbrances, claims,
security interests and defects, other than those described in the
Registration Statement and the Prospectus and those which do not
and will not have a Material Adverse Effect.
(l) The Company has
been subject to the requirements of Section 12 of the Exchange Act
during the period commencing 36 months preceding the filing of the
Registration Statement and ending on the date hereof (the
“Reporting Period”) and during such Reporting Period
the Company has timely filed all material required to be filed
pursuant to Sections 13(a), 14 and/or 15(d) of the Exchange
Act. All such material conformed in form and substance
in all material respects to the requirements of the Exchange Act
and the rules and regulations thereunder. As of the date
of the initial filing of the Registration Statement on April 17,
2009, and as of the date hereof, the aggregate market value of the
voting and non-voting common equity held by non-affiliates of the
Company was and is at least $150 million.
(m) The Company has
good and marketable title to, or leasehold interests in, all
properties and assets (including, without limitation, mortgaged
assets) as described in the Registration Statement and the
Prospectus or any document incorporated by reference therein, owned
by the Company, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Registration
Statement and the Prospectus or any document incorporated by
reference therein. The Company has such consents,
easements, rights-of-way or licenses (collectively,
“rights-of-way”) from any person as are necessary to
conduct its business in the manner described in the Registration
Statement, except for those which if not obtained would not, singly
or in the aggregate, have a Material Adverse Effect on the Company,
and none of such rights-of-way contains any restriction that is
materially burdensome to the Company.
(n) There is no
litigation or governmental or other proceeding or investigation
before any court or before or by any public body or board pending
or, to the knowledge of the Company, threatened (and the Company
does not know of any basis therefor) against, or involving the
assets, properties or businesses of the Company which would
materially adversely affect the value or the operation of any such
assets or otherwise have a Material Adverse Effect on the Company
and its subsidiaries, as a whole, except as described or
incorporated by reference in the Registration Statement.
(o) The Company
maintains insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally deemed
adequate for its businesses and, to the knowledge of the Company,
consistent with insurance coverage maintained by similar companies
in similar businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against, all of which insurance is in
full force and effect.
(p) Subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company, whether or not
arising from transactions in the ordinary course of business; (ii)
the Company has not sustained any material loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree; (iii)
since the date of the latest balance sheet, included or
incorporated by reference in the Registration Statement and the
Prospectus, except as reflected therein, the Company has not
undertaken any liability or obligation, direct or contingent,
except such liabilities or obligations undertaken in the ordinary
course of business; and (iv) there has not been any transaction
that is material to the Company, except transactions in the
ordinary course of business or as otherwise disclosed in the
Registration Statement and the Prospectus.
(q) There is no
document or contract of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or
filed as required. Each document, instrument, contract
and agreement of the Company described in the Registration
Statement or the Prospectus or incorporated by reference therein or
listed as exhibits to the Registration Statement is in full force
and effect and is valid and enforceable by and against the Company
in accordance with their terms, assuming the due authorization,
execution and delivery thereof by each of the other parties thereto
except as otherwise disclosed in the Registration Statement or
Prospectus. The Company is not, nor to the knowledge of
the Company is any other party, in default in the observance or
performance of any term or obligation to be performed by it under
any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, which
default or event would have a Material Adverse
Effect. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a
default, in the due performance and observance of any term,
covenant or condition, by the Company of any other agreement or
instrument to which the Company is a party or by which it or its
properties or business may be bound or affected, which default or
event would have a Material Adverse Effect.
(r) Neither the
Company nor any of its Significant Subsidiaries is in violation of
any term or provision of its charter, by-laws, partnership
agreement or operating agreement, as applicable. The
Company is not in violation of any franchise, license, permit,
judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a Material Adverse
Effect.
(s) Neither the
execution, delivery and performance of this Agreement by the
Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance
and sale by the Company of the Common Stock) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under,
or require any consent or waiver under, or result in the execution
or imposition of any lien, charge, encumbrance, claim, security
interest, restriction or defect upon any properties or assets of
the Company pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company is a
party or by which either is bound, or any of its properties or
businesses are bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the
Company or violate any provision of the Company’s charter or
by-laws, except for such consents or waivers which have already
been obtained and are in full force and effect.
(t) All of the
outstanding shares of common stock and preferred stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable and none of them were issued in violation of
any preemptive or other similar right. The Common Stock,
when issued and sold pursuant to this Agreement, will be duly
authorized and validly issued, fully paid and nonassessable and
will not be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statement
and the Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any securities of the
Company or any security convertible into or exercisable or
exchangeable for securities of the Company. The Common
Stock conforms in all material respects to all statements relating
thereto contained in the Registration Statement and the
Prospectus. Any stock options issued by the Company have
been issued in compliance with applicable law, and the terms and
provisions of such stock options were established in compliance
with applicable law except as would not have a Material Adverse
Effect.
(u) Subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, except as (x) described
or referred to therein, or (y) are not material and are consistent
with past practice, the Company has not (i) issued any securities
or incurred any liability or obligation, direct or contingent,
except such liabilities or obligations incurred in the ordinary
course of business and except for securities issued in connection
with the Company’s employee benefit and/or dividend
reinvestment plans, (ii) entered into any transaction not in the
ordinary course of business or (iii) declared or paid any dividend
or made any distribution on any of its securities or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any of its securities.
(v) Except as
disclosed in the Registration Statement and Prospectus, no holder
of any security of the Company has the right, which has not been
waived, to have any security owned by such holder included in the
Registration Statement or any right to demand registration of any
security owned by such holder.
(w) All necessary
corporate action has been duly and validly taken by the Company to
authorize the execution, delivery and performance of this Agreement
and the issuance and sale of the Common Stock by the Company except
for blue sky filings and New York Stock Exchange listing
application, which to the extent required, will be completed prior
to any applicable sales. This Agreement has been duly
and validly authorized, executed and delivered by the Company and
constitutes and will constitute the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms. Each approval, consent,
order, authorization, designation, declaration or filing by or with
any regulatory, administrative or other governmental body necessary
in connection with the execution and delivery by the Company of
this Agreement and the consummation of the transactions
contemplated hereby and the issuance and sale of the Common Stock
by the Company has been obtained or made and is in full force and
effect. The Common Stock is listed for trading on the
Trading Market. For purposes of this Agreement, the
“Trading Market” is (i) the New York Stock Exchange,
Inc., and (ii) each other securities exchange on which Common Stock
is admitted for trading.
(x) The Company has
not incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement
other than as contemplated hereby or as described in the
Registration Statement.
(y) The Company is
conducting its business in compliance with all applicable laws,
rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, the Americans
with Disabilities Act of 1990 and all applicable local, state and
federal employment, truth-in-advertising, franchising and
immigration laws and regulations, except where the failure to be so
in compliance would not have a Material Adverse Effect.
(z) No transaction has
occurred between or among the Company and any of its officers or
directors or any affiliate or affiliates of any such officer or
director that is required to be described in and is not adequately
described in the Registration Statement and the
Prospectus.
(aa) The Company has
not taken, nor will it take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the
price of any securities of the Company to facilitate the sale or
resale of any shares of the Common Stock.
(bb) The Company has
filed all federal, state, local and foreign tax returns which are
required to be filed through the date hereof (and will file all
such tax returns when and as required to be filed after the date
hereof), or has received extensions thereof, and has paid all taxes
shown on such returns to be due on or prior to the date hereof (and
will pay all taxes shown on such returns to be due after the date
hereof) and all assessments received by it to the extent that the
same are material and have become due.
(cc) The Company is,
and after giving effect to the offering and sale of the Common
Stock, will be, exempt from regulation as an “investment
company,” a person “controlled by” an
“investment company” or an “affiliated
person” of or “promoter” or “principal
underwriter” for an “investment company,” as such
terms are defined in the Investment Company Act of 1940, as amended
(the “Investment Company Act”).
(dd) The Company is not
involved in any labor dispute and, to the knowledge of the Company,
no such dispute has been threatened, except for such disputes as
would not have a Material Adverse Effect or subject the Company or
its shareholders to any material liability or
disability.
(ee) The
Company’s systems of internal accounting controls taken as a
whole are sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company’s financial
statements; and, to the best of the Company’s knowledge,
neither the Company nor any employee or agent thereof has made any
payment of funds of the Company or received or retained any funds,
and no funds of the Company have been set aside to be used for any
payment, in each case in violation of any law, rule or
regulation.
(ff) Except as
disclosed in the Registration Statement or the Prospectus, or in
any document incorporated therein (i) there has been no storage,
disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or
to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously
owned or leased by the Company or its subsidiaries in violation of
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which
would not have a Material Adverse Effect; (ii) there has been no
spill, discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, solid wastes,
hazardous wastes or hazardous substances due to or caused by the
Company or any of its subsidiaries, except for any such spill,
discharge, leak emission, injection, escape, dumping or release
which would not have a Material Adverse Effect; and (iii) the terms
“hazardous wastes,” “toxic wastes” and
“hazardous substances” shall have the meanings
specified in any applicable local, state, federal and foreign laws
or regulations with respect to environmental protection.
(gg) The Company has
met the qualification requirements for a “real estate
investment trust” during its taxable years ending on or after
December 31, 1999 and its proposed method of operations will enable
it to continue to meet the requirements for qualification and
taxation as a “real estate investment trust” under the
Internal Revenue Code of 1986, as amended, assuming no change in
the applicable underlying laws. The Company does not
know of any event which would cause or is likely to cause it to
fail to qualify as a “real estate investment trust” at
any time.
(hh) There is and has
been no failure on the part of the Company or, to the knowledge of
the Company, any of the Company’s directors or officers, in
their capacities as such in relation to the Company, to comply in
all material respects with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith, including without limitation Section 402 related to
loans and Sections 302 and 906 related to certificates.
(ii) The Company is not
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
ARTICLE II
SALE AND DELIVERY OF
SECURITIES
2.1
(a) On
the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell through the Sales
Manager, as agent, and the Sales Manager agrees to sell, as agent
for the Company, on a best efforts basis, up to 1,600,000 shares of
Common Stock during the term of this Agreement on the terms set
forth herein. The Common Stock will be sold from time to
time in amounts and at prices as directed by the Company and as
agreed to by the Sales Manager.
(b) The
Company or the Sales Manager may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy), at any time
and from time to time suspend the offering of Common Stock;
provided , however , that such suspension or
termination shall not affect or impair the parties’
respective obligations with respect to the Common Stock sold
hereunder prior to the giving of such notice.
(c) The
compensation to the Sales Manager for sales of Common Stock shall
be at a fixed commission rate of 3% of the gross sales price per
share of Common Stock sold under this Agreement. If,
however, during the period between the date hereof and December 31,
2009, the aggregate sales proceeds raised exceed $10 million then
the commission rate for any sales made after December 31, 2009,
will be 2.5%. The remaining proceeds, after further
deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect to such sale shall
constitute the net proceeds to the Company for such Common Stock
(the “Net Proceeds”).
(d) The
Company shall open and maintain a trading account (the
“Trading Account”) at a clearing agent designated by
the Sales Manager to facilitate the transactions contemplated by
this Agreement. The Net Proceeds from the sale of the
Common Stock shall be available in the Trading Account on the third
business day (or such other day as is industry practice for
regular-way trading) following each sale of Common Stock (each, a
“Settlement Date”). The Company shall effect
the delivery of the applicable number of shares of Common Stock to
an account designated by the Sales Manager at The Depository Trust
Company on or before the Settlement Date of each sale
hereunder. The Sales Manager’s compensation shall
be withheld from the sales proceeds on each Settlement Date and
shall be paid to the Sales Manager.
(e) At
each Settlement Date, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement
contained in this Agreement. Any obligation of the Sales
Manager under this Agreement shall be subject to the continuing
accuracy of the representations and warranties of the Company
herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional
conditions specified in Article IV of this Agreement.
(f) If
the Company shall default on its obligation to deliver shares of
Common Stock on any Settlement Date, the Company shall (i) hold the
Sales Manager harmless against any loss, claim or damage arising
from or as a result of such default by the Company and (ii) pay the
Sales Manager any commission to which it would otherwise be
entitled absent such default.
ARTICLE III
COVENANTS OF THE
COMPANY
3.1 The Company
covenants and agrees with the Sales Manager that:
(a) As promptly as
practicable after the date of this Agreement, the Company will file
a supplement to the Prospectus to permit sales of the Common Stock
pursuant to this Agreement.
(b) During the period
in which a prospectus relating to the Common Stock is required to
be delivered under the Act (including any period where such
requirement is deemed satisfied pursuant to Rule 153 or Rule 172
under the Act), the Company will notify the Sales Manager promptly
of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the
Prospectus has been filed and of any request by the Commission for
any amendment or supplement to the Registration Statement or the
Prospectus or for additional information; the Company will prepare
and file with the Commission, promptly upon the Sales
Manager’s reasonable request, any amendments or supplements
to the Registration Statement or Prospectus that, in the Sales
Manager’s reasonable opinion, may be necessary or advisable
in connection with the sale of the Common Stock pursuant to this
Agreement; the Company will not file any amendment or supplement to
the Registration Statement or Prospectus unless a copy thereof has
been submitted to the Sales Manager a reasonable period of time
before the filing and the Sales Manager has not reasonably objected
thereto; and it will notify the Sales Manager at the time of filing
thereof a copy of any document that upon filing is deemed to be
incorporated by reference in the Registration Statement or
Prospectus, which will then be available EDGAR and/or on the
Company’s website at www.suncommunities.com (and will furnish
to the Sales Manager any such document that is not available on
EDGAR or the Company’s website). The Company will
cause each amendment or supplement to the Prospectus to be filed
with the Commission as required pursuant to the Rules and
Regulations or, in the case of any document to be incorporated
therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period
prescribed.
(c) The Company will
advise the Sales Manager, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Common
Stock for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for any such purpose;
and it will promptly use its best efforts to prevent the issuance
of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(d) Within the time
during which a prospectus relating to the Common Stock is required
to be delivered under the Act (including any period where such
requirement is deemed satisfied pursuant to Rule 153 or Rule 172
under the Act), the Company will comply with all requirements
imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Common Stock as
contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a
result of which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify the Sales Manager to suspend the
offering of Common Stock during such period and the Company will
amend or supplement the Registration Statement or Prospectus (at
the expense of the Company) so as to correct such statement or
omission or effect such compliance and will use its best efforts to
have any amendment or supplement to the Registration Statement or
Prospectus declared effective as soon as possible, unless the
Company has reasonable business reasons to defer public disclosure
of the relevant information.
(e) The Company will
use its best efforts to qualify the Common Stock for sale under the
securities laws of such jurisdictions as the Sales Manager
designates and to continue such qualifications in effect so long as
required for the sale of the Common Stock, except that the Company
shall not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction.
(f) The Company will
furnish to the Sales Manager and its legal counsel (at the expense
of the Company) copies of the Registration Statement and the
Prospectus during the period in which a prospectus relating to the
Stock is required to be delivered under the Act (including any
period where such requirement is deemed satisfied pursuant to Rule
153 or Rule 172 under the Act), in each case as soon as available
and in such quantities as the Sales Manager may from time to time
reasonably request. The Company will take such action as
to enable the conditions set forth in Rule 153(b) to be satisfied
at all times that the Sales Agent is selling Stock.
(g) The Company will
make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the
end of the Company’s current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period
that satisfies the provisions of Section 11(a) of the Act and Rule
158 of the Rules and Regulations.
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