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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1/A-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 1)
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CHATEAU PROPERTIES, INC.
(Name of Subject Company)
MHC OPERATING LIMITED PARTNERSHIP
MANUFACTURED HOME COMMUNITIES, INC.
(Bidder)
Common Stock
(Title of Class of Securities)
161739 10
(CUSIP Number of Class of Securities)
Ellen Kelleher
Senior Vice President and General Counsel
Manufactured Home Communities, Inc.
Suite 800
Two North Riverside Plaza
Chicago, Illinois 60606
(312) 474-1122
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
with a copy to:
Edward J. Schneidman
Edward S. Best
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
(312) 782-0600
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1. Name of Reporting Person: MHC Operating Limited Partnership
Manufactured Home Communities, Inc.
S.S. or I.R.S. Identification No. of Above Persons: 36-3853565
36-3857664
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2. Check the Appropriate Box if a Member of a Group: (a) /X/
(b) / /
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3. SEC Use Only:
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4. Sources of Funds: BK
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(e) or 2(f): / /
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6. Citizenship or Place of Organization: Illinois
Maryland
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7. Aggregate Amount Beneficially Owned by Each Reporting Person: 127,010
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8. Check if the Aggregate in Row (7) Excludes Certain Shares: / /
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9. Percent of Class Represented by Amount in Row (7): 2%
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10. Type of Reporting Person: PN
CO
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This Statement constitutes Amendment No. 1 to the Tender Offer Statement
on Schedule 14D-1 originally filed on September 4, 1996 by MHC Operating
Limited Partnership, an Illinois limited partnership ("Purchaser"), the sole
general partner of which is Manufactured Home Communities, Inc., a Maryland
corporation ("MHC"), and MHC, relating to the offer by Purchaser to purchase
all outstanding shares of common stock, $.01 par value per share (the
"Shares"), of Chateau Properties, Inc., a Maryland corporation (the
"Company"), at a price of $26.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated September 4, 1996 (the "Offer to Purchase") and in the related Letter of
Transmittal. Capitalized terms not defined herein shall have the meanings
assigned thereto in the Offer to Purchase.
1. Item 10 is hereby amended to add the following:
ITEM 10. ADDITIONAL INFORMATION.
(e) On September 17, 1996, the Company filed suit in the
United States District Court for the District of Maryland against
Purchaser and MHC. In its complaint, the Company alleged that (i) the
Offer is in violation of certain federal securities laws and (ii) MHC
began a proxy solicitation in violation of certain federal securities
laws, and seeks injunctive relief and unspecified monetary damages. In
addition, the complaint seeks a declaratory judgment that (i) the
purchase of Shares will constitute Excess Shares pursuant to Article VI
of the Company's Articles, (ii) the Proposed Merger discussed in the
Offer to Purchase would be subject to the restrictions contained in the
Maryland Business Combination Law, and (iii) the Company's Board of
Directors does not have to exempt the purchase of Shares from the
Ownership Limit or from the Maryland Business Combination Law.
Purchaser and MHC believe that they have taken no action in
violation of federal securities laws, that the Excess Share provisions do
not apply to Shares purchased in the Offer, and that the fiduciary duties
of the Company's Board of Directors require the Board of Directors to
exempt the Offer and the Proposed Merger from the Maryland Business
Combination Law. To that end, Purchaser and MHC intend to vigorously
contest these allegations and the requested relief and further intend to
take such actions as they deem necessary to consummate the Offer and the
Proposed Merger. As of the date of this Amendment No. 1, neither
Purchaser nor MHC have been served in this proceeding.
On September 12, 1996, a class action lawsuit was filed in the
Circuit Court for Montgomery County, Maryland by Harbor Finance Partners,
a shareholder of the Company, against the Company and its directors. The
complaint alleges, among other things, that the Company's directors are
acting "in total disregard" of their fiduciary duties to shareholders by
agreeing to a business combination with ROC in the face of a "higher-
priced more beneficial" transaction with Purchaser and, more
particularly, that "Boll, who owns or controls 59% of the Company, will
be able to avoid significant tax payments associated with an all-cash
transaction." The complaint seeks, among other things, injunctive relief
and unspecified monetary damages. Harbor Finance Partners is not related
or affiliated with Purchaser or MHC.
(f) On September 19, 1996, MHC issued a press release stating:
MHC RESPONDS TO
CHATEAU/ROC ANNOUNCEMENT
Reinforces Superior Qualities of All-Cash, $26 Per Share Tender Offer
CHICAGO, IL - SEPTEMBER 19, 1996 -- Samuel Zell, Chairman of
Manufactured Home Communities, Inc. (NYSE:MHC), issued the following
statement in response to the announcement made by Chateau Properties,
Inc. (NYSE:CPJ) regarding its revised merger agreement with ROC
Communities, Inc. (NYSE:RCI):
"MHC firmly believes its proposal provides Chateau shareholders the
greatest value in all measurable criteria:
- Our all-cash offer of $26 per share remains superior to the stock
merger announced by Chateau and ROC;
- Our cash offer is not subject to financing contingencies; and
- The combination of MHC and Chateau would be the dominant company in
the manufactured home industry, with the highest quality portfolio,
strongest balance sheet, and unparalleled access to capital."
Mr. Zell added, "The revised Chateau and ROC transaction raises a
number of troubling issues about the fiduciary responsibilities of
Chateau's management and board of directors as well as tax liabilities
transferred from Operating Unit holders to Chateau and ROC common
shareholders."
With regard to Chateau's lawsuit filed against MHC, Mr. Zell said,
"We believe Chateau's lawsuit has no merit. Since MHC's ownership of any
amount of Chateau shares would not violate any REIT tax provisions, we
are fully prepared to vigorously defend our ability to purchase the
shares."
Mr. Zell added, "We still intend to see that Chateau shareholders
get the best price for their shares. We have not wavered in our
commitment to consummate our offer and remain prepared to act immediately
to see this deal through."
MHC owns or has controlling interest in 67 quality manufactured
housing communities across the country. Its portfolio consists of 26,820
sites in 19 states. MHC is a self-administered and self-managed real
estate investment trust (REIT), with headquarters in Chicago.
2. Item 11 is hereby amended to add the following:
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(7) Form of Summary Advertisement.
(a)(9) Text of Press Release, dated September 19, 1996, issued by
Manufactured Home Communities, Inc.
(c) Engagement Letter dated August 16, 1996 between
Manufactured Home Communities, Inc. and J.P. Morgan Securities, Inc.
<PAGE>
SIGNATURES
After due inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and
correct.
Dated: September 19, 1996 MHC OPERATING LIMITED PARTNERSHIP
By: Manufactured Home Communities, Inc.,
its General Partner
By: /s/ DAVID A. HELFAND
Name: David A. Helfand
Title: President and Chief
Executive Officer
MANUFACTURED HOME COMMUNITIES, INC.
By: /s/ DAVID A. HELFAND
Name: David A. Helfand
Title: President and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
(a)(7) Form of Summary Advertisement.
(a)(9) Text of Press Release, dated September 19, 1996, issued by
Manufactured Home Communities, Inc.
(c) Engagement Letter dated August 16, 1996 between
Manufactured Home Communities, Inc. and J.P. Morgan Securities, Inc.
This announcement is neither an offer to purchase nor a solicitation
of an offer to sell Shares. The Offer is made solely by the Offer to
Purchase dated September 4, 1996 and the related Letter of
Transmittal, and is being made to all holders of Shares, except in any
jurisdiction where the making of such Offer would be illegal. The
Purchaser is not aware of any State in which the making of the Offer
is prohibited by administrative or judicial action pursuant to a state
statute. If the Purchaser becomes aware of any State where the making
of the Offer is so prohibited, the Purchaser will make a good faith
effort to comply with any such statute or seek to have such statute
declared inapplicable to the Offer. If, after such good faith effort,
the Purchaser cannot comply with any applicable statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf
of) holders of Shares in such State. In any jurisdictions, the
securities laws or blue sky laws of which require the Offer to be made
by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser, if at all, by J.P. Morgan Securities Inc.,
as Dealer Manager, or one or more registered brokers or dealers that
are licensed under the laws of, and represent the stockholders
residing in, such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Chateau Properties, Inc.
at
$26.00 Net Per Share
by
MHC Operating Limited Partnership,
the Sole General Partner of which is
Manufactured Home Communities, Inc.
MHC Operating Limited Partnership, a limited partnership formed under
the laws of the State of Illinois (the "Purchaser"), the sole general
partner of which is Manufactured Home Communities, Inc., a corporation
formed under the laws of the State of Maryland ("MHC"), is offering to
purchase any and all shares of common stock, par value $.01 per share
(the "Shares"), of Chateau Properties, Inc., a corporation formed
under the laws of the State of Maryland (the "Company"), at $26.00 per
Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated September 4, 1996
(the "Offer to Purchase") and in the related Letter of Transmittal
(which, together, constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON TUESDAY, OCTOBER 1, 1996, UNLESS THE OFFER IS
EXTENDED.
The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the Expiration Date that
number of Shares which, together with Shares beneficially owned by the
Purchaser, constitutes at least two-thirds of the Shares outstanding
on the Expiration Date, (2) the Purchaser being satisfied, in its sole
judgment, that after consummation of the Offer the restrictions
contained in the Maryland Business Combination Law will not apply to
the Proposed Merger (as defined below), and (3) the Purchaser being
satisfied, in its sole judgment, that after consummation of the Offer,
none of the Shares acquired by the Purchaser shall be deemed "Excess
Stock" as defined in the Company's Articles of Amendment and
Restatement. See "The Tender Offer -- Introduction" and "--12. Certain
Conditions of the Offer" in the Offer to Purchase.
The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. MHC currently intends, as soon as
practicable after and substantially concurrently with, the
consummation of the Offer, to propose and seek to have the Company
consummate a merger or similar business combination (the "Proposed
Merger") with MHC or a direct or indirect wholly owned subsidiary of
MHC, pursuant to which each outstanding Share (other than Shares owned
by the Purchaser, MHC, or any of their affiliates and Shares held by
stockholders who perfect any available appraisal rights under Maryland
law) would be converted into the right to receive an amount in cash
equal to the price per Share paid pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly
tendered and not validly withdrawn, as, if and when the Purchaser
gives oral or written notice to ChaseMellon Shareholder Services
L.L.C. (the "Depositary") of the Purchaser's acceptance of such Shares
for payment pursuant to the Offer. In all cases, upon the terms and
subject to the conditions of the Offer, payment for Shares purchased
pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payments from the Purchaser
and transmitting such payments to validly tendering stockholders.
Under no circumstances will interest on the purchase price for Shares
be paid by the Purchaser by reason of any delay in making such
payment. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of (1) certificates representing such Shares ("Share
Certificates") or timely confirmation of the book-entry transfer of
such Shares into the Depositary's account at The Depository Trust
Company, or the Philadelphia Depository Trust Company (collectively,
the "Book-Entry Transfer Facilities"), pursuant to the procedures set
forth in "The Tender Offer--Section 3. Procedure for Tendering Shares"
in the Offer to Purchase, (2) the Letter of Transmittal (or a
facsimile thereof) properly completed and duly executed with any
required signature guarantees (or, alternatively, an Agent's Message,
as set forth in the Offer to Purchase), and (3) any other documents
required by the Letter of Transmittal.
The term "Expiration Date" means 12:00 Midnight, New York City time,
on Tuesday, October 1, 1996, unless and until the Purchaser, in its
sole judgment, shall have extended the period of time for which the
Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire. The Purchaser expressly reserves the right,
in its sole judgment, at any time and from time to time, to extend the
period during which the Offer is open for any reason, including the
non-satisfaction of any of the conditions specified in the Offer to
Purchase, by giving oral or written notice of such extension to the
Depositary, followed as promptly as practicable by public announcement
no later than 9:00 A.M., New York City time, on the next business day
after the previously scheduled Expiration Date. During any such
extension, all Shares previously tendered and not withdrawn will
remain subject to the Offer, subject to the right of tendering
stockholders to withdraw such stockholders' Shares.
The Purchaser's acceptance for payment of Shares tendered pursuant to
any one of the procedures described in the Offer to Purchase and in
the Letter of Transmittal will constitute a binding agreement between
the tendering stockholder and the Purchaser upon the terms and subject
to the conditions of the Offer. Except as otherwise provided in "The
Tender Offer--Section 4. Withdrawal Rights" in the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares
tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for
payment as provided herein, may also be withdrawn at any time after
November 4, 1996. For a withdrawal to be effective, a written,
telegraphic, telex or facsimile transmission notice of withdrawal must
be timely received by the Depositary at its address set forth on the
back cover of the Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Shares to be
withdrawn and, if Share Certificates have been tendered, the name of
the registered holder of the Shares as set forth in the Share
Certificate, if different from that of the person who tendered such
Shares. If Share Certificates have been delivered or otherwise
identified to the Depositary, then prior to the physical release of
such certificates, the tendering stockholder must submit the serial
numbers shown on the particular certificates evidencing the Shares to
be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution (as defined in the Offer to
Purchase), except in the case of Shares tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the
procedures for book-entry transfer as set forth in "The Tender
Offer--Section 3. Procedure for Tendering Shares" in the Offer to
Purchase, the notice of withdrawal must specify the name and number of
the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares, in which case a notice of
withdrawal will be effective if a written or facsimile transmission
notice of withdrawal is timely received by the Depositary at its
address set forth on the back cover of the Offer to Purchase.
Withdrawals of Shares may not be rescinded. Any Shares properly
withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in "The
Tender Offer--Section 3. Procedure for Tendering Shares" in the Offer
to Purchase. All questions as to the form and validity (including time
of receipt) of any notice of withdrawal will be determined by the
Purchaser, in its sole discretion and whose determination will be
final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference. A request is being made to the
Company for use of the Company's stockholder list and security
position listings for the purpose of disseminating the Offer to
stockholders. Upon compliance by the Company with such request or the
election by the Company to disseminate the Offer in lieu of complying
with the request, the Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed
to stockholders whose names appear on the Company's stockholder list
and will be furnished for subsequent transmittal to beneficial owners
of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on
the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security listing.
STOCKHOLDERS ARE URGED TO READ THE OFFER TO PURCHASE AND THE RELATED
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER
THEIR SHARES.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at the addresses and telephone
numbers set forth below. Requests for copies of the Offer to Purchase
and the related Letter of Transmittal and other Offer materials may be
directed to the Information Agent or the Dealer Manager or brokers,
dealers, commercial banks and trust companies and such materials will
be furnished promptly at the Purchaser's expense. The Purchaser will
not pay any fees or commissions to brokers, dealers, or other persons
(other than the Information Agent and the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.
<PAGE>
The Information Agent for the Offer is:
[MacKenzie Logo]
156 Fifth Avenue
New York, New York 10010
1-800-322-2885 (toll free)
212-929-5500 (call collect)
The Dealer Manager for the Offer is:
J.P. Morgan & Co.
60 Wall Street
Mail Stop 2860
New York, New York 10260
1-888-445-1926 (toll free)
September 4, 1996
MHC RESPONDS TO
CHATEAU/ROC ANNOUNCEMENT
Reinforces Superior Qualities of All-Cash,
$26 Per Share Tender Offer
CHICAGO, IL - SEPTEMBER 19, 1996 -- Samuel Zell, Chairman of
Manufactured Home Communities, Inc. (NYSE:MHC), issued the
following statement in response to the announcement made by
Chateau Properties, Inc. (NYSE:CPJ) regarding its revised merger
agreement with ROC Communities, Inc. (NYSE:RCI):
"MHC firmly believes its proposal provides Chateau
shareholders the greatest value in all measurable criteria:
- - Our all-cash offer of $26 per share remains superior to the
stock merger announced by Chateau and ROC;
- - Our cash offer is not subject to financing contingencies;
and
- - The combination of MHC and Chateau would be the dominant
company in the manufactured home industry, with the highest
quality portfolio, strongest balance sheet, and unparalleled
access to capital."
Mr. Zell added, "The revised Chateau and ROC transaction
raises a number of troubling issues about the fiduciary
responsibilities of Chateau's management and board of directors
as well as tax liabilities transferred from Operating Unit
holders to Chateau and ROC common shareholders."
With regard to Chateau's lawsuit filed against MHC, Mr. Zell
said, "We believe Chateau's lawsuit has no merit. Since MHC's
ownership of any amount of Chateau shares would not violate any
REIT tax provisions, we are fully prepared to vigorously defend
our ability to purchase the shares."
Mr. Zell added, "We still intend to see that Chateau
shareholders get the best price for their shares. We have not
wavered in our commitment to consummate our offer and remain
prepared to act immediately to see this deal through."
MHC owns or has controlling interest in 67 quality
manufactured housing communities across the country. Its
portfolio consists of 26,820 sites in 19 states. MHC is a self-
administered and self-managed real estate investment trust
(REIT), with headquarters in Chicago.
August 16, 1996
Manufactured Home Communities, Inc.
Two North Riverside Plaza
Suite 800
Chicago, Illinois 60606
Attention: David A. Helfand
President
Dear David:
This letter agreement (the "Agreement") confirms that Manufactured
Home Communities, Inc. (together with its subsidiaries and affiliates,
the "Company") has engaged J.P. Morgan Securities Inc. ("J.P. Morgan")
to act as the Company's exclusive third-party financial advisor with
respect to the Company's possible acquisition of, or merger with,
Chateau Properties, Inc. (the "Target") in one or a series of
transactions, by merger, consolidation, or other business combination,
or by purchase of all or a portion of the stock, assets, or business
of the Target (each, a "Transaction").
As discussed, J.P. Morgan shall undertake certain services on the
Company's behalf, including to the extent requested by the Company in
each instance: (i) assisting the Company in evaluating the Target,
its operations, historical performance, and future prospects, (ii)
advising the Company on a proposed purchase price, form of
consideration and transaction structure, (iii) assisting the Company
in negotiating the financial aspects of any proposed Transaction, and
(iv) assisting the Company in implementing a Transaction, including
but not limited to acting as exclusive dealer manager for the Company
in any tender offer involving any Transaction and arranging the
financing required by the Company to consummate any Transaction,
subject to entering into a separate written agreement or agreements
which shall contain normal and customary provisions (including
separate compensation) acceptable to both parties for such instances
in which J.P. Morgan acts as dealer manager or arranges financing.
As compensation for the services to be provided by J.P. Morgan
hereunder (in addition to the compensation payable under any separate
agreement or agreements referred to in clause (iv) above), the Company
agrees to pay J.P. Morgan (i) an engagement fee of $100,000, payable
promptly upon execution of this Agreement by the Company, and (ii) if
a Transaction is consummated, a success fee as described below (the
"Success Fee").
The Success Fee referred to above shall be in the amount of
$2,000,000. Such Success Fee shall be payable with respect to any
Transaction in cash solely upon consummation of such Transaction, and
in no other event. No fee payable to any other financial advisor by
the Company or any other person in connection with the subject matter
of this Agreement shall reduce or otherwise affect any fee payable to
J.P. Morgan hereunder.
For purposes of this Agreement, a Transaction shall be deemed to have
been consummated upon (i) the acquisition by the Company of at least
66.67% of the outstanding common stock of, or voting power in, the
Target, with the right to elect a majority of the directors of the
Target, or (ii) a merger or consolidation of the Target with the
Company. In the event the Company consummates a Transaction that does
not meet the criteria set forth in clauses (i) or (ii), the Company
and J.P. Morgan will negotiate in good faith appropriate compensation
for J.P. Morgan in an amount to be mutually agreed upon, which will
take into account, among other things, the results obtained and the
custom and practice among investment bankers acting in similar
transactions.
The Company agrees to provide to J.P. Morgan all financial and other
information in the possession of the Company regarding the Company or
the Target reasonably requested by it for the purpose of its
assignment hereunder. The Company agrees and represents that
historical information furnished by the Company to J.P. Morgan
pursuant to this Agreement shall, to the best of the Company's
knowledge, be accurate and complete in all material respects at the
time provided, and that if such information becomes known to the
Company to be materially inaccurate, incomplete, or misleading during
the term of J.P. Morgan's engagement hereunder, the Company shall
notify J.P. Morgan in writing. In performing its services hereunder,
J.P. Morgan shall be entitled to reasonably rely upon and assume,
without assuming any responsibility for independent verification, the
accuracy and completeness of all information that is publicly
available and of all information that has been furnished to it by the
Company or otherwise reviewed by J.P. Morgan, and J.P. Morgan shall
not assume any responsibility or have any liability therefor.
Schedule II attached hereto sets forth J.P. Morgan's confidentiality
obligations regarding such information. J.P. Morgan shall have no
obligation to conduct any valuation or appraisal of any assets or
liabilities. For the execution of its assignment, J.P. Morgan shall
establish a team of qualified individuals from appropriate specialty
areas within J.P. Morgan & Co. Incorporated and its subsidiaries.
Any financial advice rendered by J.P. Morgan pursuant to this
Agreement is intended solely for the benefit and use of management and
the Board of Directors of the Company in considering the matters to
which this Agreement relates, is not on behalf of, and shall not
confer rights or remedies upon, any person other than management and
the Board of Directors of the Company, and may not be used or relied
upon for any other purpose. No such inancial advice may be disclosed
publicly in any manner without J.P. Morgan's prior written approval
(not to be unreasonably withheld) and all such advice will be treated
by the Company as confidential.
In order to coordinate the parties' efforts with respect to possible
Transactions, during the period of J.P. Morgan's engagement hereunder
neither the Company nor any representative thereof (other than J.P.
Morgan) will initiate discussions with the Target or any
representative thereof regarding a Transaction except in consultation
with J.P. Morgan. If the Company or its management receives an
inquiry from the Target or any representative thereof regarding a
Transaction, it will promptly advise J.P. Morgan of such inquiry in
order that J.P. Morgan may evaluate the person making such inquiry and
its interest and assist the Company in any resulting negotiations.
The Company agrees to reimburse J.P. Morgan promptly upon request and
submission of adequate documentation from time to time (but not more
often than monthly) for all reasonable expenses (including, without
limitation, reasonable travel, communication, and document production
expenses, and the reasonable fees and disbursements of outside
counsel) incurred and paid by J.P. Morgan in performing its engagement
hereunder, whether or not a Transaction is consummated; provided, that
the Company's obligation to reimburse J.P. Morgan for the reasonable
fees and disbursements of outside counsel requires the prior approval
of the Company (except that such prior approval shall not be required
in connection with reasonable fees and disbursements of outside
counsel incurred pursuant to Schedule I attached hereto). The Company
also agrees to indemnify J.P. Morgan and certain other entities and
persons as set forth on Schedule I attached hereto.
This Agreement may be terminated by either the Company or J.P. Morgan
at any time upon giving written notice to the other party. No such
termination will affect (i) J.P. Morgan's rights to receive fees
accrued prior to such termination or to receive reimbursement of its
expenses incurred prior to such termination as set forth above, (ii)
the rights of J.P. Morgan or any other Indemnified Person (as defined
in Schedule I hereto) to receive indemnification and contribution, or
(iii) the Company's or J.P. Morgan's confidentiality obligations
hereunder. In addition, if at any time prior to the expiration of 12
months after any such termination by the Company (but not after any
such termination by J.P. Morgan) a Transaction is consummated, J.P.
Morgan will be entitled to payment in full of the Success Fee.
It is understood that if the Company completes a transaction with the
Target in lieu of any Transaction for which J.P. Morgan is entitled to
compensation pursuant to this Agreement at any time prior to the
expiration of 12 months after termination of this Agreement by the
Company (but not after any such termination by J.P. Morgan), J.P.
Morgan and the Company will negotiate in good faith appropriate
compensation for J.P. Morgan in an amount to be mutually agreed upon,
which will take into account, among other things, the results obtained
and the custom and price among investment bankers acting in similar
transactions.
J.P. Morgan acknowledges and agrees that during the period of its
engagement hereunder, it will work to serve the Company's best
interests, and it will not take any actions or make any statements in
respect of or to third parties in connection with its engagement
hereunder except upon the specific express direction of the Company.
J.P. Morgan further acknowledges and agrees that the price and terms
of any definitive agreement regarding a Transaction shall be
determined by the Company in its sole and absolute discretion.
This Agreement (including Schedule I hereto) and any claims related
directly or indirectly to this Agreement shall be governed by New York
law. No proceeding related directly or indirectly to this Agreement
shall be commenced, prosecuted, or continued in any court other than
the courts of the State of New York located in the City and County of
New York or in the United States District Court for the Southern
District of New York. Each of the Company (on the Company's behalf
and, to the extent permitted by applicable law, on behalf of the
Company's securityholders and creditors) and J.P. Morgan (i) waives,
to the fullest extent permitted by law, any objection it may now or
hereafter have to the laying of venue of any such proceeding brought
in any such court and any claim that any such proceeding brought in
any such court has been brought in an inconvenient forum, and (ii)
waives all rights to trial by jury in any proceeding related to or
arising out of the engagement of J.P. Morgan pursuant to this
Agreement.
Very truly yours,
J.P. MORGAN SECURITIES INC.
By: /s/ Peter E. Baccile
------------------------
Name: Peter E. Baccile
Title: Vice President
Accepted as of the
date first above written:
MANUFACTURED HOME COMMUNITIES, INC.
By: /s/ David A. Helfand
-----------------------
Name: David A. Helfand
Title: President
