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Prospectus Supplement
July 27, 2000
(To Prospectus dated June 22, 2000)
CP LIMITED PARTNERSHIP
$50,000,000
8% Senior Notes due 2003
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The Company: The Notes and the Offering:
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. CP Limited Partnership . Maturity: August 1, 2003
6l60 South Syracuse Way . Interest Payments: semi-annually on
Greenwood Village, Colorado 80111 February 1 and August 1,
(303) 741-3707 commencing on February 1, 2001
. Ranking: direct, unsecured obligations
Proposed Trading Format: which will rank equal in right
of payment with all of our other
. The notes will be held in global unsecured and unsubordinated
form by The Depository Trust Company indebtedness
. The notes will not be listed on any . Use of Proceeds: to retire a $30
securities exchange million short-term promissory note
maturing on August 18, 2000 and to
reduce outstanding balances under
our credit facilities
. Closing: on or about August 1, 2000
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Donaldson, Lufkin & Jenrette Securities Corporation has agreed to purchase the
notes from us at 99.816% of their principal amount ($49,908,000 aggregate
proceeds to us, before deducting expenses payable by us), plus accrued and
unpaid interest, if any, from August 1, 2000.
Donaldson, Lufkin & Jenrette Securities Corporation proposes to offer the notes
from time to time for sale in one or more negotiated transactions, or otherwise,
at market prices prevailing at the time of sale, at prices related to market
prices or at negotiated prices. The price of the notes will include accrued and
unpaid interest, if any, from August 1, 2000.
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Neither the SEC nor any state securities commission has determined whether this
prospectus supplement or the accompanying prospectus is truthful or complete.
Nor have they made, nor will they make, any determination as to whether anyone
should buy these securities. Any representation to the contrary is a criminal
offense.
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Donaldson, Lufkin & Jenrette
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TABLE OF CONTENTS
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Prospectus Supplement Prospectus
Page Page
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Forward-Looking Statements..............S-2 Cautionary Statements Concerning
CP Limited Partnership..................S-3 Forward-Looking Information..........................2
Recent Developments.....................S-3 The Company and the Operating
Use of Proceeds.........................S-4 Partnership..........................................3
Description of the Notes................S-5 Use of Proceeds........................................3
Underwriting............................S-11 Ratio of Earnings to Fixed Charges.....................3
Legal Matters...........................S-12 Description of Debt Securities.........................4
Plan of Distribution...................................11
Legal Matters..........................................12
Experts................................................12
Where You Can Find More Information....................12
Incorporation of Certain Documents by
Reference.............................................12
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FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus include and
incorporate by reference forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other things:
. our anticipated future acquisition and development strategies;
. tax risks, including our continued qualification as a real estate
investment trust; and
. general real estate investment risks, including local market
conditions and rental rates, competition for tenants, tenant
defaults, possible environmental liabilities and financing risks.
Our actual results, performance or achievements may differ materially from
anticipated results, performance or achievements expressed or implied by our
forward-looking statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this prospectus supplement
and discussed in or incorporated by reference into the accompanying prospectus
may not occur.
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The following information may not contain all the information that may be
important to you. You should read the entire prospectus supplement and
accompanying prospectus, as well as the documents incorporated by reference into
the accompanying prospectus before making an investment decision.
CP LIMITED PARTNERSHIP
We are a Maryland limited partnership managed by our general partners,
Chateau Communities, Inc. and its wholly owned subsidiary, ROC Communities, Inc.
Chateau Communities, Inc., a self-administered and self-managed real estate
investment trust, is one of the largest owners/managers of manufactured home
communities in the United States. Chateau Communities, Inc., which conducts
substantially all of its activities through us, owns, directly and through
subsidiaries, an approximate 89% general partner interest.
We own and operate, on behalf of Chateau Communities, Inc., 165
manufactured home communities containing an aggregate of 51,913 homesites and
1,359 park model/RV sites. We also fee manage, on behalf of Chateau Communities,
Inc., 44 manufactured home communities containing approximately 9,900 homesites
and 175 park model/RV sites. We also are involved in the development and
expansion of manufactured home communities and, through our subsidiary,
Community Sales, Inc., the sale of new and pre-owned manufactured homes,
brokerage of pre-owned manufactured homes and the assistance of residents in the
arrangement of financing and insurance services.
RECENT DEVELOPMENTS
Results of Operations. On July 26, 2000, Chateau Communities, Inc. released
its results of operations for the second quarter of 2000.
. Total revenues for the second quarter of 2000 were approximately $50.8
million, an increase of 8.4% from approximately $46.8 million for the
same period in 1999.
. Funds from Operations ("FFO") for the second quarter of 2000 totaled
approximately $21.6 million, or $.67 per share on a diluted basis. This
compares to FFO of approximately $19.2 million, or $.61 per share on a
diluted basis, for the same period in 1999, reflecting an increase of
12.1% and 9.8% in FFO and FFO per share, respectively.
Chateau Communities, Inc. believes that FFO is an important and widely used
measure of the operating performance of real estate investment trusts ("REITs"),
which provides a relevant basis of comparison among REITs. FFO is defined by the
National Association of Real Estate Investment Trusts as net income of the
company computed in accordance with generally accepted accounting principles,
excluding gains (or losses) from sales of property, plus depreciation and
amortization and after adjustments for unconsolidated partnerships and joint
ventures. FFO (i) does not represent cash flow from operations as defined by
generally accepted accounting principles, (ii) should not be considered as an
alternative to net income as a measure of operating performance or to cash flows
from operating, investing and financing activities and (iii) is not an
alternative to cash flows as a measure of liquidity.
Outstanding Indebtedness. As of June 30, 2000, we had approximately $486.7
million of debt outstanding, representing 33% of its total market
capitalization.
Expansion and Development. For the six months ended June 30, 2000, we
expanded the number of residential homesites at our communities by 254 new
homesites, increasing the number of homesites it owned and operated, as of June
30, 2000, to an aggregate of 51,913 homesites. In addition, during this same
time period, Chateau Communities, Inc. added an aggregate of 221 new homesites
to its management portfolio through joint venture development, increasing the
number of homesites it managed, as of June 30, 2000, to an aggregate of 9,939
homesites. For the six months ended June 30, 2000, we also purchased or acquired
an option to purchase an additional 1,000 homesites for future development.
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Home Sales. For the six months ended June 30, 2000, Community Sales, Inc.,
the home sales subsidiary of Chateau Communities, Inc., sold 283 new or pre-
owned manufactured homes and earned commissions in brokered sales of 660
manufactured homes. In addition, during this same time period, the Financial
Services Division of Community Sales, Inc. arranged financing on 406 loans in
connection with the sale of new or pre-owned manufactured homes.
USE OF PROCEEDS
The net proceeds from the sale of the notes, after deducting underwriting
discounts and estimated fees and expenses, are expected to be approximately
$49.8 million. We intend to use the net proceeds to retire our $30 million
variable rate short-term promissory note, which is currently accruing interest
at a rate of 7.35% and is due to mature on August 18, 2000, with the remaining
proceeds to be used to repay outstanding indebtedness under our $100 million
unsecured credit facility. This credit facility had approximately $46 million
outstanding as of July 27, 2000, bears interest at LIBOR plus 80 basis points
and matures in May 2001. Pending retirement of the $30 million short-term
promissory note, we may use a portion of the net proceeds which will be used to
retire such notes to temporarily reduce the outstanding balance under our $100
million unsecured credit facility.
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DESCRIPTION OF THE NOTES
We have summarized certain terms of the notes and the indenture in this
section. This summary is not complete. The following description of the
particular terms of the notes supplements the description in the accompanying
prospectus of the general terms and provisions of our debt securities. To the
extent that the following description of the notes is inconsistent with that
general description in the accompanying prospectus, the following description
replaces that in the prospectus. We urge you to read the indenture, as
supplemented by the supplemental indenture relating to these notes, because it,
and not this description, defines your rights as holders of these notes. We
have filed a copy of the indenture and the supplemental indenture relating to
these notes with the Securities and Exchange Commission. Capitalized terms used
but not defined in this prospectus supplement have the meanings specified in the
indenture.
General
The notes constitute a separate series of securities to be issued pursuant
to an indenture dated as of December 19, 1997 between CP Limited Partnership and
Bank One Trust Company, N.A. (successor in interest to The First National Bank
of Chicago), as trustee, as supplemented by a supplemental indenture to be dated
as of August 1, 2000, and will be limited in aggregate principal amount to $50
million.
The notes will be our direct, unsecured obligations and will rank equal in
right of payment with all of our other unsecured and unsubordinated
indebtedness. The notes will be effectively subordinated to the prior claims of
each secured mortgage lender to any specific property which secures such
lender's mortgage. As of June 30, 2000, such mortgages aggregated approximately
$135.6 million. The notes will be issued in denominations of $1,000 principal
amount and integral multiples of that amount.
The notes will bear interest at 8% per year and will mature on August 1,
2003. We will pay interest on the notes in U.S. dollars semi-annually in
arrears on February 1 and August 1 of each year, commencing February 1, 2001.
We will pay interest on each interest payment date and on the maturity date to
the persons in whose names the notes are registered in the security register
applicable to the notes at the close of business 15 calendar days prior to such
payment date regardless of whether such day is a business day. Interest will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
We will pay the principal of each note payable upon maturity in U.S.
dollars against presentation and surrender thereof at the corporate trust office
of the trustee, Bank One Trust Company, N.A., located initially at 14 Wall
Street, Eighth Floor, New York, New York. At our option, we may pay interest by
check mailed to the address of the person entitled thereto as it appears in the
applicable security register or by wire transfer of funds to such person at an
account maintained within the United States.
If any interest date or a maturity date falls on a day that is not a
business day, the required payment will be made on the next business day as if
it were made on the date the payment was due and no interest will accrue on the
amount so payable for the period from and after such interest payment date or
such maturity date, as the case may be. For purposes of the indenture, a
"business day" is any day, other than a Saturday or Sunday, on which banking
institutions in The City of New York are open for business.
The notes are not subject to any sinking fund provisions and are not
repayable at the option of any holder prior to maturity.
Except as described under "--Certain Covenants--Limitations on Incurrence
of Debt" below and under "Description of Debt Securities--Consolidation, Merger,
Sale, Lease or Conveyance" in the accompanying prospectus, the indenture does
not contain any other provisions that would limit the ability of CP Limited
Partnership to incur indebtedness or that would afford holders of the notes
protection in the event of:
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(1) a highly leveraged or similar transaction involving CP Limited
Partnership, the management of CP Limited Partnership or Chateau
Communities, Inc., or any affiliate of any such party;
(2) a change of control; or
(3) a reorganization, restructuring, merger or similar transaction
involving CP Limited Partnership that may adversely affect the holders
of our debt securities.
In addition, subject to the limitations on consolidation, merger, sale,
lease or conveyance set forth above, CP Limited Partnership may, in the future,
enter into certain transactions, such as the sale of all or substantially all of
its assets or the merger or consolidation of CP Limited Partnership, that would
increase the amount of CP Limited Partnership's indebtedness or substantially
reduce or eliminate CP Limited Partnership's assets, which may have an adverse
effect on CP Limited Partnership's ability to service its indebtedness,
including the notes. Neither CP Limited Partnership nor the management of CP
Limited Partnership or Chateau Communities, Inc. have any present intention of
engaging in a highly leveraged or similar transaction involving CP Limited
Partnership. In addition, certain restrictions on ownership and transfer of
Chateau Communities, Inc.'s capital stock designed to preserve its status as a
real estate investment trust may act to prevent or hinder any such transaction
or change in control.
Certain Covenants
Limitations on Incurrence of Debt. CP Limited Partnership will not, and
will not permit any Subsidiary (as defined below) to, incur any Debt (as defined
below) if, immediately after giving effect to the incurrence of such additional
Debt and the application of the proceeds thereof, the aggregate principal amount
of all outstanding Debt of CP Limited Partnership and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted accounting
principles is greater than 60% of the sum of (without duplication) (i) the
Adjusted Total Assets (as defined below) of CP Limited Partnership and its
Subsidiaries as of the end of the calendar quarter covered in CP Limited
Partnership's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Securities and Exchange Commission
(or, if such filing is not permitted or made under the Securities Exchange Act
of 1934, as amended, with the trustee) prior to the incurrence of such
additional Debt plus (ii) the increase, if any, in Adjusted Total Assets from
the end of the calendar quarter, including those proceeds obtained in connection
with the incurrence of such additional Debt minus (iii) the decrease, if any, in
the Adjusted Total Assets from the end of such quarter.
Limitations on Incurrence of Secured Debt. In addition to the foregoing
limitation on the incurrence of Debt, CP Limited Partnership will not, and will
not permit any Subsidiary to, incur any Debt secured by any Encumbrance (as
defined below) upon any of the properties of CP Limited Partnership or any
Subsidiary if, immediately after giving effect to the incurrence of such
additional Debt and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Debt of CP Limited Partnership and its
Subsidiaries on a consolidated basis which is secured by any Encumbrance on
property of CP Limited Partnership or any Subsidiary is greater than 40% of the
sum of (without duplication) (i) the Adjusted Total Assets of CP Limited
Partnership and its Subsidiaries as of the end of the calendar quarter covered
in CP Limited Partnership's Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, as the case may be, most recently filed with the Securities and
Exchange Commission (or, if such filing is not permitted under the Securities
Exchange Act of 1934, as amended, with the trustee) prior to the incurrence of
such additional Debt plus (ii) the increase, if any, in Adjusted Total Assets
from the end of the calendar quarter, including those proceeds obtained in
connection with the incurrence of such additional Debt minus (iii) the decrease,
if any, in the Adjusted Total Assets from the end of such quarter.
Ownership of Total Unencumbered Assets. CP Limited Partnership and its
Subsidiaries may not at any time own Total Unencumbered Assets (as defined
below) equal to less than 150% of the aggregate outstanding principal amount of
the Unsecured Debt of CP Limited Partnership and its Subsidiaries on a
consolidated basis.
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Debt Service Coverage. In addition to the foregoing limitations on the
incurrence of Debt, CP Limited Partnership will not, and will not permit any
Subsidiary to, incur any Debt if the ratio of Consolidated Income Available for
Debt Service (as defined below) to the Annual Service Charge (as defined below)
for the four consecutive fiscal quarters most recently ended prior to the date
on which such additional Debt is to be incurred shall have been less than 1.5:1
on a pro forma basis after giving effect thereto and to the application of the
proceeds therefrom, and calculated on the assumption that (i) such Debt and any
other Debt incurred by CP Limited Partnership and its Subsidiaries since the
first day of such four-quarter period and the application of the proceeds
therefrom, including to refinance other Debt, had occurred at the beginning of
such period; (ii) the repayment or retirement of any other Debt by the CP
Limited Partnership and its Subsidiaries since the first day of such four-
quarter period had been repaid or retired at the beginning of such period
(except that, in making such computation, the amount of Debt under any revolving
credit facility shall be computed based upon the average daily balance of such
Debt during such period); (iii) in the case of Acquired Debt (as defined below)
or Debt incurred in connection with any acquisition since the first day of such
four-quarter period, the related acquisition had occurred as of the first day of
such period with the appropriate adjustments with respect to such acquisition
being included in such pro forma calculation; and (iv) in the case of any
acquisition or disposition by CP Limited Partnership or its Subsidiaries of any
asset or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment of Debt had occurred as of
the first day of such period with the appropriate adjustments with respect to
such acquisition or disposition being included in such pro forma calculation.
As used herein and in the indenture:
"Acquired Debt" means Debt of a person or entity (i) existing at the time
such person or entity becomes a Subsidiary or (ii) assumed in connection with
the acquisition of assets from such person or entity, in each case, other than
Debt incurred in connection with, or in contemplation of, such person or entity
becoming a Subsidiary or such acquisition. Acquired Debt shall be deemed to be
incurred on the date of the related acquisition of assets from any person or
entity or the date the acquired person or entity becomes a Subsidiary.
"Adjusted Total Assets" as of any date means the sum of (i) $281,626,340,
which represents the amount determined by multiplying the sum of the shares of
common stock of Chateau Communities, Inc. and the units of limited partner
interest of CP Limited Partnership not held by Chateau Communities, Inc. issued
in connection with the 1993 initial public offering of Chateau Communities, Inc.
(the "IPO") by the price per share of common stock in the IPO, (ii) $52,831,381,
which represents the principal amount of outstanding Debt of Chateau
Communities, Inc. on the date of the IPO, (iii) the purchase price or cost of
any then held real estate assets or mortgages receivable acquired (including the
value of any units of limited partner interest of CP Limited Partnership issued
in connection therewith) or real estate assets developed or capital improvements
incurred after the IPO and the amount of any securities offering proceeds and
other proceeds of Debt received after the IPO and (iv) all other then held
assets of CP Limited Partnership acquired after the IPO (but excluding
intangibles and accounts receivable) after eliminating intercompany accounts and
transactions. As of June 30, 2000, CP Limited Partnership's Adjusted Total
Assets were approximately $1.240 billion.
"Annual Service Charge" for any period means the maximum amount which is
payable during such period for interest on, and the amortization during such
period of any original issue discount of, Debt of CP Limited Partnership and its
Subsidiaries and the amount of dividends which are payable during such period in
respect of any Disqualified Stock.
"Capital Stock" means, with respect to any person or entity, any capital
stock (including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such person or entity and any rights
(other than debt securities convertible into or exchangeable for corporate
stock), warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations (as defined below) of CP Limited Partnership and its
Subsidiaries plus amounts which have been deducted,
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and minus amounts which have been added, for the following (without
duplication): (i) interest on Debt of CP Limited Partnership and its
Subsidiaries, (ii) provision for taxes of CP Limited Partnership and its
Subsidiaries based on income, (iii) amortization of debt discount, (iv)
provisions for gains and losses on real estate assets and real estate
depreciation and amortization, (v) the effect of any noncash charge resulting
from a change in accounting principles in determining Earnings from Operations
for such period and (vi) amortization of deferred charges.
"Debt" of CP Limited Partnership or any Subsidiary means any indebtedness
of CP Limited Partnership or any Subsidiary, whether or not contingent, in
respect of (i) money borrowed or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness for borrowed money secured by any
Encumbrance existing on property owned by CP Limited Partnership or any
Subsidiary, (iii) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit actually issued or amounts representing
the balance deferred and unpaid of the purchase price of any property or
services, except any such balance that constitutes an accrued expense or trade
payable, or all conditional sale obligations or obligations under any title
retention agreement, (iv) the principal amount of all obligations of CP Limited
Partnership or any Subsidiary with respect to redemption, repayment or other
repurchase of any Disqualified Stock or (v) any lease of property by CP Limited
Partnership or any Subsidiary as lessee which is reflected on CP Limited
Partnership's consolidated balance sheet as a capitalized lease in accordance
with generally accepted accounting principles, to the extent, in the case of
items of indebtedness under (i) through (iii) above, that any such items (other
than letters of credit) would appear as a liability on CP Limited Partnership's
consolidated balance sheet in accordance with generally accepted accounting
principles, and also includes, to the extent not otherwise included, any
obligation by CP Limited Partnership or any Subsidiary to be liable for, or to
pay, as obligor, guarantor or otherwise (other than for purposes of collection
in the ordinary course of business), Debt of another person or entity (other
than CP Limited Partnership or any Subsidiary) (it being understood that Debt
shall be deemed to be incurred by CP Limited Partnership or any Subsidiary
whenever CP Limited Partnership or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Disqualified Stock" means, with respect to any person or entity, any
Capital Stock of such person or entity which by the terms of such Capital Stock
(or by the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than Capital Stock which is redeemable solely in exchange for
common stock), (ii) is convertible into or exchangeable or exercisable for Debt
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for common stock), in each case on or prior to the stated
maturity date of these notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items, and property
valuation losses, net as reflected in the financial statements of CP Limited
Partnership and its Subsidiaries for such period determined on a consolidated
basis in accordance with generally accepted accounting principles.
"Encumbrance" means any mortgage, lien, charge, pledge or security interest
of any kind.
"Subsidiary" means, with respect to any person or entity, any corporation
or other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests are owned, directly or
indirectly, by such person or entity. For the purposes of this definition,
"voting equity securities" means equity securities having voting power for the
election of directors, whether at all times or only so long as no senior class
of security has such voting power by reason of any contingency.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of CP Limited Partnership and its Subsidiaries not subject to an
Encumbrance for borrowed money determined in accordance with generally accepted
accounting principles (but excluding accounts receivable and intangibles).
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"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of CP Limited Partnership
and its Subsidiaries on such date, before depreciation and amortization,
determined on a consolidated basis in accordance with generally accepted
accounting principles. For purposes of this definition, the original cost of
each real estate asset owned by CP Limited Partnership and its Subsidiaries as
of the closing date of the IPO shall be determined by reference to each such
asset's contribution to the net operating income of CP Limited Partnership as of
the closing date of the IPO.
"Unsecured Debt" means Debt which is not secured by any Encumbrance upon
any of the properties of CP Limited Partnership or any Subsidiary.
See "Description of Debt Securities--Certain Covenants" in the accompanying
Prospectus for a description of additional covenants applicable to CP Limited
Partnership.
Optional Redemption
The notes may be redeemed at the option of CP Limited Partnership, in whole
or in part, at any time, and from time to time, at a redemption price equal to
the sum of:
(1) the principal amount of the notes being redeemed plus accrued interest
thereon to the redemption date and
(2) the Make-Whole Amount (as defined below), if any, with respect to such
notes.
If notice has been given as provided in the indenture and the funds for the
redemption of any notes called for redemption shall have been made available on
the redemption date referred to in such notice, such notes will cease to bear
interest on the date fixed for such redemption specified in such notice and the
only right of the holders from and after the redemption date will be to receive
payment of the redemption price upon surrender of such notes in accordance with
such notice.
Notice of any optional redemption of any notes will be given to holders at
their addresses, as shown in the security register for the notes, not more than
60 nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the redemption price and the
principal amount on the notes held by such holder to be redeemed.
If less than all the notes are to be redeemed at the option of CP limited
Partnership, CP Limited Partnership will notify the trustee at least 45 days
prior to giving notice of redemption (or such shorter period as is satisfactory
to the trustee) of the aggregate principal amount of the notes to be redeemed
and their redemption date. The trustee shall select, pro rata, by lot or in
such manner as it shall deem fair and appropriate, notes to be redeemed in whole
or in part. Notes may be redeemed in part in the authorized denomination of
$1,000 or in any integral multiple thereof.
As used herein:
"Make-Whole Amount" means, in connection with any optional redemption of
any note being so redeemed, the excess, if any, of:
(i) the aggregate present value as of the date of such redemption of each
dollar of principal being redeemed and the amount of any interest
(exclusive of interest accrued to the date of redemption) that would
have been payable in respect of each such dollar if such redemption
had not been made, determined by discounting, on a semi-annual basis,
such principal and interest at the applicable Reinvestment Rate
(determined on the third business day preceding the date such notice
of redemption is given) from the respective dates on which such
principal and interest would have been payable if such redemption had
not been made, over
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(ii) the aggregate principal amount of the notes being redeemed.
"Reinvestment Rate" means 0.25% plus the yield on treasury securities at a
constant maturity for the most recent week under the heading "Week Ending"
published in the most recent Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed. If no maturity exactly corresponds to such maturity,
yields for the two published maturities most closely corresponding to such
maturity shall be calculated pursuant to the immediately preceding sentence and
the Reinvestment Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding in each of such relevant periods to the nearest
month. For the purpose of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the Make-
Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination under the indenture, then such
other reasonably comparable index which shall be designated by CP Limited
Partnership.
Book-Entry System
The Depository Trust Company ("DTC") will act as securities depository for
the notes. The notes will be issued in fully-registered form in the name of
Cede & Co. (DTC's partnership nominee). We will issue one or more fully
registered certificates as global securities for the notes in the aggregate
principal amount of the notes and deposit the certificates with DTC.
DTC has provided us with the following information: DTC is a limited-
purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing agency" registered under
Section 17A of the Securities Exchange Act of 1934. DTC holds securities that
its participants deposit with DTC. DTC also facilitates the settlement among
direct participants of securities transactions, such as transfers and pledges,
in deposited securities through computerized book-entry changes in direct
participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and other organizations.
DTC is owned by a number of its direct participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly. The rules that apply to DTC and its participants
are on file with the Securities and Exchange Commission.
If you intend to purchase any of the notes you must do so through the DTC
system by or through direct participants. The participant that you purchase
through will receive a credit for the notes on DTC's records. The ownership
interest of each actual purchaser of notes, who we refer to as a "beneficial
owner," is in turn to be received on the participants' records. Beneficial
owners will not receive written confirmation from DTC of their purchases, but
beneficial owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the participant through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the notes are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in the notes except in the event that use of the book-
entry system for the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of notes with DTC and their registration in the name of
Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual beneficial owners of the notes. DTC's records reflect only the
identity of the direct
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participants to whose accounts such notes are credited, which may or may not be
the beneficial owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by
participants to beneficial owners, will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the notes.
Under its usual procedures, DTC would mail an Omnibus Proxy to us as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
We will make principal and interest payments on the notes to DTC. DTC's
practice is to credit direct participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payable date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such participant and not of DTC, us or the
trustee, subject to any statutory or regulatory requirements as may be in effect
from time to time. We or the trustee will be responsible for the payment of
principal and interest to DTC. DTC will be responsible for the disbursement of
those payments to its participants, and the participants will be responsible for
disbursements of those payments to beneficial owners.
DTC may discontinue providing its service as securities depository with
respect to the notes at any time by giving reasonable notice to us or the
trustee. Under these circumstances, in the event that a successor securities
depository is not obtained, we will print and deliver to you note certificates.
Also, in case we decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository) we will print and
deliver to you note certificates.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable (including DTC),
but we take no responsibility for its accuracy.
Same-Day Settlement And Payment
The underwriter will pay for the notes in immediately available funds. We
will make all payments due on the notes in immediately available funds so long
as such notes are in book-entry form.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next day funds. In contrast, the notes
will trade in DTC's Same-Day Funds Settlement System until maturity or until the
notes are issued in certificated form, and secondary market trading activity in
the notes will therefore be required by DTC to settle in immediately available
funds. We can give no assurance as to the effect, if any, of settlement in
immediately available funds on trading activity in the notes.
Trustee
The Bank One Trust Company, N.A. or its affiliates may from time to time
perform other services for Chateau Communities, Inc. and CP Limited Partnership
in the normal course of business.
UNDERWRITING
Subject to the terms and conditions of our underwriting agreement with
Donaldson, Lufkin & Jenrette Securities Corporation, the underwriter, we have
agreed to sell, and the underwriter has agreed to purchase from us, the notes in
an aggregate principal amount of $50,000,000.
S-11
<PAGE>
The underwriting agreement provides that the obligations of the underwriter
are subject to conditions precedent and that the underwriter will purchase all
of the notes if any are purchased.
The underwriter proposes to offer the notes from time to time for sale in
one or more negotiated transactions, or otherwise, at market prices prevailing
at the time of sale, at prices related to the prevailing market prices or at
negotiated prices. In connection with the sale of any notes, the underwriter
may be deemed to have received an underwriting discount equal to the difference
between the amount received by the underwriter upon the sale of the notes and
the price at which the underwriter purchased the notes from us.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, and to
contribute to payments that they may be required to make in this connection.
The notes are a new issue of securities. There is no active public trading
market for the notes. We do not intend to apply for listing of the notes on any
securities exchange or the Nasdaq National Market. The underwriter has advised
us that it currently intends to make a market in the notes, but the underwriter
is not obligated to do so and may discontinue any market-making at any time.
There can be no assurance as to the liquidity of any market that may develop for
the notes, your ability to sell your notes or the price at which you would be
able to sell your notes.
LEGAL MATTERS
In addition to the legal opinion referred to under "Legal Matters" in the
accompanying prospectus, the legality of the notes will be passed upon for us by
Clifford Chance Rogers & Wells LLP, New York, New York. Certain legal matters in
connection with this offering will be passed upon for the underwriter by
Milbank, Tweed, Hadley & McCloy LLP, New York, New York.
S-12
<PAGE>
PROSPECTUS
----------
$200,000,000
CHATEAU COMMUNITIES, INC.
Guarantees
$200,000,000
CP LIMITED PARTNERSHIP
Debt Securities
We may from time to time offer in one or more series unsecured
nonconvertible investment grade debt securities or other nonconvertible debt
securities of CP Limited Partnership, a majority-owned subsidiary of Chateau
Communities, Inc., with an aggregate initial offering price which will not
exceed $200,000,000. We may also issue from time to time guarantees of Chateau
Communities, Inc. fully and unconditionally guaranteeing the debt securities
offered by CP Limited Partnership. We will determine when we sell securities,
the amounts of securities we will sell and the prices and other terms on which
we sell them.
We will describe in a prospectus supplement, which we will deliver with
this prospectus, the terms of particular securities which we offer in the
future. For debt securities to be offered by CP Limited Partnership, we will
include in each prospectus supplement the title, aggregate principal amount,
denominations, maturity, rate, if any (which may be fixed or variable), or
method of calculation thereof, time of payment of any interest, any terms for
redemption at the option of CP Limited Partnership, any terms for sinking fund
payments, rank, any guarantees of Chateau Communities, Inc. and any other terms
in connection with the offering and sale of such debt securities.
We may sell securities to or through underwriters, through agents or
directly to purchasers. If any underwriters or agents are involved in the sale
of any securities, we will include their names and any applicable purchase
price, fee, commission or discount arrangement between or among them in a
prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is accurate or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is June 22, 2000
<PAGE>
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION
Certain information both included and incorporated by reference in this
prospectus may contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and as such may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of
Chateau Communities, Inc. to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Forward-looking statements, which are based on certain assumptions
and describe the future plans, strategies and expectations of Chateau
Communities, Inc. are generally identifiable by use of the words "may," "will,"
"should," "expect," "anticipate," "estimate," "believe," "intend," or "project"
or the negative thereof or other variations thereon or comparable terminology.
Factors which could have a material adverse effect on the operations and future
prospects of Chateau Communities, Inc. include, but are not limited to, changes
in: economic conditions generally and the real estate market specifically,
legislative/regulatory changes (including changes to laws governing the taxation
of real estate investment trusts), availability of capital, interest rates,
competition, supply and demand for properties in our current and proposed market
areas and general accounting principles, policies and guidelines applicable to
real estate investment trusts. These risks and uncertainties should be
considered in evaluating any forward-looking statements contained or
incorporated by reference in this prospectus.
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<PAGE>
THE COMPANY AND THE OPERATING PARTNERSHIP
The debt securities are being offered by CP Limited Partnership (the
"Operating Partnership"), which is the operating partnership of Chateau
Communities, Inc., a self-administered and self-managed equity real estate
investment trust (the "Company"). At March 31, 2000, the Operating Partnership
owned and operated 165 manufactured home communities (the "Properties") located
in 28 states, with an aggregate of 51,862 residential homesites. At March 31,
2000, the total occupancy rate for the Properties, including properties under
development, was approximately 91.3% and the occupancy rate for the Operating
Partnership's stabilized property portfolio was approximately 93.1%. The
Operating Partnership also currently fee manages approximately 9,700 homesites
in 44 communities and conducts manufactured home sales and brokerage activities
through its taxable subsidiary, Community Sales, Inc.
The Company conducts substantially all of its activities through the
Operating Partnership in which, as of March 31, 2000, it owned, directly and
through ROC Communities, Inc. ("ROC"), the other general partner of the
Operating Partnership, an approximate 89% general partner interest. As general
partners of the Operating Partnership, the Company and ROC have unilateral
control and complete responsibility for the management of the Operating
Partnership and over each of the Properties. The Company's Common Stock is
listed on the New York Stock Exchange under the symbol "CPJ."
The Company's and the Operating Partnership's executive and principal
property management offices are located at 6160 South Syracuse Way, Greenwood
Village, Colorado 80111 and their telephone number is (303) 741-3707. The
Company and the Operating Partnership have regional property management offices
in Clinton Township, Michigan; Indianapolis, Indiana; Tampa, Florida; and
Atlanta, Georgia.
USE OF PROCEEDS
Except as otherwise provided in the applicable prospectus supplement, the
Operating Partnership intends to use the net proceeds from any sale of the debt
securities for working capital and for general corporate purposes, which may
include the repayment of indebtedness, the financing of capital commitments and
possible future acquisitions, expansions and development of manufactured housing
communities.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
Quarter Ended
March 31, 2000 1999 1998 1997 1996 1995
---------------- ------------ ------------ ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges.............. 2.31x 2.37x 2.09x 1.94x 2.24x 2.12x
</TABLE>
Ratio of earnings to fixed charges represents income before extraordinary
items plus fixed charges to fixed charges (principally interest and amortization
of deferred financing costs).
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following sets forth certain general terms and provisions of the
Indenture under which the debt securities are to be issued by the Operating
Partnership. The particular terms of the debt securities will be set forth in a
prospectus supplement relating to such debt securities.
The debt securities may be issued by the Operating Partnership. The debt
securities will be either (i) nonconvertible investment grade debt securities or
(ii) nonconvertible debt securities that are fully and unconditionally
guaranteed by, and are accompanied by guarantees of, the Company. The debt
securities will be issued pursuant to an indenture, dated December 19, 1997 (the
"Indenture"), between the Operating Partnership and Bank One Trust Company, N.A.
(successor in interest to The First National Bank of Chicago), as trustee (the
"Trustee"). The Indenture has been filed as an exhibit to the registration
statement on Form S-3 of which this prospectus is a part, subject to such
amendments or supplements as may be adopted from time to time, and is available
for inspection as described below under "WHERE YOU CAN FIND MORE INFORMATION."
The Indenture is subject to, and governed by, the Trust Indenture Act of 1939,
as amended. The statements made hereunder relating to the Indenture and the
debt securities to be issued thereunder are summaries of certain provisions
thereof, do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all provisions of the Indenture and the debt
securities. As used herein, unless otherwise defined, capitalized terms shall
have the respective meanings set forth in the Indenture.
General
The debt securities will be direct, unsecured obligations of the Operating
Partnership. Except for any series of debt securities which is specifically
subordinated to other indebtedness of the Operating Partnership, the debt
securities will rank equally with all other unsecured and unsubordinated
indebtedness of the Operating Partnership.
Section 301 of the Indenture provides that the debt securities may be
issued without limit as to aggregate principal amount, in one or more series, in
each case as established from time to time in one or more board resolutions of,
or pursuant to authority granted by, the Company and ROC, as general partners of
the Operating Partnership, or in any indenture supplemental to the Indenture.
Prior to the issuance of debt securities of any series, any or all of the
following, as applicable (each of which (except for the matters set forth in
clauses (1), (2) and (13) below), if so provided, may be determined from time to
time by the Operating Partnership with respect to unissued debt securities of or
within the series when issued from time to time) and will be set forth in the
prospectus supplement relating to such series of debt securities:
(1) the title of the debt securities of or within the series (which shall
distinguish the debt securities of such series from all other series in debt
securities);
(2) any limit upon the aggregate principal amount of the debt securities
of or within the series that may be authenticated and delivered under the
Indenture;
(3) the percentage of the principal amount at which the debt securities of
the series will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of acceleration
of maturity thereof;
(4) the date or dates, or the method by which such date or dates will be
determined, on which the principal of the debt securities of or within the
series shall be payable and the amount of principal payable thereon;
(5) the rate or rates at which the debt securities of or within the series
shall bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue
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<PAGE>
or the method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest will be payable and the Regular Record
Date, if any, for the interest payable on any debt security on any Interest
Payment Date, or the method by which such date shall be determined, and the
basis upon which interest shall be calculated if other than that of a 360-day
year consisting of twelve 30-day months;
(6) the place or places, if any other than or in addition to the Borough
of Manhattan, the City of New York or the City of Chicago, where the principal
of (and premium or make-whole amount, if any) and interest, if any, on the debt
securities of or within the series will be payable, the debt securities of or
within the series may be surrendered for registration of transfer or exchange
and notices or demands to or upon the Operating Partnership in respect of the
debt securities of or within the series and the Indenture may be served;
(7) the period or periods within which the price or prices (including the
premium or make-whole amount, if any) at which, and other terms and conditions
upon which, debt securities of or within the series may be redeemed, in whole or
in part, at the option of the Operating Partnership, if the Operating
Partnership is to have the option;
(8) the obligation, if any, of the Operating Partnership to redeem, repay
or purchase debt securities of or within the series pursuant to any sinking fund
or analogous provision or at the option of a holder thereof, and the period or
periods within which or the date or dates on which, the price or prices at
which, and other terms and conditions upon which, debt securities of or within
the series shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities of or within the series
shall be issuable;
(10) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(11) if other than the principal amount thereof, the portion of the
principal amount of debt securities of or within the series that shall be
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 502 of the Indenture or the method by which such portion shall be
determined;
(12) whether the amount of payments of principal of (and premium or make-
whole amount, if any) or interest, if any, on the debt securities of or within
the series may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without limitation, on one or more
currencies, currency units, composite currencies, commodities, equity indices or
other indices), and the manner in which such amounts shall be determined;
(13) provisions, if any, granting special rights to the holder of debt
securities of or within the series upon the occurrence of such events as
may be specified;
(14) any deletions from, modifications of or additions to the Events of
Default or covenants of the Operating Partnership with respect to debt
securities of or within the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants set forth in
the Indenture;
(15) whether any debt securities of or within the series are to be issuable
initially in temporary global form and whether any debt securities of or within
the series are to be issuable in permanent global form and, if so, whether
beneficial owners of interests in any such permanent global debt security may
exchange such interests for debt securities of such series and of like tenor of
any authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 305 of the
Indenture, and, if debt securities of or within the series are to be issuable as
a global debt security, the identity of the depositary for such series;
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<PAGE>
(16) the date as of which any temporary global debt security representing
outstanding debt securities of or within the series shall be dated if other than
the date of original issuance of the first debt security of the series to be
issued;
(17) the Person to whom any interest on any debt security of the series
shall be payable, if other than the Person in whose name that debt security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, and the extent to which, or the
manner in which, any interest payable on a temporary global debt security on an
Interest Payment Date will be paid if other than in the manner provided in
Section 304 of the Indenture;
(18) the applicability, if any, of the defeasance and the covenant
defeasance provisions described herein or any modification thereof;
(19) if the debt securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary debt security
of such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(20) if the debt securities of or within the series are to be issued upon
the exercise of debt warrants, the time, manner and place for such debt
securities to be authenticated and delivered;
(21) the extent to which the debt securities of or within the series are
subordinated to other indebtedness; and
(22) any other terms of the debt securities of or within the series or of
any guarantees issued concurrently with such debt securities not inconsistent
with the provisions of the Indenture.
The debt securities may be issued as "Original Issue Discount Securities"
to be sold at a discount below their principal amount, which discount may be
substantial. In the event of an acceleration of the maturity of any Original
Issue Discount Security, the amount payable to the holder of such Original Issue
Discount Security upon such acceleration will be determined in accordance with
the applicable prospectus supplement, the terms of such debt security and the
Indenture, but will be an amount less than the amount payable at the maturity of
such Original Issue Discount Security. All material United States Federal
income tax, accounting and other considerations applicable thereto will be
described in the prospectus supplement relating thereto.
All debt securities of any one series shall be substantially identical,
except, in the case of debt securities issued in global form, as to denomination
and except as may otherwise be provided in one or more board resolutions of, or
pursuant to authority granted by, the Company and ROC, as general partners of
the Operating Partnership or in any indenture supplemental to the Indenture.
All debt securities of any one series need not be issued at the same time and,
unless otherwise provided, a series may be reopened, without the consent of the
holders, for issuances of additional debt securities of such series.
Consolidation, Merger, Sale, Lease or Conveyance
The Operating Partnership may consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into any other
entity, provided that in any such case, (i) either the Operating Partnership
shall be the continuing entity or the successor entity (if any other than the
Operating Partnership) shall be an entity organized and existing under the laws
of the United States of America or a state thereof and such successor entity
shall expressly assume the due and punctual payment of the principal of and any
interest (including all Additional Amounts, if any) on all of the debt
securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of the Indenture to be
performed by the Operating Partnership by supplemental indenture, satisfactory
to the Trustee, executed and
6
<PAGE>
delivered to the Trustee by such entity, (ii) immediately after giving effect to
such transaction and treating any indebtedness which becomes an obligation of
the Operating Partnership, any Subsidiary or such successor entity as a result
thereof as having been incurred by the Operating Partnership, such Subsidiary or
such successor entity at the time of such transaction, no Event of Default and
no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing and (iii) an officers'
certificate and a legal opinion covering such conditions shall be delivered to
the Trustee.
Certain Covenants
Existence. Except as permitted under "Consolidation, Merger, Sale, Lease
or Conveyance," the Operating Partnership will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises; provided, however, that Operating Partnership shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of the business of
the Operating Partnership and that the loss thereof is not disadvantageous in
any material respect to the holders of debt securities.
Payment of Taxes and Other Claims. The Operating Partnership will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Operating Partnership or any Subsidiary or upon the income,
profits or property of the Operating Partnership or any Subsidiary, and (ii) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Operating Partnership or any Subsidiary;
provided, however, that the Operating Partnership shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.
Additional Covenants. Reference is made to the applicable prospectus
supplement for information with respect to any additional covenants specific to
a particular series of debt securities.
Events of Default, Notice and Waiver
The Indenture provides that the following events are "Events of Default"
with respect to any series of debt securities issued thereunder: (i) default for
30 days in the payment of any installment of interest or Additional Amounts on
any debt security of such series; (ii) default in the payment of the principal
of (or premium, if any, on) any debt security of such series at its maturity;
(iii) default in making any sinking fund payment as required for any debt
security of such series; (iv) default in the performance of any other covenant
or warranty of the Operating Partnership contained in the Indenture (other than
a covenant added to such Indenture solely for the benefit of a series of debt
securities issued thereunder other than such series), such default having
continued for 60 days after written notice as provided in the Indenture; (v)
default in the payment of an aggregate principal amount exceeding a specified
dollar amount of any evidence of indebtedness (including a default with respect
to debt securities of any series other than that series) of the Operating
Partnership (or by any Subsidiary, the repayment of which the Operating
Partnership has guaranteed or for which the Operating Partnership is directly
responsible or liable as obligor or guarantor) or any mortgage, indenture or
other instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the expiration of
any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged
or such acceleration is not rescinded or annulled; (vi) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Operating Partnership or any Significant Subsidiary
or any of their respective property; and (vii) any other Event of Default
provided with respect to a particular series of debt securities.
If an Event of Default under the Indenture with respect to debt securities
of any series at the time outstanding occurs and is continuing, then in every
such case the Trustee or the holders of not less than 25% in principal amount of
the outstanding debt securities of that series may declare the principal amount
(or, if the
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<PAGE>
debt securities of that series are Original Issue Discount Securities or indexed
securities, such portion of the principal amount as may be specified in the
terms thereof) of all of the debt securities of that series to be due and
payable immediately by written notice thereof to the Operating Partnership (and
to the Trustee if given by the holders). However, at any time after such a
declaration of acceleration with respect to debt securities of such series (or
of all debt securities then outstanding under the Indenture) has been made, but
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of not less than a majority in principal amount of
outstanding debt securities of such series (or of all debt securities then
outstanding under the Indenture) may rescind and annul such declaration and its
consequences if (i) the Operating Partnership shall have deposited with the
Trustee all required payments of the principal of (and premium, if any) and
interest, if any, on the debt securities of such series (or of all debt
securities then outstanding under the Indenture), plus certain fees, expenses,
disbursements and advances of the Trustee and (ii) all Events of Default, other
than the nonpayment of accelerated principal (or specified portion thereof), or
premium (if any) or interest on the debt securities of such series (or of all
debt securities then outstanding under the Indenture) have been cured or waived
as provided in the Indenture. The Indenture also provides that the holders of
not less than a majority in principal amount of the outstanding debt securities
of any series (or of all debt securities then outstanding under the Indenture)
may waive any past default with respect to such series and its consequences,
except a default (i) in the payment of the principal of (or premium, if any) or
interest, if any, on any debt security of such series or (ii) in respect of a
covenant or provision contained in the Indenture that cannot be modified or
amended without the consent of the holder of each outstanding debt security
affected thereby.
The Trustee is required to give notice to the holders of the debt
securities within 90 days of a default under the Indenture; provided, however,
that the Trustee may withhold such notice (except for a default in the payment
of the principal of (or the make-whole amount, if any) or interest on any debt
securities of any series or in the payment of any sinking fund installment with
respect to debt securities of such series) if the Responsible Officers of the
Trustee in good faith consider such withholding to be in the interest of such
holders of the debt securities; and provided, further, that in the case of any
default or breach of the character specified in Section 501(iv) of the Indenture
with respect to the debt securities, no such notice to holders shall be given
until at least 60 days after the occurrence thereof.
The Indenture provides that no holders of the debt securities of any series
may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, unless (i) such holder has previously
given written notice to the Trustee of a continuing Event of Default with
respect to the outstanding debt securities of that series; (ii) the holders of
not less than 25% in principal amount of the outstanding debt securities of that
series shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee hereunder; (iii)
such holder or holders have offered to the Trustee indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request; (iv) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has failed to institute
any such proceeding; and (v) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the holders of a
majority in principal amount of the outstanding debt securities of that series;
it being understood and intended that no one or more of such holders shall have
any right in any manner whatsoever by virtue of, or by availing to, any
provision of the Indenture to affect, disturb or prejudice the rights of any
other of such holders, to obtain or to seek to obtain priority or preference
over any other of such holders or to enforce any right under the Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all such holders.
Modification of the Indenture
Modifications and amendments of the Indenture may be made with the consent
of the holders of not less than a majority in principal amount of all
outstanding debt securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each such debt security affected thereby,
(a) change the Stated Maturity of the principal of (or the make-whole amount, if
any), or any interest on, any such debt security; (b) reduce the
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principal amount of, or the rate or amount of interest on, or any make-whole
amount payable on redemption of, any such debt security; (c) change the Place of
Payment, or the coin or currency, for payment of principal of (or the make-whole
amount, if any) or interest on, any such debt security; (d) impair the right to
institute suit for the enforcement of any payment on or with respect to any such
debt security on or after the Stated Maturity thereof; (e) reduce the percentage
of outstanding securities of any series necessary to modify or amend the
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such debt security.
The holders of not less than a majority in principal amount of outstanding
debt securities have the right to waive compliance by the Operating Partnership
with certain covenants in the Indenture.
The Indenture also contains provisions permitting the Operating Partnership
and the Trustee, without the consent of any holders of the debt securities, to
enter into supplemental indentures, in form satisfactory to the Trustee, for any
of the following purposes: (i) to evidence the succession of another Person to
the Operating Partnership and the assumption by any such successor of the
covenants of the Operating Partnership contained in the Indenture and in the
debt securities; (ii) to add to the covenants of the Operating Partnership for
the benefit of the holders of all or any series of debt securities (and if such
covenants are to be for the benefit of less than all series of debt securities,
stating that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred upon the
Operating Partnership; (iii) to add any additional Events of Default for the
benefit of the holders of all or any series of debt securities (and if such
Events of Default are to be for the benefit of less than all series of debt
securities, stating that such Events of Default are expressly being included
solely for the benefit of such series); provided, however, that in respect of
any such additional Events of Default such supplemental indenture may provide
for a particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the holders of a
majority in aggregate principal amount of that or those series of debt
securities to which such additional Events of Default apply to waive such
default; (iv) to add to or change any of the provisions of the Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of debt securities in uncertificated form; provided,
however, that any such action shall not adversely affect the interests of the
holders of debt securities of any series or any related coupons in any material
respect; (v) to change or eliminate any of the provisions of the Indenture;
provided, however, that any such change or elimination shall become effective
only when there is no debt security outstanding of any series created prior to
the execution of such supplemental indenture which is entitled to the benefit of
such provision; (vi) to secure the debt securities; (vii) to establish the form
or terms of debt securities of any series as permitted by the Indenture; (viii)
to evidence and provide for the acceptance of appointment under the Indenture by
a successor Trustee with respect to the debt securities of one or more series
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; (ix) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect to matters
or questions arising under the Indenture which shall not be inconsistent with
the provisions of the Indenture; provided, however, such provisions shall not
adversely affect the interests of the holders of debt securities of any series
or any related coupons in any material respect; or (x) to supplement any of the
provisions of the Indenture to such extent as shall be necessary to permit or
facilitate the defeasance and discharge of any series of debt securities
pursuant to Sections 401, 1402 and 1403 of the Indenture; provided, however,
that any such action shall not adversely affect the interests of the holders of
debt securities of such series and any related coupons or any other series of
debt securities in any material respect.
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Discharge, Defeasance and Covenant Defeasance
Unless otherwise provided in the prospectus supplement, the Operating
Partnership may discharge certain obligations to holders of debt securities that
have not already been delivered to the Trustee for cancellation and that either
have become due and payable or will become due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
Trustee, in trust, funds in an amount sufficient to pay the entire indebtedness
on such debt securities in respect of principal and interest to the date of such
deposit (if such debt securities have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be.
The Indenture provides that, unless otherwise provided in the prospectus
supplement, the Operating Partnership may elect either (a) to defease and be
discharged from any and all obligations with respect to the debt securities
(except for the obligations to register the transfer or exchange of the debt
securities, to replace temporary or mutilated, destroyed, lost or stolen debt
securities, to maintain an office or agency in respect of the debt securities
and to hold moneys for payment in trust) ("defeasance") or (b) to be released
from its obligations with respect to the debt securities under provisions of the
Indenture described under "Certain Covenants," and its obligations with respect
to any other covenant, and any omission to comply with such obligations shall
not constitute a default or an Event or Default with respect to the debt
securities ("covenant defeasance"), in either case upon the irrevocable deposit
by the Operating Partnership with the Trustee, in trust, of cash or Government
Obligations (as defined below), or both, which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of and interest on the debt securities on
the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Operating
Partnership has delivered to the Trustee a legal opinion to the effect that the
holders of the debt securities will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to United States Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such
legal opinion, in the case of defeasance, must refer to and be based upon a
ruling of the Internal Revenue Service or a change in applicable United States
Federal income tax laws occurring after the date of the Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided, however, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
In the event the Operating Partnership effects covenant defeasance and the
debt securities are declared due and payable because of the occurrence of any
Event of Default other than an Event of Default with respect to provisions of
the Indenture which as a result of such covenant defeasance would no longer be
applicable to the debt securities, the cash and Government Obligations on
deposit with the Trustee will be sufficient to pay amounts due on the debt
securities at the time of their Stated Maturity but may not be sufficient to pay
amounts due on the debt securities at the time of the acceleration resulting
from such Event of Default. However, the Operating Partnership would remain
liable to make payment of such amounts due at the time of acceleration.
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The applicable prospectus supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the debt
securities of a particular series.
Guarantees
If the Operating Partnership issues any debt securities that are rated
below investment grade at the time of issuance, the Company will fully and
unconditionally guarantee, on a senior or subordinated basis, the due and
punctual payment of principal of (and premium, if any) and interest on such debt
securities, and the due and punctual payment of any sinking fund payments
thereon, when and as the same shall become due and payable, whether at a
maturity date, by declaration of acceleration, call for redemption or otherwise.
The applicability and terms of any such guarantees relating to a series of debt
securities will be set forth in the prospectus supplement relating to such debt
securities.
PLAN OF DISTRIBUTION
The Operating Partnership may issue the debt securities, which may or may
not be guaranteed by the Company, through underwriters or dealers, directly to
one or more purchasers (including executive officers of the Company, Operating
Partnership or other persons that may be deemed affiliates of the Company,
Operating Partnership), through agents or through a combination of any such
methods of sale.
The distribution of the debt securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of the sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of the debt securities, underwriters or agents
may receive compensation from the Operating Partnership, or from purchasers of
the debt securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters may sell the debt securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers and
agents that participate in the distribution of the debt securities may be deemed
to be underwriters under the Securities Act, and any discounts or commissions
they receive from the Operating Partnership and any profit on the resale of the
debt securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Operating Partnership
will be described, in the applicable prospectus supplement.
Unless otherwise specified in the applicable prospectus supplement, each
series of the debt securities will be a new issue with no established trading
market. The Operating Partnership may elect to list any series of debt
securities on an exchange, but is not obligated to do so. It is possible that
one or more underwriters may make a market in a series of the debt securities,
but will not be obligated to do so and may discontinue any market making at any
time without notice. Therefore, no assurance can be given as to the liquidity
of, or the trading market for, the debt securities.
Under agreements into which the Company or the Operating Partnership may
enter, underwriters, dealers and agents who participate in the distribution of
the debt securities may be entitled to indemnification by the Company or the
Operating Partnership, as the case may be, against certain liabilities,
including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be tenants of, the Company or the Operating Partnership
in the ordinary course of business.
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In order to comply with the securities laws of certain states, if
applicable, the debt securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
debt securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company and the Operating Partnership by Clifford Chance Rogers & Wells LLP, New
York, New York.
EXPERTS
The consolidated financial statements as of December 31, 1999 and 1998, and
for each of the three years in the period ended December 31, 1999, incorporated
by reference in this Registration Statement, have been incorporated herein in
reliance on the reports of PricewaterhouseCoopers LLP, independent accountants,
given the authority of that firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 with the Securities and
Exchange Commission (the "SEC") relating to the securities offered hereby. This
prospectus does not contain all of the information set forth in the registration
statement and the exhibits and schedules to the registration statement.
Statements contained in this prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance we
refer you to the copy of the contract or other document filed as an exhibit to
the registration statement, each such statement being qualified in all respects
by such reference.
For further information with respect to Chateau Communities, Inc. and CP
Limited Partnership and the securities offered by this prospectus, we refer you
to the registration statement, exhibits and schedules. A copy of the
registration statement may be inspected by anyone without charge at the public
reference facilities maintained by the SEC in Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; the Chicago Regional Office, Suite 1400, 500 West
Madison Street, Citicorp Center, Chicago, Illinois 60661; and the New York
Regional Office, Suite 1300, 7 World Trade Center, New York, New York 10048.
Copies of all or any part of the registration statement may be obtained from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-
0330. The registration statement is also available through the SEC's web site
at the following address: http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is considered
to be part of this prospectus and information we file later with the SEC will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made by us with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the sale
of all of the securities that are part of this offering. The documents we are
incorporating by reference are as follows:
Chateau Communities, Inc. (File Number 1-12496)
-----------------------------------------------
1. Chateau Communities, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1999; and
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2. Chateau Communities, Inc.'s Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2000.
CP Limited Partnership (File Number 33-85492)
---------------------------------------------
1. CP Limited Partnership's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999;
2. CP Limited Partnership's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2000; and
3. CP Limited Partnership's Current Reports on Form 8-K filed with the
SEC on February 17, 2000, February 18, 2000 and February 25, 2000.
Whenever after the date of this prospectus we file reports or documents on
behalf of Chateau Communities, Inc. or CP Limited Partnership under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act those reports and documents will
be deemed to be part of this prospectus from the time they are filed. If
anything in a report or document we file after the date of this prospectus
changes anything in it, this prospectus will be deemed to be changed by that
subsequently filed report or document beginning on the date the report or
document is filed.
We will provide to each person to whom a copy of this prospectus is delivered a
copy of any or all of the information that has been incorporated by reference
into this prospectus, but not delivered with this prospectus. We will provide
this information at no cost to such person upon written or oral request
addressed to Chateau Communities, Inc. or CP Limited Partnership, as the case
may be, at 6160 South Syracuse Way, Greenwood Village, Colorado 80111 (telephone
303-741-3707).
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July 27, 2000
CP Limited Partnership
$50,000,000
8% Senior Notes due 2003
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P R O S P E C T U S S U P P L E M E N T
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Donaldson, Lufkin & Jenrette
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We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus supplement and the accompanying
prospectus or to make representations as to matters not stated in this
prospectus supplement or the accompanying prospectus. You must not rely on
unauthorized information. This prospectus supplement is not an offer to sell
the securities or our solicitation of your offer to buy the securities in any
jurisdiction where that would not be permitted or legal. Neither the delivery
of this prospectus supplement and the accompanying prospectus nor any sales made
hereunder after the date of this prospectus supplement shall create an
implication that the information contained herein or the affairs of the Company
have not changed since the date hereof.
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