As filed with the Securities and Exchange Commission on March 6, 2008.
Registration No. 333-149016
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUN COMMUNITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
MARYLAND 38-2730780
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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GARY A. SHIFFMAN
CHIEF EXECUTIVE OFFICER
27777 FRANKLIN ROAD
SUITE 200
SOUTHFIELD, MICHIGAN 48034
(248) 208-2500
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
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Copies of all correspondence to:
LEE B. KELLERT, ESQ.
AMY S. NOWLAN, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
27777 FRANKLIN ROAD
SUITE 2500
SOUTHFIELD, MICHIGAN 48034
(248) 351-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become effective upon
filing with the Commission pursuant to Rule 462(e) under the Securities Act,
check the following box. [ ]
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Title of Proposed Maximum
Each Maximum Aggregate
Class of Amount to Offering Price Offering Amount of
Securities be Registered Per Unit(1) Price (1) Registration Fee
---------- ------------- -------------- -------------- -----------------
Common
Stock,
$.01 par
value (2) 695,838 $19.22 $13,370,536.60 $525.46
(1) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(c), based upon the average of the high and low prices reported
on the New York Stock Exchange on January 31, 2008.
(2) Includes rights to purchase Junior Participating Preferred Stock of the
Company (the "Rights"). Since no separate consideration is paid for the
Rights, the registration fee therefor is included in the fee for the Common
Stock.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
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The information contained in this Prospectus is not completed and may change.
The selling shareholders may not sell these securities until the registration
statement we filed with the Securities and Exchange Commission is effective.
This Prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any state where the offer or sale is not
permitted
SUBJECT TO COMPLETION
PROSPECTUS DATED MARCH 6, 2008
PROSPECTUS
695,838 SHARES
SUN COMMUNITIES, INC.
COMMON STOCK
This prospectus covers the sale of up to 695,838 shares of Sun Communities,
Inc. common stock by the selling stockholders. The prices at which the selling
stockholders may sell the shares will be determined by prevailing market rates
or through privately-negotiated transactions. We will not receive any proceeds
from the sale of the shares by the stockholders.
The shares of our common stock offered under this prospectus are being
registered to permit the selling stockholders to sell the shares from time to
time in the public market. The selling stockholders may sell the shares through
ordinary brokerage transactions or through any other means described in the
section titled "Plan of Distribution". We do not know when or in what amount the
selling stockholders may offer the shares for sale. The selling stockholders may
sell any, all or none of the shares offered by this prospectus.
The common stock is listed on the New York Stock Exchange under the symbol
"SUI." The last reported sale price of the common stock as reported on the New
York Stock Exchange on January 31, 2008, was $19.33 per share.
YOU SHOULD CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 5 FOR CERTAIN
FACTORS RELATING TO AN INVESTMENT IN THE SHARES.
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Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or passed upon the adequacy or accuracy
of this prospectus. Any representation to the contrary is a criminal offense.
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The Attorney General of the State of New York has not passed
on or endorsed the merits of this offering. Any
representation to the contrary is unlawful.
The date of this Prospectus is March 6, 2008
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Sun Communities,
Inc., a Maryland corporation (hereinafter sometimes referred to as "we", "us",
or the "Company"), filed with the Securities and Exchange Commission (the
"SEC"). The selling stockholders may, from time to time, sell the common stock
described in this prospectus. We may prepare a prospectus supplement at any time
to add, update or change information contained in this prospectus, including
adding or removing certain selling stockholders. Except for those instances in
which a specific date is referenced, the information in this prospectus is
accurate as of the date of this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading "Where You Can Find More Information".
We believe that we have included or incorporated by reference all
information material to investors in this prospectus, but certain details that
may be important for specific investment purposes have not been included. To see
more detail, you should read the exhibits filed with or incorporated by
reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the SEC's
public reference rooms. Our SEC filings are also available to the public over
the Internet at the SEC's web site at http://www.sec.gov. In addition, our
common stock is listed on the New York Stock Exchange and such reports, proxy
statements and other information concerning the Company can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The SEC allows us to "incorporate by reference" the information we file
with them, 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 that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the SEC and our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until the offering is complete:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 2006.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 2007.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2007.
The Company's current report on Form 8-K filed February 7, 2008.
5. The Company's current report on Form 8-K filed dated January 7, 2008.
6. The Company's current report on Form 8-K filed dated December 30,
2007.
7. The Company's current report on Form 8-K filed dated December 19,
2007.
8. The Company's current report on Form 8-K filed dated November 8, 2007.
9. The Company's current report on Form 8-K filed dated October 30, 2007.
10. The Company's current report on Form 8-K filed dated August 6, 2007.
11. The Company's current report on Form 8-K filed dated May 22, 2007.
12. The Company's current report on Form 8-K filed dated May 9, 2007.
13. The Company's current report on Form 8-K filed dated March 15, 2007.
14. The Company's Proxy Statement on Schedule 14A, dated April 19, 2007.
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You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Sun Communities, Inc.
27777 Franklin Road
Suite 200
Southfield, MI 48034
Attn: Corporate Secretary
(248) 208-2500
You should rely only on the information incorporated by reference or provided in
this prospectus and any supplement. We have not authorized anyone else to
provide you with different information.
THE COMPANY
As used in this prospectus, "Company," "us," "we," "our" and similar terms
means Sun Communities, Inc., a Maryland corporation, and one or more of its
subsidiaries (including the Operating Partnership (as defined below) and Sun
Home Services, Inc.).
We are a self-administered and self-managed real estate investment trust,
or REIT. We own, operate, develop and finance manufactured housing communities
concentrated in the midwestern and southeastern United States. We are a fully
integrated real estate company which, together with our affiliates and
predecessors, have been in the business of acquiring, operating and expanding
manufactured housing communities since 1975. As of September 30, 2007, we owned
and operated a portfolio of 136 properties located in eighteen states (the
"Properties" or "Property"), including 124 manufactured housing communities,
four recreational vehicle communities, and eight properties containing both
manufactured housing and recreational vehicle sites. As of September 30, 2007,
the Properties contained an aggregate of 47,608 developed sites comprised of
42,265 developed manufactured home sites and 5,343 recreational vehicle sites
and an additional 6,590 manufactured home sites suitable for development. In
order to enhance property performance and cash flow, the Company, through Sun
Home Services, Inc., a Michigan corporation ("SHS"), actively markets, sells and
leases new and pre-owned manufactured homes for placement in the Properties.
Structured as an umbrella partnership REIT, or UPREIT, Sun Communities
Operating Limited Partnership, a Michigan limited partnership (the "Operating
Partnership"), is the entity through which we conduct substantially all of our
operations, and which owns, either directly or indirectly through subsidiaries,
all of our assets (the subsidiaries, collectively with the Operating
Partnership, the "Subsidiaries"). This UPREIT structure enables us to comply
with certain complex requirements under the Federal tax rules and regulations
applicable to REITs, and to acquire manufactured housing communities in
transactions that defer some or all of the sellers' tax consequences. We are the
sole general partner of, and, as of September 30, 2007, held approximately 88%
of the interests (not including preferred limited partnership interests) in, the
Operating Partnership. The Subsidiaries also include SHS, which provides
manufactured home sales and other services to current and prospective tenants of
the Properties.
Our executive and principal property management office is located at 27777
Franklin Road, Suite 200, Southfield, Michigan 48034 and our telephone number is
(248) 208-2500. We have regional property management offices located in Austin,
Texas; Dayton, Ohio; Grand Rapids, Michigan; Elkhart, Indiana; and Orlando,
Florida, and we employed an aggregate of approximately 650 people as of
September 30, 2007.
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FORWARD-LOOKING STATEMENTS
This prospectus contains various "forward-looking statements" within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
and the Company intends that such forward-looking statements will be subject to
the safe harbors created thereby. For this purpose, any statements contained in
this filing that relate to prospective events or developments are deemed to be
forward-looking statements. Words such as "believes," "forecasts,"
"anticipates," "intends," "plans," "expects," "may", "will" and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements reflect the Company's current views with respect to
future events and financial performance, but involve known and unknown risks and
uncertainties, both general and specific to the matters discussed in this
filing. These risks and uncertainties may cause the actual results of the
Company to be materially different from any future results expressed or implied
by such forward looking statements. Such risks and uncertainties include the
national, regional and local economic climates, the ability to maintain rental
rates and occupancy levels, competitive market forces, changes in market rates
of interest, the ability of manufactured home buyers to obtain financing, the
level of repossessions by manufactured home lenders and those risks and
uncertainties referenced under the headings entitled "Risk Factors" contained in
this prospectus and the Company's filings with the Securities and Exchange
Commission. The forward-looking statements contained in this prospectus speak
only as of the date hereof and the Company expressly disclaims any obligation to
provide public updates, revisions or amendments to any forward-looking
statements made herein to reflect changes in the Company's expectations of
future events.
RISK FACTORS
Our prospects are subject to certain uncertainties and risks. Our future
results could differ materially from current results, and our actual results
could differ materially from those projected in forward-looking statements as a
result of certain risk factors. These risk factors include, but are not limited
to, those set forth below, other one-time events, and important factors
disclosed previously and from time to time in other Company filings with the
Securities and Exchange Commission. This registration statement contains certain
forward-looking statements.
REAL ESTATE RISKS
General economic conditions and the concentration of our properties in Michigan,
Florida, and Indiana may affect our ability to generate sufficient revenue.
The market and economic conditions in our current markets generally, and
specifically in metropolitan areas of our current markets, may significantly
affect manufactured home occupancy or rental rates. Occupancy and rental rates,
in turn, may significantly affect our revenues, and if our communities do not
generate revenues sufficient to meet our operating expenses, including debt
service and capital expenditures, our cash flow and ability to pay or refinance
our debt obligations could be adversely affected. We derived significant amounts
of rental income for the twelve month period ended December 31, 2006 and the
nine month period ended September 30, 2007 from properties located in Michigan,
Florida, and Indiana. As of September 30, 2007, 47 of our 136 Properties, or
approximately 30% of developed sites, are located in Michigan, 19 Properties, or
approximately 21% of developed sites, are located in Florida, and 18 Properties,
or approximately 14% of developed sites, are located in Indiana. As a result of
the geographic concentration of our Properties in Michigan, Florida, and
Indiana, we are exposed to the risks of downturns in the local economy or other
local real estate market conditions which could adversely affect occupancy
rates, rental rates and property values of properties in these markets.
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The following factors, among others, may adversely affect the revenues generated
by our communities:
- the national and local economic climate which may be adversely
impacted by, among other factors, plant closings and industry
slowdowns;
- local real estate market conditions such as the oversupply of
manufactured housing sites or a reduction in demand for manufactured
housing sites in an area;
- the number of repossessed homes in a particular market;
- the lack of an established dealer network;
- the rental market which may limit the extent to which rents may be
increased to meet increased expenses without decreasing occupancy
rates;
- the perceptions by prospective tenants of the safety, convenience and
attractiveness of the Properties and the neighborhoods where they are
located;
- zoning or other regulatory restrictions;
- competition from other available manufactured housing sites and
alternative forms of housing (such as apartment buildings and
site-built single-family homes);
- our ability to provide adequate management, maintenance and insurance;
- increased operating costs, including insurance premiums, real estate
taxes and utilities; or
- the enactment of rent control laws or laws taxing the owners of
manufactured homes.
Our income would also be adversely affected if tenants were unable to pay
rent or if sites were unable to be rented on favorable terms. If we were unable
to promptly relet or renew the leases for a significant number of the sites, or
if the rental rates upon such renewal or reletting were significantly lower than
expected rates, then our business and results of operations could be adversely
affected. In addition, certain expenditures associated with each equity
investment (such as real estate taxes and maintenance costs) generally are not
reduced when circumstances cause a reduction in income from the investment.
Furthermore, real estate investments are relatively illiquid and, therefore,
will tend to limit our ability to vary our portfolio promptly in response to
changes in economic or other conditions.
Competition affects occupancy levels and rents which could adversely affect our
revenues.
All of our Properties are located in developed areas that include other
manufactured housing community properties. The number of competitive
manufactured housing community properties in a particular area could have a
material adverse effect on our ability to lease sites and increase rents charged
at our Properties or at any newly acquired properties. We may be competing with
others with greater resources and whose officers and directors have more
experience than our officers and directors. In addition, other forms of
multi-family residential properties, such as private and federally funded or
assisted multi-family housing projects and single-family housing, provide
housing alternatives to potential tenants of manufactured housing communities.
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Our ability to sell or lease manufactured homes may be affected by various
factors, which may in turn adversely affect our profitability.
SHS is in the manufactured home market offering manufactured home sales and
leasing services to tenants and prospective tenants of our communities. The
market for the sale and lease of manufactured homes may be adversely affected by
the following factors:
- downturns in economic conditions which adversely impact the housing
market;
- an oversupply of, or a reduced demand for, manufactured homes;
- the difficulty facing potential purchasers in obtaining affordable
financing as a result of heightened lending criteria; and
- an increase or decrease in the rate of manufactured home repossessions
which provide aggressively priced competition to new manufactured home
sales.
Any of the above listed factors could adversely impact our rate of
manufactured home sales and leases, which would result in a decrease in
profitability.
Increases in taxes and regulatory compliance costs may reduce our revenue.
Costs resulting from changes in real estate laws, income taxes, service or
other taxes, generally are not passed through to tenants under leases and may
adversely affect our funds from operations and our ability to pay or refinance
our debt. Similarly, changes in laws increasing the potential liability for
environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions may result in significant unanticipated
expenditures, which would adversely affect our business and results of
operations.
We may not be able to integrate or finance our development activities.
From time to time, we engage in the construction and development of new
communities, and may continue to engage in the development and construction
business in the future. Our development and construction business may be exposed
to the following risks which are in addition to those risks associated with the
ownership and operation of established manufactured housing communities:
- we may not be able to obtain financing with favorable terms for
community development which may make us unable to proceed with the
development;
- we may be unable to obtain, or face delays in obtaining, necessary
zoning, building and other governmental permits and authorizations,
which could result in increased costs and delays, and even require us
to abandon development of the community entirely if we are unable to
obtain such permits or authorizations;
- we may abandon development opportunities that we have already begun to
explore and as a result we may not recover expenses already incurred
in connection with exploring such development opportunities;
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- we may be unable to complete construction and lease-up of a community
on schedule resulting in increased debt service expense and
construction costs;
- we may incur construction and development costs for a community which
exceed our original estimates due to increased materials, labor or
other costs, which could make completion of the community uneconomical
and we may not be able to increase rents to compensate for the
increase in development costs which may impact our profitability;
- we may be unable to secure long-term financing on completion of
development resulting in increased debt service and lower
profitability; and
- occupancy rates and rents at a newly developed community may fluctuate
depending on several factors, including market and economic
conditions, which may result in the community not being profitable.
If any of the above occurred, our business and results of operations could
be adversely affected.
We may not be able to integrate or finance our acquisitions and our acquisitions
may not perform as expected.
We acquire and intend to continue to acquire manufactured housing
communities on a select basis. Our acquisition activities and their success are
subject to the following risks:
- we may be unable to acquire a desired property because of
competition from other well capitalized real estate investors,
including both publicly traded real estate investment trusts and
institutional investment funds;
- even if we enter into an acquisition agreement for a property, it
is usually subject to customary conditions to closing, including
completion of due diligence investigations to our satisfaction,
which may not be satisfied;
- even if we are able to acquire a desired property, competition
from other real estate investors may significantly increase the
purchase price;
- we may be unable to finance acquisitions on favorable terms;
- acquired properties may fail to perform as expected;
- acquired properties may be located in new markets where we face
risks associated with a lack of market knowledge or understanding
of the local economy, lack of business relationships in the area
and unfamiliarity with local governmental and permitting
procedures; and
- we may be unable to quickly and efficiently integrate new
acquisitions, particularly acquisitions of portfolios of
properties, into our existing operations.
If any of the above occurred, our business and results of operations could
be adversely affected.
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In addition, we may acquire properties subject to liabilities and without
any recourse, or with only limited recourse, with respect to unknown
liabilities. As a result, if a liability were to be asserted against us based
upon ownership of those properties, we might have to pay substantial sums to
settle it, which could adversely affect our cash flow.
Rent control legislation may harm our ability to increase rents.
State and local rent control laws in certain jurisdictions may limit our
ability to increase rents and to recover increases in operating expenses and the
costs of capital improvements. Enactment of such laws has been considered from
time to time in other jurisdictions. Certain Properties are located, and we may
purchase additional properties, in markets that are either subject to rent
control or in which rent-limiting legislation exists or may be enacted.
We may be subject to environmental liability.
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real estate is liable for the costs of removal or
remediation of certain hazardous substances at, on, under or in such property.
Such laws often impose such liability without regard to whether the owner knew
of, or was responsible for, the presence of such hazardous substances. The
presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or rent such
property, to borrow using such property as collateral or to develop such
property. Persons who arrange for the disposal or treatment of hazardous
substances also may be liable for the costs of removal or remediation of such
substances at a disposal or treatment facility owned or operated by another
person. In addition, certain environmental laws impose liability for the
management and disposal of asbestos-containing materials and for the release of
such materials into the air. These laws may provide for third parties to seek
recovery from owners or operators of real properties for personal injury
associated with asbestos-containing materials. In connection with the ownership,
operation, management, and development of real properties, we may be considered
an owner or operator of such properties and, therefore, are potentially liable
for removal or remediation costs, and also may be liable for governmental fines
and injuries to persons and property. When we arrange for the treatment or
disposal of hazardous substances at landfills or other facilities owned by other
persons, we may be liable for the removal or remediation costs at such
facilities.
All of the Properties have been subject to a Phase I or similar
environmental audit (which involves general inspections without soil sampling or
ground water analysis) completed by independent environmental consultants. These
environmental audits have not revealed any significant environmental liability
that would have a material adverse effect on our business. These audits cannot
reflect conditions arising after the studies were completed, and no assurances
can be given that existing environmental studies reveal all environmental
liabilities, that any prior owner or operator of a property or neighboring owner
or operator did not create any material environmental condition not known to us,
or that a material environmental condition does not otherwise exist as to any
one or more Properties.
Losses in excess of our insurance coverage or uninsured losses could adversely
affect our cash flow.
We maintain comprehensive liability, fire, flood (where appropriate),
extended coverage, and rental loss insurance on the Properties with policy
specifications, limits, and deductibles which are customarily carried for
similar properties. As a result of market conditions in the insurance industry,
we carry a $250,000 deductible on our liability insurance. Certain types of
losses, however, may be either uninsurable or not economically insurable, such
as losses due to earthquakes, riots, or acts of war. In the event an uninsured
loss occurs, we could lose both
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our investment in and anticipated profits and cash flow from the affected
property. Any loss would adversely affect our ability to repay our debt.
FINANCING AND INVESTMENT RISKS
Our significant amount of debt could limit our operational flexibility or
otherwise adversely affect our financial condition.
We have a significant amount of debt. As of September 30, 2007, we had
approximately $1.2 billion of total debt outstanding, consisting of
approximately $1.1 billion in debt that is collateralized by mortgage liens on
103 of the Properties (the "Mortgage Debt"), and approximately $125.5 million in
unsecured debt. If we fail to meet our obligations under the Mortgage Debt, the
lender would be entitled to foreclose on all or some of the Properties securing
such debt which could have a material adverse effect on us and our ability to
make expected distributions, and could threaten our continued viability.
We are subject to the risks normally associated with debt financing,
including the following risks:
- our cash flow may be insufficient to meet required payments of
principal and interest, or require us to dedicate a substantial
portion of our cash flow to pay our debt and the interest associated
with our debt rather than to other areas of our business;
- our existing indebtedness may limit our operating flexibility due to
financial and other restrictive covenants, including restrictions on
incurring additional debt;
- it may be more difficult for us to obtain additional financing in the
future for our operations, working capital requirements, capital
expenditures, debt service or other general requirements;
- we may be more vulnerable in the event of adverse economic and
industry conditions or a downturn in our business; and
- we may be placed at a competitive disadvantage compared to our
competitors that have less debt.
If any of the above risks occurred, our financial condition and results of
operations could be materially adversely affected.
We may be able to incur substantially more debt which would increase the risks
associated with our substantial leverage.
Despite our current indebtedness levels, we may still be able to incur
substantially more debt in the future. If new debt is added to our current debt
levels, an even greater portion of our cash flow will be needed to satisfy our
debt service obligations. As a result, the related risks that we now face could
intensify and increase the risk of a default on our indebtedness.
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Our equity investment in Origen Financial, Inc., may subject us to certain
risks.
In October 2003, Origen Financial, LLC completed a $150 million
recapitalization. In this transaction, we purchased 5,000,000 shares of common
stock (representing approximately 19% of the issued and outstanding shares of
common stock as of September 30, 2007) of Origen Financial, Inc. ("Origen") for
$50 million. Origen is a publicly traded real estate investment trust in the
business of originating, acquiring and servicing manufactured home loans. Our
equity investment in Origen is subject to all of the risks associated with
Origen's business, including the risks associated with the manufactured housing
finance industry. The failure of Origen to achieve its development and operating
goals could have a material adverse effect on the value of our investment in
Origen. At December 31, 2006, the Company determined that an impairment to its
investment in Origen had occurred and recorded an $18.0 million adjustment to
the carrying value of this investment. Additional information is included in
Footnote 1.g. to our consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2006.
The financial condition and solvency of our borrowers and the market value of
our properties may adversely affect our investments in real estate, installment
and other loans.
As of December 31, 2006, we had an investment of approximately $13.5
million in a real estate loan to an entity which owns a manufactured home
community located in Arizona. The loan was secured by a first lien on the
underlying property and was repaid in full on March 1, 2007. Also, as of
September 30, 2007, we had outstanding approximately $28.7 million in
installment loans to owners of manufactured homes. These installment loans are
collateralized by the manufactured homes. We may invest in additional mortgages
and installment loans in the future. By virtue of our investment in the
mortgages and the loans, we are subject to the following risks of such
investment:
- the borrowers may not be able to make debt service payments or pay
principal when due;
- the value of property securing the mortgages and loans may be less
than the amounts owed; and
- interest rates payable on the mortgages and loans may be lower than
our cost of funds.
If any of the above occurred, our business and results of operations could
be adversely affected.
TAX RISKS
We may suffer adverse tax consequences and be unable to attract capital if we
fail to qualify as a REIT.
We believe that since our taxable year ended December 31, 1994, we have
been organized and operated, and intend to continue to operate, so as to qualify
for taxation as a REIT under the Internal Revenue Code ("Code"). Although we
believe that we have been and will continue to be organized and have operated
and will continue to operate so as to qualify for taxation as a REIT, we cannot
assure you that we have been or will continue to be organized or operated in a
manner to so qualify or remain so qualified. Qualification as a REIT involves
the satisfaction of numerous requirements (some on an annual and quarterly
basis) established under highly technical and complex Code provisions for which
there are only limited judicial or administrative interpretations, and involves
the determination of various factual matters and circumstances not entirely
within our control. In addition, frequent changes occur in the area of REIT
taxation, which require the Company continually to monitor its tax status.
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If we fail to qualify as a REIT in any taxable year, we would be subject to
federal income tax (including any applicable alternative minimum tax) on our
taxable income at regular corporate rates. Moreover, unless entitled to relief
under certain statutory provisions, we also would be disqualified from treatment
as a REIT for the four taxable years following the year during which
qualification was lost. This treatment would reduce our net earnings available
for investment or distribution to stockholders because of the additional tax
liability to us for the years involved. In addition, distributions to
stockholders would no longer be required to be made. Even if we qualify for and
maintain our REIT status, we will be subject to certain federal, state and local
taxes on our property and certain of our operations.
We intend for the Operating Partnership to qualify as a partnership, but we
cannot guarantee that it will qualify.
We believe that the Operating Partnership has been organized as a
partnership and will qualify for treatment as such under the Code. However, if
the Operating Partnership is deemed to be a "publicly traded partnership," it
will be treated as a corporation instead of a partnership for federal income tax
purposes unless at least 90% of its income is qualifying income as defined in
the Code. The income requirements applicable to REITs and the definition of
"qualifying income" for purposes of this 90% test are similar in most respects.
Qualifying income for the 90% test generally includes passive income, such as
specified types of real property rents, dividends and interest. We believe that
the Operating Partnership would meet this 90% test, but we cannot guarantee that
it would. If the Operating Partnership were to be taxed as a corporation, it
would incur substantial tax liabilities, we would fail to qualify as a REIT for
federal income tax purposes, and our ability to raise additional capital could
be significantly impaired.
Our ability to accumulate cash is restricted due to certain REIT distribution
requirements.
In order to qualify as a REIT, we must distribute to our stockholders at
least 90% of our REIT taxable income (calculated without any deduction for
dividends paid and excluding net capital gain) and to avoid federal income
taxation, our distributions must not be less than 100% of our REIT taxable
income, including capital gains. As a result of the distribution requirements,
we do not expect to accumulate significant amounts of cash. Accordingly, these
distributions could significantly reduce the cash available to us in subsequent
periods to fund our operations and future growth.
BUSINESS RISKS
Some of our directors and officers may have conflicts of interest with respect
to certain related party transactions and other business interests.
Ownership of Origen. In the 2003 recapitalization of Origen Financial,
Inc., ("Origen"), the Company purchased 5,000,000 shares of Origen common stock
for $50 million and Shiffman Origen LLC (which is owned by the Milton M.
Shiffman Spouse's Marital Trust, Gary A. Shiffman (the Company's Chief Executive
Officer), and members of Mr. Shiffman's family) purchased 1,025,000 shares of
Origen common stock for $10.25 million. Gary A. Shiffman is a member of the
board of directors of Origen and Arthur A. Weiss, a director of the Company, is
a trustee of the Milton M. Shiffman Spouse's Marital Trust.
Accordingly, in all transactions involving Origen, Mr. Shiffman and/or Mr.
Weiss may have a conflict of interest with respect to their respective
obligations as an officer and/or director of the Company. The following are the
current transactions and agreements involving Origen which may present a
conflict of interest for Mr. Shiffman or Mr. Weiss:
12
- Origen Servicing Inc., a wholly owned subsidiary of Origen, services
approximately $28.8 million of manufactured home loans for the Company
as of September 30, 2007, for an annual servicing fee of 100 to 150
basis points of the outstanding principal balance of the loans
pursuant to a Loan Servicing Agreement.
- Origen has agreed to fund loans that meet the Company's underwriting
guidelines and then transfer those loans to the Company pursuant to a
Loan Origination, Sale and Purchase Agreement. During 2006 and 2005,
the Company purchased $7.9 million and $7.2 million of these loans,
respectively.
- The Company purchases certain repossessed manufactured houses owned by
Origen located in its manufactured housing communities. The Company
purchased approximately $1.2 million and $2.1 million of repossessed
homes from Origen during 2006 and 2005, respectively. This program
allows the Company to retain houses for resale and rent in its
communities and allows Origen to enhance recoveries on its repossessed
homes.
- As noted above, Origen services manufactured home loans for the
Company under a Loan Servicing Agreement. Certain loans may, from time
to time, be sold to Origen. For loans that are made below published
rates, the Company will pay Origen the interest differential between
market rates and the rate paid by the borrower for any such loans sold
to Origen. During 2004, the Company sold a portfolio of below
published rates loans totaling $1.6 million to Origen. No sales of
such loans were made in 2005 and 2006. The Company paid interest
differential of approximately $0.1 million during 2006, 2005 and 2004.
In addition, in the third quarter of 2006, the Company sold a
portfolio of installment loans on manufactured homes totaling
approximately $4.1 million to a wholly-owned subsidiary of Origen
Financial, Inc. for 100.5 percent of the principal balance for loans
that were 89 days or less delinquent and 100 percent of the principal
balance for loans that were 90 days or more delinquent. The Company
recognized a gain on the sale of these notes of $0.02 million.
Tax Consequences Upon Sale of Properties. Gary A. Shiffman holds limited
partnership interests in the Operating Partnership which were received in
connection with the contribution of 24 properties (four of which have been sold)
from partnerships previously affiliated with him (the "Sun Partnerships"). Prior
to any redemption of these limited partnership interests for our common stock,
Mr. Shiffman will have tax consequences different from those of us and our
public stockholders on the sale of any of the Sun Partnerships. Therefore, Mr.
Shiffman and the Company may have different objectives regarding the appropriate
pricing and timing of any sale of those properties.
Lease of Executive Offices. Gary A. Shiffman, together with certain family
members, indirectly owns approximately a 21 percent equity interest in American
Center LLC, the entity from which we lease office space for our principal
executive offices. Arthur A. Weiss owns a 0.75 percent indirect interest in
American Center LLC. This lease was for an initial term of five years, beginning
May 1, 2003, with the right to extend the lease for an additional five year
term. On July 30, 2007, the Company exercised its option to extend its lease for
its executive offices. The extension is for a period of five years commencing on
May 1, 2008. The base rent for the option term will continue to be the same as
the rent payable at the end of the current term. The current annual base rent
under the current lease is $21.25 per square foot (gross). Mr. Shiffman may have
a conflict of interest with respect to his obligations as an officer and/or
director of the Company and his ownership interest in American Center LLC.
13
We rely on key management.
We are dependent on the efforts of our executive officers, particularly
Gary A. Shiffman, Brian W. Fannon, John B. McLaren, Karen J. Dearing and
Jonathan M. Colman (together, the "Senior Officers"). As disclosed under "Legal
Proceedings" in the Company's Annual Report on Form 10-K for the year ended
December 31, 2006, the SEC has initiated civil action against three of our
employees, including Mr. Shiffman with respect to our accounting of the SunChamp
LLC investment during 2000, 2001 and 2002. The defense of this civil action may
divert the time and attention of these employees, be costly to the Company
and/or result in the loss of services, or change in duties, of one or more of
these employees. The loss of services of one or more of our executive officers
could have a temporary adverse effect on our operations. We do not currently
maintain or contemplate obtaining any "key-man" life insurance on the Senior
Officers.
Certain provisions in our governing documents may make it difficult for a
third-party to acquire us.
9.8% Ownership Limit. In order to qualify and maintain our qualification as
a REIT, not more than 50% of the outstanding shares of our capital stock may be
owned, directly or indirectly, by five or fewer individuals. Thus, ownership of
more than 9.8% of our outstanding shares of common stock by any single
stockholder has been restricted, with certain exceptions, for the purpose of
maintaining our qualification as a REIT under the Code. Such restrictions in our
charter do not apply to Gary Shiffman, the Milton M. Shiffman Spouse's Marital
Trust and the Estate of Robert B. Bayer.
The 9.8% ownership limit, as well as our ability to issue additional shares
of common stock or shares of other stock (which may have rights and preferences
over the common stock), may discourage a change of control of the Company and
may also: (1) deter tender offers for the common stock, which offers may be
advantageous to stockholders; and (2) limit the opportunity for stockholders to
receive a premium for their common stock that might otherwise exist if an
investor were attempting to assemble a block of common stock in excess of 9.8%
of the outstanding shares of the Company or otherwise effect a change of control
of the Company.
Staggered Board. Our Board of Directors has been divided into three classes
of directors. The term of one class will expire each year. Directors for each
class will be chosen for a three-year term upon the expiration of such class's
term, and the directors in the other two classes will continue in office. The
staggered terms for directors may affect the stockholders' ability to change
control of the Company even if a change in control were in the stockholders'
interest.
Preferred Stock. Our charter authorizes the Board of Directors to issue up
to 10,000,000 shares of preferred stock and to establish the preferences and
rights (including the right to vote and the right to convert into shares of
common stock) of any shares issued. The power to issue preferred stock could
have the effect of delaying or preventing a change in control of the Company
even if a change in control were in the stockholders' interest.
Rights Plan. We adopted a stockholders' rights plan in 1998 that provides
our stockholders (other than a stockholder attempting to acquire a 15% or
greater interest in the Company) with the right to purchase stock in the Company
at a discount in the event any person attempts to acquire a 15% or greater
interest in the Company. Because this plan could make it more expensive for a
person to acquire a controlling interest in the Company, it could have the
effect of delaying or preventing a change in control of the Company even if a
change in control were in the stockholders' interest.
14
Changes in our investment and financing policies may be made without stockholder
approval.
Our investment and financing policies, and our policies with respect to
certain other activities, including our growth, debt, capitalization,
distributions, REIT status, and operating policies, are determined by our Board
of Directors. Although the Board of Directors has no present intention to do so,
these policies may be amended or revised from time to time at the discretion of
the Board of Directors without notice to or a vote of our stockholders.
Accordingly, stockholders may not have control over changes in our policies and
changes in our policies may not fully serve the interests of all stockholders.
Substantial sales of our common stock could cause our stock price to fall.
Sales of a substantial number of shares of our common stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices for shares. As of September 30, 2007, up to approximately 2,828,000
shares of our common stock may be issued in the future to the limited partners
of the Operating Partnership in exchange for their common limited partnership
interests ("Common OP Units") and preferred limited partnership interests
("Preferred OP Units"). These Preferred OP Units are convertible into common
shares at a price of $68 per share. The limited partners may sell such shares
pursuant to registration rights or an available exemption from registration.
Also, in 2008 and 2009, Water Oak, Ltd., a former owner of one of the
Properties, may be issued Common OP Units with a value of approximately
$1,250,000. In addition, as of September 30, 2007, options to purchase 300,137
shares of our common stock were outstanding under our 1993 Employee Stock Option
Plan, our 1993 Non-Employee Director Stock Option Plan and our Long-Term
Incentive Plan (the "Plans"). No prediction can be made regarding the effect
that future sales of shares of our common stock will have on the market price of
shares.
An increase in interest rates may have an adverse effect on the price of our
common stock.
One of the factors that may influence the price of our common stock in the
public market will be the annual distributions to stockholders relative to the
prevailing market price of the common stock. An increase in market interest
rates may tend to make the common stock less attractive relative to other
investments, which could adversely affect the market price of our common stock.
15
SELLING STOCKHOLDERS
The Selling Stockholders may use this prospectus for the resale of shares
of Common Stock being registered by this prospectus, although no Selling
Stockholder is obligated to sell any such shares. Each of the Selling
Stockholders is a holder of Common OP Units and/or shares of Common Stock. We
are the sole general partner of the Operating Partnership. Under the terms of
the Operating Partnership's Second Amended and Restated Limited Partnership
Agreement (the "Partnership Agreement"), the Common OP Units may be exchanged
for shares of Common Stock. As of the date of this prospectus, the exchange
ratio is one share for each Common OP Unit exchanged, but such exchange ratio is
subject to adjustment in certain events pursuant to anti-dilution provisions
contained in the Partnership Agreement. The Common Stock offered by this
prospectus has been or will be issued to the Selling Stockholders in exchange
for Common OP Units held by the Selling Stockholders (the "Shares"). The Selling
Stockholders are not required to exchange Common OP Units to Common Stock. Mr.
Shiffman, and Mr. Jorissen are affiliates of the Company.
The following table sets forth certain information regarding the Selling
Stockholders and the shares of Common Stock beneficially owned by each of them:
Shares of Shares Beneficially
Common Stock Owned After
Beneficially Completion of
Owned Prior Number of the Offering (2)
to the Shares ----------------------
Selling Stockholder Offering (1) Being Offered Number Percent(3)
------------------- ------------ ------------- --------- ----------
Water Oak, Ltd. 66,113 66,075 38 *
Louis and Gertrude Benson, Co-Trustees of the Louis
Benson Revocable Trust 3/18/93 13,931 13,931 0 *
Gerard Berger 20,707 20,707 0 *
Barbara Fruman 449 449 0 *
Lee Fruman 449 449 0 *
Richard Geronemus 1,044 1,044 0 *
J.B.E., Inc. 38,571 38,571 0 *
Jeffrey Jorissen 220,133(4) 100,000 120,133 *
Jane Nacht 1,444 1,444 0 *
Nacht, Trupkin and Babyak, P.A. Pension F/B/O E. Nacht 899 899 0 *
Vernon J. Rosen, as Trustee for the Herbert Rosen
Irrevocable Trust 22,000 22,000 0 *
Robert Sentz 100 100 0 *
Jeffrey Simon, as custodian for Peter Simon 2,917 2,917 0 *
Miriam Simon, as custodian for Brian Simon 2,917 2,917 0 *
Miriam Simon, as custodian for Richard Simon 2,917 2,917 0 *
Paul Simon 17,955 17,955 0 *
Sherman Simon 25,005 25,005 0 *
Susan Smith 38,221 38,221 0 *
16
Shares of Shares Beneficially
Common Stock Owned After
Beneficially Completion of
Owned Prior Number of the Offering (2)
to the Shares ----------------------
Selling Stockholder Offering (1) Being Offered Number Percent(3)
------------------- ------------ ------------- --------- ----------
S.R.K. Financial, Inc. 27,676 27,676 0 *
Stephen Abramson 1,893 1,893 0 *
Bonnie Askowitz 1,894 1,894 0 *
Gerald Askowitz 1,894 1,894 0 *
Steven Brown 3,788 3,788 0 *
Irwin Cantor 2,346 2,346 0 *
Adam Kalkin 1,685 1,685 0 *
Eugene Kalkin 14,308 14,308 0 *
Nancy Kalkin 1,685 1,685 0 *
Morton Kaplan 4,994 4,994 0 *
Alexander Kaufman Trust 1,444 1,444 0 *
Jennifer Stein 482 482 0 *
Alan I. Burch IRA Rollover 449 449 0 *
Ruth Wasserman 1,444 1,444 0 *
Gary A. Shiffman 2,055,546(5) 272,811 1,782,735 9.8%
Mary Ann Shapiro 1,444 1,444 0 *
TOTAL 2,598,744 695,838 1,902,906
(1) The number set forth in this column is the number of shares of Common Stock
held by each such Selling Stockholder and/or the number of shares of Common
Stock that would be received upon an exchange of Common OP Units held by
each such Selling Stockholder.
(2) Assumes that all shares of Common Stock being offered and registered
hereunder are sold, although no Selling Stockholder is obliged to sell any
such shares.
(3) Based upon 18,249,610 shares of Common Stock outstanding as of September
30, 2007.
(4) Includes 100,000 Common OP Units convertible into shares of common stock;
12,250 shares of Common Stock which may be acquired pursuant to options
exercisable within sixty days of the date hereof; 37,500 restricted shares
over which Mr. Jorissen does not have the right to vote until such time as
certain performance criteria are met. Mr. Jorissen disclaims beneficial
ownership of 2,796 shares of common stock held by other family members
because he does not have a pecuniary interest therein.
(5) Includes 544,222 Common OP Units convertible into shares of Common Stock;
25,000 Common OP Units of which Mr. Shiffman has only beneficial ownership,
but not record ownership; 50,000 shares of Common Stock which may be
acquired pursuant to options exercisable within sixty days of the date
hereof; 453,841 shares of Common Stock owned by certain limited liability
companies of which Mr. Shiffman is a member and a manager; and 56,250
restricted shares over which Mr. Shiffman does not have the right to vote
until such time as certain performance criteria are met. Mr. Shiffman
disclaims beneficial ownership of 3,000 Common OP Units convertible into
shares of Common Stock and 2,300 shares of Common Stock held by other
family members because he does not have a pecuniary interest therein.
* Less than one percent (1%).
17
USE OF PROCEEDS
We will not receive any of the proceeds of any sale by the Selling
Stockholders. We have agreed to pay the fees, costs and expenses of this
offering.
PLAN OF DISTRIBUTION
The Company is registering the Shares on behalf of the Selling
Stockholders. As used herein, "Selling Stockholders" includes pledgees, donees,
transferees or other successors in interest (collectively with the Selling
Stockholders, the "Sellers") selling shares received from a Selling Stockholder
after the date of this prospectus. The registration of the Shares, however, does
not necessarily mean that any of the Shares will be offered or sold by the
Selling Stockholders or their respective donees, pledgees or other transferees
or successors in interest. We will not receive any proceeds from the sale of the
Shares offered by this prospectus.
Subject to certain restrictions on transfer that may be applicable to the
Selling Stockholders, they may sell the Shares described in this prospectus and
any prospectus supplement to one or more underwriters for public offering and
sale, or they may sell the Shares to investors directly or through dealers or
agents.
The Selling Stockholders may act independently of us in making decisions
with respect to the timing, manner and size of each of their sales. The Selling
Stockholders may make sales on the New York Stock Exchange or otherwise, at
prices and under terms prevailing at the time of the sale, or at prices related
to the then-current market price, at fixed prices, or in privately negotiated
transactions. The Selling Stockholders may sell the Shares offered by this
prospectus by one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resales by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to
sell the Shares as agent, but may position and resell a portion of the
block as principal to facilitate the transaction; or
- privately negotiated transactions, which include direct sales to
purchasers and sales effected through agents.
In effecting sales, broker-dealers engaged by the Selling Stockholders may
arrange for other broker-dealers to participate. Broker-dealers may receive
compensation from the Selling Stockholders in the form of commissions, discounts
or concessions. Broker-dealers may also receive compensation from purchasers of
the Shares for whom they act as agents or to whom they sell as principals or
both. Compensation as to a particular broker-dealer may be in excess of
customary commissions and will be in amounts to be negotiated.
The distribution of the Shares also may be effected from time to time in
one or more underwritten transactions. Any underwritten offering may be on a
"best efforts" or a "firm commitment" basis. In connection with any underwritten
offering, underwriters or agents may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders or from
purchasers of the Shares. Underwriters may sell the Shares to or through
dealers, and 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.
Any underwriting compensation paid by any Selling Stockholders to
underwriters or agents in connection with the offering of the Shares, and any
discounts, concessions or commissions allowed by underwriters to participating
18
dealers, will be set forth in the applicable prospectus supplement.
Underwriters, dealers and agents participating in the distribution of the Shares
may be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of the Shares may be deemed to be
underwriting discounts and commissions under the Securities Act. Any
underwriter, dealer or agent involved in the offer and sale of the Shares will
be named in the applicable prospectus supplement.
In addition, any securities registered and offered pursuant to this
prospectus which qualify for sale pursuant to Rule 144 of the Securities Act may
be sold under Rule 144 rather than pursuant to this prospectus.
The Selling Stockholders may be required by the securities laws of some
states to offer and sell the Shares only through registered or licensed brokers
or dealers.
We have agreed to pay all expenses incident to the offering and sale of the
Shares offered by this prospectus, other than commissions, discounts and fees of
underwriters, broker-dealers or agents. Pursuant to the registration rights
granted to the Selling Stockholders in connection with the issuance of Common OP
Units to the Selling Stockholders, we have agreed to indemnify the Selling
Stockholders and any person who controls a Selling Stockholder against certain
liabilities and expenses arising out of, or based upon the information set forth
in, or incorporated by reference in, this prospectus, and the registration
statement of which this prospectus is a part, including liabilities under the
Securities Act.
If a prospectus supplement so indicates, the Selling Stockholders may
authorize agents, underwriters or dealers to solicit offers by institutional
investors to purchase the Shares to which such prospectus supplement relates,
providing for payment and delivery on a future date specified in such prospectus
supplement. There may be limitations on the minimum amount that may be purchased
by any institutional investor or on the number of the Shares that may be sold
pursuant to such arrangements. Institutional investors include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and such other institutions as we may
approve.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon by
Jaffe, Raitt, Heuer & Weiss, Professional Corporation, Southfield, Michigan.
Arthur A. Weiss, who is a director of the Company, is the Chairman of the Board
of Directors and a shareholder of Jaffe, Raitt, Heuer & Weiss, P.C.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2006, have been
so incorporated in reliance on the report of Grant Thornton, LLP, independent
accountants, given on the authority of such firm as experts in auditing and
accounting.
19
--------------------------------------------------------------------------------
No dealer, salesperson or other
individual has been authorized to
give any information or to make any 695,838 SHARES
representations not contained or
incorporated by reference in this
prospectus in connection with any
offering to be made by the
prospectus. If given or made, such
information or representations must
not be relied upon as having been
authorized by the Company. This
prospectus does not constitute an
offer to sell, or a solicitation of
an offer to buy, the securities, in
any jurisdiction where, or to any
person to whom, it is unlawful to
make such offer or solicitation.
Neither the delivery of this
prospectus nor any offer or sale made
hereunder shall, under any
circumstance, create an implication
that there has been no change in the
facts set forth in this prospectus or
in the affairs of the Company since
the date hereof. SUN COMMUNITIES, INC.
TABLE OF CONTENTS
PROSPECTUS
Page
----
ABOUT THIS PROSPECTUS 3 COMMON STOCK
WHERE YOU CAN FIND MORE
INFORMATION 3 ----------
FORWARD-LOOKING STATEMENTS 5
RISK FACTORS 5 PROSPECTUS
USE OF PROCEEDS 18
PLAN OF DISTRIBUTION 18 ----------
LEGAL MATTERS 19
EXPERTS 19
--------------------------------------------------------------------------------
________________, 2008
20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered.
Registration Fee............... $ 525.46
Legal Fees and Expenses........ 15,000.00
Accounting Fees and Expenses... 7,000.00
Miscellaneous.................. 2,474.54
----------
Total.......................... $25,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's charter authorizes the Company to obligate itself to
indemnify its present and former directors and officers and to pay or reimburse
expenses for such individuals in advance of the final disposition of a
proceeding to the maximum extent permitted from time to time by Maryland law.
The Company's bylaws obligate it to indemnify and advance expenses to present
and former directors and officers to the maximum extent permitted by Maryland
law. The Maryland General Corporation Law ("MGCL") permits a corporation to
indemnify its present and former directors and officers, among others, against
judgments, penalties, fines, settlements, and reasonable expenses actually
incurred by them in connection with any proceeding to which they may be made a
party by reason of their service to the Company in those capacities unless it is
established that: (i) the act or omission of the director or officer was
material to the matter giving rise to the proceeding; and (a) was committed in
bad faith or, (b) was the result of active and deliberate dishonesty; (ii) the
director or officer actually received an improper personal benefit in money,
property, or services; or (iii) in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission was
unlawful.
The MGCL permits the charter of a Maryland corporation to include a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages, except to the extent that:
(i) it is proved that the person actually received an improper benefit or profit
in money, property or services; or (ii) a judgment or other final adjudication
is entered in a proceeding based on a finding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The Company's
charter contains a provision providing for elimination of the liability of its
directors or officers to the Company or its stockholders for money damages to
the maximum extent permitted by Maryland law.
The partnership agreement of the Operating Partnership also provides for
indemnification of the Company and its officers and directors to the same extent
indemnification is provided to officers and directors of the Company in its
charter, and limits the liability of the Company and its officers and directors
to the Operating Partnership and its respective partners to the same extent the
liability of the officers and directors of the Company to the Company and its
stockholders is limited under the Company's charter.
ITEM 16. EXHIBITS
The exhibits to the Registration Statement are listed in the Exhibit Index
which appears elsewhere in this Registration Statement and is hereby
incorporated by reference.
II-1
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table set forth in this
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
Provided however, that Paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement; and
Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do
not apply if the registration statement is on Form S-3 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the Securities offered herein, and the
offering of such Securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the Securities being registered which remain unsold at the termination of the
offering.
(4) That, for the purpose of determining liability under the Securities Act
of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part
of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify
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any statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such date of first use.
(5) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield, State of Michigan, on March 5, 2008.
SUN COMMUNITIES, INC.,
a Maryland corporation
By: /s/ Karen J. Dearing
------------------------------------
Karen J. Dearing, Chief Financial
Officer, Secretary and Principal
Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
NAME TITLE DATE
---- ----- ----
/s/ Gary A. Shiffman Chief Executive Officer March 5, 2008
---------------------------- and Chairman of the
Gary A. Shiffman Board of Directors
/s/ Karen J. Dearing Executive Vice President, March 5, 2008
---------------------------- Treasurer, Chief Financial
Karen J. Dearing Officer, Secretary and
Principal Accounting Officer
/s/ * Director March 5, 2008
----------------------------
Paul D. Lapides
/s/ * Director March 5, 2008
----------------------------
Ted J. Simon
/s/ * Director March 5, 2008
----------------------------
Clunet R. Lewis
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NAME TITLE DATE
---- ----- ----
/s/ * Director March 5, 2008
----------------------------
Ronald L. Piasecki
/s/ * Director March 5, 2008
----------------------------
Arthur A. Weiss
/s/ * Director March 5, 2008
----------------------------
Robert H. Naftaly
/s/ * Director March 5, 2008
----------------------------
Stephanie W. Bergeron
/s/ Gary A. Shiffman
----------------------------
*By: Gary A. Shiffman, Attorney-in-Fact
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
*5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, Professional Corporation,
as to legality of securities
*23.1 Consent of Grant Thornton, independent registered public
accounting firm
*23.2 Consent of Jaffe, Raitt, Heuer & Weiss, Professional Corporation
(included in Exhibit 5.1)
* PREVIOUSLY FILED
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