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Membership Pledge Agreement

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Sectors: Real Estate
Governing Law: Michigan, View Michigan State Laws
Effective Date: December 13, 1999
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MEMBERSHIP PLEDGE AGREEMENT


This MEMBERSHIP PLEDGE AGREEMENT (this "Agreement") is entered into as of December 13, 1999 by and between BINGHAM FINANCIAL SERVICES CORPORATION, a Michigan corporation ("Pledgor") and SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP, a Michigan Limited Partnership ("Secured Party").


RECITALS:


A. Pledgor is the sole member of Bloomfield Acceptance Company, L.L.C., and of Bloomfield Servicing Company, L.L.C.


B. Pledgor executed and delivered to Sun Communities, Inc. a Term Promissory Note in the original principal amount of $4,000,000, dated September 30, 1997, which note was assigned and delivered by Sun Communities, Inc. to Secured Party on December 31, 1997 (the "Term Note").


C. Pledgor has executed and delivered to Secured Party a Demand Promissory Note in favor of Secured Party in the original principal amount of $10,000,000 dated March 30, 1999 (the "First Demand Note").


D. Pledgor has executed and delivered to Secured Party a Demand Promissory Note in favor of Secured Party in the original principal amount of $50,000,000 dated December 13, 1999 (the "Second Demand Note").


E. Pledgor has entered into and may in the future enter into various agreements with Secured Party, pursuant to which Pledgor may have various contractual, indemnification, warranty and/or other obligations to Secured Party (the "Contractual Obligations").


F. To secure the prompt satisfaction by Pledgor of Pledgor's obligations to Secured Party under the Term Note, the First Demand Note, the Second Demand Note, the Contractual Obligations and all other obligations of Pledgor to Secured Party, Pledgor has agreed to execute and deliver this Agreement to Secured Party.


NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants contained herein, the parties agree as follows:


NOW, THEREFORE, for and in consideration of the foregoing Recitals, the mutual covenants and agreements set forth below and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties agree as follows:


1. DEFINED TERMS. Unless otherwise defined in this Agreement, the following terms shall have the following meanings, unless the context otherwise requires:


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"BOOKS" means all books, records, financial information and correspondence relating to the Collateral.


"COLLATERAL" has the meaning set forth in Section 2 of this Agreement.


"COMPANIES" means Bloomfield Acceptance Company, L.L.C., Bloomfield Servicing Company, L.L.C. and any and all other membership interests in which Pledgor has or in the future acquires.


"DISTRIBUTIONS" has the meaning set forth in Section 2 of this Agreement.


"EVENT OF DEFAULT" means (i) any material default under this Agreement, or (ii) any Event of Default (as defined in the Term Note or in the Demand Note), after taking into account all applicable cure periods.


"GOVERNING DOCUMENTS" means, with respect to any Person, the certificate (or articles) of incorporation, by-laws, any agreement among the shareholders, partners or members of such Person, partnership agreement, certificate of partnership, articles of organization, operating agreement, all amendments to any of the foregoing and all other governing documents of such Person.


"LIEN" means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement or any lease in the nature thereof) and any agreement to give or refrain from giving any lien, mortgage, pledge, assignment, security interest, charge or other encumbrance of any kind.


"MEMBERSHIP INTERESTS" means all of Pledgor's right, title and interest in and to the Companies now owned or hereafter acquired.


"NOTES" means the Term Note, the First Demand Note, the Second Demand Note and the other promissory notes executed by Pledgor in favor of Secured Party.


"OBLIGATIONS" means Pledgor's obligations under the Notes and under the Contractual Obligations.


"PERMITTED LIENS" means any Liens both consented to in writing by Secured Party and identified on the attached Exhibit A.


"PERSON" OR "PERSONS" means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, lenders, trust companies, land trusts, vehicle trusts, business trusts or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.


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"PROCEEDS" means whatever is received upon the sale, exchange or other disposition of the Collateral.


"REQUIREMENTS OF LAW" means, with respect to any Person, the Governing Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.


"SECURED PARTY" has the meaning set forth in the preamble to this Agreement.


"UCC" means the Uniform Commercial Code as in effect in the State of Michigan; provided that if by reason of mandatory provisions of law, the perfection or effect of perfection or nonperfection of the security interest in any Collateral or the availability of any remedy under this Security Agreement is governed by the Uniform Commercial Code in effect in any other jurisdiction, "UCC" means the Uniform Commercial Code in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to such perfection or effect of perfection or nonperfection or availability of such remedy.


2. GRANT OF SECURITY INTEREST AND PLEDGE. As security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the Obligations due Secured Party, Pledgor hereby pledges, assigns, hypothecates, transfers and delivers to Secured Party, and grants to Secured Party, a first lien on and continuing security interest in the following property, whether now existing or hereafter acquired (collectively, the "Collateral"):


2.1. the Membership Interests;


2.2. to the extent not otherwise included, all Proceeds of the
Membership Interests; and


2.3. any and all distributions, cash, instruments and other property
from time to time received, receivable or otherwise distributed to Pledgor
in respect of, or in exchange for, the items described in Sections 2.1 and
2.2 above ("Distributions").


If any of the Governing Documents of any of the Companies restricts or prohibits the pledge or assignment of any of the Membership Interests, this Agreement shall in all events be construed to be a permitted assignment of all of Pledgor's right, title and interest in and to all Distributions and Proceeds with respect to such Membership Interests of Pledgor. In the event that any such restriction or prohibition shall terminate or be modified in such a way as to permit the pledge or assignment of such Membership Interests, Pledgor shall promptly take all actions consistent with the requirements of this Agreement with respect to Collateral of the same nature not so restricted.


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3. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants that:


3.1. GOOD TITLE. Pledgor is the owner of the Collateral and has good and marketable title thereto free and clear of any and all Liens, except for those granted pursuant to this Agreement and also except for Permitted Liens. There are no outstanding grants, warrants, options or other agreements with respect to any of the Collateral, except for those granted pursuant to this Agreement and also except for Permitted Liens.


3.2. NOTICE. On the written request of the Secured Party, Pledgor will execute and deliver notice and directions for payment, in form and substance satisfactory to Secured Party, to the Companies with respect to this Agreement, and will deliver to Secured Party in timely fashion, the acknowledgment of each of them, in form and substance satisfactory to Secured Party, of the assignment and pledge of the Membership Interests and/or Distributions and Proceeds pursuant to this Agreement.


3.3. NO COMPETING FILINGS. No security agreement, financing statement or equivalent security or lien instrument or continuation statement covering all or any part of the Collateral is on file or of record in any public office, except as may have been filed in favor of Secured Party pursuant to this Agreement, or except for those evidencing Permitted Liens.


All of the foregoing representations and warranties shall be deemed to have been made on each and every day during which this Agreement is in effect.


4. RIGHTS AND OBLIGATIONS OF SECURED PARTY.


4.1. VOTING AND OTHER RIGHTS. So long as no Event of Default has occurred and is continuing, Pledgor shall be entitled to vote or consent with respect to the Membership Interests in any manner not inconsistent with this Agreement and shall have the right to all Distributions. Subject to the previous sentence, Pledgor hereby grants to Secured Party or its nominee an irrevocable proxy to exercise all voting and other rights and privileges relating to the Membership Interests, which proxy shall be effective immediately upon the occurrence of, and throughout the continuation of, an Event of Default and written notice to Pledgor of Secured Party's election to exercise such proxy, and shall be coupled with an interest. Secured Party may exercise all rights and privileges herein granted with respect to the Membership Interests without liability and Secured Party shall have no duty to exercise any of the aforesaid rights or privileges and shall not be responsible for any failure to do so or delay in so doing. Upon an Event of Default, Secured Party shall have a right to all Distributions.


4.2. OBLIGATIONS OF SECURED PARTY. Beyond the exercise of reasonable care to assure the safe custody of the Collateral while Secured Party has a security interest in the Collateral, Secured Party shall have no duty or liability to preserve any rights pertaining to the Collateral. Secured Party shall not be liable for failure to collect or realize upon the Obligations


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or any Collateral, or any part thereof, or for any delay in so doing, nor shall it be under any obligation to take any action whatsoever with regard thereto. Secured Party shall at no time incur any liability to the Companies or others for any losses, debts or other liabilities or obligations of the Companies unless Secured Party shall have acquired t
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