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EXHIBIT 1.1
MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
3,800,000 Shares of Common Shares
PURCHASE AGREEMENT
Dated: January 31, 2001
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MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
3,800,000 Common Shares
(No Par Value Per Share)
PURCHASE AGREEMENT
January 31, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS Warburg LLC
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Municipal Mortgage & Equity, LLC, a Delaware limited liability company
(the "Company"), confirms its agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the
other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 9 hereof), for whom Xxxxxxx Xxxxx, UBS Warburg
LLC, First Union Securities, Inc. and Xxxx Xxxxx Xxxx Xxxxxx Incorporated are
acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common
Shares, no par value per share, of the Company ("Common Shares") set forth in
Schedule A hereto and (ii) the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b)
hereof to purchase all or any part of 570,000 additional shares of Common
Shares to cover over-allotments, if any. The aforesaid 3,800,000 shares of
Common Shares (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the 570,000 shares of Common Shares subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-56049) covering
the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), including the related prospectus or prospectus
supplement. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company
has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the
provisions of Rule 434 and Rule 424(b). The information included in such
prospectus or in such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration
statement became effective, and any prospectus that omitted, as applicable,
the Rule 430A Information or the Rule 434 Information, that was used after
such effectiveness and prior to the execution and delivery of this Agreement,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto, schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." If Rule 434 is relied on, the term
"Prospectus" shall refer to the preliminary prospectus and preliminary
prospectus supplement dated January 29, 2001 together with the Term Sheet and
all references in this Agreement to the date of the Prospectus shall mean the
date of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed
to include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which
is incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
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1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(1) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with.
(i) At the respective times the Registration
Statement became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, and any amendments and supplements thereto complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing
Time (and, if any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or omitted or
will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the requirements
of Rule 434. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished
to the Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly
for use in the Registration Statement or Prospectus.
(ii) Each preliminary prospectus and the prospectus
filed as part of the Registration Statement as originally filed or as part of
any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act Regulations
and each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(2) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations or
the 1934 Act and the rules and regulations of the Commission thereunder (the
"1934 Act Regulations"), as applicable, and, when read together with the other
information in the Prospectus, at the time the Registration Statement became
effective, at the time the
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Prospectus was issued and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act and
the 1933 Act Regulations.
(4) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, except for the information presented as "Other Data", present
fairly the financial position of the Company and its consolidated subsidiaries
at the dates indicated and the statement of operations, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with GAAP
the information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus, including
information presented as "Other Data" present fairly the information shown
therein and have been compiled on a basis consistent with the audited
financial statements included in the Registration Statement, except for normal
year-end adjustments. The information presented as "Other Data" fairly present
the information contained therein and are based on information derived from
the Company's accounting records on a basis consistent with the description of
the calculation of Cash Available for Distribution as set forth in the
footnote.
(5) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in
the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Common Shares and Preferred Shares in
amounts per share that are consistent with past practice and a special
distribution relating to the redemption of the Southfork mortgage revenue
bond, there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(6) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has limited liability company power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign limited liability
company to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
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except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(7) Good Standing of Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation, has
corporate or limited liability company power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation or limited liability
company to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding equity interests of each such Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity; none
of the outstanding shares of equity interest of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are the subsidiaries listed
on Schedule B hereto.
(8) Capitalization. The shares of issued and outstanding membership
interests have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of membership interests was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(9) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(10) Authorization and Description of Securities. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued and fully paid
and non-assessable to the extent permitted under the Delaware Limited
Liability Company Act; the Common Shares conform to all statements relating
thereto contained in the Prospectus and such description conforms to the
rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(11) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its certificate of organization or
operating agreement or charter or by-laws, as the case may be, or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements
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and Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities and
the use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Company
with its obligations hereunder have been duly authorized by all necessary
limited liability company action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not result
in a Material Adverse Effect), nor will such action result in any violation of
the provisions of the certificate of organization or operating agreement or
the charter or by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(12) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(13) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any subsidiary, which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party or
of which any of their respective property or assets is the subject which are
not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(14) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(15) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses,
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inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any
of its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification
or decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder or
the consummation of the transactions contemplated by this Agreement, except
such as have been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws.
(17) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(18) Title to Investments. The Company and its subsidiaries have
good and marketable title to all investments owned by the Company and its
subsidiaries as described in the Prospectus, in each case, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the Prospectus or
(b) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such investment.
(19) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(20) Investment Company Act. Neither the Company, nor any of the
Company's subsidiaries is, nor upon the issuance and sale of the Securities as
herein
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contemplated and the application of the net proceeds therefrom as described in
the Prospectus will become, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(21) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, the Company is not aware of (A) any violation of any
federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), or (B) any pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to any Environmental Law, relating to any real
property providing direct or indirect security for the Company's investments.
2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 570,000 shares of Common
Shares, as set forth in Schedule A, at the price per share set forth in Schedule
C, less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by the Representatives to
the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the
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Underwriters, acting severally and not jointly, will purchase that proportion
of the total number of Option Securities then being purchased which the number
of Initial Securities set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Securities, subject in each
case to such adjustments as the Representatives in their discretion shall make
to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxx
Xxxxxxx Xxxxxxx & Xxxxx LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately available
funds to bank accounts designated by the Company against delivery to the
Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for,
the Initial Securities and the Option Securities, if any, which it has agreed
to purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
3. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
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of any comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take
such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and
12
in the Prospectus. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the effective
date of the Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing
of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Shares or any securities convertible
into or exercisable or exchangeable for Common Shares or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause (i)
13
or (ii) above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Securities to be sold hereunder, (B) any shares of Common Shares
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectus, (C) any shares of Common Shares issued or options to purchase
Common Shares granted pursuant to existing employee benefit plans of the
Company referred to in the Prospectus, including but not limited to the 1996
Share Incentive Plan and the 1998 Share Incentive Plan, (D) any shares of
Common Shares issued pursuant to any non-employee director stock plan or
dividend reinvestment plan, or (E) any shares of Common Shares issued to the
prior stockholders of Midland Financial Holdings, Inc., pursuant to section
2.04 of the Stock Purchase and Contribution Agreement dated as of September
30, 1999 between the Company and the former stockholders of Midland Financial
Holdings, Inc.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(l) Payment of Expenses. The Company will pay or cause to be paid all
expenses incident to the performance of their obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of any transfer agent or registrar for the Securities and
(ix) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
(m) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 4, Section 8(a)(i)
or Section 10 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
4. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 1 hereof or in certificates of
any officer of the Company or any subsidiary
14
of the Company delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxxxx
Chance Xxxxxx & Xxxxx LLP, or Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (i) , (ii), (v),
(vi) (solely as to preemptive or other similar rights arising by operation of
law or under the charter or by-laws of the Company), (viii) through (x),
inclusive, (xiii), (xv) (solely as to the information in the Prospectus under
"Description of Common Shares") and the penultimate paragraph of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no
15
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(h) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule D hereto.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company, any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(1) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 4(d) hereof
remains true and correct as of such Date of Delivery.
(2) Opinion of Counsel for Company. The favorable opinion of
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by Section
4(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion required by
Section 4(d) hereof.
16
(4) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers
LLP, in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 4(f) hereof, except that
the "specified date" in the letter furnished pursuant to this paragraph shall
be a date not more than five days prior to such Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 3 and except that Sections 1, 5, 6 and 7 shall survive any
such termination and remain in full force and effect.
5. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission provided that (subject to Section 5(d)
below) any such settlement is effected with the written consent of the Company
and
17
(3) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage,
and expense described in the indemnity contained in subsection (1) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 5(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 5(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental
18
agency or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 5 or
Section 6 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and shall not have objected thereto and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
6. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
19
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 6. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 6, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
7. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
8. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development
20
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in
any securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
9. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Securities, as the case may
be, either (i) the Representatives or (ii) the Company shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
21
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
10. Default by the Company. If the Company shall fail at Closing Time or at the
Date of Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any nondefaulting party; provided, however, that the provisions of Sections
1, 3, 5, 6, and 7 shall remain in full force and effect. No action taken
pursuant to this Section shall relieve the Company from liability, if any, in
respect of such default.
11. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, attention of Xxxx Xxxxx, with a copy to Xxxxx Xxxxxxx
Xxxxxxx & Xxxxx, LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, attention of
X. X. Xxxxx, Xx.; notices to the Company shall be directed to it at 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, attention of Xxxx Xxxxxxxxx,
with a copy to Xxxxxxxx Chance Xxxxxx & Xxxxx, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxxx X. Xxxx, Xx.
12. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Company
and their respective successors and the controlling persons and officers and
directors referred to in Sections 5 and 6 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME.
14. Effect of Headings. The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
MUNICIPAL MORTGAGE & EQUITY, LLC
By: /s/ XXXX X. XXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
UBS WARBURG LLC
FIRST UNION SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX INCORPORATED
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxx Xxxxx
-----------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
23
SCHEDULE A
Name of Underwriter Number
------------------- of
Initial
Securities
----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................................ 1,520,000
UBS Warburg LLC......................................................... 988,000
First Union Securities.................................................. 646,000
Xxxx Xxxxx Xxxx Xxxxxx Incorporated..................................... 646,000
---------
Total................................................................... 3,800,000
=========
24
SCHEDULE B
List of subsidiaries
SCA Tax Exempt Trust
MuniMae TEI Holdings, LLC
MuniMae XX Xxxx Subsidiary, LLC
MMA Credit Enhancement I, LLC
Municipal Mortgage Investments, LLC
MMA Taxable Holdings, LLC
MuniMae Operating, LLC
MuniMae Structured Finance, LLC
MMA Taxable Structured Finance, LLC
MuniMae Investment Services Corporation
Midland Financial Holdings, Inc.
Midland Mortgage Investment Corporation
Midland Capital Corporation
Midland Advisory Services, Inc.
Midland Securities Corporation
Midland Realty Investment Corporation
Midland Equity Corporation
MuniMae Portfolio Services, LLC (formerly Municipal Mortgage Servicing, LLC)
MMACap, LLC
Municipal Mortgage & Equity, LLC Employee Compensation Trust
MMA Servicing, LLC
Municipal Mortgage Investments II, LLC
Midland Realty Incorporated
Midland Special Partners Corp.
Affordable Property Holdings LLC
Midland Special Limited Partner, Inc.
25
SCHEDULE C
Price of Securities
1 The public offering price per share for the Securities, determined as
provided in said Section 2, shall be $23.07 per share.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $21.89, being an amount equal to the public
offering price set forth above less $1.18 per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
26
SCHEDULE D
List of persons and entities
subject to lock-up
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxx, III
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Jews
Xxxxxxx X. XxXxxxxxx
Xxxx X. Xxxxxx
27
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
1. The Company has been duly organized and is validly existing as
a limited liability company in good standing under the laws of the State of
Delaware.
2. The Company has full limited liability company power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
the Purchase Agreement.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
4. To our knowledge, none of the outstanding shares of membership
interests of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
5. The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability by
reason of being such a holder.
6. The issuance and sale of the Securities by the Company is not
subject to the preemptive or other similar rights of any securityholder of the
Company.
7. Each Subsidiary has been duly incorporated or organized, as the
case may be, and is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of its formation,
has power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a foreign
entity to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock or membership interests of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable and,
to the best of our knowledge, is owned by the Company (except for MuniMae XX
Xxxx Subsidiary, LLC of which the Company owns all of the outstanding common
stock but none of the outstanding preferred stock), directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock of
any Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
28
8. The Registration Statement has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
9. The Registration Statement the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
10. The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which we need express no opinion), when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the 1933 Act or the 1934
Act, as applicable, and the rules and regulations of the Commission thereunder.
11. The form of certificate used to evidence the Securities complies in
all material respects with the Delaware Limited Liability Company Act.
12. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
13. The Securities conform in all material respects to the descriptions
thereof contained in the Prospectus.
14. To our knowledge and except as described in the Prospectus, there
is not pending or threatened any action, suit, proceeding, inquiry or
investigation, against the Company or any subsidiary of the Company or any of
their respective officers, directors or to which the properties, assets or
rights of any such entity are subject, which, if determined adversely to any
such entity, would individually or in the aggregate have a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder or the transactions
contemplated by the Prospectus.
15. The information in the Prospectus under the captions "Risk
Factors--The value of the common shares and MuniMae's ability to make
distributions depends on the application of tax laws," "Risk Factors--We are not
required to be registered under the Investment Company Act and would not be able
to conduct our business as we currently conduct it if we became required to be
registered," "Description of Common Shares," and " Federal Income Tax
Considerations," to the extent that such information constitutes matters of law,
summaries of legal matters, the Company's certificate of organization or
operating agreement or legal proceedings, or legal conclusions, has been
reviewed by us and is correct in all material respects; and the opinions set
forth under the caption " Federal Income Tax Considerations" and "Risk Factors--
The value of the common shares and MuniMae's ability to make distributions
depends
29
on the application of tax laws," as opinions of Xxxxxxxx Chance Xxxxxx & Xxxxx
LLP or "our counsel" are confirmed subject to the assumptions, qualifications,
limitations, representations and covenants described in those sections.
16. All descriptions in the Prospectus of contracts and other documents
to which the Company or any of its subsidiaries is a party are accurate in all
material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments that are not described or referred to in the Prospectus that are
required to be described.
17. To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
18. To the best of our knowledge no default by the Company or any of
its subsidiaries exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Prospectus or incorporated by
reference therein.
19. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering, issuance,
sale or delivery of the Securities.
20. None of (i) the issuance, sale and delivery by the Company of the
Securities, (ii) the execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Prospectus (including the use of the proceeds from the sale
of the Common Shares as described in the Prospectus under the caption "Use Of
Proceeds") or (iii) compliance by the Company with its obligations under the
Purchase Agreement and the terms of the Common Shares, whether with or without
the giving of notice or lapse of time or both, (a) violate the Company's
Certificate of Organization, Operating Agreement or Bylaws; (b) constitute a
default under any contract or agreement to which the Company is a party of which
we are aware; or (c) violate any applicable statute or regulation, or, to our
knowledge, any judgment, order or decree, of any court or governmental agency or
body.
21. Neither the Company nor any of the Company's subsidiaries, is nor
solely as a result of the consummation of the transactions contemplated by the
Prospectus and this Agreement, will become an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940.
In addition, we have participated in the preparation of the Prospectus
(but not in the preparation of the Incorporated Documents) and in conferences
with officers and other representatives of the Company and representatives of
their independent public accountants, at which time the contents of the
Prospectus and related matters were discussed, and have reviewed certain limited
liability company records, documents and proceedings. On the basis of the
foregoing nothing has come to our attention that would lead us to believe that
the Prospectus
30
(except for financial statements and schedules and other financial data included
or incorporated by reference therein or omitted therefrom, as to which we make
no statement), at the time the Prospectus became effective included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The limitations inherent in the
independent verification of the factual matters and the character of
determinations involved in the offering process are such, however, that we do
not assume any responsibility for the accuracy, completeness, or fairness of the
statements contained or incorporated by reference in the Prospectus.
31
EXHIBIT B
Form of Lock-Up
January 31 2001
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
UBS Warburg LLC
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Ladies and Gentlemen:
The Undersigned understands that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), First Union Securities, Inc., Xxxx Xxxxx Xxxx
Xxxxxx Incorporated and UBS Warburg LLC (the "Representatives") propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") with
Municipal Mortgage & Equity, LLC, a Delaware Limited liability company (the
"Company") providing for the public offering (the "Public Offering") by the
several Underwriters, including the Representatives (the "Underwriters"), of up
to 4,000,000 growth share interests (without par value) of the Company (the
"Common Shares"), plus up to an additional 600,000 shares to cover
over-allotments, (the "Shares") of the Common shares.
To induce the Underwriters that may participate in the Public Offering
to enter into the Underwriting Agreement and to continue their efforts in
connection with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of Xxxxxxx Xxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 45 days after the date that the Underwriting Agreement is executed, (1)
offer for sale, sell, contract to sell or otherwise transfer or dispose of,
directly or indirectly, any Common Shares or any securities convertible into
or exercisable or exchangeable for Common Shares or (2) sell or grant options,
rights or warrants with respect to any Common Shares, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Shares or such other securities, in cash or otherwise.
Notwithstanding the previous sentence, the following transfers of Common Shares
may be made at any time without the consent of Xxxxxxx Xxxxx: (i) any transfer
to entities controlled by the undersigned or equity owners of entities
controlled by the undersigned and (ii) any transfer to members of the
immediate family of the undersigned (or to an entity for their benefit);
provided that in each case, prior to making any such transfer, the undersigned
shall have delivered a written instrument to Xxxxxxx Xxxxx in which the
transferee agrees to be bound by the restrictions contained in this agreement
with respect to the Common Shares being transferred.
Very truly yours,
