UNDERWRITING AGREEMENT
between
VILLAGE AT OAKWOOD, L.L.C. (" Issuer")
00000 Xxxxxx Xxxx Xxxx.
Xxxxx, XX 00000
and
MMR INVESTMENT BANKERS, INC. ("Underwriter")
000 X Xxxxxx
Xxxxxx X
Xxxxxx, XX 00000-0000
(000) 000-0000
Toll Free 0-000-000-0000
INTRODUCTION
The Underwriter will provide professional and technical services in preparing
two bond issues for the Issuer.
AMOUNT
The Bond Issue shall be in the aggregate amount of $9,990,000.00 and
shall be designated as follows:
Issue One $6,000,000.00 First Mortgage
Issue Two $3,990,000.00 First Mortgage
SECURITY
The address of the property securing the two Bond Issues as follows:
--5.91 acres of land east of the intersection of SE 15th Street
and Westminister Road in the eastern portion of Midwest City, Oklahoma.
ISSUER'S RESPONSIBILITIES
The Issuer agrees to:
1. The Issuer shall complete the prospectus information forms,
and provide any other information requested by the Underwriter. An
independent audit performed by a Certified Public Accountant will be
required.
2. Engage an attorney to prepare a legal debt letter, secure a
title insurance policy in the amount of the Bond Issue and to review the
necessary legal documents, including, but not limited to, the Resolution
authorizing the Bond Issue and the Trust Indenture. This work shall be
completed in a manner and within a time period satisfactory to the Underwriter.
The Issuer shall pay the attorney's fees.
3. Furnish to the Underwriter a certified copy of its Articles
of Organization, its Operating Agreement, and any other forms required by
the Underwriter and the Securities Commission of its state or any other
state in which it wishes to sell the bonds.
4. Furnish an appraisal of its property and improvements to the
Underwriter. The Underwriter will require an MAI appraisal. A Phase I
Environmental Study will also be required. The Issuer agrees to pay all
expenses of the appraisal and Environmental Study.
5. Engage a paying agent, registrar, and independent trustee selected
by the Underwriter. The Issuer agrees to pay any expenses pertaining to
these services.
6. Prior to the delivery of the bonds, execute the Trust Indenture
and cause it to be recorded in all places required by law and as may be
agreed upon by the Underwriter and the Issuer. The Issuer shall take such
steps as necessary to make the Indenture a valid obligation of the Issuer
and a lien on and security interest in the property owned by the Issuer and
included in the lien of the Indenture. The Issuer agrees that the Bonds will
be secured by a first mortgage on the property.
7. The Issuer shall pay the expenses of furnishing the title insurance,
the filing and recording fees, the Attorney's fees, the Appraiser's fees,
the Environmental Study fees, the Accountant's fees, all Trustee's fees,
any registration, recording or mortgage taxes levied on bonds by either
state or federal government bodies and any registration and licensing fees
required by any regulatory body, any state or the federal government.
8. Furnish the Underwriter copies of the architectural and construction
contracts, final plans and specifications, and detail of all bids.
9. The Issuer is responsible to begin making Sinking Fund Payments
the week of the Issue Date for each Series of Bonds.
10. The Issuer agrees to set up a Bond Reserve Account in an amount
equivalent to four months of Operating Fund Payments of each Series of Bonds
to be controlled and used by the Trustee to pay principal and interest due
on the bonds, should the Issuer ever be in an event of default on the bond
issue. The Bond Reserve Account will remain in place until all the Bonds
have matured. At the time all the Bonds have matured, the bond reserve
account will be released to the Village at Oakwood. The Issuer will
establish the Bond Reserve Account from sale of the bonds. In addition, the
first four months of the Initial Operating Fund Payments will be funded
from the initial proceeds from the sale of the bonds.
11. The Issuer agrees that it shall not contact any person listed
in the records of the Underwriter as a Customer of the Underwriter for any
reason whatsoever. This provision shall not be construed to prohibit the
Issuer from providing any reports or notification to securities holders that
may be mandated by any federal or state laws or regulations.
UNDERWRITER'S RESPONSIBILITIES
The Underwriter agrees to:
1. Furnish the preliminary organizational material to the Issuer.
2. Set the interest rates and calculate the maturity schedule just
prior to filing the issues with the proper regulatory bodies.
3. Furnish a printed prospectus for each of the bond issues prepared
from the information provided by the Issuer.
4. Process all information sent to the Underwriter by the Issuer.
5. Make appropriate filings with all regulatory bodies on behalf of the
Issuer. The Issuer agrees to pay all costs of these filings.
6. Will offer and sell the Bonds on a "best efforts" basis at the
public offering price of $250 per Bond, or integral multiples thereof.
DEPOSIT OF PROCEEDS FROM BOND SALES
The Issuer agrees to deposit proceeds from the sale of the bonds pursuant
to the Trust Indenture. Any funds received by the Underwriter subject to
the terms of the Trust Indenture will be delivered to the bond proceeds
account no later than 12:00 noon the next business day following receipt.
The Underwriter shall instruct investors to make their checks payable to the
Registrar. If there is an escrow, then the Underwriter will instruct
investors to make their checks payable to the Escrow Agent.
FUTURE BOND ISSUES
In accordance with the Trust Indenture, additional bonds may be issued
from time to time on a par and equality basis with the same underlying
security, (plus improvements), provided the proceeds are used to enhance
the existing project, to make additional improvements, to purchase more
land, or to refinance indebtedness. The Underwriter shall have the first
right of refusal for any additional financing and/or refinancing for the
Issuer involving the Properties that secures the Bonds for a period not to
exceed three years from date of issue on the first Series of Bonds.
FEES
The Issuer agrees to pay the Underwriter an investment banking fee of
1.25% of the aggregate amount of the two Bond Issues ($124,875.00). The
investment banking fee is due in the following manner:
--For Bond Issue One the investment banking fee is $75,000.00.
$31,875 is due upon signing of this agreement; $31,000 is to be paid prior
to filing with the regulatory agencies; and the remaining fee of $12,125 is
to be paid from the first proceeds of the bond sales of this issue.
--For Bond Issue Two the investment banking fee is $49,875.00.
This amount is to be paid from the first proceeds of the sales of Bond Issue
One.
In the event the issues are canceled prior to the issuance of the Bonds,
the Underwriter shall be entitled to the above fee only to the extent of its
actual, accountable out-of-pocket expenses, upon submission to the Issuer a
listing of these expenses. These expenses may include, but are not limited
to legal fees, travel, telephone, photo copies, postage and printing. If the
Issuer terminates this Agreement for any reason not enumerated in the section
entitled "Termination", such action shall be considered a material breach of
this Agreement and the Issuer shall be liable to the Underwriter for the
amount of the investment banking fee for out-of-pocket expenses for services
rendered and not as a penalty.
In addition to the investment banking fee, the Issuer agrees to pay the
Underwriter one of the following concessions:
--Processing fee of 2% of the face amount of each bond sold to the
Constituents of the Issuer;
--Concession of 5% of the face amount of each bond sold to clients
of the Broker;
--Concession of 6% of the face amount of each bond sold through
certain selected members of the National Association of Securities Dealers,
Inc. through a Selling Group Agreement.
All bond sales are on a best efforts basis. The concession shall be
deducted from the sale price of each bond by the Registrar and forwarded to
the Underwriter.
The Custodian of the Bond Proceeds Account is authorized to pay MMR Investment
Bankers, Inc. any fees and/or brokerage concessions due them according to the
priority of disbursements as set forth in the Trust Indenture and Prospectus.
In the event the issue is canceled, the Underwriter shall be entitled to the
above fee to the extent of its costs, including due diligence and consulting
costs incurred by the Registered Representative, and costs paid on behalf of
the Issuer, upon submission to the Issuer of a listing of these costs.
SYNDICATION
The Underwriter may offer these bonds for sale to and through certain
selected members of the National Association of Securities Dealers, Inc.
INDEMNIFICATION
The Issuer will indemnify and hold harmless the Underwriter, its agents
and each person, if any, who controls the Underwriter within the meaning of
the Securities Act of 1933 (the "Act") against
any losses, claims, damages or liabilities, joint or several, to which they
may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any drawings, pictures, opinions of counsel or appraisals
furnished by the Issuer to the Underwriter or caused by the failure or
refusal of the Issuer to furnish such information to the Underwriter, any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and will reimburse the Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by the Underwriter
or such controlling person in connection with investigating or defending any
such loss, claim, damage, liabilities or action; provided, however, that
the Issuer will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission made in any of such documents in reliance upon and
in conformity with written information furnished to the Issuer by the
Underwriter specifically for use therein; provided, however, that the
indemnification contained in this paragraph with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter (or of any
person controlling the Underwriter) on account of any such losses, claims,
damages, liabilities or expenses arising from the sale of the Bonds by the
Underwriter to any person if a copy of the Prospectus (as amended or
supplemented if any amendments or supplements thereto shall have been
furnished to such Underwriter prior to the written confirmation of the sales
involved) shall not have been given or sent to such person, if required by
law, by or on behalf of the Underwriter with or prior to the written
confirmation of the sale involved, and the untrue statement or omission of a
material fact contained in such preliminary prospectus was corrected in the
Prospectus (as amended or supplemented if amended or supplemented as
aforesaid). This indemnity agreement will be in addition to any liability
which the Issuer may otherwise have.
The Underwriter will indemnify and hold harmless the Issuer, each of
its directors, each of its officers who has signed the Registration Statement
and each person, if any, who controls the Issuer within the meaning of the
Act, against any losses, claims, damages or liabilities to which the Issuer
or any such director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
or any related preliminary prospectus, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Issuer by the Underwriter specifically for use therein; and will
reimburse any legal or other expenses reasonably incurred by the Issuer or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability with the
Underwriter may otherwise have.
Promptly after receipt by an indemnified party under this Section of
notice of the commencement
of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section, notify the
indemnifying party of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Section. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of the counsel by
such indemnified party has been authorized by the indemnifying party, (ii)
the indemnified party shall have reasonably concluded that there may be
conflict of interest between the indemnifying party and the indemnified
party in the conduct of the defense of such action (in which case the
indemnifying party shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying party
shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of such counsel shall
be at the expense of the indemnifying party. An indemnifying party shall
not be liable for any settlement of any action or claim effected without its
consent.
TERMINATION
This agreement may be terminated by the Underwriter without liability
to the Underwriter if, prior to the time of delivery of any bonds any
substantial change in the financial position of the Issuer or in the existing
operating, political, international, economic or market conditions shall
have taken place, which in the judgment of the Underwriter makes it
impractical to market the bonds. The Underwriter may also terminate this
agreement if the Issuer becomes one month delinquent in any Sinking Fund
Payment, or fails to comply with any of the provisions of this agreement.
This agreement may be terminated by the Underwriter or the Issuer without
liability if, after the date of this agreement the Issuer sustains a
substantial loss on account of fire, accident or other act of God, or in the
case of war or other national emergency makes it impractical in the judgment
of the Underwriter or the Issuer to sell the bonds. The Underwriter
or the Issuer may also terminate this agreement without liability if
registration or exemption from registration from any state or regulatory
body is finally denied after a good faith effort on the part of the Issuer
and the Underwriter to obtain such registration or exemption from
registration. If the Issuer terminates this Agreement for any reason not
enumerated in the section entitled "Termination", such action shall be
considered a material breach of this Agreement and the Issuer shall be
liable to the Underwriter for the amount of the investment banking fee for
out-of-pocket expenses for services rendered and not as a penalty.
It is understood that no agreements will exist between MMR Investment
Bankers, Inc., its officers, agents, employees, and/or registered
representatives and the Issuer other than that which
is in written form, signed by the authorized signatories of the Issuer and
MMR Investment Bankers, Inc.
This agreement must be approved by an officer of the Underwriter. Prior
to signing by an officer, there will be an analysis of the Issuer's ability
to perform the proposed contract by the loan committee of the Underwriter.
This agreement constitutes a binding contract. Please read it carefully
before signing.
CONCLUSION AND VENUE
This written agreement represents the entire agreement and understanding
between the Underwriter and the Issuer. This agreement, and any legal
action brought to enforce its provisions shall be governed by the laws of
the State of Kansas. The parties mutually agree that venue for any legal
action on this agreement shall be in El Dorado, Xxxxxx County, Kansas.
Date: 08/24/01
___________
/s/Xxxxxxx Addudell Sr.
_________________________________
Signed by Managing Member
Issuer's Name: Village at Oakwood L.L.C.
Address: 00000 Xxxxxx Xxxx Xxxx, Xxxxx, XX 00000
Phone: (000)000-0000
_________________________________
Approved by MMR Investment Bankers, Inc. Officer
This agreement must be approved by an officer of MMR. Prior to signing
by an officer, there will be an analysis of the Issuer's ability to perform
the proposed contract. This agreement constitutes a binding contract.
Please read it carefully before signing.
