EXHIBIT 1.1
MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
2,800,000 Common Shares
PURCHASE AGREEMENT
Dated: February 5, 2003
TABLE OF CONTENTS
SCHEDULES
Schedule A - List of Underwriters
Schedule B - List of Subsidiaries
Schedule C - Price of Securities
Schedule D - List of Persons Subject to Lock-Up
EXHIBITS
Exhibit A-1 - Form of Opinion of Xxxxxxxx Chance US LLP
Exhibit A-2 - Form of Opinion of Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP
Exhibit B - Form of Lock-Up
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MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
2,800,000 Common Shares
(No Par Value Per Share)
PURCHASE AGREEMENT
February 5, 2003
RBC Xxxx Xxxxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
UBS Warburg LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Wachovia Securities, Inc.
as Representatives of the several Underwriters named on Schedule A hereto
c/o RBC Capital Markets
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Municipal Mortgage & Equity, LLC, a Delaware limited liability company (the
"Company"), confirms its agreements with RBC Xxxx Xxxxxxxx Inc. ("RBC") 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 RBC, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, UBS Warburg LLC, Xxxx Xxxxx Xxxx Xxxxxx
Incorporated and Wachovia Securities, Inc. are acting as representatives (in
such capacity, the "Representatives"), with respect to (i) the sale by the
Company, and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers 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 420,000
additional Common Shares to cover over-allotments, if any. The aforesaid
2,800,000 Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 420,000 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.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-56049) and
pre-effective amendment no. 1 thereto for the registration of the Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations").
Such registration statement has been declared effective by the Commission, and
the Company has filed such post-effective amendments thereto as may be required
prior to the execution of this Agreement and each such post-effective amendment
has been declared effective by the Commission. Such registration statement (as
so amended, if applicable), including the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule
430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement relating to the offering of
the Securities, in the forms first furnished to the Underwriters by the Company
for use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution of this Agreement; provided, further, that if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations (the "Rule 462(b) Registration Statement"), then all references
to "Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the forms first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references to the
date of the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to (i) any prospectus used before the
Registration Statement became effective and (ii) any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the initial delivery of the Prospectus to
the Underwriters by the Company. For purposes of this Agreement, all references
to the Registration Statement, Prospectus, Term Sheet or preliminary prospectus
or to any amendment or supplement to any of the foregoing shall be deemed to
include any 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" (or other references of
like import) in the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include all such financial statements and
schedules and other information which is
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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, Prospectus
or any preliminary prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, the Prospectus or preliminary prospectus, as the case
may be.
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 RBC 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 the Prospectus to be delivered to the Underwriters for use
in connection with this offering will be identical to the electronically
transmitted
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copies thereof to be filed with the Commission in accordance with Rule
424(b) 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
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. The materials submitted by the Company to the
Commission with a Form 8-K Xxxxx submission tag on January 27, 2003,
October 21, 2002, August 12, 2002, August 12, 2002 and July 12, 2002 are
not incorporated or deemed to be incorporated by reference into the
Registration Statement or the Prospectus.
(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 or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, except for
information as to cash available for distribution, 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. Except for information as to cash available for
distribution, 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 or incorporated by reference in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data,
the summary financial information and capitalization information included
or incorporated by reference in the Prospectus present fairly the
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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 cash available for distribution fairly presents the Company's
cash available for distribution, and is 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 applicable footnote. In addition, any pro forma information
of the Company and its subsidiaries and the related notes thereto included
or incorporated by reference in the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
information and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(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 distributions on
the Common Shares, Term Growth Shares, Preferred Capital Distribution
Shares and Preferred Shares in amounts per share that are consistent with
past practice and a special distribution relating to the final redemption
of the Company's Preferred Capital Distribution Shares and Preferred
Shares (the "Redemptions") as described in the Prospectus, and there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock. The Redemptions were conducted
in accordance with the Company's certificate of formation and operating
agreement.
(6) Good Standing of the Company. 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 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. 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, 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
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would not result in a Material Adverse Effect. Except as otherwise
disclosed in the Prospectus or on Schedule B hereto, 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 issued and outstanding Common Shares have
been duly authorized and validly issued and are fully paid and
non-assessable to the extent permitted under the Delaware Limited
Liability Company Act; 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 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 Prospectus (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described 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
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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 Prospectus (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 Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(14) Accuracy of Exhibits; No Termination. There are no contracts,
agreements 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. Neither the Company nor any of its
subsidiaries has sent or received any written notice indicating the
termination of or intention to terminate any of the contracts, agreements
or documents referred to or described in the Registration Statement or the
Prospectus, or filed as an exhibit to the Registration Statement, and no
such termination has been threatened by the
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Company, any subsidiary or, to the knowledge of the Company, any other
party to any such contract, agreement or document.
(15) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, 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
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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, or upon the issuance and sale of the Securities
as herein 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 Prospectus 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.
(22) Forward Looking Statements. The information contained in the
Registration Statement, the Prospectus and the documents incorporated by
reference therein regarding the Company's expectations, plans and
intentions, and any other information that constitutes "forward-looking"
information within the meaning of the 1933 Act and the 1934 Act were made
by the Company on a reasonable basis and reflect the Company's good faith
belief and/or estimate of the matters described therein.
(23) Internal Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles; and (iii) the recorded assets are compared
with
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existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(24) Insurance. The Company and each of the subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar industries. All material policies of insurance insuring the
Company or any subsidiary or any of their respective businesses, assets,
employees, officers and directors are in full force and effect, and the
Company and the subsidiaries are in compliance with the terms of such
policies in all material respects. There are no material claims by the
Company or any subsidiary under any such policy or instrument as to which
an insurance company is denying liability or defending under a reservation
of rights clause.
(25) Broker's Fees. Other than as contemplated by this Agreement,
the Company has not incurred any liability for any finder's or broker's
fee, or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
(26) No Illegal Payments. No payments or inducements have been made
or given, directly or indirectly, to any federal, state or local official
or candidate for, any federal, state or local office in the United States
or foreign offices by the Company or any subsidiary, by any of their
officers, directors, employees or agents or, to the knowledge of the
Company, by any other person in connection with any opportunity, contract,
agreement, permit, certificate, consent, order, approval, waiver or other
authorization relating to the business of the Company or any subsidiary,
except for such payments or inducements as were lawful under applicable
laws, rules and regulations. Neither the Company nor any subsidiary, nor,
to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any
subsidiary, (i) has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to
any government official or employee from corporate funds; (iii) violated
or is in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment in connection with the
business of the Company or any subsidiary.
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
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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 420,000
shares of Common Shares, 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
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, the
Initial Securities shall be made at the offices of Xxxxx Xxxxxxx 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 the
Securities to be purchased by them. It is understood that each Underwriter has
authorized RBC, 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. RBC, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for
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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 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
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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, if
applicable, 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 in the Prospectus. If at any
time when the 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 date of the Prospectus;
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
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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 RBC, (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) 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 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 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, the 1998 Share Incentive Plan
and the 2001 Share Incentive Plan, or (D) any Common Shares issued pursuant to
any non-employee director stock plan or dividend reinvestment plan.
(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, an Agreement among
Underwriters, if any, 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
- 14 -
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.
(n) No Stabilizing Activities. During a period of 90 days from the
date of the Prospectus, the Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any securities of the Company; provided, however, that notwithstanding
the foregoing, the Company shall be permitted to engage in its previously
announced share repurchase program in accordance with applicable law.
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 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 US LLP and 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
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the other Underwriters to the effect set forth in Exhibits A-1 and A-2 hereto,
respectively, and to such further effect as counsel to the Underwriters may
reasonably request. In giving such opinion Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP, may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of Maryland, upon the opinion of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
LLP. 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.
(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 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 (1), (2), (4), (5) (solely as to
preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (6), (7), (10), (11), (13) (solely as to the
information in the Prospectus under "Description of Common Shares") and the last
two paragraphs of Exhibit A-1 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 and with the consent of counsel issuing such
opinions. 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 proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Reserved.
(f) 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
- 16 -
financial statements and certain financial information contained in or
incorporated be reference into the Registration Statement and the Prospectus.
(g) 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 (f) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(h) 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.
(i) 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.
(j) 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 US LLP and Xxxxxxxxx Xxxxxxx & 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 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(c) hereof.
(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(g) 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.
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(k) 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.
(l) 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, 3(l) and (m), 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;
(3) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any alleged act or failure to act
by any Underwriter in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included as
part of or referred to in any loss, liability, claim, damage or action
- 18 -
arising out of or based upon matters covered by clause (1) or (2) above
(provided, however, that the Company shall not be liable under this clause
(3) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, liability, claim, damage or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or
willful misconduct); and
(4) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by RBC),
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), (2)
or (3) 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 RBC 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 RBC 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 RBC, 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
- 19 -
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 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 5(a)(2) 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 5 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
- 20 -
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.
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 6 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.
- 21 -
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 (exclusive
of any supplement or amendment pursuant to Section 3(e) of this Agreement), 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, declaration of war or national emergency, or
other calamity or crisis or any change or development 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 or inadvisable 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 a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, 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
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(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
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 9.
10. Default by the Company. If the Company shall fail at the 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, 7 and 10 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 RBC Xxxx Xxxxxxxx Inc. c/o RBC Capital Markets at 00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, attention of Xxxx Masssad, Syndicate
Director, with a copy to Xxxxx Xxxxxxx 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 US 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
- 23 -
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.
15. Amendments and Waivers. This Agreement may only be amended or modified
in writing, signed by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit.
16. Entire Agreement. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
17. Information Provided by Underwriters. The Company and the Underwriters
acknowledge and agree that the only information furnished or to be furnished by
any Underwriter to the Company for inclusion in any Prospectus, preliminary
prospectus or the Registration Statement consists of the information contained
in the "Underwriting" section of the Prospectus (i) under the first paragraph
under the heading "Commissions and Discounts," and (ii) under the heading "Price
Stabilization and Short Positions."
- 24 -
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/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
RBC XXXX XXXXXXXX INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
UBS WARBURG LLC
XXXX XXXXX XXXX XXXXXX, INCORPORATED
WACHOVIA SECURITIES, INC.
BY: RBC XXXX XXXXXXXX INC.
By: /S/ Wado Xxxxxx
-------------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
- 25 -
SCHEDULE A
NUMBER OF
INITIAL
NAME OF UNDERWRITER SECURITIES
------------------- ----------
RBC Xxxx Xxxxxxxx Inc............................................ 1,040,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................ 520,000
UBS Warburg LLC.................................................. 520,000
Xxxx Xxxxx Xxxx Xxxxxx Incorporated.............................. 260,000
Wachovia Securities, Inc......................................... 260,000
X.X. Xxxxxxx & Sons, Inc......................................... 100,000
McDonald Investments Inc., a KeyCorp Company..................... 100,000
-------
Total............................................................ 2,800,000
-----------
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 Midland, LLC (formerly known as MuniMae Operating, LLC)
MuniMae Structured Finance, LLC (formerly known as MMA Taxable Structured
Finance, LLC)
MuniMae Midland Construction 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 known as Municipal Mortgage Servicing,
LLC) MMACap, LLC
Municipal Mortgage & Equity, LLC Employee Compensation Trust
MMA Servicing, LLC
Municipal Mortgage Investments II, LLC
Midland Special Partners Corp.
Affordable Property Holdings LLC
Midland Special Limited Partner, Inc. (49% ownership)
FM Sponsor I, LLC
MuniMae Enhancement, LLC
Whitehawk Capital Fund IV, LLC (75% ownership)
Whitehawk Capital, LLC (75% ownership)
CAPREIT Tera Venture, LLC (35% ownership)
MEC Bond Warehousing, LLC
MEC Warehousing, LLC
XX Xxxx Holder Limited Partnership
Municipal Mortgage Investments III, LLC
Municipal Mortgage Investments IV, LLC
MuniMae Midland Equity Ventures, LLC
MuniMae Midland Swap Party I, LLC
MuniMae Midland Equity I, LLC
MuniMae Midland Equity II, LLC
MuniMae Midland Equity III, LLC
MuniMae Midland Equity IV, LLC
SCHEDULE C
PRICE OF SECURITIES
1. The public offering price per share for the Securities, determined as
provided in said Section 2, shall be $23.60 per share.
2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $22.42, 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.
SCHEDULE D
LIST OF PERSONS
SUBJECT TO LOCK-UP
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxx, III
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. XxXxxxxx
Xxxx X. Xxxxxx
EXHIBIT A-1
FORM OF OPINION OF XXXXXXXX CHANCE US LLP
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. 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.
4. The Common Shares 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 Common Shares is or will be subject to personal liability by
reason of being such a holder (subject to the requirements under Delaware law
that a shareholder may have liability to repay a distribution under Section
18-607(b) of the Delaware Limited Liability Company Act).
5. The issuance and sale of the Common Shares by the Company is not
subject to the preemptive or other similar rights of any securityholder of the
Company.
6. 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).
7. The Registration Statement, the Prospectus, excluding the documents
incorporated by reference in each thereof, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference in each thereof, as of their respective effective or issue dates
(other than the financial statements, supporting schedules and other financial
data included or incorporated therein or omitted therefrom, as to which we
express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
8. The documents incorporated by reference in the Registration Statement
and the Prospectus and listed on Exhibit A to this letter (other than the
financial statements, supporting schedules and other financial data included or
incorporated therein or omitted therefrom, as to which we 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.
- 1 -
9. The form of certificate used to evidence the Common Shares complies in
all material respects with the Delaware Limited Liability Company Act.
10. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
11. The Common Shares conform in all material respects to the descriptions
thereof contained in the Prospectus.
12. 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.
13. The information in the Prospectus under the captions "Risk Factors --
The value of the common shares and MuniMae's ability to make distributions
depend 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 depend on the application of tax
laws," as opinions of Xxxxxxxx Chance US LLP are confirmed subject to the
assumptions, qualifications, limitations, representations and covenants
described in those sections.
14. 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.
15. 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.
16. 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, except for such defaults as would not result in a Material
Adverse Effect.
- 2 -
17. 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 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 Common Shares.
18. None of (i) the issuance, sale and delivery by the Company of the
Common Shares, (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 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 Amended
and Restated Certificate of Formation and 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.
19. 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 (except for financial statements, supporting 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.
We have been informed by the Commission that the Registration Statement is
effective under the 1933 Act and, to our knowledge, (i) no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and (ii) no proceedings seeking the issuance of such a stop order have been
initiated or threatened by the Commission.
- 3 -
EXHIBIT A-2
FORM OF OPINION OF XXXXXXXXX, XXXXXXX & XXXXX, LLP
TO BE DELIVERED PURSUANT TO SECTION 5(B)
1. The Company is duly qualified as a foreign 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 (as defined
in the Purchase Agreement).
2. Each Subsidiary is duly organized, validly existing and in good
standing under the laws of the state of its organization. Each Subsidiary has
the power to own, operate and lease its properties and conduct its business as
described in the Prospectus.
3. Each Subsidiary 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 to so qualify or
to be in good standing would not result in a material adverse effect (as defined
in the Purchase Agreement); except as otherwise disclosed in the Prospectus or
on Schedule B to the Purchase Agreement, (a) all of the issued and outstanding
capital stock or membership interest of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and, (b) to the best of our
knowledge, except for the Series A, Series A-1, Series B and Series B-1
cumulative preferred shares of MuniMae XX Xxxx Subsidiary, LLC, is 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 capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any security holder of such Subsidiary.
- 4 -
EXHIBIT B
FORM OF LOCK-UP
February 5, 2003
RBC Xxxx Xxxxxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
UBS Warburg LLC
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Wachovia Securities, Inc.
c/o RBC Capital Markets
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that RBC Xxxx Xxxxxxxx Inc. ("RBC"), together
with the other underwriters named in the prospectus supplement (collectively
with RBC, the "Representatives") of Municipal Mortgage & Equity, LLC, a Delaware
limited liability company (the "Company") propose to enter into a Purchase
Agreement (the "Purchase Agreement") with the Company providing for the public
offering (the "Public Offering") by the several Underwriters, including the
Representatives (the "Underwriters"), of up to 3,220,000 common share interests
(without par value) of the Company (the "Common Shares").
To induce the Underwriters that may participate in the Public Offering to
enter into the Purchase Agreement and to continue their efforts in connection
with the Public Offering, the undersigned hereby agrees that, without the prior
written consent of RBC 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
Purchase Agreement is executed, directly or indirectly, (1) offer, sell,
contract to sell, pledge, 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 request or
demand the filing of any registration statement with respect to any of the
foregoing or (2) 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 or any securities convertible into
or exercisable or exchangeable for Common Shares, whether any such swap or
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 RBC: (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 RBC
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,
----------------------------------------
Name:
Address:
--------------------------------
--------------------------------
