EXHIBIT 1.1
MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
3,000,000 Common Shares
PURCHASE AGREEMENT
Dated: February 8, 2002
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 Xxxxxx & Xxxxx LLP
Exhibit A-2 - Form of Opinion of Xxxxxxxxx, Xxxxxxx & Xxxxx, LLP
Exhibit B - Form of Lock-Up
-i-
MUNICIPAL MORTGAGE & EQUITY, LLC
(Delaware limited liability company)
3,000,000 Common Shares
(No Par Value Per Share)
PURCHASE AGREEMENT
February 8, 2002
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
Xxxxxxxxx Xxxxxxxx, Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Municipal Mortgage & Equity, LLC, a Delaware limited liability company (the
"Company"), confirms its agreements with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 9 hereof), for whom Xxxxxxx Xxxxx, First Union Securities, Inc., Xxxx
Xxxxx Xxxx Xxxxxx Incorporated and Xxxxxxxxx Xxxxxxxx, 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
450,000 additional Common Shares to cover over-allotments, if any. The aforesaid
3,000,000 Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 450,000 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
-2-
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 Xxxxxxx Xxxxx expressly for use in the
Registration Statement or Prospectus.
(ii) Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and the
Prospectus to be delivered to the Underwriters for use in connection with
this offering will be identical to the electronically transmitted
-3-
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.
(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
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
-4-
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 and will
be 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 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
-5-
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; 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 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,
-6-
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. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(15) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, 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
-7-
Intellectual Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect the interest of
the Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(16) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(17) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and
its subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(18) Title to Investments. The Company and its subsidiaries have
good and marketable title to all investments owned by the Company and its
subsidiaries as described in the Prospectus, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such investment.
(19) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(20) Investment Company Act. Neither the Company nor any of the
Company's subsidiaries is, 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
-8-
"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.
2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, severally and
not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule C,
the number of Initial Securities set forth in Schedule A opposite the name
of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the
Underwriters as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms
and conditions herein set forth, the Company hereby grants an option to
the Underwriters, severally and not jointly, to purchase up to an
additional 450,000 shares of Common Shares, as set forth in Schedule A, at
the price per share set forth in Schedule C, less an amount per share
equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice
by the Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and
-9-
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 Xxxxxxx & Xxxxx
LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, or at such other place as shall be
agreed upon by the Representatives and the Company, at 9:00 A.M. (Eastern time)
on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the Representatives
and the Company (such time and date of payment and delivery being herein called
"Closing Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. It is understood that each Underwriter has
authorized Xxxxxxx Xxxxx, for its account, to accept delivery of, receipt for,
and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
-10-
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 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
-11-
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 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".
-12-
(i) Listing. The Company will use its best efforts to effect the listing
of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectus, the Company will not, without the prior written consent
of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Shares, whether any such swap or transaction described in clause (i) 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, (D) any Common Shares issued pursuant to any
non-employee director stock plan or dividend reinvestment plan, or (E) any
shares of Common Shares issued to the prior stockholders of Midland Financial
Holdings, Inc., pursuant to section 2.04 of the Stock Purchase and Contribution
Agreement dated as of September 30, 1999 between the Company and the former
stockholders of Midland Financial Holdings, Inc., as such agreement and the
related employment agreements have been amended to date.
(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 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
-13-
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.
(m) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 4, Section 8(a)(i)
or Section 10 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
4. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP 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 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 Xxxxxxx & Xxxxx LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (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
-14-
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) Accountant's Agreed Upon Procedures 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 with respect to the financial statements and certain financial
information incorporated by reference in the Registration Statement and the
Prospectus based on agreed upon procedures between PricewaterhouseCoopers LLP
and the Representatives.
(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 financial statements and certain financial information contained
in 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 subsections (e) and (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.
-15-
(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 Xxxxxx & Xxxxx 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 Xxxxxxx & Xxxxx LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 4(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.
(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.
-16-
(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, 5, 6 and 7 shall survive any
such termination and remain in full force and effect.
5. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission provided that (subject to
Section 5(d) below) any such settlement is effected with the written
consent of the Company and
(3) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
Xxxxxxx Xxxxx), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the
-17-
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage, and expense described in the indemnity contained in subsection
(1) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 5(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 5(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental 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.
-18-
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and shall not have objected thereto and (iii)
such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
6. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 6. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against
-19-
any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
For purposes of this Section 6, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 6 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
7. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
8. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus (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 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
-20-
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
(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
-21-
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
10. Default by the Company. If the Company shall fail at 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, and 7 shall remain in full force and effect. No action
taken pursuant to this Section shall relieve the Company from liability, if any,
in respect of such default.
11. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives at Four World Financial Center, New York, New
York 10080, attention of Xxxx Xxxxx, with a copy to Xxxxx Xxxxxxx Xxxxxxx &
Xxxxx, LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, attention of X. X.
Xxxxx, Xx.; notices to the Company shall be directed to it at 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, attention of Xxxx Xxxxxxxxx, with a copy
to Xxxxxxxx Chance Xxxxxx & Xxxxx, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, attention of Xxxxxx X. Xxxx, Xx.
12. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters, the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters,
the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 5 and 6 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
14. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
-22-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
MUNICIPAL MORTGAGE & EQUITY, LLC
By: /s/ 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:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
FIRST UNION SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX INCORPORATED
XXXXXXXXX XXXXXXXX, INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxx Xxxxx
------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
-23-
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ................................. 2,100,000
First Union Securities, Inc. .............................. 300,000
Xxxx Xxxxx Xxxx Xxxxxx Incorporated ....................... 300,000
Xxxxxxxxx Xxxxxxxx, Inc. .................................. 300,000
---------
Total ..................................................... 3,000,000
=========
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 Municipal Finance, LLC (75% ownership)
CAPREIT Tera Venture, LLC (35% ownership)
SCHEDULE C
Price of Securities
1. The public offering price per share for the Securities, determined as
provided in said Section 2, shall be $24.700 per share.
2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $23.638, being an amount equal to the public offering
price set forth above less $1.062 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 and Entities
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. Xxxxxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Jews
Xxxxxxx X. XxXxxxxx
Xxxx X. Xxxxxx
Exhibit A-1
FORM OF OPINION OF XXXXXXXX CHANCE XXXXXX &WELLS 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 therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements, 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 Incorporated Documents (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
depends on the application of tax laws," "Risk Factors -- We are not required to
be registered under the Investment Company Act and would not be able to conduct
our business as we currently conduct it if we became required to be registered,"
"Description of Common Shares," and "Federal Income Tax Considerations," to the
extent that such information constitutes matters of law, summaries of legal
matters, the Company's certificate of organization or operating agreement or
legal proceedings, or legal conclusions, has been reviewed by us and is correct
in all material respects; and the opinions set forth under the caption "Federal
Income Tax Considerations" and "Risk Factors -- The value of the common shares
and MuniMae's ability to make distributions depend on the application of tax
laws," as opinions of Xxxxxxxx Chance Xxxxxx & Xxxxx 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.
20. 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 __, 2002
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
First Union Securities, Inc.
Xxxx Xxxxx Xxxx Xxxxxx Incorporated
Xxxxxxxxx Xxxxxxxx, Inc.
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), First Union Securities, Inc., Xxxx Xxxxx Xxxx
Xxxxxx Incorporated and Xxxxxxxxx Xxxxxxxx, Inc. (the "Representatives") propose
to enter into a Purchase Agreement (the "Purchase Agreement") with Municipal
Mortgage & Equity, LLC, a Delaware limited liability company (the "Company")
providing for the public offering (the "Public Offering") by the several
Underwriters, including the Representatives (the "Underwriters"), of up to
5,000,000 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 Xxxxxxx Xxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 45 days after the
date that the Purchase Agreement is executed, (1) offer for sale, sell, contract
to sell or otherwise transfer or dispose of, directly or indirectly, any Common
Shares or any securities convertible into or exercisable or exchangeable for
Common Shares or (2) sell or grant options, rights or warrants with respect to
any Common Shares, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Shares or such other securities, in
cash or otherwise. Notwithstanding the previous sentence, the following
transfers of Common Shares may be made at any time without the consent of
Xxxxxxx Xxxxx: (i) any transfer to entities controlled by the undersigned or
equity owners of entities controlled by the undersigned and (ii) any transfer to
members of the immediate family of the undersigned (or to an entity for their
benefit); provided that in each case, prior to making any such transfer, the
undersigned shall have delivered a written instrument to Xxxxxxx Xxxxx in which
the transferee agrees to be bound by the restrictions contained in this
agreement with respect to the Common Shares being transferred.
Very truly yours,
___________________________________
Name
Address: __________________________
__________________________
