FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
JANUARY 26, 1998
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(Date of report)
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
(Exact Name of Registrant as Specified in its Charter)
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DELAWARE 001-11981 74-2717523
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
218 NORTH CHARLES STREET, SUITE 500
BALTIMORE, MARYLAND 21201
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(Address of Principal Executive Offices)(Zip Code)
(410) 962-8044
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
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On January 26, 1998, Municipal Mortgage and Equity, L.L.C.
(the "Registrant"), announced the price per share of its
underwritten offering of 3,000,000 of the Registrant's common
shares (the "Offering"). Reference is made to the press release,
dated January 26, 1998, annexed hereto as Exhibit 20.1, for
further information regarding the Offering.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION OF DOCUMENT
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1.1 Form of Underwriting Agreement, among the Registrant and
the several Underwriters named therein.
8.1 Opinion of Rogers & Wells concerning certain tax matters.
20.1 Press release, dated January 26, 1998, announcing the
pricing of the Offering.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
Date: January 28, 1998 By: /S/ MICHAEL L. FALCONE
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Michael L. Falcone
President
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Exhibit 1.1
3,000,000 Shares
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
Common Shares
UNDERWRITING AGREEMENT
January 26, 1998
LEGG MASON WOOD WALKER, INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WHEAT, FIRST SECURITIES, INC.
As Representatives of the several Underwriters
c/o Legg Mason Wood Walker, Incorporated
111 South Calvert Street, 20th Floor
Baltimore, MD 21202
Ladies and Gentlemen:
Municipal Mortgage and Equity, L.L.C., a limited liability company
organized under the laws of the State of Delaware (the "Company"), proposes to
sell an aggregate of 3,000,000 growth share limited liability company interests
(the "Common Shares") of the Company, without par value (the "Firm Shares"), to
you and to the other underwriters named in Schedule I, acting severally and not
jointly (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company has also agreed to grant to
you and the other Underwriters an option (the "Option") to purchase up to an
additional 450,000 Common Shares (the "Option Shares") as set forth below. The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
In consideration of the mutual agreements contained herein and of
the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. Agreement to Sell and Purchase.
(a) On the basis of the respective representations, warranties
and agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, (i) the Company agrees to sell to the several
Underwriters and (ii) each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at the purchase price of $____ per share,
the number of Firm Shares set forth opposite the name of such Underwriter in
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Schedule I, plus such additional number of Firm Shares which such Underwriter
may become obligated to purchase pursuant to Section 9 hereof.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to 450,000 Option Shares from the Company at the same price
per share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date hereof, upon written or
telegraphic notice (the "Option Shares Notice") by the Representatives to the
Company no later than 12:00 noon, New York City time, at least two and no more
than five business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date") setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will issue and sell to the Underwriters the
number of Option Shares set forth in the Option Shares Notice, and each
Underwriter will purchase such percentage of the Option Shares as is equal to
the percentage of Firm Shares that such Underwriter is purchasing, as adjusted
by the Representatives in such manner as they deem advisable to avoid fractional
shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made
to the Representatives for the accounts of the Underwriters at the office of
Legg Mason Wood Walker, Incorporated, 111 South Calvert Street, 20th Floor,
Baltimore, Maryland 21202, against payment of the purchase price therefor by
wire transfer of Federal Funds or similar same day funds to an account which has
been designated in writing by the Company to Legg Mason Wood Walker,
Incorporated at least one business day prior to the Closing Date (as hereinafter
defined). Such payment shall be made at 10:00 A.M., New York City time, on the
third business day after the date on which this Agreement is executed or on the
fourth business day if this Agreement is executed after the daily closing time
of the American Stock Exchange or at such time on such other date, not later
than ten business days after such date, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date"). The place of closing for the Firm Shares may also be varied by agreement
between you and the Company.
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date on the Option Closing
Date.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection and packaging not later than 9:30 A.M., New York City
Time, at least 24 hours prior to the Closing Date or the Option Closing Date, as
the case may be.
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The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the respective Underwriters shall be borne by the Company. The Company shall pay
and save each Underwriter and any subsequent holder of the Shares harmless from
any and all liabilities with respect to or resulting from any failure or delay
in paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company.
The Company represents, warrants and covenants to each Underwriter
that:
(a) A registration statement (Registration No. 333-20945) on
Form S-3 relating to Common Shares with an aggregate initial offering price of
$250,000,000, including a prospectus and such amendments to such registration
statement as may have been required to the date of this Agreement, have been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the published rules and regulations (collectively
referred to as the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission. The Company has complied with the conditions for the use of Form
S-3. Such registration statement and any post-effective amendment thereto have
become effective under the Act. The Company also has filed, or proposes to file,
with the Commission pursuant to Rule 424(b) under the Act, a prospectus
supplement specifically relating to the Shares (the "prospectus supplement").
The term "registration statement" as used in this Agreement means
the registration statement (including all financial statements, schedules and
exhibits), as amended at the time it became effective, as supplemented or
amended prior to the execution of the Agreement, including all information (if
any) deemed to be a part of such registration statement at the time it became
effective pursuant to Rule 430A or Rule 424 of the Rules and Regulations under
the Act. If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Shares may commence, the term
"registration statement" means the registration statement as amended by said
post-effective amendment. The term "prospectus" as used herein means a base
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement at the time it became
effective (the "base prospectus") under the Act together with the prospectus
supplement dated January 26, 1998 in the form first filed with the Commission
pursuant to Rule 424(b)(2) under the Act. The term "pre-pricing prospectus
supplement" as used herein means the base prospectus together with any
prospectus supplement subject to completion included in the registration
statement as filed with the Commission pursuant to Rule 424(b) under the Act,
and as such pre-pricing prospectus supplement shall have been amended or
supplemented from time to time prior to the date of the prospectus. Copies of
such registration statement and amendments, each related prospectus, and each
prospectus supplement, including the pre-pricing prospectus supplement, have
been delivered to the Representatives. Any reference herein to any "registration
statement," "base
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prospectus," "prospectus," "prospectus supplement" or "pre-pricing prospectus
supplement" shall be deemed to refer to, describe and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of the registration statement, prospectus or pre-pricing
prospectus supplement, as the case may be, and any reference to any amendment or
supplement to the registration statement, the prospectus or any pre-pricing
prospectus supplement shall be deemed to refer to, describe and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which, upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3.
(b) No order preventing or suspending the use of any
pre-pricing prospectus supplement or prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission or the securities authority of any state
or other jurisdiction. No stop order suspending the effectiveness of the
registration statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or, to the knowledge of the Company, threatened
by the Commission or the securities authority of any state or other
jurisdiction.
(c) The Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Act, set forth in the General Instructions to
Form S-3. When the registration statement or any amendment thereto was declared
effective it complied in all material respects with the requirements of the Act
and the rules and regulations of the Commission thereunder and on such date and
on the Closing Date it did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading on such date. When the prospectus or any
amendment or supplement thereto is filed with the Commission pursuant to Rule
424(b) and at the Closing Date (or the Option Closing Date, as the case may be),
the prospectus, as amended or supplemented at any such time, (i) contained or
will contain all statements required to be stated therein in accordance with,
and complied or will comply in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder and (ii) did
not or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
representation and warranty in this paragraph (c) does not apply to statements
in or omissions from the registration statement or the prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of any Underwriter through you expressly for use
therein. For all purposes of this Agreement, the legend concerning stabilization
on the inside front cover of the Prospectus, the list of Underwriters and their
respective allotments appearing under the caption "Underwriting" in the
prospectus and the statements in the first, third, eighth, ninth, tenth and
eleventh paragraphs under the caption "Underwriting" in the prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
pre-pricing prospectus supplement, the registration statement or the prospectus.
The Company has not distributed any offering material
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in connection with the offering or sale of the Shares other than the
registration statement, the pre-pricing prospectus supplement, the prospectus or
any other materials, if any, permitted by the Act.
(d) The documents incorporated by reference in the
registration statement heretofore filed, when they were filed (or, if any
amendment with respect to any such document was filed, when such amendment was
filed), conformed in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading.
(e) The Company has been duly organized and is validly
existing as a limited liability company of duration as set forth in Section 10
of the Company's Amended and Restated Certificate of Formation and Operating
Agreement, with transferable limited liability company growth shares in good
standing under the laws of the State of Delaware with full power and authority
to own and lease its properties and to conduct its business as now conducted.
The only subsidiaries (as defined in the Rules and Regulations) of the Company
are the subsidiaries listed on Exhibit A hereto (the "Subsidiaries"). None of
the Subsidiaries other than MME Investments LLC is a "significant subsidiary" as
such term is defined in the rules and regulations of the Commission. Each of the
Subsidiaries is, and at the Closing Date will be, duly organized and validly
existing in good standing under the laws of its jurisdiction of organization.
The Company and each of the Subsidiaries has, and at the Closing Date will have,
full power and authority to conduct all the activities conducted by it, to own
or lease all the assets and properties, owned or leased by it and to conduct its
business as described in the registration statement and the prospectus. Each of
the Company and the Subsidiaries is, and at the Closing Date will be, duly
licensed or qualified to do business and in good standing (i) in the
jurisdiction in which it has its principal place of business and (ii) in all
other jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary except where the failure to so license or qualify in any
such other jurisdiction will not have a material adverse effect on the business,
properties, condition (financial or otherwise), or results of operations of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"). All
of the outstanding shares of limited liability company interests of the
Subsidiaries have been duly authorized and validly issued, and are fully paid
and non-assessable (subject to the requirements under Delaware law that a
shareholder may have liability to repay a distribution under Section 16-607(b)
of the Delaware Limited Liability Company Act (the "Distribution Liability"))
and are, except as set forth in Exhibit A or as disclosed in the registration
statement or prospectus, owned by the Company or a Subsidiary, free and clear of
all liens, encumbrances and claims whatsoever and, except as set forth in
Exhibit A or as disclosed in the registration statement or prospectus, no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into any shares of limited
liability company interests of any Subsidiary are
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outstanding. Except for the limited liability company interests of the
Subsidiaries or except as disclosed in Exhibit A or as disclosed in the
registration statement or prospectus, the Company does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, limited liability company,
association or other entity that are required to be described in the
registration statement or prospectus. Complete and correct copies of the Amended
and Restated Certificate of Formation and Operating Agreement and Bylaws of the
Company and the operating agreement of each Subsidiary and all amendments or
supplements thereto have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(f) The Company has full right, power and authority to enter
into this Agreement, to issue, sell and deliver the Shares as provided herein
and to consummate the transactions contemplated herein. This Agreement has been
duly authorized, executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general applicability relating to or
affecting creditors' rights, or by general equity principles and except to the
extent the indemnification and contribution provisions set forth in Section 8 of
this Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
(g) Each consent, approval, authorization, order, license,
certificate, permit, registration, designation or filing by or with any
governmental agency or body necessary for the valid authorization, issuance,
sale and delivery of the Shares, the execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby has been made or obtained and is in full force and effect (except in any
case in which the failure to do so would not have a Material Adverse Effect).
(h) Neither the issuance, sale and delivery by the Company of
the Shares, nor the execution, delivery and performance of this Agreement nor
the consummation of the transactions contemplated hereby by the Company, will
conflict with or result in a breach or violation of any of the terms and
provisions of, or (with or without the giving of notice or the passage of time
or both) constitute a default under, the certificate of formation and operating
agreement or the certificate of limited partnership or partnership agreement of
the Company or any Subsidiary, as the case may be; any indenture, mortgage, deed
of trust, loan agreement, note, lease or other agreement or instrument to which
the Company or any Subsidiary is a party or to which it, they, any of them, or
any of their respective properties or other assets are subject; or any
applicable statute, judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to any business of the foregoing or any
of their respective properties; or result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or assets of any of the
foregoing (except in any case in which the failure to do so would not have a
Material Adverse Effect).
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(i) The Shares to be issued and sold to the Underwriters
hereunder have been validly authorized by the Company. When issued and delivered
against payment therefor as provided in this Agreement, the Shares will be duly
and validly issued, fully paid and nonassessable (subject to the Distribution
Liability). No statutory or other preemptive rights of shareholders exist with
respect to any of the Shares. No person or entity holds a right to require or
participate in the registration under the Act of the Shares pursuant to the
registration statement; and, except as set forth in the registration statement
or prospectus, no person holds a right to require registration under the Act of
any shares of limited liability company interest of the Company at any other
time. No person or entity has a right of participation or first refusal with
respect to the sale of the Shares by the Company. The form of certificates
evidencing the Shares complies with all applicable requirements of Delaware law.
(j) The Company's authorized, issued and outstanding limited
liability company interests are as disclosed in the prospectus, subject to the
effects, as described in the Prospectus, of the Company's tender offer for
certain of its outstanding Preferred and Preferred CD Shares. All of the issued
limited liability company interests of the Company have been duly authorized and
validly issued, are fully paid and nonassessable (subject to the Distribution
Liability and subject to the provisions of the Company's Amended and Restated
Certificate of Formation and Operating Agreement regarding the liability of the
Special Shareholder). None of the issued limited liability company interests of
the Company has been issued or is owned or held in violation of any statutory or
other preemptive rights of shareholders. Except as disclosed in the prospectus,
there is no outstanding option, warrant or other right calling for the issuance
of, and no commitment, plan or arrangement to issue, any limited liability
company interests of the Company or any security convertible into or
exchangeable for limited liability company interests of the Company.
(k) All offers and sales of the Company's limited liability
company interests prior to the date hereof were at all relevant times duly
registered under the Act or exempt from the registration requirements of the Act
by reason of Sections 3(b), 4(2) or 4(6) thereof and were duly registered or
were issued pursuant to an available exemption from the registration
requirements of the applicable state securities or blue sky laws.
(l) The consolidated financial statements of the Company
(together with related notes and schedules) included or incorporated by
reference in the registration statement and prospectus present fairly the
financial position of the Company as of the dates indicated and the results of
operations and cash flows for the Company for the periods specified, all in
conformity with generally accepted accounting principles applied on a consistent
basis. The financial statement schedules and summaries and Investment and
Property information included or incorporated by reference in the registration
statement and in the prospectus, including the existing and pending investment
information contained under the captions "Prospectus Supplement Summary--The
Investments," "--Recent Acquisitions," "--Pending Acquisitions," "--Summary
Financial Data," "The Investments" and "The Properties" accurately reflect the
information shown therein. All other financial, operating, statistical and
investment information (including the related notes) included in the prospectus
or any pre-pricing prospectus supplement
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complies as to form in all material respects to the applicable accounting
requirements of the Act and the Rules and Regulations thereunder.
(m) Price Waterhouse LLP, who have examined and are reporting
upon certain audited financial statements included in the registration
statement, are, and were during the periods covered by their reports included in
the registration statement and the prospectus, independent public accountants
within the meaning of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder.
(n) Neither the Company nor any Subsidiary has sustained,
since September 30, 1997, any material loss or interference with its business,
whether or not covered by insurance; and, since the respective dates as of which
information is given in the registration statement and the prospectus, and
except as otherwise stated in the registration statement and prospectus, there
has not been (i) any material change in the limited liability company interests,
long-term debt, obligations under capital leases or short-term borrowings of the
Company or any Subsidiary, (ii) any change, or any development which could
reasonably be seen as involving a prospective change, that could reasonably be
expected to have a Material Adverse Effect, (iii) any liability or obligation,
direct or contingent, incurred or undertaken by the Company or any Subsidiary
that could reasonably be expected to have a Material Adverse Effect, except for
liabilities or obligations incurred in the ordinary course of business, (iv) any
declaration or payment of any dividend or distribution of any kind on or with
respect to the limited liability company interests of the Company except for
dividends on shares of the Company other than Common Shares, or (v) any
transaction that could reasonably be expected to have a Material Adverse Effect,
except transactions in the ordinary course of business.
(o) Neither the Company nor any Subsidiary is in violation of
its respective certificate of formation, articles of organization, operating
agreement, bylaws, certificate of trust, declaration of trust certificate of
limited partnership, partnership agreement, as the case may be, and no default
exists, and no event has occurred, nor state of facts exists which, with notice
or after the lapse of time to cure or both, would constitute a default by the
Company or any Subsidiary, and to the best knowledge of the Company, no other
party thereto is in default, and no event has occurred, nor state of fact exists
which, with notice or after the lapse of time to cure or both, would constitute
a default, in the due performance and observance of any obligation, agreement,
term, covenant, consideration or condition contained in any indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement or instrument to
which any such entity is a party or to which any such entity or any of its
properties is subject, except as may be properly described in the registration
statement or prospectus or such as in the aggregate do not now have or are not
reasonably expected to have a Material Adverse Effect, respectively. Neither of
the Company or any Subsidiary is in violation of, or in default with respect to,
any statute, rule, regulation, order, judgment or decree, except as may be
properly described in the prospectus or such as in the aggregate do not now have
and are not reasonably expected to have a Material Adverse Effect.
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(p) There is not pending or, to the best knowledge of the
Company or any Subsidiary, threatened, any action, suit, proceeding, inquiry or
investigation against the Company or any Subsidiary or any of their respective
officers and directors, trustees, general partners or members or to which the
properties, assets or rights of the Company or any Subsidiary are subject,
before or brought by any court or governmental agency or body or board of
arbitrators, which could reasonably be expected to result in any Material
Adverse Effect or which could reasonably be expected to adversely affect the
consummation of the transactions contemplated by this Agreement.
(q) The descriptions included in the registration statement
and the prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown, and there are no
contracts, leases, or other documents of a character required to be described in
the registration statement or the prospectus or document incorporated by
reference therein, or to be filed as exhibits to the registration statement or
any document incorporated by reference therein, which are not described or filed
as required. To the best knowledge of the Company and the Subsidiaries, there
are no statutes or regulations applicable to the Company or any Subsidiary or
material certificates, permits or other authorizations from governmental
regulatory officials or bodies required to be obtained or maintained by the
Company or any Subsidiary of a character required to be disclosed in the
registration statement or the prospectus which have not been so disclosed and
properly described therein.
(r) To the best knowledge of the Company, the interest on all
but one of the Mortgage Bonds (as defined in the prospectus) is excludable from
gross income for federal income tax purposes, except that for any Mortgage Bond
the proceeds of which are not loaned to a charitable organization such income is
not excludable during any period when such Mortgage Bond is held by a
"substantial user" or a "related person" (as such terms are used in the Internal
Revenue Code of 1986, as amended (the "Code")). With respect to one Mortgage
Bond, to the best knowledge of the Company, base interest is excludable from
gross income for federal income tax purposes, except with respect to any period
in which it is held by a "substantial user" or a "related person" (as such terms
are used in the Code) and the contingent interest payable on such Mortgage Bond
is taxable. To the best knowledge of the Company, the Company is not, in any
material respect, a "substantial user" of any of the Properties or a "related
person" to a "substantial user," and after consummation of the offering, will
not be such a "substantial user" or "related person." Neither the Company nor
any Subsidiary has or will have any financial liability or risk of loss with
respect to Mortgage Bonds sold into a trust in connection with a securitization
transaction completed on or prior to the date of this Agreement, except to the
extent of a loss of any Company investment in the residual interests in the
trust. To the best knowledge of the Company, none of the counterparties to the
Company's hedging agreements or the hedging agreements of the owners of the
Mortgage Properties with respect to the debt service obligations on the Mortgage
Bonds is financially unsound or insolvent.
(s) Each of the Company and the Subsidiaries owns or
possesses or has obtained all material permits, licenses, franchises,
certificates, consents, orders, approvals and other authorizations of
governmental or regulatory authorities or other entities as are necessary to
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own or lease, as the case may be, and to operate its respective assets and
properties and to carry on its business as presently conducted, or as
contemplated in the prospectus to be conducted (except in any case in which the
failure to do so would not have a Material Adverse Effect), and none of the
Company or any Subsidiary has received any notice of proceedings relating to
revocation or modification of any such licenses, permits, franchises,
certificates, consents, orders, approvals or authorizations that could
reasonably be expected to have a Material Adverse Effect.
(t) Each of the Company and the Subsidiaries owns or
possesses adequate license or other rights to use all trademarks, service marks,
trade names, copyrights, software and design licenses, trade secrets, other
intangible property rights and know-how (collectively "Intangibles") necessary
to entitle the Company or the Subsidiary, as the case may be, to conduct its
respective business now, and as proposed to be conducted or operated as
described in the prospectus (except in any case in which the failure to do so
would not have a Material Adverse Effect), and none of the Company or any
Subsidiary has received notice of infringement or of conflict with (and knows of
no such infringement of or conflict with) asserted rights of others with respect
to any Intangibles which could reasonably be expected to have a Material Adverse
Effect.
(u) The Company's and the Subsidiaries' system of internal
accounting controls taken as a whole is sufficient to meet the broad objectives
of internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that would be
material in relation to the Company's or the Subsidiaries', financial
statements; and, to the best knowledge of the Company and the Subsidiaries, none
of the Company the Subsidiaries, or any employee or agent thereof, has made any
payment of funds of the Company or the Subsidiaries, as the case may be, or
received or retained any funds and no funds of the Company or the Subsidiaries,
as the case may be, have been set aside to be used for any payment, in each case
in violation of any law, rule or regulation.
(v) The Company has filed on a timely basis all necessary
federal, state, local and foreign income, personal property tax and franchise
tax returns required to be filed through the date hereof and has paid all taxes
shown as due thereon, except where the failure to so file would not have a
Material Adverse Effect, and no tax deficiency has been asserted against the
Company, nor does the Company know of any tax deficiency which is likely to be
asserted against it, which if determined adversely to the Company, would have a
Material Adverse Effect. All tax liabilities are adequately provided for on the
respective books of such entities to the extent required under generally
accepted accounting principles.
(w) The Company maintains insurance (issued by insurers of
recognized financial responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and properties, and, consistent
with insurance coverage maintained by similar companies in similar businesses,
all of which insurance is in full force and effect.
(x) The Company and the Subsidiaries are in compliance in all
material respects with all federal, state and local employment and labor laws,
including, but not limited to,
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laws relating to non-discrimination in hiring, promotion and pay of employees;
no labor dispute with the employees of the Company or any Subsidiary exists or,
to the knowledge of the Company or any Subsidiary, is imminent or threatened;
and none of the Company or any Subsidiary is aware of any existing, imminent or
threatened labor disturbance by the employees of any of its principal vendors or
contractors that could reasonably be expected to result in a Material Adverse
Effect.
(y) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to by the Company or any
Subsidiary, or with respect to which the Company or any Subsidiary could incur
any liability under ERISA (collectively, the "Benefit Plans"), no event has
occurred and, to the best knowledge of the Company or any Subsidiary, there
exists no condition or set of circumstances, in connection with which the
Company, the or any Subsidiary could be subject to any liability under the terms
of such Benefit Plan, applicable law (including, without limitation, ERISA and
the Code) or any applicable agreement, except in any case in which the liability
would not reasonably be expected to have a Material Adverse Effect.
(z) None of the Company or the Subsidiaries, or to the
knowledge of the Company, their officers, directors or affiliates has taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in or constitute the stabilization or manipulation
of any security of the Company or to facilitate the sale or resale of the
Shares.
(aa) The Common Shares are registered pursuant to Section
12(b)of the Exchange Act and are listed on the American Stock Exchange.
(bb) Neither the Company nor the Subsidiaries have incurred
any liability for a fee, commission or other compensation on account of the
employment of a broker or finder in connection with the transactions
contemplated by this Agreement other than as contemplated hereby or as described
in the registration statement or prospectus.
(cc) For federal income tax purposes, the Company has at all
times since its formation been classified as a partnership, and not as an
association taxable as a corporation, and has not at any time since its
formation been treated as a corporation under Section 7704 of the Code and, to
the knowledge of the Company, will continue to be treated as a partnership and
not as a corporation under Section 7704 of the Code for the year ended December
31, 1997.
(dd) Neither the Company nor any Subsidiary is, or will become
as a result of the transactions contemplated hereby, "an investment company," or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
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(ee) None of the officers, trustees or 5% or greater
shareholders of the Company have any affiliation with the National Association
of Securities Dealers, Inc. (the "NASD"), except as disclosed in the
registration statement and except for Charles Baum. Any certificate signed by
any officer of the Company on behalf of the Company or any Subsidiary and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by such entity to each Underwriter as to the matters
covered thereby.
4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the registration statement to
be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause such post-effective amendment to become effective
as soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when such post-effective amendment has become
effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the registration statement, any pre-pricing
prospectus supplement or the prospectus or for additional information; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the registration statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (e)
below, of any change in the Company's and the Subsidiaries financial condition,
business, prospects, investments, net worth or results of operations, or of the
happening of any event, which makes any statement of a material fact made in the
registration statement or the prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
registration statement or the prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein, as to
the prospectus in light of the circumstances in which they were made, not
misleading, or of the necessity to amend or supplement the prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
registration statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, (i) one
copy of the registration statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, (ii) such number of conformed copies of the registration statement as
originally filed and of each amendment thereto, but without exhibits, as you may
reasonably request, (iii) such number of copies of the documents incorporated by
reference, without exhibits, as you may reasonably request, and (iv) five copies
of the exhibits to the documents incorporated by reference.
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(d) During the period described in (e) below, (i) the Company
will not file any amendment to the registration statement or make any amendment
or supplement to the prospectus or file any document which upon filing, becomes
a document incorporated by reference therein, of which you shall not previously
have been advised or to which, after you shall have received a copy of the
document proposed to be filed, you shall reasonably object; and (ii) no such
further document, when it is filed, will contain an untrue statement of a
material fact or will omit, together with the documents which it amends or
supplements or into which it is incorporated by reference, to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
(e) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the Act to
be delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the prospectus (and of any amendment or supplement thereto) as
you may reasonably request. Subject to the provisions of subsection (g) below,
the Company consents to the use of the prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws or real estate syndication laws of the jurisdictions
in which the Shares are offered by the several Underwriters and by all dealers
to whom Shares may be sold, both in connection with the offering and sale of the
Shares and for such period of time thereafter as the prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Underwriters is required to be set
forth in the prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the prospectus (or to file under the Exchange Act any
document which, upon filing, becomes a document incorporated by reference
therein) in order to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Underwriters and dealers a
reasonable number of copies thereof.
(f) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws or real estate syndication laws of such
jurisdictions as you may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
registration or qualification and continue such qualification in effect so long
as required for distribution of the Shares; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to service of
process in suits or taxation, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject.
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(g) The Company will make generally available to its
shareholders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
registration statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11 (a) of the Act.
(h) The Company will furnish to its shareholders, as soon as
practicable after the end of each respective period, annual reports (including
financial statements audited by independent public accountants) and unaudited
quarterly reports of operations for each of the first three quarters of the
fiscal year, and during the period of three years hereafter, the Company will
furnish to you (i) concurrently with mailing or filing, a copy of each report of
the Company mailed to shareholders or filed with the Commission, and (ii) from
time to time such other information concerning the Company as you may reasonably
request.
(i) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
Section 10 hereof or by notice given by you terminating this Agreement pursuant
to Section 9 or Section 10 hereof) or if this Agreement shall be terminated by
the Underwriters because of any failure or refusal on the part of the Company to
comply with the terms or fulfill any of the conditions of this Agreement to be
complied with or fulfilled by the Company, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including fees and
expenses of counsel for the Underwriters) incurred by you in connection
herewith.
(j) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth under the
caption "Use of Proceeds" in the prospectus.
(k) The Company will timely file the prospectus pursuant to
Rule 424(b) under the Act and will advise you of the time and manner of such
filing.
(l) Except as provided in this Agreement, the Company will
not offer for sale, contract to sell, sell or otherwise issue or dispose of,
directly or indirectly, any Common Shares other than Common Shares issued by the
Company pursuant to the Company's Non-Employee Director Plan and 1996 Share
Incentive Plan, or sell or grant options, rights or warrants with respect to any
Common Shares (other than the grant of options pursuant to the Company's option
plans) for a period of ninety (90) days after the date of the Prospectus,
without the prior written consent of Legg Mason Wood Walker, Incorporated;
provided, however, that the foregoing shall not prohibit the Company from
issuing Common Shares upon conversion of the Preferred Shares or Preferred CD
Shares.
(m) The Company has furnished or will furnish to you
"lock-up" letters in form and substance satisfactory to you, signed by each of
its current executive officers and directors named in the prospectus.
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(n) Except as stated in this Agreement and in any pre-pricing
prospectus supplement and prospectus or as permitted by applicable law, the
Company has not taken, nor will take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Shares.
(o) The Company covenants that it will conduct the Company's
operations in a manner such that the Company will continue at all times to be
properly treated for federal income tax purposes as a partnership and not as a
corporation under Section 7704 of the Code.
5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the registration statement to
be declared effective before the offering of the Shares may commence, such
post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by you, and all filings, if any, required by Rule 424
under the Act shall have been timely made; no stop order suspending the
effectiveness of the registration statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the registration
statement or the prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the financial condition, business,
properties, investments, net worth, results of operations or cash flow of the
Company and the Subsidiaries taken as a whole not contemplated by the
prospectus, which in your reasonable opinion, as Representatives of the several
Underwriters, would materially, adversely affect the market for the Shares, (ii)
any event or development relating to or involving the Company or any Subsidiary
or any officer or director of the Company which makes any statement made in the
prospectus of a material fact untrue or which, in the reasonable opinion of the
Company and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading in light of the
circumstances under which they were made, if amending or supplementing the
prospectus to reflect such event or development would, in your reasonable
opinion, as Representatives of the several Underwriters, materially adversely
affect the market for the Shares, or (iii) any suspension of trading in any of
the equity securities of the Company by the Commission, the NASD or the American
Stock Exchange or the New York Stock Exchange.
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<PAGE>
(c) You shall have received on the Closing Date, an opinion
of Rogers & Wells, counsel for the Company, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, to the effect that:
(i) 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 with full power and authority to own and lease its assets and
properties, and to conduct its business as now conducted as described in the
prospectus; and each of the Subsidiaries is duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization, with power and authority to own or lease its assets and properties
owned by it and conduct its business as described in the prospectus. The
outstanding shares of limited liability company interests of Municipal Mortgage
Investments, LLC have been duly authorized and validly issued and are fully paid
and nonassessable (subject to the Distribution Liability) and, to the best of
such counsel's knowledge, such shares are owned by the Company free and clear of
all liens, encumbrances and claims, and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of limited liability company interests of Municipal
Mortgage Investments, LLC are outstanding.
(ii) The Company has full power and authority to enter
into this Agreement, to issue, sell and deliver the Shares as provided herein
and to consummate the transactions contemplated herein. This Agreement has been
duly authorized by all necessary action and has been executed and delivered by
the Company.
(iii) No consent, approval, authorization or other order
of or registration or filing with, any governmental agency or body is required
for the valid authorization, issuance, sale and delivery of the Shares to the
Underwriters as contemplated by this Agreement.
(iv) Neither the issuance, sale and delivery by the
Company of the Shares, nor the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby, will (a)
violate the amended and restated certificate of formation and operating
agreement or bylaws of the Company; (b) constitute a default under any contract
or agreement to which the Company is a party of which such counsel is aware; or
(c) violate any applicable statute or regulation or, to the knowledge of such
counsel, any judgment, decree, order or rule of any court or governmental agency
or body.
(v) The Shares to be issued and sold to the
Underwriters hereunder have been validly authorized by the Company. When issued
and delivered against payment therefor as provided in this Agreement, such
Shares will be validly issued, fully paid and nonassessable (subject to the
Distribution Liability). No preemptive rights of shareholders exist with respect
to any of the Shares under Delaware law, the Company's Certificate of Formation
and Operating Agreement and Bylaws or any agreements of which such counsel is
aware. To such counsel's knowledge, no person or entity holds a right to require
or participate in the registration under the Act of the Shares pursuant to the
registration statement; and, to such counsel's knowledge, except as set forth in
the registration statement or prospectus, no person or
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entity holds a right to require registration under the Act of any shares of
beneficial interest of the Company at any other time. To such counsel's
knowledge, no person or entity has a right of participation or first refusal
with respect to the sale of the Shares by the Company. The form of certificates
evidencing the Shares complies in all material respects with all applicable
requirements of Delaware law.
(vi) At September 30, 1997, the Company had authorized
limited liability company shares as set forth in the prospectus under the
caption "Capitalization." To the knowledge of such counsel, none of the issued
limited liability company interests of the Company has been issued or is owned
or held in violation of any preemptive rights of shareholders. To the knowledge
of such counsel, except as included in the prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and no commitment,
plan or arrangement to issue, any limited liability company interests of the
Company or any security convertible or exchangeable for limited liability
company interests of the Company.
(vii) The descriptions in the registration statement and
the prospectus of each document filed as an exhibit with the Commission and
described in the registration statement and the prospectus accurately reflect
the information required to be shown or described and there are no contracts,
leases or other documents known to such counsel of a character required to be
described in the registration statement or the prospectus or to be filed as
exhibits with the Commission, which are not described or filed as required.
There are no statutes or regulations applicable to the Company or any Subsidiary
or certificates, permits or other authorizations from governmental regulatory
officials or bodies required to be obtained or maintained by any such entity,
known to such counsel, of a character required to be disclosed in the
registration statement or the prospectus which have not been so disclosed and
properly described therein.
(viii) To such counsel's knowledge and except as
described in the registration statement or prospectus, there is not pending or
threatened, any action, suit, proceeding, inquiry or investigation against the
Company or any Subsidiary 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.
(ix) The registration statement has become effective
under the Act and, to the knowledge of such counsel, no stop order suspending
the effectiveness of the registration statement has been issued and no
proceeding for that purpose has been instituted or is pending or contemplated
under the Act. Other than financial statements and other financial and operating
or statistical data and schedules contained therein, as to which counsel need
express no opinion, the registration statement and the prospectus, as of the
date of filing thereof, and each document incorporated by reference therein,
appear on their face to conform as to form in all material respects with the
requirements of the Act or the Exchange Act, as the case may be, and the
respective Rules and Regulations thereunder promulgated by the Commission.
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(x) Neither the Company nor the Subsidiaries are, or
solely as a result of the consummation of the transactions contemplated hereby
will become, an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
(xi) The descriptions of statutes, regulations, legal
or governmental proceedings included or incorporated by reference in the
registration statement and prospectus are accurate in all material respects and
present fairly a summary of the information required to be disclosed under the
Act and the Rules and Regulations promulgated by the Commission. The information
in the prospectus under the captions "Risk Factors -- Tax Risks," "--
Registration Under the Investment Company Act," "The Company -- General" (the
second and third paragraphs thereof), "Federal Income Tax Considerations,"
"Description of Common Shares," and the information in the Company's annual
report on Form 10-K for the year ended December 31, 1996 under the caption
"Description of Shares," to the extent that such information constitutes matters
of law or legal conclusions, or descriptions of documents, has been reviewed by
such counsel, is correct in all material respects and accurately reflects the
information required to be disclosed therein under the Act and the Rules and
Regulations promulgated by the Commission.
(xii) All statements in the sections "Risk Factors --
Tax Risks" and "Federal Income Tax Considerations," in the prospectus described
as opinions of Rogers & Wells with respect to certain federal income tax matters
are hereby reaffirmed as opinions to and for the benefit of the Underwriters,
subject to the assumptions, qualifications, limitations, representations and
covenants described in those sections.
(xiii) To such counsel's knowledge, the conditions for
use of a registration statement on Form S-3 set forth in the General
Instructions to Form S-3 have been satisfied with respect to the Company and the
transactions contemplated by this Agreement and the registration statement.
In rendering their opinion as aforesaid, counsel may rely
upon an opinion or opinions, each dated the Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction other than the
United States and jurisdictions in which they are admitted, provided that (1)
each such local counsel is acceptable to the Representatives, (2) such reliance
is expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and is, in form and substance
satisfactory to them and their counsel, and (3) counsel shall state in their
opinion that they believe that they and the Underwriters are justified in
relying thereon.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that while such counsel has not independently
verified and is not passing upon, and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
registration statement or the prospectus, on the basis of their participation in
the preparation of the registration statement and the prospectus supplement
dated January 26, 1998
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(but not in the preparation of the items incorporated by reference therein) and
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company, at which
the contents of the registration statement and the prospectus and related
matters were discussed, and their review of the documents incorporated by
reference and certain limited liability company records, documents and
proceedings, nothing has come to the attention of such counsel that leads them
to believe that the registration statement, at the time such registration
statement became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the prospectus, as
of its date or the Closing Date (or the Option Closing Date, as the case may
be), included or includes an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading (it being understood that such counsel expresses
no belief with respect to the financial statements, financial schedules and
other financial and statistical data included or incorporated by reference in
the registration statement or prospectus).
(d) You shall have received on the Closing Date, an opinion
of Gallagher Evelius & Jones, counsel for the Company, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, to the
effect that the Company is qualified to transact business and is in good
standing (i) in the jurisdiction in which it has its principal place of business
and (ii) in all other jurisdictions in which there is located real estate
securing one or more of the Company's investments, except where the failure to
so qualify in any such other jurisdiction will not have a Material Adverse
Effect on the Company.
(e) You shall have received on the Closing Date an opinion of
Piper & Marbury L.L.P., counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (ii), (v) and (ix) of the foregoing
paragraph (c) and such other related matters as you may request.
(f) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Price Waterhouse LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the
registration statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material change in the capital stock of the Company nor any
material increase in the consolidated short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the registration statement or the prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the registration statement and the
prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the registration statement and prospectus (or any amendment or
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supplement thereto), any material adverse change in the financial condition,
business, prospects, properties, investments, net worth, results of operations
or cash flow of the Company taken as a whole; and (iv) all the representations
and warranties of the Company contained in this Agreement shall be true and
correct on and as of the date hereof and on and as of the Closing Date or the
Option Closing Date, as the case may be, as if made on and as of the Closing
Date or Option Closing Date, and you shall have received a certificate, dated
the Closing Date or the Option Closing Date, as the case may be, and signed by
the chief executive officer and the chief financial officer of the Company, to
the effect set forth in this Sections 5(g), 5(h) and 5(i) hereof.
(h) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) The officers of the Company have carefully examined the
registration statement, the pre-pricing prospectus supplement and the prospectus
and, in such officers' opinions, as of the effective date of the registration
statement, the statements contained in the registration statement, including any
document incorporated by reference therein, were true and correct, and such
registration statement and any prospectus or any document incorporated by
reference therein did not omit to state a material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances in which they were made, not misleading and, in his opinion,
since the effective date of the registration statement, no event has occurred
which should have been set forth in a supplement to or an amendment of the
prospectus which has not been so set forth in such supplement or amendment or
incorporated by reference in the prospectus.
(j) The Shares shall have been listed for trading on the
American Stock Exchange.
(k) The NASD, upon a review of the terms of the public
offering of the Shares, if required, shall not have objected to such offering,
such terms or the Underwriters' participation in the same.
(l) The Company shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel in your reasonable discretion.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 6, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (h) shall be dated the Option
Closing
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Date in question and the opinions called for by paragraphs (c) and (d) shall be
revised to reflect the sale of Option Shares.
6. Conditions of the Obligations of the Company. The obligations of
the Company to sell and deliver the Shares as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the Option
Closing Date, as the case may be, no stop order suspending the effectiveness of
the registration statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
7. Expenses. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each pre-pricing prospectus supplement, the
prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the registration
statement, each pre-pricing prospectus supplement, the prospectus, and all
amendment or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the reproduction and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda, if any, and all other
agreements or documents reproduced and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the American Stock Exchange;
(vi) the filing fees in connection with any filings required to be made with the
NASD; (vii) the transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to prospective
purchasers of the Shares; (viii) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company and (ix) the fees and expenses of the transfer agent
for the Shares.
8. Indemnification.
(a) The Company indemnifies and holds harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including, without
limitation, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted, which settlement has been approved by the
indemnifying party), as and when incurred, to which any Underwriter, or any such
person, may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
(i) any untrue statement or alleged
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<PAGE>
untrue statement of a material fact contained in any pre-pricing prospectus
supplement, the registration statement or the prospectus or any amendment or
supplement to the registration statement or the prospectus, or in any
application or other document executed by or on behalf of the Company or based
on written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities laws thereof or
filed with the Commission, (ii) the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it, as to the prospectus, in light of the circumstances under
which they were made, not misleading, or (iii) any act or failure to act by any
Underwriter in connection with, or relating in any manner to, the Shares or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, liability, expense or damage arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company shall not
be liable under this clause (iii) to the extent it is finally judicially
determined by a court of competent jurisdiction that such loss, claim,
liability, expense or damage resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such underwriter through its negligence
or willful misconduct), provided that the Company will not be liable to the
extent that (i) such loss, claim, liability, expense or damage arises from the
sale of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of any Underwriter expressly for inclusion in the registration statement, any
pre-pricing prospectus supplement or the prospectus or (ii) such statement or
omission was contained or made in any preliminary prospectus and corrected in
the prospectus and (a) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (b) such
Underwriter failed to deliver or provide a copy of the prospectus to such person
at or prior to the confirmation of the sale of such Shares in any case where
such delivery is required by the Act. This indemnity agreement will be in
addition to any liability that the Company might otherwise have to any person
who is an indemnified party hereunder.
(b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the registration statement to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the registration statement, pre-pricing
prospectus supplement or the prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have; provided, however,
that in no case shall any Underwriter be liable or responsible for any amount in
excess of the underwriting discounts and commissions received by such
Underwriter.
-22-
<PAGE>
(c) Any party that proposes to assert the right to be indemnified
under this Section 8 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 8 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel reasonably satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 8 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 8(c), if at any time an indemnified party
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<PAGE>
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as required under this Section 8(c), such
indemnifying party agrees that it shall be liable for any settlement 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
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with this Section 8(c) or otherwise provided for such
reimbursement prior to the date of such settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 8 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid consistent
with the Agreement in settlement of, any action, suit or proceeding or any claim
asserted, but after deducting any contribution received by the Company from
persons other than the Underwriters, such as persons who control the Company
within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for
contribution) to which the Company and any one or more of the Underwriters may
be subject in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other. The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the 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 the Representatives on
behalf of the Underwriters, the intent of the parties and their relative
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 contributions pursuant to this Section 8(d) were to be
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 into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 8(d) shall be deemed to include, for purpose of this Section 8(d),
any legal or other expenses
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<PAGE>
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it, and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 8(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the registration statement
will have the same rights to contribution as the Company, subject in each case
to the provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 8(d), will notify
any such party or parties from whom contribution may be sought, but the omission
so to notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 8(d).
Except for a settlement entered into pursuant to the last sentence of Section
8(c) hereof, no party will be liable for contribution with respect to any action
or claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of any of the Shares and payment therefor or (iii) any termination of this
Agreement.
9. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the Option Shares, on or prior to the Option Closing Date), by
written notice to the Company from Legg Mason Wood Walker, Incorporated, without
liability on the part of any Underwriter to the Company, if, prior to delivery
and payment for the Shares (or the Option Shares, as the case may be), in the
sole judgment of the Representatives, (i) trading in securities generally on the
American Stock Exchange or the New York Stock Exchange shall have been suspended
or limited or minimum or maximum prices shall have been generally established on
such exchanges or on The Nasdaq Stock Market, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchanges or by
order of the Commission or the NASD or any court or other governmental
authority, (ii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or (iii) any material adverse change in
the financial or securities markets in the United States or in political,
financial or economic conditions in the United States or any outbreak or
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in
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<PAGE>
the sole judgment of the Representatives, impracticable or inadvisable to market
the Shares on the terms and in the manner contemplated by the prospectus.
10. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 10 by more than one-ninth of the number of Firm Shares
agreed to be purchased by such Underwriter without the prior written consent of
such Underwriter. If any Underwriter or Underwriters shall fail or refuse to
purchase any Firm Shares and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, or
the Company for the purchase or sale of any Shares under this Agreement. In any
such case either the Representatives or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken pursuant to this Section 10 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
11. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 218
North Charles Street, Baltimore, Maryland 21201, attention, Mark K. Joseph with
a copy to Robert E. King, Jr., Esq., Rogers & Wells, 200 Park Avenue, New York,
New York, 10166 or (b) if to the Underwriters, to Legg Mason Wood Walker,
Incorporated at the offices of Legg Mason Wood Walker, Incorporated, 111 South
Calvert Street, 20th Floor, Baltimore, MD 21202, Attention: Corporate Finance
Department, with a copy to Piper & Marbury L.L.P., 36 S. Charles Street,
Baltimore, MD 21201, Attention: R.W. Smith, Jr. Any such notice shall be
effective only upon receipt. Any notice hereunder may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and of the controlling persons, directors and
officers referred to in Section 8, and their respective successors and assigns,
and no other person shall acquire or have any right under
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<PAGE>
or by virtue of this Agreement. The term "successors and assigns" as used in
this Agreement shall not include a purchaser, as such purchaser, of Shares from
any of the several Underwriters.
All representations, warranties and agreements of the Company contained
herein or in certificates or other instruments delivered pursuant hereto, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any of their controlling persons and
shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by Legg Mason Wood Walker,
Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any provision
hereof waived except by an instrument in writing signed by Legg Mason Wood
Walker, Incorporated, on behalf of the Underwriters and the Company.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
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<PAGE>
Very truly yours,
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
By:
-------------------------------
Name: Michael L. Falcone
Title: President and Chief Operating Officer
Confirmed as of the date first above mentioned:
LEGG MASON WOOD WALKER, INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WHEAT, FIRST SECURITIES, INC.
Acting on behalf of themselves and
as the Representatives of the several
Underwriters named in Schedule I hereof.
By: LEGG MASON WOOD WALKER, INCORPORATED
By:
---------------------------------
Authorized Officer
-28-
<PAGE>
UNDERWRITERS
<TABLE>
<CAPTION>
Name of Underwriters Number of Firm Shares Purchased
<S> <C>
Legg Mason Wood Walker, Incorporated 654,000
Merrill Lynch Pierce Fenner & Smith Incorporated 653,000
Wheat, First Securities, Inc. 653,000
BT Alex. Brown Incorporate 60,000
Credit Lyonnaise Securities (USA) Inc. 60,000
Donaldson, Lufkin & Jenrette Securities Corporation 60,000
A.G. Edwards & Sons, Inc. 60,000
Goldman, Sachs & Co. 60,000
Lehman Brothers Inc. 60,000
Morgan Stanley & Co. Incorporated 60,000
Salomon Smith Barney 60,000
J.C. Bradford & Co. 40,000
EVEREN Securities, Inc. 40,000
Ferris, Baker Watts, Inc. 40,000
Janney Montgomery Scott Inc. 40,000
McDonald & Company Securities, Inc. 40,000
Morgan Keegan & Company, Incorporated 40,000
Pennsylvania Merchant Group Ltd 40,000
Piper Jaffray Inc. 40,000
Raymond James & Associates, Inc. 40,000
The Robinson-Humphrey Company, LLC 40,000
Scott & Stringfellow, Inc. 40,000
Stifel, Nicolaus & Company, Incorporated 40,000
Sutro & Co. Incorporated 40,000
Tucker Anthony Incorporated 40,000
Total 3,000,000
</TABLE>
-29-
<PAGE>
Exhibit A
Municipal Mortage Investments, LLC
Municipal Mortgage Servicing LLC
MMA Cap LLC
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<PAGE>
Exhibit 8.1
[Letterhead of Rogers & Wells]
January 28, 1998
Municipal Mortgage
and Equity, LLC
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Re: Municipal Mortgage and Equity, LLC (the "Company")
OFFERING OF UP TO 3,450,000 COMMON SHARES
--------------------------------------------------
Ladies and Gentlemen:
You have requested our opinion with respect to certain federal
income tax matters in connection with the transactions contemplated by the
Prospectus Supplement dated January 26, 1998 to the Prospectus dated June
2, 1997 (together, the "Prospectus"), included in the Registration
Statement on Form S-3 (File No. 333-20945), originally filed with the
Securities and Exchange Commission on February 3, 1997, and as subsequently
amended, relating to the Company. All capitalized terms used herein have
their respective meanings set forth in the Prospectus unless otherwise
stated.
We have acted as counsel to the Company with respect to the
Offering of the Common Shares pursuant to the Registration Statement. This
letter is for delivery in connection with the Offering and is intended to
confirm as of the date hereof the opinions described in the sections of the
Prospectus captioned "RISK FACTORS--Tax Risks" and "FEDERAL INCOME TAX
CONSIDERATIONS." We hereby consent to the use of this opinion letter as an
exhibit to the Registration Statement of the Company and to the reference
to this Firm in the Registration Statement under the captions "RISK
FACTORS--Tax Risks," "FEDERAL INCOME TAX CONSIDERATIONS" and "Legal
Matters."
<PAGE>
Municipal Mortgage 2 January 28, 1998
and Equity, LLC
In rendering the opinion stated below, we have examined and
relied, with your consent, upon the following:
(i) the Prospectus, the Registration Statement, as
subsequently amended;
(ii) the Amended and Restated Certificate of Formation and
Operating Agreement; and
(iii) such other documents, records and instruments as we have
deemed necessary to enable us to render the opinions referred to in this
letter.
In our examination of the foregoing documents, we have assumed,
with your consent, that (i) all documents reviewed by us are original
documents, or true and accurate copies of original documents, and have not
been subsequently amended, (ii) the signatures on each original document
are genuine, (iii) each party who executed the document had proper
authority and capacity, (iv) all representations and statements set forth
in such documents are true and correct, (v) all obligations imposed by any
such documents on the parties thereto have been or will be performed or
satisfied in accordance with their terms and (vi) the Company at all times
will be organized and operated in accordance with the terms of such
documents. We have further assumed the accuracy of the statements and
descriptions of the Company's intended activities as described in the
Prospectus.
For purposes of rendering the opinion stated below, we have
also assumed, with your consent, the accuracy of the representations and
covenants contained in the Certificate of Representations dated as of the
date hereof provided to us by the Company and attached hereto. These
representations generally relate to the classification and the operation of
the Company.
Based upon and subject to the foregoing, we are of the opinion
that:
(1) The opinions set forth in the Prospectus under the
captions "RISK FACTORS--Tax Risks" and "FEDERAL INCOME TAX CONSIDERATIONS"
and identified as our opinions are hereby confirmed.
(2) The summary of federal income tax considerations set
forth in the Prospectus fairly summarize the federal income tax
considerations that are likely to be material to a typical holder of Common
Shares.
<PAGE>
Municipal Mortgage 3 January 28, 1998
and Equity, LLC
The opinions stated above are subject to and based upon the
assumptions, qualifications, limitations, representations and covenants
discussed in the Prospectus. The opinions stated above also represent our
conclusions as to the application of federal income tax laws existing as of
the date of this letter to the transactions contemplated in the Prospectus
and we can give no assurance that legislative enactments, administrative
changes or court decisions may not be forthcoming that would modify or
supersede our opinions. Moreover, there can be no assurance that positions
contrary to our opinions will not be taken by the IRS, or that a court
considering the issues would not hold contrary to such opinions. Further,
the opinions set forth above represents our conclusions based upon the
documents, facts and representations referred to above. Any material
amendments to such documents, changes in any significant facts or
inaccuracy of such representations could affect the opinions referred to
herein. Although we have made such inquiries and performed such
investigations as we have deemed necessary to fulfill our professional
responsibilities as counsel, we have not undertaken an independent
investigation of all of the facts referred to in this letter.
We express no opinion as to any federal income tax issue or
other matter except those set forth above.
Very truly yours,
/s/ Rogers & Wells
Exhibit 20.1
M U N I M A E 218 North Charles St., Suite 500
Municipal Mortgage & Equity, LLC Baltimore, Maryland 21201-4019
TEL 410-962-8044 FAX 410-347-0587
[email protected]
PRESS RELEASE CONTACT: Derek K. Cole
Director, Investor Relations
FOR IMMEDIATE RELEASE (888) 788-3863
- ---------------------
MUNIMAE ANNOUNCES THE PUBLIC OFFERING OF 3,000,000 COMMON SHARES
BALTIMORE, MD, January 26, 1998 -- Municipal Mortgage and Equity, L.L.C.
(AMEX: MMA), also known as MuniMae, announced today the public offering of
3,000,000 growth, or common, shares at a price of $20.625 per share.
Mark K. Joseph, Chairman of the Board and CEO of MuniMae stated, "Net
proceeds from this offering are intended to fund bond acquisitions totaling
$116 million. These acquisitions are secured by 14 multifamily communities
encompassing 2,949 units in 5 states. This offering is part of our plan to
grow MuniMae.
Net proceeds of the offering to MuniMae will be approximately $58 million.
The underwriters, led by Legg Mason Wood Walker, Incorporated, Merrill Lynch &
Co. and Wheat First Butcher Singer, have an option to purchase an
additional 450,000 shares to cover over-allotments. If the option is
exercised in full, the net proceeds to the Company would then be approximately
$67 million. The offering is expected to close on January 30, 1998. A
written prospectus supplement prepared in connection with this offering may be
obtained by calling the Company at (888) 788-3863.
MuniMae originates, invests in, and services tax-exempt multifamily housing
bonds. The Company's assets currently (prior to the offering) consist of
38 tax-exempt bonds and other bond related investments, most of which
provide for MuniMae to participate in the appreciation of the underlying
apartments on a tax-exempt basis. The multifamily housing complexes which
back MuniMae's portfolio are located in eleven states, contain 9,993 units
with an average occupancy of 95%, and are valued at approximately $375
million.
MuniMae is organized as a limited liability company which provides for tax
advantages as well as the benefit of corporate governance. MuniMae, like
Real Estate Investment Trusts ("REITs"), is exempt from tax at the
corporate level. In addition, the Company passes through to its
shareholders primarily tax-exempt dividends which are generated by its
municipal bond investments. Dividends to shareholders are declared and
paid quarterly.
MUNIMAE: TAX-EXEMPT DIVIDENDS AND GROWTH THROUGH REAL ESTATE
