Purchase and Sale Agreement (2009)Full Document 

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EXECUTION VERSION

PURCHASE AND SALE AGREEMENT
by and among
JEN I, L.P.
and
MUNICIPAL MORTGAGE & EQUITY, LLC
and
MMA EQUITY CORPORATION
and
MMA FINANCIAL TC CORP.
and
MUNIMAE TEI HOLDINGS LLC
Dated as of June 26, 2009

PURCHASE AND SALE AGREEMENT

PURCHASE AND SALE AGREEMENT, dated as of June 26, 2009, by and among JEN I, L.P., a Delaware limited partnership (“Purchaser”), Municipal Mortgage & Equity, LLC, a Delaware limited liability company (“Parent”), MMA Equity Corporation, a Florida Corporation and an indirect wholly owned Subsidiary of Parent (“MMAEC”), MMA Financial TC Corp., a Delaware corporation and an indirect wholly owned Subsidiary of Parent (together with MMAEC, the “Sellers” and, each, a “Seller” and Parent and the Sellers, collectively, the “Seller Parties”), and MuniMae TEI Holdings LLC, a Maryland limited liability company and a wholly owned Subsidiary of Parent (“Guarantor”).

RECITALS:

WHEREAS, the Sellers are or will be the direct or indirect owners of all of the outstanding common stock or other equity or ownership interests in the Subject Entities, except for equity interests equal to 10% of the outstanding equity interests in MMA Financial BFG Investments, LLC that are held by certain former employees of the Business (as described herein) (such common stock or other equity interests, excluding such equity interests held by such former employees, the “Entity Interests”);

WHEREAS, Sellers are or will be the direct or indirect owners of the equity or other ownership interests in the LIHTC Funds as set forth on Exhibit B to Section 3.4(b) of the Seller Disclosure Schedule (the “Fund Interests”);

WHEREAS, the Sellers, through certain of their direct and indirect Subsidiaries, operate a housing and community investment business (the “Business”) that (i) aggregates, syndicates and manages portfolios of low income housing tax credit and assisted multi family properties and (ii) manages such properties and other assets related to the operation of such properties and the investment vehicles through which such properties and other assets are owned and/or operated;

WHEREAS, Parent, through its representatives and agents, including Lazard Freres & Co. LLC (“Lazard”), as its financial advisor, engaged in a multi stage competitive auction sale process through which potential acquirors of the Business were contacted and solicited to submit proposals to acquire the Business;

WHEREAS, in connection with such sale process, bids to acquire the Business were submitted by potential acquirors, including Purchaser;

WHEREAS, after extensive negotiations and discussions between representatives of Parent and such potential acquirors and careful consideration by Parent’s Board of Directors (the “Parent Board”), the Parent Board determined that Purchaser’s proposal was the most attractive of the submitted proposals and instructed representatives of Parent to pursue a sale of the Business substantially on the terms outlined in such proposal;

WHEREAS, the Seller Parties and Purchaser have engaged in extensive arms length negotiations and discussions with respect to the final terms and conditions upon which Purchaser would acquire the Business, which terms and conditions are set forth in this Agreement;

WHEREAS, the Seller Parties desire to sell or cause the sale of, and Purchaser wishes to purchase, the Business through the acquisition of the Entity Interests and the Fund Interests upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, in connection with such purchase and sale, the parties hereto desire to make certain representations, warranties, covenants and agreements as set forth in this Agreement; and

WHEREAS, the respective Boards of Directors of the Seller Parties have determined that this Agreement and the transactions contemplated hereby are advisable and in the best interests of their respective stockholders and equity holders and, accordingly, such Boards of Directors have approved this Agreement and the transactions contemplated hereby;

NOW, THEREFORE, in consideration of foregoing premises, the mutual promises hereinafter set forth and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereto hereby agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1. Definitions.

(a) As used in this Agreement, the following terms shall have the following meanings:

Acquired Remainder Fund” means a Remainder Fund that is directly or indirectly owned (in whole or in part) through Second Closing Interests.

Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified; provided that, for the purposes of this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the direct or indirect possession of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; provided, further, that the LIHTC Funds and any other Person, the majority of the outstanding equity interests of which are not directly or indirectly owned by the Seller Parties shall not be considered “Affiliates” for purposes of Section 7.2 of this Agreement.

Agreement” means this Purchase and Sale Agreement, together with the Exhibits and Schedules attached hereto and the Seller Disclosure Schedule.

Bankruptcy Event” means the occurrence of any of the following: (i) the commencement of an involuntary proceeding or the filing of an involuntary petition (A) seeking liquidation, reorganization or other relief in respect of any Seller Party or any of its Affiliates that are involved in the Business (including any Subject Entity or any Subsidiaries of a Subject Entity), or of a substantial part of their respective assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect, or (B) effecting the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Seller Party or any of its Affiliates that are involved in the Business (including any Subject Entity or any Subsidiaries of a Subject Entity), or for a substantial part of their respective assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall have been entered; or (ii) if any Seller Party or any of its Affiliates that are involved in the Business (including any Subject Entity or any Subsidiaries of a Subject Entity) (A) voluntarily commences any proceeding or files any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect, (B) consents to the institution of, or fails to contest in a timely and appropriate manner, any proceeding or petition described in the immediately preceding clause (i), (C) applies for or consents to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar

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