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Exhibit 1.1
EXECUTION
COPY
MBIA INC.
82,304,527 Shares of Common
Stock
Underwriting
Agreement
February 7, 2008
J.P. Morgan Securities Inc.
277 Park Avenue
New York, NY 10172
Lehman Brothers Inc.
745 Seventh Avenue
New York, NY 10019
Ladies and Gentlemen:
MBIA Inc., a Connecticut
corporation (the “ Company ”), proposes to issue
and sell to the several Underwriters listed in
Schedule 1 hereto (the “ Underwriters
”), an aggregate of 82,304,527 shares of Common Stock, par
value $1.00 per share, of the Company (the “ Underwritten
Shares ”) and, at the option of the Underwriters, up to
an additional 12,345,679 shares of Common Stock of the Company (the
“ Option Shares ”). The Underwritten Shares and
the Option Shares are herein referred to as the “
Shares ”. The shares of Common Stock of the Company to
be outstanding after giving effect to the sale of the Shares are
herein referred to as the “ Stock ”.
The Company has prepared and
filed with the Securities and Exchange Commission (the “
Commission ”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “ Securities Act ”), an
automatic shelf registration statement (File No. 333-144194)
as defined in Rule 405 under the Securities Act, including a
prospectus, relating to the Company’s Common Stock and other
securities; the registration statement has become effective
pursuant to the Securities Act and no stop order suspending the
effectiveness of the registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. The term “ Registration Statement ”
means such registration statement referenced above, as amended at
the time it becomes effective for purposes of Section 11 of
the Securities Act as such section applies to the Company and the
Underwriters for the Shares pursuant to Rule 430B(f)(2) under the
Securities Act (the “ Effective Time ”),
including (i) all documents then filed as a part thereof or
incorporated or deemed to be incorporated by reference therein and
(ii) any information contained or incorporated by reference in
a prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act, to the extent such information is deemed,
pursuant to Rule 430B(f)(1) under the Securities Act, to be part of
the Registration Statement at the Effective Time. The Company
proposes to file
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pursuant to Rule 424(b) under the
Securities Act a prospectus supplement specifically relating to the
Shares and reflecting the terms of the Shares and plan of
distribution arising from this Agreement (the “ Pricing
Supplement ”) and has previously advised the Underwriters
of all information to be set forth therein. The term “
Basic Prospectus ” means the prospectus included in
the Registration Statement exclusive of the Pricing Supplement. The
term “ Prospectus ” means the Basic Prospectus
together with the Pricing Supplement in the form first used (or
made available upon request of purchasers pursuant to Rule 173
under the Securities Act) in connection with the confirmation of
sales of the Shares. The term “ Preliminary Prospectus
” means the preliminary prospectus supplement specifically
relating to the Shares filed with the Commission pursuant to Rule
424(b) under the Securities Act for use in connection with the
offering of the Shares together with the Basic
Prospectus.
Any reference in this
Agreement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or
the Prospectus, as the case may be and any reference to
“amend”, “amendment” or
“supplement” with respect to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “ Exchange
Act ”) that are deemed to be incorporated by reference
therein.
The Preliminary Prospectus
dated February 6, 2008, each “free-writing
prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto and any electronic
roadshow used by the Company in marketing the Shares are
hereinafter collectively referred to as the “ Time of Sale
Information ”.
The Company hereby confirms
its agreement with the several Underwriters concerning the purchase
and sale of the Shares, as follows:
1. Sale and Delivery of
the Shares . (a) The Company agrees to issue and sell the
Underwritten Shares to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the
representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and
not jointly, to purchase from the Company the respective number of
Underwritten Shares set forth opposite such Underwriter’s
name in Schedule 1 hereto at a price per share (the “
Purchase Price ”) of $11.694.
In addition, the Company
agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, shall
have the option to purchase, severally and not jointly, from the
Company the Option Shares at the Purchase Price less an amount per
share equal to any dividends or distributions declared by the
Company and payable on the Underwritten Shares but not payable on
the Option Shares.
If any Option Shares are to
be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the
same ratio to the
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aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite
the name of such Underwriter in Schedule 1 hereto (or such number
increased as set forth in Section 10 hereof) bears to the
aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Underwriters
in their sole discretion shall make.
The Underwriters may exercise
the option to purchase the Option Shares at any time in whole, or
from time to time in part, on or before the thirtieth day following
the date of this Agreement, by written notice from the Underwriters
to the Company. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Shares by the
Underwriters. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the
date and time when the Option Shares are to be delivered and paid
for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date
nor later than the tenth full business day (as hereinafter defined)
after the date of such notice (unless such time and date are
postponed in accordance with the provisions of Section 10
hereof). Any such notice shall be given at least two Business Days
prior to the date and time of delivery specified therein. The term
“ Business Day ” means any day other than a day
on which banks are permitted or required to be closed in New York
City.
(b) The Company understands
that the Underwriters intend to make a public offering of the
Shares as soon after the effectiveness of this Agreement as in the
judgment of the Underwriters is advisable, and initially to offer
the Shares on the terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell
Shares to or through any affiliate of an Underwriter and that any
such affiliate may offer and sell Shares purchased by it to or
through any Underwriter.
(c) Payment for the Shares
shall be made to the Company by wire transfer in immediately
available funds to the bank account designated by the Company at
the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York at 10:00 A.M. New York City time on
February 13, 2008, or at such other time or place on the same
or such other date, not later than the fifth business day
thereafter, as the Underwriters and the Company may agree upon in
writing or, in the case of the Option Shares, on the date and at
the time and place specified by the Underwriters in the written
notice of the Underwriters’ election to purchase such Option
Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the “ Closing Date
” and the time and date for such payment for the Option
Shares, if other than the Closing Date, is herein referred to as
the “ Additional Closing Date ”.
Payment for the Shares to be
purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Underwriters
for the respective accounts of the several Underwriters of the
Shares to be purchased on such date or the Additional Closing Date,
as the case may be, with any transfer taxes payable in connection
with the sale of such Shares duly paid by the Company. Delivery of
the Shares shall be made through the facilities of The Depository
Trust Company (“ DTC ”) unless the Underwriters
shall otherwise instruct. The certificates for the Shares will
be
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made available for inspection
and packaging by the Underwriters at the office of J.P. Morgan
Securities Inc. set forth above not later than 1:00 P.M., New York
City time, on the Business Day prior to the Closing Date or the
Additional Closing Date, as the case may be.
(d) The Company acknowledges
and agrees that the Underwriters are acting solely in the capacity
of an arm’s length contractual counterparty to the Company
with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, neither
the Underwriters nor any other Underwriter is advising the Company
or any other person as to any legal, tax, investment, accounting,
rating agency or regulatory matters in any jurisdiction. The
Company shall consult with its own advisors concerning such matters
and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated
hereby, and the Underwriters shall have no responsibility or
liability to the Company with respect thereto. Any review by the
Underwriters of the Company, the transactions contemplated hereby
or other matters relating to such transactions will be performed
solely for the benefit of the Underwriters and shall not be on
behalf of the Company or any other person.
2. Representations and
Warranties of the Company . The Company represents and warrants
to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and the
Preliminary Prospectus included in the Time of Sale Information, at
the time of filing thereof, complied in all material respects with
the Securities Act, and the Preliminary Prospectus, at the time of
filing thereof, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in the
Preliminary Prospectus, it being understood and agreed that the
only such information furnished by any Underwriter consists of the
information described as such in Section 7(b)
hereof.
(b) Time of Sale
Information . For purposes of this Agreement, the Time of Sale
is 5:30 p.m. on the date of this Agreement. The Time of Sale
Information, at the Time of Sale, did not, and at the Closing Date
and as of the Additional Closing Date, as the case may be, will
not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in such Time
of Sale Information, it being understood and agreed that the only
such information furnished by any Underwriter consists of the
information described as such in Section 7(b)
hereof.
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(c) Issuer Free Writing
Prospectus. Other than the Registration Statement, the
Preliminary Prospectus and the Prospectus, the Company (including
its agents and representatives, other than the Underwriters in
their capacity as such) has not made, used, prepared, authorized,
approved or referred to and will not prepare, make, use, authorize,
approve or refer to any “written communication” (as
defined in Rule 405 under the Securities Act) that constitutes an
offer to sell or solicitation of an offer to buy the Shares (each
such communication by the Company or its agents and representatives
(other than a communication referred to in clause (i) below)
an “ Issuer Free Writing Prospectus ”) other
than (i) any document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Securities Act or Rule 134 under
the Securities Act or (ii) the documents listed on Annex B
hereto, each electronic road show and any other written
communications approved in writing in advance by the Underwriters.
Each such Issuer Free Writing Prospectus complied in all material
respects with the Securities Act, has been or will be (within the
time period specified in Rule 433) filed in accordance with the
Securities Act (to the extent required thereby) and, when taken
together with the Preliminary Prospectus filed prior to the first
use of such Issuer Free Writing Prospectus, did not, and at the
Closing Date and as of the Additional Closing Date, as the case may
be, will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements
or omissions made in each such Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in such
Issuer Free Writing Prospectus, it being understood and agreed that
the only such information furnished by any Underwriter consists of
the information described as such in Section 7(b)
hereof.
(d) Registration Statement
and Prospectus. The Registration Statement is an
“automatic shelf registration statement” as defined
under Rule 405 of the Securities Act that has been filed with the
Commission not earlier than three years prior to the date hereof;
and no notice of objection of the Commission to the use of such
registration statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act has been
received by the Company. No order suspending the effectiveness of
the Registration Statement has been issued by the Commission and no
proceeding for that purpose or pursuant to Section 8A of the
Securities Act against the Company or related to the offering has
been initiated or threatened by the Commission; as of the
applicable effective date of the Registration Statement and any
post-effective amendment thereto and as of the Closing Date, the
Registration Statement complied and will comply in all material
respects with the Securities Act, and did not and will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the
Closing Date and as of the Additional Closing Date, as the case may
be, the Prospectus does not and will not contain any untrue
statement of a material fact or omit to state a material
fact
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required to be stated therein
or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information furnished to the
Company in writing by an Underwriter expressly for use in the
Registration Statement and the Prospectus and any amendment or
supplement thereto, it being understood and agreed that the only
such information furnished by any Underwriter consists of the
information described as such in Section 7(b)
hereof.
(e) Incorporated
Documents. The documents incorporated by reference or deemed to
be incorporated by reference in the Prospectus or the Time of Sale
Information, when they were filed with the Commission, complied in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission hereunder, and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus or the Time
of Sale Information, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Exchange Act, and will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f) Financial
Statements. The financial statements and the related notes
thereto of the Company and its consolidated subsidiaries included
or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and
the Exchange Act, as applicable, and present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results
of their operations and the changes in their cash flows for the
periods specified; and except as otherwise described in the Time of
Sale Information and the Prospectus, such financial statements have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
covered thereby, and the supporting schedules included or
incorporated by reference in the Registration Statement present
fairly the information required to be stated therein; and the other
financial information included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus has been derived from the accounting records of the
Company and its consolidated subsidiaries and presents fairly the
information shown thereby.
(g) No Material Adverse
Change. Since the date as of which information is given in or
incorporated by reference in each of the Registration Statement,
the Time of Sale Information and the Prospectus, except as
otherwise stated therein (including in information incorporated by
reference therein), (i) there has been no event or occurrence
that would, individually or in the aggregate, have a material
adverse effect on the
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condition, financial or
otherwise, results of operations, business or prospects of the
Company and its significant subsidiaries as defined in Rule 1-02 of
Regulation S-X under the Exchange Act and listed in Schedule
2 hereto (“ Subsidiaries ”) taken as a
whole; (ii) there have been no transactions entered into by
the Company or any of its Subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its Subsidiaries taken as a whole.
(h) Organization and Good
Standing. The Company and each of its Subsidiaries have been
duly organized and are validly existing and in good standing under
the laws of their respective jurisdictions of incorporation with
the corporate power and authority to own, lease and operate its
properties and to conduct its business as described or incorporated
by reference in the Registration Statement, the Time of Sale
Information and the Prospectus and to enter into and perform its
obligations under this Agreement, and consummate the transactions
as described in the Registration Statement, the Time of Sale
Information and the Prospectus; the Company and each of its
Subsidiaries is duly qualified to do business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
or be in good standing would not, individually or in the aggregate,
have a material adverse effect on the condition, financial or
otherwise, results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole (a “
Material Adverse Effect ”).
(i) Capitalization.
The Company has authorized common stock and preferred stock as set
forth in the Time of Sale Information and the Prospectus under the
heading “Description of Capital Stock” (except for
subsequent issuances, if any, pursuant to this Agreement or
pursuant to resolutions, agreements, convertible securities,
options or employee benefit plans referred to therein); all the
outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the
Time of Sale Information and the Prospectus, there are no
outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its Subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the
Company or any such Subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus.
(j) Authorization of this
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(k) Authorization of the
Shares. The Shares to be issued and sold by the Company
hereunder and the Company’s preferred stock to be issued
pursuant to the Investment Agreement dated as of December 10,
2007 between the Company and Warburg Pincus Private Equity X, L.P.
(“ Warburg Pincus ”), as amended by the
first
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amendment thereto dated
February 6, 2008, (the “ Investment Agreement
”) have been duly authorized by the Company and, when issued
and delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Registration Statement,
the Time of Sale Information and the Prospectus; and the issuance
of the Shares is not subject to any preemptive or similar
rights.
(l) Authorization of
Investment Agreement. The Investment Agreement, as amended, has
been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights
generally or by equitable principles relating to enforceability.
The Company has no reason to believe that it will not be able to
exercise its election to sell its preference shares to Warburg
Pincus pursuant to the Investment Agreement, as amended, up to the
Backstop Shortfall Amount (as defined in the Time of Sale
Information and Prospectus).
(m) Descriptions of
Agreement. The Investment Agreement and the first amendment
thereto conform in all respects which are material in the context
of the offering of the Shares to the description thereof contained
in the Registration Statement, the Time of Sale Information and the
Prospectus.
(n) Absence of Defaults
and Conflicts . Neither the Company nor any of its Subsidiaries
is (a) in violation of the provisions of its amended and
restated certificate of incorporation or by-laws (or similar
organizational documents), (b) in default and no event has
occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any agreement,
indenture or other instrument to which it is a party or by which it
is bound or to which any of its properties is subject, except for
any such defaults that would not, individually or in the aggregate,
have a material adverse effect on the condition, financial or
otherwise, results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole, or (c) in
violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property may be subject, except for
any such violations that would not, individually or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole.
None of (w) the execution, delivery and performance of this
Agreement and the Investment Agreement, (x) the consummation
of the transactions contemplated hereby, thereby or as described in
the Registration Statement, the Time of Sale Information or the
Prospectus, (y) the issuance, sale and delivery of the Shares
or (z) the compliance by the Company with all of the
provisions of this Agreement and the Investment Agreement and the
consummation of the transactions herein and therein contemplated
and as described in the Registration Statement, the Time of Sale
Information or the Prospectus will result in a breach or violation
of, or constitute a default under, the amended and restated
certificate of incorporation or by-laws or other governing
documents of the Company or any of its Subsidiaries, or any
agreement, indenture or other instrument to which the Company
or
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any of its Subsidiaries is a
party or by which any of them is bound, or to which any of their
respective properties is subject, and assuming each Underwriter and
each of its affiliates has complied and will comply with all
applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Shares, nor will any such
action or the performance by the Company of its obligations
hereunder, thereunder or as described in the Registration
Statement, the Time of Sale Information or the Prospectus violate
any law, rule, administrative regulation or decree of any court, or
any governmental agency or body having jurisdiction over the
Company, its Subsidiaries or any of their respective properties, or
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or any of its
Subsidiaries.
(o) Absence of
Proceedings . There is no litigation or governmental proceeding
to which the Company or any of its Subsidiaries is a party or to
which any property of the Company or any of its Subsidiaries is
subject or which is pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries that
could reasonably be expected to, individually or in the aggregate,
have a material adverse effect on the condition, financial or
otherwise, results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole.
(p) Possession of Licenses
and Permits . Each of the Company and its Subsidiaries
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, “ MBIA Governmental
Licenses ”) issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
in all material respects the business now operated by it, except
where the failure to possess such permits, licenses, approvals,
consents and other authorizations would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole;
each of the Company and its Subsidiaries is in compliance with the
terms and conditions of all such MBIA Governmental Licenses, except
where the failure so to comply would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole; all
of the MBIA Governmental Licenses are valid and in full force and
effect, except where the invalidity of such MBIA Governmental
Licenses or the failure of such MBIA Governmental Licenses to be in
full force and effect would not, singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise,
results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole; and neither the Company nor any of
its Subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such MBIA Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material
adverse effect on the condition, financial or otherwise, results of
operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(q) No Filings, Regulatory
Approvals, Etc . No filing with, or approval, authorization,
permit, consent, license, registration, qualification, order or
decree of any
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court or governmental
authority or agency, domestic or foreign, is necessary or required
for the due authorization, execution and delivery by the Company of
this Agreement or the Investment Agreement as amended, for the due
authorization and issuance the Shares or for the performance by the
Company of the transactions contemplated herein, therein or as
described in the Registration Statement, the Time of Sale
Information and the Prospectus, as applicable, except (A) such
as have been previously made, obtained or rendered, (B) such
as may be required under state or foreign securities or “Blue
Sky” laws of certain jurisdictions (including insurance
securities laws) in connection with the offering, issuance and sale
of the Securities or (C) such filings, approvals,
authorizations, permits, consents, licenses, registrations,
qualifications, orders or decrees which the failure to make, obtain
or comply with would not have an adverse effect on the ability of
the Company to consummate the transactions contemplated by this
Agreement, provided that the Company makes no representation
as to any such filing, approval, authorization, consent, license,
registration, qualification, order or decree required to be made or
obtained by the Underwriters.
(r) Investment Company
Act . The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in each of the Registration Statement, the
Time of Sale Information and the Prospectus will not be, an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “
Investment Company Act ”).
(s) Reinsurance Treaties
and Arrangements . All reinsurance treaties and arrangements to
which MBIA Insurance Corporation (“ MBIA Insurance
”) is a party are in full force and effect, and MBIA
Insurance is not in violation of, or in default in the performance,
observance or fulfillment of, any obligation, agreement, covenant
or condition contained therein, except to the extent that any such
violation or default would not, singly or in the aggregate with all
such other violations or defaults, have a material adverse effect
on the condition, financial or otherwise, results of operations,
business or prospects of MBIA Insurance; MBIA Insurance has not
received any notice from any of the other parties to such treaties,
contracts or agreements that such other party intends not to
perform in any material respect such treaty, contract or agreement,
and, to the best of its knowledge, MBIA Insurance has no reason to
believe that any of the other parties to such treaties or
arrangements will be unable to perform such treaty or
arrangement.
(t) Independent
Accountants. PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and its Subsidiaries is
an independent registered public accounting firm with respect to
the Company and its Subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Accounting
Oversight Board (United States) and as required by the Securities
Act.
(u) Taxes. The Company
and its Subsidiaries have paid all federal, state, local and
foreign taxes and filed all tax returns required to be paid or
filed through the date hereof, except for such taxes and filings
which the failure to pay or file would not have a
10
material adverse effect on
the condition, financial or otherwise, results of operations,
business or prospects of the Company and its Subsidiaries taken as
a whole; and except as otherwise disclosed in each of the
Registration Statement, the Time of Sale Information and the
Prospectus, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any
of its Subsidiaries or any of their respective properties or assets
which deficiency would reasonably be expected to have a material
adverse effect on the condition, financial or otherwise, results of
operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(v) Compliance With
ERISA. (i) Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ ERISA ”), for which the
Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “ Code
”)) would have any liability (each, a “ Plan
”) has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code;
(ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected
pursuant to a statutory or administrative exemption; (iii) for
each Plan that is subject to the funding rules of Section 412
of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the
Code, whether or not waived, has occurred or is reasonably expected
to occur; (iv) the fair market value of the assets of each
Plan exceeds the present value of all benefits accrued under such
Plan (determined based on those assumptions used to fund such
Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur; and (vi) neither the Company nor
any member of the Controlled Group has incurred, nor reasonably
expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary
course and w
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