EXHIBIT 1.2
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
(a Maryland corporation)
PLACEMENT AGENCY AGREEMENT
Dated: March 21, 2002
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
(a Maryland corporation)
PLACEMENT AGENCY AGREEMENT
March 21, 2002
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Apartment Investment and Management Company, a Maryland corporation
(the "COMPANY"), confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX" or the "PLACEMENT AGENT"),
to act as exclusive placement agent for the Company, from the date of this
agreement (the "AGREEMENT") through the Closing Time (as defined below) (the
"ENGAGEMENT PERIOD"), with respect to the issue and sale by the Company to, and
the purchase by, Xxxxx & Steers Quality Income Realty Fund, Inc., a Maryland
corporation, and Xxxxx and Steers Equity Income Fund, Inc., a Maryland
corporation (together, the "FUND"), of a total of 1,000,000 shares of the
Company's Class R Cumulative Preferred Stock, par value $0.01 per share (the
"SECURITIES").
The Securities will be issued by the Company to the Fund in an
aggregate principal amount of $25,770,000. In acting as the Placement Agent,
Xxxxxxx Xxxxx will seek to place the securities with the Fund on a reasonable
best efforts basis, acting as the Company's agent and not as a principal in the
placement of the Securities. Xxxxxxx Xxxxx may separately engage, at its own
expense and with the prior approval of the Company, sub-agents as it may deem
necessary or appropriate.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-71452) for the
registration of the Securities and certain other securities of the Company under
the Securities Act of 1933, as amended (the "1933 ACT"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 ACT RULES AND
REGULATIONS"). Such registration statement has been declared effective by the
Commission and the Company has filed such post-effective amendments thereto as
may be required prior to the execution of this Agreement and each such
post-effective amendment has been declared effective by the Commission. Such
registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 434(d) of the
1933 Act Rules and Regulations (the "RULE 434 INFORMATION"), is referred to
herein as the "Registration Statement"; and the final prospectus and the final
prospectus supplement relating
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to the offering of the Securities, in the form first furnished to the Placement
Agent by the Company for use in connection with the offering of the Securities,
are collectively referred to herein as the "Prospectus"; provided, however, that
all references to the "Registration Statement" and the Prospectus" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 ACT"), prior to the
execution of this Agreement; provided, further, that if the Company files a
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Rules and Regulations (the "RULE 462(b) REGISTRATION STATEMENT"), then,
after such filing, all references to "Registration Statement" shall also be
deemed to include the Rule 462 Registration Statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Rules and
Regulations, then all references to "Prospectus" shall also be deemed to include
the final or preliminary prospectus and the applicable term sheet or abbreviated
term sheet (the "TERM SHEET"), as the case may be, in the form first furnished
to the Placement Agent by the Company in reliance upon Rule 434 of the 1933 Act
Rules and Regulations, and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the Registration
Statement became effective and any prospectus that omitted, as applicable, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Rules and Regulations and was used after such effectiveness. For purposes of
this Agreement, all references to the Registration Statement, Prospectus, Term
Sheet or preliminary prospectus or to any amendment or supplement to any of the
foregoing shall be deemed to include any copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX")
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act, which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
As used herein, the term "Subsidiary" means a corporation or a
partnership a majority of the outstanding voting stock, partnership or
membership interests, as the case may be, of which is owned or controlled,
directly or indirectly, by the Company, AIMCO Properties, L.P., a Delaware
limited partnership (the "OPERATING PARTNERSHIP"), or by one or more other
Subsidiaries of the Company or the Operating Partnership.
Section 1. Representations and Warranties.
(a) Representations and Warranties. The Company and the Operating
Partnership, jointly and severally, represent and warrant to and agree with the
Placement Agent that:
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(i) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Securities Act. The
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(ii) (a) Each document, if any, filed or to be filed pursuant to the
1934 Act and incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 ACT RULES AND
REGULATIONS"), (b) each part of the Registration Statement, when such part
became effective, did not contain, and each such part, as amended or
supplemented, if applicable, 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 not misleading, (c) the Registration Statement
and the Prospectus comply, and, as amended or supplemented, if applicable, will
comply in all material respects with the 1933 Act and the 1933 Act Rules and
Regulations and (d) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Placement Agent furnished to
the Company in writing by the Placement Agent expressly for use therein.
(iii) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Maryland, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and the direct and indirect
subsidiaries, taken as a whole.
(iv) Each Subsidiary is a corporation, limited partnership, limited
liability company or trust, as the case may be, duly organized or formed, is
validly existing in good standing under the laws of the jurisdiction of its
organization or formation, has the corporate, limited partnership, limited
liability company or trust power and authority, as the case may be, to own its
property and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be in good
standing, to have such power and authority or to be so qualified would not have
a material adverse effect on the Company and the Subsidiaries, taken as a whole;
all of the issued shares of capital stock, partnership interests, limited
liability company membership interests or trust beneficial interests, as the
case may be, of each Subsidiary or created by agreements to which such
Subsidiaries are parties have been duly and validly authorized and issued (and
in the case of capital stock are fully paid and non-assessable); all such shares
of
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capital stock, partnership interests, limited liability company membership
interests and trust beneficial interests owned or held, directly or indirectly,
by the Company are held free and clear of any security interest, lien, adverse
claim, equity or other encumbrance (each of the foregoing, a "Lien"), other than
Liens described in the Registration Statement or the Prospectus, except with
respect to clause (i) and (ii) above, where the failure of such shares of
capital stock, partnership interests, limited liability company membership
interests or trust beneficial interests being duly and validly authorized or the
existence of such Liens would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(v) This Agreement has been duly authorized, executed and delivered by
each of the Company and the Operating Partnership. The Purchase Agreement
between the Company and the Fund dated the date hereof (the "PURCHASE
AGREEMENT") has been duly authorized, executed and delivered by the Company.
(vi) The Company has an authorized capitalization as set forth in the
Prospectus. All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights; the Securities to be purchased by the
Fund from the Company have been duly authorized for issuance and sale to the
Fund and, when issued and delivered against the payment of the consideration set
forth in the Purchase Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms in all material respects to the description
thereof in the Registration Statement and the Prospectus. The preferred units to
be issued by the Operating Partnership in exchange for the net proceeds from the
sale of the Securities (the "PREFERRED UNITS") have been duly authorized and,
when issued to the Company, will be validly issued. Except as disclosed in the
Registration Statement and the Prospectus, and except for options or other
securities issued to employees, officers or directors of the Company, the
Operating Partnership or a Subsidiary pursuant to a stock-based plan of the
Company, the Operating Partnership or a Subsidiary, there are no outstanding
options, convertible or exchangeable securities, warrants or other rights
calling for the issuance of capital stock of the Company.
(vii) As of the date hereof, the Company indirectly owns an aggregate
approximate 87% partnership interest in the Operating Partnership free and clear
of all Liens. A wholly-owned subsidiary of the Company is the sole general
partner of the Operating Partnership.
(viii) The Company has the corporate power and authority to enter into
this Agreement and the Purchase Agreement and to issue, sell and deliver the
Securities as provided in this Agreement. The Operating Partnership has the
power and authority to enter into this Agreement and to issue and deliver the
Preferred Units to the Company as provided in Section 3(f) of this Agreement.
(ix) Neither the Company nor any of the Subsidiaries listed on Schedule
I to this Agreement (collectively, the "SPECIFIED SUBSIDIARIES") is in violation
of its
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certificate or articles of incorporation or by-laws or certificates or
agreements of limited partnership, limited liability company or trust or other
organizational documents. None of the Subsidiaries (other than the Specified
Subsidiaries) is in violation of its certificate or articles of incorporation or
by-laws or certificates or agreements of limited partnership, limited liability
company or trust or other organizational documents, except for such violations
which would not, singly or in the aggregate, have a material adverse effect on
the Company and the Subsidiaries, taken as a whole. Neither the Company nor any
of the Subsidiaries is (i) in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or any of their
respective properties or (ii) in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties is bound, except, with respect to clauses (i) and (ii) above, for any
defaults which would not, singly or in the aggregate, have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
(x) None of the issuance and sale of the Securities by the Company, the
issuance of the Preferred Units by the Operating Partnership, the execution,
delivery or performance of this Agreement by the Company and the Operating
Partnership, the execution, delivery and performance of the Purchase Agreement
by the Company or the consummation by the Company and the Operating Partnership
of the transactions contemplated under this Agreement and the Purchase Agreement
(i) requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may be required
for the registration of the Securities under the 1933 Act and the 1934 Act and
compliance with the securities or Blue Sky or real estate syndication laws of
various jurisdictions, to the extent applicable, and the filing of the
Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act,
all of which have been or will be effected in accordance with this Agreement,
and except for the filing of the Articles Supplementary (as hereinafter defined)
with the SDAT (as hereinafter defined), which filing with the SDAT will be made
prior to the Closing Time), or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws or certificates or agreements of limited
partnership, limited liability company or trust or other organizational
documents of the Company or any of the Specified Subsidiaries, (iii) conflicts
or will conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation or bylaws or
certificates or agreements of limited partnership, limited liability company or
trust or other organizational documents of any of the Subsidiaries (other than
the Specified Subsidiaries), except, with respect to clause (iii), for such
conflicts, breaches or defaults which would not, singly or in the aggregate,
have a material adverse effect on the Company and the Subsidiaries, taken as a
whole, or (iv) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any
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of their respective properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any Lien upon any
property or assets of the Company or any of the Subsidiaries pursuant to the
terms of any agreement or instrument to which any of them is a party or by which
any of them may be bound or to which any of the property or assets of any of
them is subject, except, with respect to clause (iv), for such conflicts,
breaches, defaults, violations or Liens which would not, singly or in the
aggregate, have a material adverse effect on the Company and the Subsidiaries,
taken as a whole.
(xi) Except as disclosed in the Registration Statement and the
Prospectus, (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement) subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus, there has
not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and the Subsidiaries,
taken as a whole.
(xii) Ernst & Young LLP, which has certified the consolidated financial
statements of the Company included or incorporated by reference in the
Registration Statement and the Prospectus, are independent public accountants
with respect to the Company as required by the Securities Act.
(xiii) The financial statements, together with related schedules and
notes, of the Company included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
or incorporated by reference in the Registration Statement and the Prospectus
(or any amendment or supplement thereto) are accurately presented and prepared
on a basis consistent with such financial statements and the books and records
of the Company and the Subsidiaries.
(xiv) To the knowledge of the Company and the Partnership, the audited
consolidated financial statements and unaudited interim financial statements
(the "CASDEN FINANCIAL STATEMENTS") listed in Section 4.4(a) of the Disclosure
Letter (the "CASDEN DISCLOSURE LETTER") to the Agreement and Plan of Merger,
dated as of December 3, 2001, by and among the Company, Casden Properties Inc.
("CASDEN") and XYZ Holdings LLC have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto, and except for the absence of notes
in the case of unaudited statements) and fairly present in all material respects
the financial position of the applicable entities (or consolidated group of
entities) referenced therein as of the dates
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thereof and the results of their operations and cash flows for the periods then
ended, subject to normal recurring audit and year-end adjustments, in the case
of the unaudited interim financial statements.
(xv) To the knowledge of the Company and the Operating Partnership, the
schedules attached as Section 4.4(b) of the Casden Disclosure Letter present
fairly, in all material respects, on a pro forma basis the financial position of
Casden and its subsidiaries, on a consolidated basis, as of December 31, 2000
and June 30, 2001, and the results of operations on a pro forma basis of Casden
and its subsidiaries, on a consolidated basis, for the twelve months and six
months then ended, in each case after giving effect to the transactions and
adjustments disclosed therein.
(xvi) The Company is not required to include in the Prospectus or the
Registration Statement any historical financial statements of Casden or any pro
forma financial statements reflecting the merger of Casden with and into the
Company or the related transactions described in the Merger Agreement pursuant
to Regulation S-X under the 0000 Xxx. The Company is not required, as a result
of the merger of Casden with and into the Company or the related transactions
described in the Merger Agreement, to file a Current Report on Form 8-K
including any historical financial statements of Casden or any pro forma
financial statements reflecting the merger of Casden with and into the Company
or the related transactions described in the Merger Agreement pursuant to
Regulation S-X.
(xvii) There are no legal or governmental proceedings pending or, to
the knowledge of the Company and the Operating Partnership, threatened against
the Company or any of the Subsidiaries or to which any of the properties of the
Company or any of the Subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus that are not so described. There
are no statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are not
described, filed or incorporated as required.
(xviii) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the 1933 Act and the 1933 Act Rules and Regulations
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to the Placement Agent furnished to
the Company in writing by the Placement Agent expressly for use therein.
(xix) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and each of the Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
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conditions of any such permit, license or approval, except with respect to (i),
(ii) and (iii) above, where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole.
(xx) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties or in connection with
off-site disposal of hazardous waste) which would, singly or in the aggregate,
have a material adverse effect on the Company and the Subsidiaries, taken as a
whole.
(xxi) Except as disclosed in the Registration Statement and the
Prospectus, there are no unwaived contracts, agreements or understandings
between the Company or the Operating Partnership and any person granting such
person the right to require the Company or the Operating Partnership to include
any securities of the Company or the Operating Partnership with the securities
registered pursuant to the Registration Statement.
(xxii) Except as disclosed in the Registration Statement and the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
neither the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, nor entered into any transaction not in the
ordinary course of business, in either case, that is material to the Company and
the Subsidiaries, taken as a whole; (ii) the Company has not purchased any of
its outstanding capital stock, (iii) the Company has not declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock
other than ordinary and customary dividends; and (iv) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company and the Subsidiaries, taken as a whole.
(xxiii) (i) The Company and the Subsidiaries have good and marketable
title in fee simple to all parcels of real property (except for those easement
parcels that are appurtenant to the real property owned in fee simple by the
Company and the Subsidiaries) and good and marketable title to all personal
property owned by them, in each case free and clear of all Liens, except where
the failure to have good and marketable title or such Liens would not, singly or
in the aggregate, have a material adverse effect on the Company and the
Subsidiaries taken as a whole, (ii) any real property and buildings held under
lease by the Company and the Subsidiaries are held under valid, subsisting and
enforceable leases, except where failure to hold such property and buildings
under valid, subsisting and enforceable leases would not, singly or in the
aggregate, have a material adverse effect on the Company and the Subsidiaries
taken as a whole, (iii) the construction, management or operation of the
buildings, fixtures and other improvements located on the apartment properties
owned or controlled by the Company or the Subsidiaries ("OWNED PROPERTIES"), as
presently conducted or existing is not in
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violation of any applicable building code, zoning ordinance or other law or
regulation, except where any such violation would not, singly or in the
aggregate, have a material adverse effect on the Company and the Subsidiaries,
taken as a whole, (iv) neither the Company nor any of the Subsidiaries has
received notice of any proposed special assessment or any proposed change in any
property tax, zoning or land use laws affecting all or any portion of the Owned
Properties, except where any such assessment or change would not, singly or in
the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole, (v) there do not exist any violations of any
declaration of covenants, conditions and restrictions with respect to any of the
Owned Properties, nor is there any existing state of facts or circumstances or
condition or event which could, with the giving of notice or passage of time, or
both, constitute such a violation, except where any such violation would not,
singly or in the aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole, and (vi) the improvements comprising any
portion of the Owned Properties (the "IMPROVEMENTS") are free of any and all
material physical, mechanical, structural, design and construction defects and
the mechanical, electrical and utility systems servicing the Improvements
(including, without limitation, all water, electric, sewer, plumbing, heating,
ventilation, gas and air conditioning) are in good condition and proper working
order and are free of material defects, except for any such defects or failures
to be in good condition or proper working order which would not, singly or in
the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(xxiv) There is no strike or work stoppage existing or, to the
knowledge of the Company and the Operating Partnership, threatened against the
Company or any Specified Subsidiary. The Company does not have any knowledge as
to any intentions of any key employee or any group of employees to leave the
employ of the Company or any of the Subsidiaries where such departure would have
a material adverse effect on the Company and the Subsidiaries, taken as a whole.
Except as disclosed in the Registration Statement and the Prospectus, the
Company has not established, sponsored, maintained, made any contributions to or
been obligated by law to establish, maintain, sponsor or make any contributions
to any "employee pension benefit plan" or "employee welfare benefit plan" (as
such terms are defined in the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), including, without limitation, any "multi-employer plan."
The Company is in compliance with all applicable laws relating to the employment
of labor, including provisions relating to wages, hours, equal opportunity,
collective bargaining and the payment of Social Security and other taxes, and
with ERISA, except where the failure to so comply would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(xxv) The Subsidiaries have obtained Extended Coverage Owner's Policies
of Title Insurance, to the extent available in the pertinent jurisdiction (other
than in connection with real property located in Texas, with respect to which
the Company and its direct and indirect subsidiaries have obtained Texas Form
T-1 Policies of Title Insurance) from title insurers of recognized financial
responsibility on all of the Owned Properties and such policies are in full
force and effect, except where any such failure to obtain title insurance or to
have such policies in full force and effect would not, singly or
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in the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(xxvi) The Company and the Subsidiaries self insure, or are insured by
insurers of recognized financial responsibility, against such losses and risks
and in such amounts as are customary in the businesses in which they are
engaged; and neither the Company nor any of the Subsidiaries has any reason to
believe that it will not be able to renew that coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(xxvii) The Company has not distributed and, prior to the later to
occur of (i) the Closing Time and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement and
the Prospectus or other materials, if any, permitted by the 1933 Act.
(xxviii) (i) The Company and each of the Subsidiaries have such
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("PERMITS") as are necessary to own their respective properties and
to conduct their respective businesses in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus, (ii) the Company and each of the Subsidiaries have fulfilled and
performed all of their respective material obligations with respect to such
permits and to the Company's knowledge no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination thereof or
result in any other material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set forth in the
Prospectus, and (iii) except as described in the Prospectus, none of such
permits contains any restriction that is materially burdensome to the Company or
any of the Subsidiaries, except, with respect to clauses (i), (ii) and (iii)
above, for any such failure to obtain permits or failure to fulfill or perform
obligations, or the occurrence of events, or such restrictions that would not,
singly or in the aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole.
(xxix) The Company and each of the Subsidiaries have filed or caused to
be filed all federal, state, local, foreign and other tax returns, reports,
information returns and statements (except for returns, reports, information
returns and statements the failure to file which will not have a material
adverse effect on the Company and the Subsidiaries taken as a whole) required to
be filed by them. The Company and each of the Subsidiaries have paid or caused
to be paid all taxes (including interest and penalties) that are shown as due
and payable on such returns or claimed in writing by any taxing authority to be
due and payable with respect to such returns, except those which are being
contested by them in good faith by appropriate proceedings and in respect of
which adequate reserves are being maintained on their books in accordance with
generally accepted accounting principles consistently applied or those which
would not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole. The Company and each of the
Subsidiaries do not have any material liabilities for taxes other than those
incurred in the ordinary course of business and in
10
respect of which adequate reserves are being maintained by it in accordance with
generally accepted accounting principles consistently applied or those which
would not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole. Federal and state income tax
returns for the Company and each of the Subsidiaries have not been audited by
the Internal Revenue Service or state authorities; provided, however, (i) the
1997 Federal income tax return of NHP Management Company was accepted by the
Internal Revenue Service as filed, (ii) an Internal Revenue Service audit of the
Federal income tax returns of Insignia Financial Group, Inc. and its
subsidiaries ("Insignia") for the tax periods ended December 31, 1996, December
31, 1997 and October 1, 1998 (i.e., the short tax year of Insignia ending when
Insignia was merged with and into the Company) was concluded in 2001, (iii)
various state income tax returns of the Company and/or the Subsidiaries are
currently under examination, and (iv) various partnership affiliates are under
examination by the Internal Revenue Service. No deficiency assessment with
respect to or proposed adjustment of the Company's or any of the Subsidiaries'
federal, state, local, foreign or other tax returns is pending or, to the best
of the Company's knowledge, threatened in writing. There is no tax lien, whether
imposed by any federal, state, local or other tax authority, outstanding against
the assets, properties or business of the Company other than statutory liens in
respect of taxes that are not delinquent. There are no applicable taxes, fees or
other governmental charges payable by the Company or any of the Subsidiaries in
connection with the execution and delivery of this Agreement or the issuance by
the Company of the Securities.
(xxx) Neither the Company nor the Operating Partnership is now, and
after the sale of the Securities and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds," neither
of them will be, an "investment company" (as such term is defined in the
Investment Company Act of 1940, as amended).
(xxxi) The Company has since July 29, 1994 been organized and qualified
as a real estate investment trust (a "REIT") under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the "CODE"), has elected to be
taxed as a REIT under the Code for the taxable years ended December 31, 1994
through December 31, 2001, and currently expects to continue to be organized and
to operate in a manner so as to qualify as a REIT in the taxable year ending
December 31, 2002 and succeeding taxable years.
(xxxii) The Company intends to apply to have the Securities listed on
the New York Stock Exchange.
(xxxiii) The Company for itself and on behalf of each Specified
Subsidiary maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for
11
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
Section 2. Placement Agent Fees.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
pay Xxxxxxx Xxxxx a fee (the "FEE"), based upon the aggregate amount of
Securities sold, as calculated in accordance with the provisions of this Section
for its services pursuant to this Agreement. The Fee will be equal to 2.0% of
the purchase price of all Securities sold to the Fund pursuant to this
Agreement.
(b) On the date on which the Fund purchases the Securities from the
Company in accordance with this Agreement (the "CLOSING TIME"), the Company
shall pay the Fee to the Placement Agent in cash by wire transfer of immediately
available funds to a bank account designated by the Placement Agent.
(c) If during the Engagement Period, unless terminated pursuant to
Section 9(a) of this Agreement (in which case the provisions of such Section
shall apply), the Company sells Securities or other equity interests in the
Company, to any purchaser besides the Fund, the Company will pay Xxxxxxx Xxxxx a
fee with respect to all such sales of Securities or other equity interests as
calculated in accordance with the provisions of this Section.
Section 3. Covenants of the Company. Each of the Company and the
Operating Partnership covenants with the Placement Agent as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company will comply with the requirements of Rule 434 of the 1933 Act Rules and
Regulations, if and as applicable, and will notify the Placement Agent
immediately, and confirm the notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement, or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any comments from
the Commission, (iii) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the Prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it will
promptly file the Prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Rules and Regulations and the 1934 Act and
the 1934 Act Rules and Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Registration Statement and in the Prospectus. If at any time when a
12
prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Placement Agent or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Rules and
Regulations, the Company will promptly prepare and file with the Commission such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Placement Agent such
number of copies of such amendment or supplement as the Placement Agent may
reasonably request.
(c) Blue Sky Qualifications. To the extent required based on the
written opinion of counsel to the Placement Agent, the Company will use its best
efforts, in cooperation with the Placement Agent, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Placement Agent may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(d) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(e) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act Rules and
Regulations.
(f) Use of Proceeds. The Company shall contribute the net proceeds from
the sale of the Securities to the Operating Partnership. The Operating
Partnership shall apply such net proceeds substantially in accordance with the
description set forth under the caption "Use of Proceeds" in the Prospectus. In
exchange for the contribution of such net proceeds, at the Closing Time, the
Operating Partnership will issue the Preferred Units to the Company. The terms
of such Preferred Units will be substantially equivalent to the economic terms
of the Securities.
13
(g) REIT Qualification. The Company will use its best efforts to
continue to meet the requirement to qualify as a "real estate investment trust"
under the Code for each of its taxable years for so long as the Company's board
of directors deems it in the best interests of the Company's shareholders to
remain so qualified.
(h) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(i) No Manipulation of Market for Securities. Except for the
authorization of actions permitted to be taken by the Placement Agent as
contemplated herein or in the Prospectus, neither the Company nor the Operating
Partnership will (a) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities, and (b) until the Closing Time,
(i) sell, bid for or purchase the Securities or pay any person any compensation
for soliciting purchases of the Securities or (ii) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(j) Rule 462(b) Registration Statement. If the Company elects to rely
upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the 1933 Act.
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) and each amendment thereto, (ii)
the preparation and delivery to the Placement Agent of this Agreement and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the fees and disbursements
of the Company's counsel, accountants and other advisors, (iv) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(c) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Placement Agent in connection therewith, (v)
the printing and delivery to the Placement Agent of copies of each of the
preliminary prospectus, Prospectus and any amendments or supplements thereto,
(vi) the fees and expenses of any transfer agent or registrar for the Securities
and (vii) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Placement Agent in accordance with the provisions of Section 5 or Section 9(a),
the Company shall reimburse the Placement Agent for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Placement Agent.
14
Section 5. Conditions of Placement Agent's Obligations. The obligations
of the Placement Agent hereunder are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
contained in Section 1 hereof or in certificates of any officer or authorized
representative of the Company or the Operating Partnership delivered pursuant to
the provisions hereof, to the performance by the Company or the Operating
Partnership of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or be
pending or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Placement Agent. A prospectus shall
have been filed with the Commission in accordance with Rule 424(b) or a
post-effective amendment providing such information shall have been filed and
declared effective, or, if the Company has elected to rely upon Rule 434 of the
1933 Act Rules and Regulations, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP. At Closing
Time, the Placement Agent shall have received (i) the favorable opinion, dated
as of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Company and the Operating Partnership, in form and substance satisfactory to
counsel for the Placement Agent, to the effect set forth in Exhibit A hereto and
to such further effect as counsel to the Placement Agent may reasonably request
and (ii) the favorable tax opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
in form and substance satisfactory to counsel for the Placement Agent, to the
effect set forth in Exhibit B hereto and to such further effect as counsel to
the Placement Agent may reasonably request.
(c) Opinion of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP. At Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Placement Agent, to the effect set
forth in Exhibit C hereto and to such further effect as counsel to the Placement
Agent may reasonably request.
(d) Opinion of Xxxx X. Xxxxxx. At Closing Time, the Placement Agent
shall have received the favorable opinion, dated as of Closing Time, of Xxxx X.
Xxxxxx, the Company's Executive Vice President of Legal and Regulatory Affairs,
in form and substance satisfactory to counsel for the Placement Agent, to the
effect set forth in Exhibit D hereto and to such further effect as counsel to
the Placement Agent may reasonably request.
(e) Opinion of Designated Underwriter's Counsel. At Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of Closing
Time, of Mayer, Brown, Xxxx & Maw, designated underwriter's counsel for the
Company, covering the matters referred to in paragraphs (i), (ii), (vi), (viii)
and (ix) and the last paragraph of Exhibit A. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than
15
the law of the State of New York and the federal law of the United States, upon
the opinions of counsel satisfactory to the Placement Agent. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company, the Operating Partnership and the Subsidiaries and certificates of
public officials.
(f) Officers' Certificate. At Closing Time, (i) there shall not have
occurred any downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of the
Company's securities as of the date of this Agreement by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act and (ii) there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Company, the Operating Partnership, and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Placement Agent shall have received (1) a certificate of the President or a Vice
President of the Company and of the chief financial officer of the Company, and
(2) a certificate of the President or a Vice President of AIMCO-GP, Inc., the
General Partner of the Operating Partnership, and of the chief financial officer
of the General Partner of the Operating Partnership, each dated as of Closing
Time, and each to the effect that (i) there has been no such downgrading, (ii)
there has been no such material adverse change, (iii) the representations and
warranties in Section 1(a) hereof of the Company or the Operating Partnership,
as the case may be, are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iv) the Company or the
Operating Partnership, as the case may be, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (v) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or are contemplated by the Commission.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Placement Agent shall have received from Ernst & Young a letter
dated such date, in form and substance satisfactory to the Placement Agent,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Placement Agent
shall have received from Ernst & Young a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
16
(j) Articles Supplementary. The Company shall have duly filed the
articles supplementary (the "ARTICLES SUPPLEMENTARY") designating the Securities
with the State Department of Assessments and Taxation of Maryland (the "SDAT").
(k) Additional Documents. At Closing Time, counsel for the Placement
Agent shall have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Placement Agent
and counsel for the Placement Agent.
(l) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Placement Agent by notice to the Company
at any time at or prior to Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6, 7, 8 and 12 shall survive any such termination and
remain in full force and effect.
Section 6. Indemnification.
(a) Indemnification of Placement Agent. Each of the Company and the
Operating Partnership agrees, jointly and severally, to indemnify and hold
harmless the Placement Agent and each person, if any, who controls the Placement
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and any director, officer, employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
neither the Company nor the Operating Partnership shall be required
under this subsection (a)(i) to indemnify the Placement Agent with
respect to any preliminary prospectus to the extent that any loss,
claim, damage or expense of the Placement Agent results solely from an
untrue statement of a material fact contained in, or the omission of a
material fact from, such preliminary prospectus which untrue statement
or omission was corrected in the Prospectus and which corrected
Prospectus was furnished by the Company to the Placement Agent but was
not sent or given by the Placement Agent to the purchaser of the
Securities at or prior to the written confirmation of such sale.
17
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Placement Agent), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. The Placement
Agent severally agrees to indemnify and hold harmless the Company and the
Operating Partnership, each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and any
officer, director, trustee, employee or affiliate thereof, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Placement Agent expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Placement Agent,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
18
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
Section 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Operating Partnership on the one hand and the Placement Agent on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Operating Partnership on the one hand and of the Placement Agent on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Operating
Partnership on the one hand and the Placement Agent on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Fee received by the Placement Agent.
The relative fault of the Company and the Operating Partnership on the
one hand and the Placement Agent on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Operating Partnership
or by the Placement Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Operating Partnership and the Placement Agent agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities,
19
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, the Placement Agent
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities placed by it exceeds the amount of any
damages which the Placement Agent has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each trustee of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. For purposes of this
Section 7, the Company and the Operating Partnership shall be deemed one party,
jointly and severally liable for any obligations hereunder.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent or controlling person,
or by or on behalf of the Company or the Operating Partnership, and shall
survive delivery of the Securities to the Fund.
Section 9. Termination of Agreement.
(a) Termination; General. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, the Operating
Partnership and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case, the
effect of which is such as to make it, in the judgment of the Placement Agent,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange,
20
or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 12 shall survive such termination and remain in full force and
effect.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to the Placement Agent at North Tower, World Financial
Center, New York, New York 10281-1201, attention of Xxxxx Xxxxxx; notices to the
Company and the Operating Partnership shall be directed to it at Apartment
Investment and Management Company, Colorado Center, Tower Two, 0000 Xxxxx
Xxxxxxxx Xxxxxxxxx, Xxxxx 0-0000, Xxxxxx, Xxxxxxxx 00000, attention of Xx. Xxxx
XxXxxxxxx.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Placement Agent, the Company and the Operating Partnership
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Placement Agent, the Company and the Operating
Partnership and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Placement Agent and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Placement Agent shall be deemed
to be a successor by reason merely of such purchase.
Section 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 13. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Placement Agent, the Company and the Operating Partnership in
accordance with its terms.
Very truly yours,
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Xxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxx X. XxXxxxxxx
Title: Executive Vice
President, Chief
Financial Officer
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC., its general partner
By: /s/ Xxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxx X. XxXxxxxxx
Title: Executive Vice
President, Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxx Xxxxxx
---------------------------------------------------------
Authorized Signatory
22
SCHEDULE I
SPECIFIED SUBSIDIARIES
Delaware Corporations
1. AIMCO-GP, Inc.
2. AIMCO-LP, Inc.
3. AIMCO/Bethesda Holdings, Inc.
Delaware Limited Partnerships
1. AIMCO Properties, L.P.
2. Casden Properties Operating Partnership, L.P.
D.C. Corporations
1. NHP Management Company
I-1
EXHIBIT A
FORM OF OPINION OF SKADDEN, ARPS,
SLATE, XXXXXXX & XXXX LLP
PURSUANT TO SECTION 5(b)(i)
(i) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(ii) The Operating Partnership has partnership power and
authority to enter into this Agreement and to issue and deliver to the
Company the Preferred Units to be issued and delivered by the Operating
Partnership as provided in this Agreement.
(iii) None of the issuance and sale by the Company of the
Securities, the issuance of the Preferred Units by the Operating
Partnership, or the execution, delivery and performance by the Company
or the Operating Partnership of their respective obligations under the
Transaction Agreements (as defined in such counsel's opinion) will (i)
conflict with or constitute a breach of, or default under, the
certificate of incorporation of AIMCO-GP, Inc. or AIMCO-LP, Inc. or the
certificate of limited partnership or limited partnership agreement of
the Operating Partnership, (ii) constitute a violation of, or a breach
or default under, the terms of any Applicable Contract or (iii) violate
or conflict with, or result in any contravention of, any Applicable
Order. Such counsel need not express any opinion, however as to (a)
whether the execution, delivery or performance by the Company or the
Operating Partnership of the Transaction Agreements will constitute a
violation of or a default under any covenant, restriction or provision
with respect to financial ratios or tests or any aspect of the
financial condition or results of operations of the Company or the
Operating Partnership or (b) the enforceability of any of the
Applicable Contracts. "Applicable Order" means those judgments, orders
or decrees identified in paragraph __ to the Company Certificate.
"Applicable Contract" means those agreements or instruments identified
in Annex B to the Company Certificate.
(iv) No Governmental Approval which has not been obtained or
taken and is not in full force and effect, is required to authorize, or
is required in connection with the consummation of the transactions
contemplated by the Transaction Agreements, except such as may be
required under the Act or the 1934 Act. "Governmental Approval" means
any consent, approval, license, authorization or validation of, or
filing, qualification or registration with, any Governmental Authority
required to be made or obtained by the Company or the Operating
Partnership pursuant to Applicable Laws, other than any consent,
approval, license, authorization, validation, filing, qualification or
registration which may have become applicable as a result of the
involvement of any other party (other than the Company or the Operating
Partnership) in the transactions contemplated by the Transaction
Agreements or because of such parties' legal or regulatory status or
because of any other facts specifically pertaining to such parties.
A-1
(v) To such counsel's knowledge, no holder of any security of
the Company or the Operating Partnership has any right that has not
been waived under any of the Registration Rights Agreements listed on
Annex C to the Company Certificate attached to such counsel's opinion
to require registration of any security of the Company or the Operating
Partnership because of the filing of the Registration Statement or
consummation of the transactions contemplated by the Transaction
Agreements.
(vi) The Registration Statement has become effective under the
1933 Act, and such counsel has been advised by the Commission that no
stop order suspending the effectiveness of the Registration Statement
has been issued and, to the best of such counsel's knowledge, no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission. The Prospectus has been filed with the
Commission pursuant to Rule 424(b) under the Securities Act.
(vii) Neither the Company nor the Operating Partnership is
and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the Prospectus,
will be an "investment company."
(viii) Each of the documents incorporated by reference into
the Registration Statement and the Prospectus (the "INCORPORATED
DOCUMENTS"), when it was filed, appeared on its face to be
appropriately responsive in all material respects with the requirements
of the 1934 Act and the 1934 Act Rules and Regulations of the
Commission thereunder, except that such counsel need not express any
opinion as to the financial statements, including pro forma financial
statements, and related notes and schedules and other financial or
statistical data included therein or omitted therefrom or the exhibits
thereto.
(ix) The Registration Statement, as of the date of the filing
of the Company's 2001 Annual Report on Form 10-K, and as of the pricing
date, and the Prospectus, as of the date of the Prospectus appeared on
their faces to be appropriately responsive in all material respects to
the requirements of the 1933 Act and the 1933 Act Rules and
Regulations, except that in each case such counsel need not express any
opinion as to the financial statements, including pro forma financial
statements, and schedules and other financial or statistical data
included or incorporated by reference therein or excluded therefrom, or
the exhibits thereto, and, except to the extent expressly stated in
such counsel's opinion relating to certain tax matters delivered
pursuant to Section 5(b)(ii) of this Agreement, such counsel need not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus.
In addition, such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, the Placement Agent and counsel for the
Placement Agent, at which the contents of the Registration Statement and the
Prospectus (including the Incorporated
A-2
Documents) and related matters were discussed and, although such counsel 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 (including the Incorporated Documents), except as
set forth in such counsel's opinion relating to certain tax matters delivered
pursuant to Section 5(b)(ii) of this Agreement, and have made no independent
check or verification thereof, on the basis of the foregoing, no facts have come
to such counsel's attention that have led such counsel to believe that the
Registration Statement (including the Incorporated Documents), at the time it
became effective and as of the date of this Agreement, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus (including the Incorporated Documents), as of the date of
the Prospectus Supplement and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that such counsel need not
express any opinion or belief with respect to the financial statements,
including pro forma financial statements, the schedules and other financial and
statistical data included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statement.
A-3
EXHIBIT B
FORM OF TAX OPINION OF
SKADDEN, ARPS, SLATE, XXXXXXX
& XXXX LLP TO BE DELIVERED
PURSUANT TO SECTION 5(b)(ii)
(i) Commencing with the Company's initial taxable year ended December
31, 1994, the Company was organized in conformity with the requirements for
qualification as a REIT under the Code, and its actual method of operation has
enabled, and its proposed method of operation will enable, the Company to meet
the requirements for qualification and taxation as a REIT. As noted in the
Registration Statement, the Company's qualification and taxation as a REIT
depend upon its ability to meet, through actual annual operating results,
certain requirements, including requirements relating to distribution levels and
diversity of stock ownership, and the various qualification tests imposed under
the Code, the results of which will not be reviewed by us. Accordingly, no
assurance can be given that the actual results of the Company's operation for
any one taxable year will satisfy the requirements for taxation as a REIT under
the Code.
(ii) Although the discussion set forth in the Prospectus under the
caption "Certain Federal Income Tax Considerations" does not purport to discuss
all possible United States Federal income tax consequences of the purchase,
ownership, and disposition of the Securities, such discussion constitutes, in
all material respects, a fair and accurate summary under current law of the
material United States Federal income tax consequences of the purchase,
ownership and disposition of the Securities by a holder who purchases such
Securities, subject to the qualifications set forth therein. The United States
Federal income tax consequences of an investment in the Securities by an
investor will depend upon that holder's particular situation, and we express no
opinion as to the completeness of the discussion set forth in "Certain Federal
Income Tax Considerations" as applied to any particular holder.
B-1
EXHIBIT C
FORM OF OPINION OF XXXXX XXXXXXX
XXXXXXX & XXXXX LLP
TO BE DELIVERED PURSUANT
TO SECTION 5(c)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland.
(ii) The Company has the corporate power and authority to own,
lease, and operate its properties and to conduct its business as
described in its Charter (as defined in such counsel's opinion).
(iii) The Securities to be purchased by the Fund from the
Company have been duly authorized for issuance and sale to the Fund
and, when issued and delivered by the Company against payment of
consideration set forth in the Purchase Agreement, will be duly and
validly issued, fully paid, and non-assessable and free of any
preemptive right (or, to such counsel's knowledge, similar rights) that
are contained in the Company's Charter or arising under the Maryland
General Corporation Law that entitle or will entitle any person to
acquire any of the Securities upon issuance thereof by the Company.
(iv) The Company has corporate power and authority to enter
into this Agreement and the Purchase Agreement and to issue, sell and
deliver to the Fund the Securities to be issued and sold by the Company
pursuant to this Agreement and the Purchase Agreement.
(v) This Agreement and the Purchase Agreement have each been
duly authorized by all necessary corporation action on the part of the
Company and, assuming that they have been executed and delivered by the
Chairman of the Board of Directors, the Vice Chairman of the Board of
Directors or any Vice President of the Company, have been duly executed
and delivered by the Company.
(vi) The authorized capital stock of the Company conforms in
all material respects to the description thereof contained in the
Registration Statement and the Prospectus under the captions
"Description of Preferred Stock", "Description of Class A Common
Stock," "Provisions of Maryland Law Applicable to Preferred Stock,
Equity Stock and Class A Common Stock," "Description of Outstanding
Classes of Preferred Stock" and "Description of Class R Preferred
Stock," in so far as such description relates to the Company's Charter
and By-Laws (as defined in such counsel's opinion) and the Maryland
General Corporation Law.
(vii) The form of certificates evidencing the Securities is in
due and proper form and complies in all material respects with the
requirements of the Maryland General Corporation Law.
C-1
(viii) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement or the Purchase
Agreement by the Company nor the consummation by the Company of the
transactions contemplated thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental
body, agency or official of the State of Maryland (other than the
filing of the Articles Supplementary relating to the Securities with
the SDAT), (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Charter or By-Laws of
the Company, or (iii) violates or will violate any statute, law,
regulation, filing, judgment, injunction, order or decree of the State
of Maryland known to us, applicable to the Company or any of its
properties.
(ix) The statements under the caption "Description of Class R
Preferred Stock" in the Prospectus, insofar as such statements
constitute a summary of legal matters, documents, or proceedings
referred to therein, are accurate summaries and fairly and correctly
present the information called for with respect to such legal matters,
documents, or proceedings in all material respects.
(x) The statements in Item 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of Maryland
statutes or provisions of the Charter or By-Laws of the Company
referred to therein, are accurate in all material respects.
(xi) To such counsel's knowledge, the Company is not (i) in
violation of its Charter or By-Laws, or (ii) in breach of any
applicable statute, rule or regulation or any writ, order or decree of
any court or governmental agency or body of the State of Maryland
having jurisdiction over the Company or its properties.
(xii) To such counsel's knowledge, there are no material legal
or governmental proceedings pending or threatened in the State of
Maryland against the Company, or to which the Company or any of its
properties is subject.
C-2
EXHIBIT D
FORM OF OPINION OF
XXXX X. XXXXXX
PURSUANT TO SECTION 5(d)
(i) Each of the Specified Subsidiaries listed on Schedule A
under the caption "Delaware corporation" (collectively, the "Delaware
Corporations") has been duly incorporated under the Delaware General
Corporation Law ("DGCL"). AIMCO Properties, L.P. has been duly
organized or formed as a limited partnership under the Delaware Revised
Uniform Limited Partnership Act ("DRULPA"). NHP Management Company has
been duly incorporated under the laws of the District of Columbia. Each
of the Specified Subsidiaries is a corporation or a limited
partnership, as the case may be, validly existing and in good standing
under the laws of its jurisdiction of organization or formation, and
has corporate or limited partnership power, as the case may be, to own,
lease and operate the properties that to such counsel's knowledge are
currently owned by it and to conduct its business as described in the
Registration Statement and the Prospectus.
(ii) The Transaction Agreements (as defined in such counsel's
opinion) have been duly executed and delivered by the Company, assuming
the authorization thereof by the Company.
(iii) All of the outstanding shares of capital stock of
AIMCO-GP, Inc. and AIMCO-LP, Inc. have been validly issued and, to the
best of such counsel's knowledge, are fully paid and non-assessable and
are owned of record by the Company. All of the outstanding units of
limited partnership interests issued by the Operating Partnership
subsequent to July 29, 1994, including, without limitation, the
Preferred Units, have been validly issued and, to the best of such
counsel's knowledge, are owned of record by the Company or one or more
subsidiaries of the Company, except, with respect to the Operating
Partnership, for units of limited partnership held by third parties.
All of the outstanding units of limited partnership interests issued by
Casden Properties Operating Partnership, L.P. have been validly issued
and, to the best of my knowledge, are owned of record by the Operating
Partnership or one or more subsidiaries of the Company. All of the
outstanding shares of capital stock of AIMCO/Bethesda Holdings, Inc.
and NHP Management Company have been validly issued and, to the best of
such counsel's knowledge, are fully paid and non-assessable and are
owned of record by the Operating Partnership except with respect to no
more than one percent of the outstanding shares of capital stock of
each of AIMCO/Bethesda Holdings, Inc. and NHP Management Company owned
of record by third parties.
(iv) To such counsel's knowledge, based solely upon
discussions with, and representations from, officers and other
representatives of the Company, and upon such counsel's review of the
Applicable Contracts, all of the shares of the corporation listed as
items 1, 2, 3 and 6 on Schedule A to such counsel's opinion, and all of
the limited partnership interests of the limited partnerships listed as
items 4 and 5 on Schedule A to such counsel's opinion, that are owned,
directly or
D-1
indirectly, by the Company, are owned free and clear of any security
interests, liens, adverse claims, equities or other encumbrances,
except that (i) certain of the shares of Series A Preferred Stock of
AIMCO/Bethesda Holdings, Inc. are pledged pursuant to a Borrowers
Pledge Agreement, dated as of March 11, 2002, by and between the
Pledgors (the Operating Partnership, the Company, AIMCO/Bethesda
Holdings, Inc., AIMCO GP, Inc., AIMCO GP LA, L.P., AIMCO Investment
Services, Inc., AIMCO LA QRS, Inc., AIMCO LP LA, L.P., Casden
Properties Operating Partnership, L.P., AIC REIT Properties LLC and NHP
Management Company) and Bank of America N.A., as Administrative Agent
for and representative of the financial institutions party to the
Fourth Amended and Restated Credit Agreement, dated as of March 11,
2002, by and among the Company, the Operating Partnership, NHP
Management Company, AIMCO/Bethesda Holdings, Inc., Bank of America
N.A., Fleet National Bank, First Union National Bank, and the other
financial institutions party thereto, and (ii) certain of the shares of
Series A Preferred Stock of NHP Management Company are pledged pursuant
to a Borrowers Pledge Agreement, dated as of March 11, 2002, by and
between the Pledgors (the Operating Partnership, the Company,
AIMCO/Bethesda Holdings, Inc., AIMCO GP, Inc., AIMCO GP LA, L.P., AIMCO
Investment Services, Inc., AIMCO LA QRS, Inc., AIMCO LP LA, L.P.,
Casden Properties Operating Partnership, L.P., AIC REIT Properties LLC
and NHP Management Company) and Xxxxxx Commercial Paper, Inc., as
Administrative Agent for and respective of the financial institutions
party to the Interim Credit Agreement, dated as of March 11, 2002, by
and among the Company, the Operating Partnership, NHP Management
Company, Xxxxxx Commercial Paper, Inc., and the other financial
institutions party thereto.
(v) The Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its direct and indirect subsidiaries, taken as a whole.
(vi) To such counsel's knowledge, the Company possesses the
Governmental Licenses and the Company is in compliance with the terms
and conditions of all such Governmental Licenses, except where the
failure to so comply would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole, and all of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole. "Governmental Licenses" means such
permits licenses, franchises or authorizations from governmental or
regulatory authorities as are necessary under Applicable Laws for the
Company and its direct and indirect subsidiaries to own their
respective properties and to conduct their respective businesses in the
manner described in the Prospectus.
D-2
(vii) None of the issuance and sale by the Company of the
Securities, the issuance of the Preferred Units by the Operating
Partnership, the execution, delivery and performance by the Company or
the Operating Partnership of their respective obligations under the
Transaction Agreements or the execution, delivery and performance by
the Company of its obligations under the Purchase Agreement, will
violate or conflict with, or result in any contravention of, any
judgment, decree or order known to such counsel of any federal or state
governmental authority entered in any proceedings to which the Company
or any Specified Subsidiary is a party or by which its property is
bound.
(viii) Neither the issuance and sale by the Company of the
Securities nor the execution, delivery and performance by the Company
of its obligations under the Transaction Agreements will violate or
conflict with, or result in any contravention of, any judgment, decree
or order known to me of any federal or state governmental authority
entered in any proceedings to which the Company or any Specified
Subsidiary is a party or by which its property is bound.
(ix) The statements in "Item 3 - Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the
matters referred to therein.
(x) After due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of the Specified Subsidiaries is a party or to which any of the
properties of the Company or any of the Specified Subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required.
In addition, such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, the Placement Agent and counsel for the
Placement Agent, at which the contents of the Registration Statement and the
Prospectus (including the Incorporated Documents) and related matters were
discussed and, although such counsel 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 (including the
Incorporated Documents), and has made no independent check or verification
thereof, on the basis of the foregoing, no facts have come to such counsel's
attention that have led such counsel to believe that the Registration Statement
(including the Incorporated Documents), at the time it became effective and as
of the date of this Agreement, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading
D-3
or that the Prospectus (including the Incorporated Documents), as of the date of
the Prospectus and as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that such counsel need not
express any opinion or belief with respect to the financial statements,
including pro forma financial statements, the schedules and other financial and
statistical data included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statement.
D-4
