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EXHIBIT 1.1
UNDERWRITING AGREEMENT
March 14, 2001
Apartment Investment and Management Company
0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0-0000
Xxxxxx, Xxxxxxxx 00000
AIMCO Properties, L.P.
0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0-0000
Xxxxxx, Xxxxxxxx 00000
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Apartment Investment and
Management Company, a Maryland corporation (the "Company"), proposes to issue
and sell 2,200,000 of its Class Q Cumulative Preferred Stock, par value $0.01
per share (the "Initial Equity Securities"). The Company also proposes to issue
and sell not more than 330,000 additional shares of its Class Q Cumulative
Preferred Stock, par value $0.01 per share (the "Equity Optional Securities,"
and together with the Initial Equity Securities, the "Equity Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
respective number of Initial Equity Securities set forth below opposite such
Underwriter's names at a purchase price of $25 per share of Equity Security:
NAME NUMBER OF INITIAL EQUITY SECURITIES
Xxxxxx Xxxxxxx & Co. Incorporated 425,000
Prudential Securities Incorporated 425,000
Xxxxxxx Xxxxx & Associates, Inc. 425,000
UBS Warburg LLC 425,000
Bear, Xxxxxxx & Co. Inc. 110,000
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Xxxxxxxxx Xxxxxxxx, Inc. 110,000
Xxxxxx Xxxxxxx Incorporated 110,000
Advest Inc. 10,000
BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx 10,000
CIBC World Markets Corp. 10,000
Deutsche Banc Alex. Xxxxx Inc. 10,000
Xxxxxxxxxx & Co. Inc. 10,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC 10,000
Josephthal & Co. Inc. 10,000
XX Xxxx & Associates, Inc. 10,000
McDonald Investments Inc., a KeyCorp Company 10,000
Mesirow Financial, Inc. 10,000
Xxxxxx/Xxxxxx Incorporated 10,000
The Xxxxxxxx-Xxxxxxxx Company, LLC 10,000
Southwest Securities, Inc. 10,000
Xxxxxx, Xxxxxxxx & Company Incorporated 10,000
US Bancorp Xxxxx Xxxxxxx Inc. 10,000
Xxxxx Fargo/Xxx Xxxxxx & Co. 10,000
XX Xxxxx Securities Incorporated 10,000
Total 2,200,000
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company also agrees to
sell the Underwriters the Equity Optional Securities, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 330,000 of
Equity Optional Securities. If the Underwriters elect to exercise such option,
the Underwriters shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Equity Optional Securities to be purchased by the Underwriters and the date on
which such shares are to be purchased. Such date may be the same as the Closing
Date (as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Equity Optional Securities may be
purchased as provided solely for the purpose of covering overallotments made in
connection with the offering of the Equity Securities. If any Equity Optional
Securities are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the number of Equity Optional Securities (subject to such
adjustments to eliminate fractional shares as the Manager may determine) that
bears the same proportion to the total number of Equity Optional Securities to
be purchased as the number of Initial Equity Securities set forth above opposite
the name of such Underwriter bears to the total number of Initial Equity
Securities to be purchased.
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The Underwriters will pay for the Equity Securities upon delivery thereof
at Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx at 10:00
a.m. (New York City time) on March 19, 2001, or at such other time, not later
than 5:00 p.m. (New York City time) on March 26, 2001, as shall be designated
by the Manager. The time and date of such payment and delivery are hereinafter
referred to as the "Closing Date."
The Underwriters will pay for the Equity Optional Securities upon delivery
thereof at Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx at
10:00 a.m. (New York City time) on a date to be designated by the Manager which
shall not be later than seven full business days after the exercise of the
option nor later than 30 days after the Closing Date for the Initial Equity
Securities. The time and date of such payment and delivery are hereinafter
referred to as the "Option Closing Date."
All provisions contained in the document entitled Apartment Investment and
Management Company Form of Underwriting Agreement Standard Provisions (Equity
Securities) dated March 14, 2001, a copy of which is attached hereto, are
incorporated herein by reference in their entirety and shall be deemed to be
a part of this Agreement to the same extent as if such provisions had been set
forth in full herein, except that (i) if any term defined in such document is
otherwise defined herein, the definition set forth herein shall control, (ii)
all references in such document to a type of security that is not being offered
shall not be deemed to be a part of this Agreement and (iii) all references in
such document to a type of agreement that has not been entered into in
connection with the transactions contemplated hereby shall not be deemed to be
a part of this Agreement.
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Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
Acting on behalf of
itself and the several
Underwriters named herein
By: /s/ Xxxxxxx Xxxxx
-----------------
Name: Xxxxxxx Xxxxx
Title: Principal
Accepted:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By: /s/ Xxxx X. XxXxxxxxx
---------------------
Name: Xxxx X. XxXxxxxxx
Title: Chief Financial Officer
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC., its General Partner
By: /s/ Xxxx X. XxXxxxxxx
---------------------
Name: Xxxx X. XxXxxxxxx
Title: Chief Financial Officer
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM OF
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(EQUITY SECURITIES)
March 14, 2001
From time to time, Apartment Investment and Management Company, a Maryland
corporation (the "COMPANY"), may enter into one or more underwriting agreements
that provide for the sale of designated securities to the several underwriters
named therein. The standard provisions set forth herein may be incorporated by
reference in any such underwriting agreement (an "UNDERWRITING AGREEMENT"). The
Underwriting Agreement, including the provisions incorporated therein by
reference, is herein sometimes referred to as this Agreement. Terms defined in
the Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Equity Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Equity Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means such
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "BASIC PROSPECTUS" means the prospectus included in
the Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Equity
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT," "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
1. Representations and Warranties. The Company and AIMCO Properties,
L.P., a Delaware limited partnership (the "OPERATING PARTNERSHIP"), jointly and
severally, represent and warrant to and agree with each of the Underwriters
that:
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(a) 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.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder,
(ii) 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, (iii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder and
(iv) 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 any Underwriter furnished
to the Company in writing by or on behalf of such Underwriter through the
Manager expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, 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 its direct and indirect subsidiaries, taken as a
whole.
(d) Each direct and indirect subsidiary of the Company 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
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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 its direct and indirect 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 direct and indirect subsidiary of
the Company or created by agreements to which such subsidiaries are parties
(i) have been duly and validly authorized and issued (and in the case of
capital stock are fully paid and non-assessable) and (ii) are owned or
held, directly or indirectly, by the Company 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 its direct and indirect subsidiaries, taken as
a whole.
(e) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Operating Partnership.
(f) 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 Equity Securities
have been duly authorized and, when issued and delivered in accordance with
the terms of this 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 Equity 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 or the Operating Partnership pursuant
to a stock-based plan of the Company or the Operating Partnership, there
are no outstanding options, convertible or exchangeable securities,
warrants or other rights calling for the issuance of capital stock of the
Company.
(g) As of the date hereof, the Company indirectly owns an aggregate
approximate 90% 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.
(h) The Company has the corporate power and authority to enter into
this Agreement and to issue, sell and deliver the Equity Securities as
provided in this Agreement. The Operating Partnership has the power and
authority to enter into this
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Agreement and to issue and deliver the Preferred Units to the Company as
provided in Section 5(f) of this Agreement.
(i) Neither the Company nor any of the subsidiaries listed on
Schedule I to this Agreement (collectively, 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. None of the Company's
direct or indirect 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 its direct and indirect subsidiaries,
taken as a whole. Neither the Company nor any of its direct or indirect
subsidiaries is (i) in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or its direct or
indirect subsidiaries or of any decree of any court or governmental agency
or body having jurisdiction over the Company or any of its direct or
indirect 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 its direct or indirect
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 its direct and indirect
subsidiaries, taken as a whole.
(j) None of the issuance and sale of the Equity 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, or the consummation by the Company and the
Operating Partnership of the transactions contemplated hereby (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 Equity Securities under the Securities Act and the
Exchange 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 Supplement 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 Date (as hereinafter defined)), 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
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limited partnership, limited liability company or trust or other
organizational documents of any of the Company's direct or indirect
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 its direct and indirect 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 its direct or indirect subsidiaries is a
party or by which any of them or any 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 its direct or indirect 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 its direct or indirect
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 its direct and indirect subsidiaries, taken as a whole.
(k) 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 its direct and indirect subsidiaries, taken
as a whole.
(l) Ernst & Young LLP, which has certified (i) the consolidated
financial statements of the Company and (ii) the financial statements of
(a) Xxxxxxxx Apartment Communities ("XXXXXXXX") and (b) Regency Windsor
Apartment Communities ("WINDSOR") included or incorporated by reference in
the Registration Statement and the Prospectus, are independent public
accountants with respect to the Company, Xxxxxxxx and Windsor as required
by the Securities Act. Pricewaterhouse Coopers LLP, which has certified the
financial statements of Oxford Tax Exempt Fund II L.P. ("OTEF")
incorporated by reference in the Registration Statement and Prospectus are
independent accountants with respect to OTEF as required by the Securities
Act. Xxxxxxx, Xxxxxx and Xxxxxxxxx, which has certified the financial
statements of each of Oxford Realty Financial Group, Oxford Holding
Corporation and Subsidiaries, Oxford Realty Financial Group, Inc. and
Subsidiaries, ZIMCO Entities and Oxford Equities Corporation III, ORFG
Operations, L.L.C. and Subsidiary and Oxparc L.L.C.s (collectively, the
"OXFORD ENTITIES") incorporated by reference in the Registration Statement
and Prospectus are independent accountants with respect to each of the
Oxford Entities as required by the Securities Act.
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(m) The financial statements, together with related schedules and
notes, of the Company and of any properties or entities acquired, or to be
acquired, by the Company included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), present fairly (i) the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries and (ii) the combined revenues and certain expenses of the
properties or entities acquired, or to be acquired, by the Company, as the
case may be, 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
(i) of the Company and its subsidiaries and (ii) the properties or entities
acquired, or to be acquired, by the Company, as the case may be. The
selected historical financial data of the Company set forth under the
caption "Summary Historical Financial Information," "Ratio of Earnings and
Free Cash Flow to Fixed Charges" and "Capitalization" in the Prospectus
Supplement, present fairly, on the basis stated in the Prospectus
Supplement, the historical financial information of the Company included
therein. The unaudited pro forma financial statements included, or
incorporated by reference, in the Prospectus Supplement comply in all
material respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X and the pro forma adjustments have been properly applied
to the historical amounts in the compilation of that data. The selected pro
forma financial data of the Company set forth under the caption "Summary
Pro Forma Financial Information," "Ratio of Earnings and Free Cash Flow to
Fixed Charges" and "Capitalization" in the Prospectus Supplement present
fairly, on the basis stated in the Prospectus Supplement, the pro forma
financial information of the Company included therein and have been
compiled on a basis consistent with that of the unaudited pro forma
financial statements included, or incorporated by reference, in the
Prospectus.
(n) 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 its direct or indirect subsidiaries or to
which any of the properties of the Company or any of its direct or indirect
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and 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.
(o) 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 Securities Act
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and the applicable rules and regulations of the Commission thereunder
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 any Underwriter furnished
to the Company in writing by or on behalf of such Underwriter through the
Manager expressly for use therein.
(p) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and each of its direct and indirect
subsidiaries (i) is 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) has
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 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 its direct and indirect subsidiaries, taken as a whole.
(q) 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 its direct and indirect subsidiaries, taken as a whole.
(r) 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 Equity Securities registered pursuant to the Registration Statement.
(s) 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 its direct or indirect
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 its direct
and indirect 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
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material change in the capital stock, short-term debt or long-term
debt of the Company and its direct and indirect subsidiaries, taken as
a whole.
(t) (i) The Company and its direct and indirect 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 its direct and indirect
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 would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct and
indirect subsidiaries taken as a whole, (ii) any real property and
buildings held under lease by the Company and its direct and indirect
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 its direct and indirect
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 its direct or
indirect subsidiaries ("OWNED PROPERTIES"), as presently conducted or
existing is not in 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 its direct and indirect subsidiaries, taken as a whole,
(iv) neither the Company nor any of its direct or indirect 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 its direct and indirect 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 its direct and indirect 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 its direct and
indirect subsidiaries, taken as a whole.
(u) 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
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of its direct or indirect subsidiaries where such departure would have
a material adverse effect on the Company and its direct and indirect
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 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 its direct and
indirect subsidiaries, taken as a whole.
(v) The direct and indirect subsidiaries of the Company 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 in
the aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole.
(w) The Company and its direct and indirect 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
its direct or indirect 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 its direct and indirect subsidiaries, taken as a
whole.
(x) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) the completion of the distribution
of the Equity Securities, will not distribute any offering material in
connection with the offering and sale of the Equity Securities other than
the Registration Statement and the Prospectus or other materials, if any,
permitted by the Securities Act.
(y) (i) Each of the Company and each of its direct and indirect
subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("PERMITS") as are necessary to own
its properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus, (ii) each of the Company and each of its direct and indirect
subsidiaries has fulfilled and performed all of its material obligations
with respect to such permits and to the Company's knowledge no event has
occurred which allows, or after
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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 its direct or indirect 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 restriction that would not singly or in the aggregate, have
a material adverse effect on the Company and its direct and indirect
subsidiaries, taken as a whole.
(z) The Company and each of its direct and indirect 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 its direct
and indirect subsidiaries taken as a whole) required to be filed by them.
The Company and each of its direct and indirect 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 its direct and indirect
subsidiaries, taken as a whole. The Company and each of its direct and
indirect subsidiaries do not have any material liabilities for taxes other
than those incurred in the ordinary course of business and in 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 its direct and indirect subsidiaries, taken as a whole.
Federal and state income tax returns for the Company and each of its direct
and indirect 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) 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) are currently under examination and (iii) various state income
tax returns of the Company and/or its direct or indirect subsidiaries are
currently under examination. No deficiency assessment with respect to or
proposed adjustment of the Company's or any of its direct or indirect
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
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its direct or indirect subsidiaries in connection with the execution and
delivery of this Agreement or the issuance by the Company of the Equity
Securities.
(aa) Neither the Company nor the Operating Partnership is now,
and after the sale of the Equity Securities and application of the net
proceeds from such sale as described in the Prospectus Supplement under the
caption "Use of Proceeds," neither of them will be, an "investment company"
required to register under the Investment Company Act of 1940, as amended
(the "1940 Act") (as such term is defined in the 1940 Act).
(bb) 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 Code, has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended (the "CODE") for the taxable years ended
December 31, 1994 through December 31, 2000, 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, 2001 and succeeding
taxable years.
(cc) The Company intends to apply to have the Equity Securities listed
on the New York Stock Exchange.
(dd) 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 assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
2. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Equity Securities as soon after this Agreement has been entered into and,
if necessary, any post-effective amendment to the Registration Statement has
become effective, as in the Manager's judgment is advisable. The terms of the
public offering of the Equity Securities are set forth in the Prospectus.
3. Payment and Delivery. Except as otherwise provided in this Section 3,
payment for the Initial Equity Securities shall be made to the Company in
Federal or other funds immediately available at the time and place set forth in
the Underwriting Agreement, upon delivery to the Manager for the respective
accounts of the several Underwriters of the Initial Equity Securities. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Except as otherwise provided in this Section 3, payment for the Equity
Optional Securities shall be made to the Company in Federal or other funds
immediately available at the time and place set forth in this Agreement, upon
delivery to the Manager for the respective
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accounts of the several Underwriters of the Equity Optional Securities. The
time and date of such payment are hereinafter referred to as the "OPTION CLOSING
DATE."
Certificates for the Equity Securities shall be in definitive form and
registered in such names and in such denominations as the Manager shall request
in writing not later than two full business days prior to the date of delivery,
with any transfer taxes payable in connection with the transfer of the Equity
Securities to the Underwriters duly paid, against payment of the Purchase Price
therefor.
4. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Equity Securities hereunder are subject to
the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(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 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 occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its direct and indirect subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
the judgment of the Manager, is material and adverse and that makes
it, in the judgment of the Manager, impracticable to market the Equity
Securities on the terms and in the manner contemplated in the
Prospectus.
(b) (i) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 4(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
(ii) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Operating Partnership, to the effect that the representations
and warranties of the Operating Partnership contained in this
Agreement are true and correct as of the Closing Date and that the
Operating Partnership has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
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The officer signing and delivering the certificate described in
clauses (i) or (ii) above may rely upon the best of his or her knowledge as
to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside counsel for
the Company, dated the Closing Date, to the effect that:
(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 the Underwriting 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
Equity 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 Underwriting Agreement, 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 (as defined in
such counsel's opinion) or (iii) violate or conflict with, or result
in any contravention of, any Applicable Order (as defined in such
counsel's opinion). 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 Underwriting Agreement
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.
(iv) No Governmental Approval (as defined in such counsel's
opinion), which has not been obtained or taken and is not in full
force and effect, is required in connection with the consummation of
the transactions contemplated by this Agreement, except such as may be
required under the Act or the Exchange Act.
(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 B to the Officers' Certificate 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 Underwriting
Agreement.
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(vi) The Registration Statement has become effective under the
Securities 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 Equity Securities
and the application of the proceeds thereof as described in the
Prospectus, will be an "investment company" required to register as
such under the Investment Company Act of 1940, as amended.
(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 Exchange Act and the applicable 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 1999 Annual Report on Form 10-K, and as of the pricing
date, and the Prospectus, as of the date of the Prospectus Supplement
appeared on their faces to be appropriately responsive in all material
respects to the requirements of the Securities Act and the 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 4(e) 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 Underwriters and
counsel for the Underwriters, 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), except
as set forth in such counsel's opinion relating to certain tax matters
delivered pursuant to Section 4(e) of the Underwriting Agreement, and have
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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 the Underwriting 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.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, dated the Closing Date, to
the effect that:
(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 historical authorized capital stock of the Company is
as set forth in the Prospectus Supplement under the caption
"Capitalization" as of the date stated therein.
(iv) The Initial Equity Securities have been duly authorized and
upon issuance and delivery against payment therefor in accordance with
the terms of the Underwriting 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 Initial Equity Securities upon issuance thereof by
the Company.
(v) The Company has corporate power and authority to enter into
the Underwriting Agreement and to issue, sell and deliver to the
Underwriters the Initial Equity Securities to be issued and sold by
the Company pursuant to such Underwriting Agreement.
(vi) The Underwriting Agreement has been duly authorized by all
necessary corporation action on the part of the Company and, assuming
that it has been executed and delivered by the Chairman or Vice
Chairman of the Board of Directors of the Company, has been duly
executed and delivered by the Company.
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(vii) 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" and "Description of Other Classes of Outstanding Stock" and in
the Prospectus Supplement under the caption "Description of Class Q
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.
(viii) The form of certificates evidencing the Equity Securities is
in due and proper form and complies in all material respects with the
requirements of the Maryland General Corporation Law.
(ix) Neither the issuance and sale of the Initial Equity
Securities, the execution, delivery or performance of the Underwriting
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, (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.
(x) The statements under the caption "Description of Class Q
Preferred Stock" in the Prospectus Supplement, 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.
(xi) 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.
(xii) 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.
(xiii) 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.
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(e) The Underwriters shall also be furnished with a copy of the tax
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, dated the Closing Date
and addressed to the Company, to the effect that:
(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 Equity
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 Equity Securities by a holder who purchases such
Equity Securities, subject to the qualifications set forth therein.
The United States Federal income tax consequences of an investment in
the Equity 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.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxx X. Xxxxxx, General Counsel of the Company, dated the
Closing Date, to the effect that:
(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
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and to conduct its business as described in the Registration
Statement and the Prospectus.
(ii) This Agreement has 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 shares of capital stock of AIMCO/Bethesda
Holdings, Inc. and NHP Management Company have been validly issued
and, to the best of my 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. 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 5 on Schedule A to such
counsel's opinion, and all of the limited partnership interests of the
limited partnerships listed as item 4 on Schedule A to such counsel's
opinion, that are owned, directly or indirectly, by the Company, are
owned free and clear of any security interests, lien, adverse claims,
equity or other encumbrance, except that certain of the shares of
Series A Preferred Stock of NHP Management Company are pledged
pursuant to two Borrower Pledge Agreements, each dated as of September
20, 2000, each among the Operating Partnership, AIMCO/Bethesda
Holdings, Inc., NHP Management Company, AIMCO Holdings L.P. and Bank
of America.
(iv) 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.
(v) To such counsel's knowledge, the Company possesses the
Governmental Licenses (as defined in such counsel's opinion) 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 its direct and indirect subsidiaries,
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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 its direct and indirect subsidiaries, taken as
a whole;
(vi) None of the issuance and sale by the Company of the
Equity 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 Underwriting 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.
(vii) The statements (A) in "Item 3 -- Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (B) in "Item 1 -- Legal Proceedings"
of Part II of the Company's quarterly reports on Form 10-Q, if any,
filed since such annual report, in each case 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.
(viii) 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 Underwriters and
counsel for the Underwriters, 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), except
as set forth in opinion (vii) above, 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 the Underwriting Agreement,
contained an untrue
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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.
(g) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx, Xxxxx & Xxxxx, special counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
4(c)(i), 4(c)(ii), 4(c)(vi), 4(c)(viii) and 4(c)(ix) and the paragraph
immediately following Section 4(c)(ix).
With respect to the paragraph immediately following Section 4(c)(ix)
and 4(f)(vii) above, Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx LLP, Xxxxx, Xxxxx
& Xxxxx and Xxxx X. Xxxxxx may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
documents incorporated therein by reference and review and discussion of
the contents thereof, but are without independent check or verification,
except as specified. With respect to the paragraph immediately following
Section 4(c)(ix) and 4(f)(vii) above, Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx
LLP, Xxxxx, Xxxxx & Xxxxx and Xxxx X. Xxxxxx may state that their opinion
and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto (but not including documents incorporated therein by reference) and
review and discussion of the contents thereof (including documents
incorporated therein by reference), but are without independent check or
verification, except as specified.
The opinions of Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx LLP, Piper,
Marbury, Xxxxxxx & Xxxxx LLP and Xxxx X. Xxxxxx described in Sections 4(c),
4(d) and 4(f) above shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(h) The Underwriters shall have received on each of the date hereof
and on the Closing Date (i) a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus or the Registration Statement and (ii) to the extent
that the audited financial statements of another person are required under
the rules and regulations of the Securities Act to be contained in the
Prospectus or Registration Statement, a similar "cold comfort" letter,
dated the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from such other person's
independent public accountants.
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(i) The Company shall have duly filed the articles supplementary (the
"ARTICLES SUPPLEMENTARY") designating the Equity Securities with the State
Department of Assessments and Taxation of Maryland (the "SDAT").
(j) Counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Equity 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 and the
Operating Partnership in connection with the issuance and sale of the
Equity Securities as herein contemplated shall be reasonably satisfactory
in form and substance to counsel for the Underwriters.
The several obligations of the Underwriters to purchase Equity Optional
Securities hereunder are subject to the delivery to the Underwriters on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Equity Optional Securities and other matters related to the issuance of
the Equity Optional Securities, which deliveries shall be substantially
identical to those described in this Section 4.
5. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company and the Operating Partnership
covenant with each Underwriter, jointly and severally, as follows:
(a) The Company shall furnish the Manager, without charge, three
signed copies of the Registration Statement (including exhibits thereto)
and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and shall furnish the
Manager in New York City, without charge, prior to 10:00 a.m. New York City
time on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 5(c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement as the
Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Equity Securities, the Company shall
furnish to the Manager a copy of each such proposed amendment or supplement
and shall not file any such proposed amendment or supplement to which the
Manager reasonably objects.
(c) If, during such period after the first date of the public
offering of the Equity Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary in the judgment of the
Company or in the opinion of counsel to the Underwriters and counsel to the
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Company to amend or supplement the Prospectus (as then amended or
supplemented) in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, the Company shall forthwith prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names and addresses the Manager will furnish to the Company) to which
Equity Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) The Company will cooperate with the Underwriters and with counsel
for the Underwriters in connection with the registration or qualification
of the Equity Securities for offering and sale by the several Underwriters
and by dealers under the securities or Blue Sky or real estate syndication
laws of such jurisdictions as the Underwriters may designate and will file
such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided
that in no event shall the Company be obligated to qualify do so business
in any jurisdiction where it is not now so qualified to take any action
which would subject it to taxation or to service of process in suits, other
than those arising out of the offering or sale of the Equity Securities, in
any jurisdiction where it is not now so subject.
(e) The Company shall make generally available to the Company's
security holders and to the Manager as soon as practicable an earnings
statement covering a twelve month period beginning on the first day of the
first full fiscal quarter after the date of this Agreement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder. If such
fiscal quarter is the last fiscal quarter of the Company's fiscal year,
such earnings statement shall be made available not later than 90 days
after the close of the period covered thereby and in all other cases shall
be made available not later than 45 days after the close of the period
covered thereby.
(f) The Company shall contribute the net proceeds from the sale of
the Equity 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 Supplement. In exchange for the contribution of such net
proceeds, on the Closing Date, 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 Equity Securities.
(g) The Company will use its best efforts to meet the requirements to
maintain its qualification for the fiscal year ending December 31, 2001
(and each fiscal quarter of such year) as a REIT under the Code.
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(h) The Company will use its reasonable efforts to (i) accomplish the
listing of the Equity Securities on the New York Stock Exchange within the
30-day period after the issuance thereof and (ii) maintain the listing of
the Equity Securities, on the New York Stock Exchange or on any other
national securities exchange on which the Company's class A common stock,
par value $.01 per share is listed, for a period of three years following
the Closing Date, unless Xxxxxx Xxxxxxx & Co. Incorporated consents to the
termination of such listing, which consent shall not be unreasonably
withheld.
(i) For a period of thirty (30) days from the date of the Prospectus
Supplement, the Company will not, without the prior written consent of the
Manager on behalf of the Underwriters, offer for sale or sell any Equity
Securities to be sold under this Agreement, any shares of preferred stock
or any other securities which are substantially similar to the Equity
Securities to be sold under this Agreement.
(j) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company shall pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and the Company's accountants in
connection with the registration and delivery of the Equity Securities
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Equity Securities to the
Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or legal investment
memorandum in connection with the offer and sale of the Equity Securities
under state law and all expenses in connection with the qualification of
the Equity Securities for offer and sale under state law as provided in
Section 5(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements
of counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Equity Securities by the National
Association of Securities Dealers, Inc., (v) any fees charged by the rating
agencies for the rating of the Equity Securities, (vi) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Securities and all costs and expenses
incident to listing the Equity Securities on the New York Stock Exchange,
(vii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Equity Securities, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Company, travel
and lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection
with the road show and
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(viii) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided in
this Section, Section 6 entitled "Indemnity and Contribution," and the last
paragraph of Section 7 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, and any
advertising expenses connected with any offers they may make.
6. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter through
the Manager expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by or on
behalf of such Underwriter through the Manager expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either Section 6(a) or 6(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the reasonable fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel
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would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to Section 6(a) above, and by the Company, in the case of parties
indemnified pursuant to Section 6(b) above. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of
the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or
6(b) is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Equity Securities
or (ii) if the allocation provided by clause 6(d)(i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 6(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Equity Securities shall be deemed to be
in the same respective proportions as the net proceeds from the offering of
such Equity Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate Price to Public of the Equity
Securities, in each case as set forth in the table on the cover of the
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Prospectus Supplement. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section
6 are several in proportion to the respective principal amounts of Equity
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 6(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 6, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Equity Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for
any of the Equity Securities.
7. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange or the National
Association of Securities Dealers, Inc., (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by
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either Federal or New York State authorities or (iv) there shall have occurred
any outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in the judgment of the Manager, is material and
adverse and (b) in the case of any of the events specified in clauses 7(a)(i)
through 7(a)(iv), such event, singly or together with any other such event,
makes it, in the judgment of the Manager, impracticable to market the Equity
Securities on the terms and in the manner contemplated in the Prospectus.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
8. Defaulting Underwriters. If, on the Closing Date, or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Equity Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate amount of Equity Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate amount of the Equity
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the amount of Equity Securities set
forth opposite their respective names in the Underwriting Agreement bears to the
aggregate amount of Equity Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Equity Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the amount of Equity Securities that any Underwriter has
agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 8 by an amount in excess of one-ninth of such amount of Equity
Securities without the written consent of such Underwriter. If, on the Closing
Date, or the Option Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase Equity Securities and the
aggregate amount of Equity Securities with respect to which such default occurs
is more than one-tenth of the aggregate amount of Equity Securities to be
purchased on such date, and arrangements satisfactory to the Manager and the
Company for the purchase of such Equity Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either the
Manager or the Company shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
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9. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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