EXHIBIT 1.1
UNDERWRITING AGREEMENT
May 30, 2002
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
Ladies and Gentlemen:
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 to the Underwriters 8,000,000 shares of its Class A
Common Stock, $0.01 par value per share (the "Initial Equity Securities"). The
Company also proposes to issue and sell to the Underwriters not more than
1,200,000 additional shares of its Class A Common Stock, $0.01 par value 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 principal amounts of Initial Equity Securities set forth
below opposite their names at a purchase price of $46.17 per share of Equity
Security:
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 1,200,000 of
Equity Optional Securities. If the Underwriters elect to exercise such option,
the Manager, on behalf of 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 in Schedule I hereto opposite the name of
such Underwriter bears to the total number of Initial Equity Securities to be
purchased.
NUMBER OF INITIAL
NAME EQUITY SECURITIES
Xxxxxx Xxxxxxx & Co. Incorporated 8,000,000
----------
Total........................................... 8,000,000
The Underwriters will pay for the Equity Securities upon delivery
thereof at Mayer, Brown, Xxxx & Maw, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
at 10:00 a.m. (
New York City time) on June 5, 2002, or at such other time, not
later than 5:00 p.m. (
New York City time) on June 15, 2002, 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 Mayer, Brown, Xxxx & Maw, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx at 10:00 a.m. (
New York City time) on such date and at such time as
specified in the notice from the Underwriters referred to above. 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 May 30, 2002 (the "
Underwriting Agreement"), a copy of
which is attached hereto, are herein incorporated 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 an Offered Security 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.
In addition to the conditions specified in Section 4 of the
Underwriting Agreement, the obligations of the Underwriters to purchase the
Equity Securities are subject to the condition that each of the directors and
executive officers of the Company shall have delivered to the Underwriters a
"lock-up" agreement substantially in the form attached hereto as Exhibit A.
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
By: /s/ XXXXXXX XXXX
-----------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
Accepted:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By: /s/ XXXX XXXXXXXXX
------------------------
Name: Xxxx XxXxxxxxx
Title: Executive Vice President and Chief Financial Officer
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC., its General Partner
By: /s/ XXXX XXXXXXXXX
------------------------
Name: Xxxx XxXxxxxxx
Title: Executive Vice President and Chief Financial Officer
EXHIBIT A
FORM OF LOCK-UP LETTER
May 30, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an
Underwriting Agreement (the
"
UNDERWRITING AGREEMENT") with Apartment Investment and Management Company, a
Maryland corporation (the "COMPANY"), providing for the public offering (the
"PUBLIC OFFERING") by Xxxxxx Xxxxxxx, of up to 9,200,000 shares (the "SHARES")
of Class A Common Stock, $0.01 par value per share, of the Company (the "COMMON
STOCK"), including up to 1,200,000 shares of Common Stock that Xxxxxx Xxxxxxx
has an option to purchase solely to cover over-allotments.
To induce Xxxxxx Xxxxxxx to continue its efforts in connection with the
Public Offering, the undersigned hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final prospectus supplement
relating to the Public Offering (the "PROSPECTUS SUPPLEMENT"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) any Shares sold to Xxxxxx Xxxxxxx pursuant to the
Underwriting Agreement,
(b) transactions relating to shares of Common Stock or other securities acquired
in open market transactions after the completion of the Public Offering, (c)
dispositions of Common Stock by gift to members of the immediate family or to
trusts established for the benefit of members of the immediate family of the
undersigned, provided that any such person or trust agrees as a condition to
receiving such gifts to be bound by the restrictions set forth in this paragraph
with respect to sales of such Common Stock during the 90-day period referred to
above; and (d) exercises by the undersigned of options granted by the Company
where Common Stock received upon any such exercises are held by the undersigned
subject to the terms of the this paragraph. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxx Xxxxxxx, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus Supplement, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's share of Common Stock except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and Xxxxxx Xxxxxxx are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an
Underwriting Agreement, the terms of which are subject to
negotiation between the Company and Xxxxxx Xxxxxxx.
Very truly yours,
--------------------------------------------
(Name)
--------------------------------------------
(Address)
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM OF
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(EQUITY SECURITIES)
May 30, 2002
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:
(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
1
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
the Subsidiaries, taken as a whole. "SUBSIDIARY" means a corporation,
partnership, limited liability company or trust, a majority of the
outstanding voting stock, partnership, membership interests or
beneficial interests, as the case may be, of which is owned or
controlled, directly or indirectly, by the Company, the Operating
Partnership or by one or more other Subsidiaries of the Company or the
Operating Partnership.
(d) Each 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 or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be in good standing, to have such power and
authority or to be so qualified would not have a material adverse
effect on the Company and the Subsidiaries, taken as a whole; all of
the issued shares of capital stock, partnership interests, limited
liability company membership
2
interests or trust beneficial interests, as the case may be, of each
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 the 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 common units to be issued by the
Operating Partnership upon its receipt of the net proceeds from the
sale of the Equity Securities (the "COMMON UNITS") have been duly
authorized and, when issued to the Company, will be validly issued.
Except as disclosed in the Registration Statement and the Prospectus,
and except for options or other securities issued to employees,
officers or directors of the Company, the Operating Partnership or a
Subsidiary pursuant to a stock-based plan of the Company 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 86% 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 Agreement and to issue and
deliver the Common 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 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,
3
limited liability company or trust or other organizational documents,
except for such violations which would not, singly or in the aggregate,
have a material adverse effect on the Company and the Subsidiaries,
taken as a whole. Neither the Company nor any of the Subsidiaries is
(i) in violation of any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or the Subsidiaries or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or any of
their respective properties or (ii) in default in any material respect
in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or any of their respective properties is bound, except, with
respect to clauses (i) and (ii) above, for any defaults which would
not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole.
(j) None of the issuance and sale of the Equity Securities by
the Company, the issuance of the Common 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), or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation or bylaws
or certificates or agreements of limited partnership, limited liability
company or trust or other organizational documents of the Company or
any of the Specified Subsidiaries, (iii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under,
the certificate or articles of incorporation or bylaws or certificates
or agreements of limited partnership, limited liability company or
trust or other organizational documents of any of the Subsidiaries
(other than the Specified Subsidiaries), except, with respect to clause
(iii), for such conflicts, breaches or defaults which would not, singly
or in the aggregate, have a material adverse effect on the Company and
the Subsidiaries, taken as a whole, or (iv) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under,
any agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Company or any of the Subsidiaries or
any of their respective properties,
4
or will result in the creation or imposition of any Lien upon any
property or assets of the Company or any of the Subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, except, with respect to
clause (iv), for such conflicts, breaches, defaults, violations or
Liens which would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(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 the Subsidiaries,
taken as a whole.
(l) Ernst & Young LLP, which has certified the consolidated
financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, are
independent public accountants with respect to the Company as required
by the Securities Act.
(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 the consolidated financial
position, results of operations and changes in financial position of
the Company and the Subsidiaries.
(n) The Company is not required to include in the Prospectus
or the Registration Statement any historical financial statements of
Casden or any pro forma financial statements reflecting the merger of
Casden with and into the Company or the related transactions described
in the Merger Agreement pursuant to Regulation S-X under the Securities
Act. The Company is not required, as a result of the merger of Casden
with and into the Company or the related transactions described in the
Merger Agreement, to file a Current Report on Form 8-K including any
historical financial statements of Casden or any pro forma financial
statements reflecting the merger of Casden with and into the Company or
the related transactions described in the Merger Agreement pursuant to
Regulation S-X.
(o) There are no legal or governmental proceedings pending or,
to the knowledge of the Company and the Operating Partnership,
threatened against the Company or any of the Subsidiaries or to which
any of the properties of the Company or any of the Subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not so described. There are no statutes,
regulations, contracts or other documents that are required to be
described in the Registration
5
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.
(p) 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
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.
(q) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and each of the Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except with respect to (i), (ii) and (iii)
above, where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a whole.
(r) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties or in connection with off-site disposal of
hazardous waste) which would, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
(s) 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.
(t) Except as disclosed in the Registration Statement and the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), subsequent to the respective
dates as of which information is given in the Registration Statement
and the Prospectus, (i) neither the Company nor any of the Subsidiaries
has incurred any liability or obligation, direct or contingent, nor
entered into any transaction not in the ordinary course of business, in
either case, that is material to the
6
Company and the Subsidiaries, taken as a whole; (ii) the Company has
not purchased any of its outstanding capital stock, (iii) the Company
has not declared, paid or otherwise made any dividend or distribution
of any kind on its capital stock other than ordinary and customary
dividends; and (iv) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and the
Subsidiaries, taken as a whole.
(u) (i) The Company and the Subsidiaries have good and
marketable title in fee simple to all parcels of real property (except
for those easement parcels that are appurtenant to the real property
owned in fee simple by the Company and the Subsidiaries) and good and
marketable title to all personal property owned by them, in each case
free and clear of all Liens, except where the failure to have good and
marketable title or such Liens would not, singly or in the aggregate,
have a material adverse effect on the Company and the Subsidiaries
taken as a whole, (ii) any real property and buildings held under lease
by the Company and the Subsidiaries are held under valid, subsisting
and enforceable leases, except where failure to hold such property and
buildings under valid, subsisting and enforceable leases would not,
singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries taken as a whole, (iii) the construction,
management or operation of the buildings, fixtures and other
improvements located on the apartment properties owned or controlled by
the Company or the Subsidiaries ("OWNED PROPERTIES"), as presently
conducted or existing is not in violation of any applicable building
code, zoning ordinance or other law or regulation, except where any
such violation would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, taken as a whole,
(iv) neither the Company nor any of the Subsidiaries has received
notice of any proposed special assessment or any proposed change in any
property tax, zoning or land use laws affecting all or any portion of
the Owned Properties, except where any such assessment or change would
not, singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole, (v) there do not exist
any violations of any declaration of covenants, conditions and
restrictions with respect to any of the Owned Properties, nor is there
any existing state of facts or circumstances or condition or event
which could, with the giving of notice or passage of time, or both,
constitute such a violation, except where any such violation would not,
singly or in the aggregate, have a material adverse effect on the
Company and the Subsidiaries, taken as a whole, and (vi) the
improvements comprising any portion of the Owned Properties (the
"IMPROVEMENTS") are free of any and all material physical, mechanical,
structural, design and construction defects and the mechanical,
electrical and utility systems servicing the Improvements (including,
without limitation, all water, electric, sewer, plumbing, heating,
ventilation, gas and air conditioning) are in good condition and proper
working order and are free of material defects, except for any such
defects or failures to be in good condition or proper working order
which would not, singly or in the aggregate, have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
(v) There is no strike or work stoppage existing or, to the
knowledge of the Company and the Operating Partnership, threatened
against the Company or any Specified Subsidiary. The Company does not
have any knowledge as to any intentions of any key employee or any
group of employees to leave the employ of the Company or any of the
7
Subsidiaries where such departure would have a material adverse effect
on the Company and the Subsidiaries, taken as a whole. Except as
disclosed in the Registration Statement and the Prospectus, the Company
has not established, sponsored, maintained, made any contributions to
or been obligated by law to establish, maintain, sponsor or make any
contributions to any "employee pension benefit plan" or "employee
welfare benefit plan" (as such terms are defined in ERISA), including,
without limitation, any "multi-employer plan." The Company is in
compliance with all applicable laws relating to the employment of
labor, including provisions relating to wages, hours, equal
opportunity, collective bargaining and the payment of Social Security
and other taxes, and with ERISA, except where the failure to so comply
would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(w) The Subsidiaries have obtained Extended Coverage Owner's
Policies of Title Insurance, to the extent available in the pertinent
jurisdiction (other than in connection with real property located in
Texas, with respect to which the Company and the 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 the Subsidiaries, taken as a
whole.
(x) The Company and the Subsidiaries self insure, or are
insured by insurers of recognized financial responsibility, against
such losses and risks and in such amounts as are customary in the
businesses in which they are engaged; and neither the Company nor any
of the Subsidiaries has any reason to believe that it will not be able
to renew that coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on
the Company and the Subsidiaries, taken as a whole.
(y) 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.
(z) (i) Each of the Company and each of the 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 the 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 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
8
the Company or any of the Subsidiaries, except, with respect to clauses
(i), (ii) and (iii) above, for any such failure to obtain permits or
failure to fulfill or perform obligations, or the occurrence of events,
or such restrictions that would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
(aa) The Company and each of the Subsidiaries have filed or
caused to be filed all federal, state, local, foreign and other tax
returns, reports, information returns and statements (except for
returns, reports, information returns and statements the failure to
file which will not have a material adverse effect on the Company and
the Subsidiaries taken as a whole) required to be filed by them. The
Company and each of the Subsidiaries have paid or caused to be paid all
taxes (including interest and penalties) that are shown as due and
payable on such returns or claimed in writing by any taxing authority
to be due and payable with respect to such returns, except those which
are being contested by them in good faith by appropriate proceedings
and in respect of which adequate reserves are being maintained on their
books in accordance with generally accepted accounting principles
consistently applied or those which would not, singly or in the
aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole. The Company and each of the
Subsidiaries do not have any material liabilities for taxes other than
those incurred in the ordinary course of business and in respect of
which adequate reserves are being maintained by it in accordance with
generally accepted accounting principles consistently applied or those
which would not, singly or in the aggregate, have a material adverse
effect on the Company and the Subsidiaries, taken as a whole. Federal
and state income tax returns for the Company and each of the
Subsidiaries have not been audited by the Internal Revenue Service or
state authorities; provided, however, (i) the 1997 Federal income tax
return of NHP Management Company was accepted by the Internal Revenue
Service as filed, (ii) an Internal Revenue Service audit of the Federal
income tax returns of Insignia Financial Group, Inc. and its
subsidiaries ("INSIGNIA") for the tax periods ended December 31, 1996,
December 31, 1997 and October 1, 1998 (i.e., the short tax year of
Insignia ending when Insignia was merged with and into the Company) was
concluded in 2001, (iii) various state income tax returns of the
Company and/or the Subsidiaries are currently under examination and
(iv) various partnership affiliates are under examination by the
Internal Revenue Service. No deficiency assessment with respect to or
proposed adjustment of the Company's or any of the Subsidiaries'
federal, state, local, foreign or other tax returns is pending or, to
the best of the Company's knowledge, threatened in writing. There is no
tax lien, whether imposed by any federal, state, local or other tax
authority, outstanding against the assets, properties or business of
the Company other than statutory liens in respect of taxes that are not
delinquent. There are no applicable taxes, fees or other governmental
charges payable by the Company or any of the Subsidiaries in connection
with the execution and delivery of this Agreement or the issuance by
the Company of the Equity Securities.
(bb) 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" (as such term is defined in the Investment Company Act of
1940, as amended).
9
(cc) The Company has since July 29, 1994 been organized and
qualified as a real estate investment trust (a "REIT") under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the
"CODE"), has elected to be taxed as a REIT under the Code for the
taxable years ended December 31, 1994 through December 31, 2001, and
currently expects to continue to be organized and to operate in a
manner so as to qualify as a REIT in the taxable year ending December
31, 2002 and succeeding taxable years.
(dd) The Company intends to apply to have the Equity
Securities listed on the
New York Stock Exchange.
(ee) 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 any 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 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 book entry 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.
10
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 the 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.
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, special 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.
11
(ii) The Operating Partnership has partnership power
and authority to enter into the Underwriting Agreement and to
issue and deliver to the Company the Common Units to be issued
and delivered by the Operating Partnership as described in
this Agreement.
(iii) None of the issuance and sale by the Company of
the Equity Securities, the issuance of the Common 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 or (iii) violate or
conflict with, or result in any contravention of, any
Applicable Order. Such counsel need not express any opinion,
however as to (a) whether the execution, delivery or
performance by the Company or the Operating Partnership of the
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, 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 C to the Officers'
Certificate attached to such counsel's opinion to require
registration of any security of the Company or the Operating
Partnership because of the filing of the Registration
Statement or consummation of the transactions contemplated by
the Underwriting Agreement.
(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, solely 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" as such term is defined in the Investment
Company Act of 1940.
12
(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 2001 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. 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 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.
13
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxxxxx 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 such opinion.
(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 of the Board of Directors, the Vice
Chairman of the Board of Directors or any Vice President of
the Company, has been duly executed and delivered by the
Company.
(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",
"Provisions of Maryland Law Applicable to Preferred Stock,
Equity Stock and Class A Common Stock," "Description of
Outstanding Classes of Preferred Stock," "Description of Class
A Common 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
14
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 A Common Stock" in the Prospectus, insofar as such
statements constitute a summary of legal matters, documents,
or proceedings referred to therein, are accurate summaries and
fairly and correctly present the information called for with
respect to such legal matters, documents, or proceedings in
all material respects.
(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.
(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.
15
(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 Miles 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 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 Common 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
of the Subsidiaries, except, with respect to the Operating
Partnership, for units of limited partnership held by third
parties. All of the outstanding partnership interests issued
by Casden Properties Operating Partnership, L.P., to the best
of such counsel's knowledge, are owned of record by the
Operating Partnership or one or more subsidiaries of the
Operating Partnership or the Company. All of the outstanding
shares of capital stock of AIMCO/Bethesda Holdings, Inc. and
NHP Management
16
Company have been validly issued and, to the best of such
counsel's knowledge, are fully paid and non-assessable and are
owned of record by the Operating Partnership, except with
respect to no more than one percent of the outstanding shares
of capital stock of each of AIMCO/Bethesda Holdings, Inc. and
NHP Management Company owned of record by third parties.
(iv) To such counsel's knowledge, based solely upon
discussions with, and representations from, officers and other
representatives of the Company, and upon such counsel's review
of the Applicable Contracts, all of the shares of the
corporations listed as items 1,2,3 and 6 on Schedule A to such
counsel's opinion, and all of the limited partnership
interests of the limited partnerships listed as item 4 and 5
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, liens, adverse claims,
equities or other encumbrances, except that certain of the
shares of Common Stock and Series A Preferred Stock of
AIMCO/Bethesda Holdings, Inc. and NHP Management Company and
all of the limited partnership interests of Casden Properties
Operating Partnership, L.P. are pledged pursuant to (i) a
Borrowers Pledge Agreement, dated as of March 11, 2002, by and
between the Pledgors (the Operating Partnership, the Company,
AIMCO/Bethesda Holdings, Inc., AIMCO-GP, Inc., AIMCO GP LA,
L.P., AIMCO Investment Services, Inc., AIMCO LA QRS, Inc.,
AIMCO LP LA, L.P., Casden Properties Operating Partnership,
L.P., AIC REIT Properties LLC and NHP Management Company) and
Bank of America N.A., as Administrative Agent for and
representative of the financial institutions party to the
Fourth Amended and Restated Credit Agreement, dated as of
March 11, 2002, by and among the Company, the Operating
Partnership, NHP Management Company, AIMCO/Bethesda Holdings,
Inc., Bank of America N.A., Fleet National Bank, First Union
National Bank, and the other financial institutions party
thereto, and (ii) a Borrowers Pledge Agreement, dated as of
March 11, 2002, by and between the Pledgors and Xxxxxx
Commercial Paper, Inc., as Administrative Agent for and
representative of the financial institutions party to the
Interim Credit Agreement, dated as of March 11, 2002, by and
among the Company, the Operating Partnership, NHP Management
Company, Xxxxxx Commercial Paper, Inc., and the other
financial institutions party thereto.
(v) The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
the Subsidiaries, taken as a whole.
(vi) To such counsel's knowledge, the Company
possesses the Governmental Licenses and the Company is in
compliance with the terms and conditions of all such
Governmental Licenses, except where the failure to so comply
would not, singly or in the aggregate, have a material adverse
effect on the Company and the Subsidiaries, taken as a whole,
and all of the Governmental
17
Licenses are valid and in full force and effect, except where
the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect
would not have a material adverse effect on the Company and
the Subsidiaries, taken as a whole. "Governmental Licenses"
means such permits licenses, franchises or authorizations from
governmental or regulatory authorities as are necessary under
Applicable Laws for the Company and its direct and indirect
subsidiaries to own their respective properties and to conduct
their respective businesses in the manner described in the
Prospectus.
(vii) None of the issuance and sale by the Company of
the Equity Securities, the issuance of the Common 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.
(viii) 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 report on Form 10-Q 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.
(ix) 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 (ix) 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
18
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.
(g) The Underwriters shall have received on the Closing Date
an opinion of Mayer, Brown, Xxxx & Maw, 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)(viii) above, Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx LLP,
Mayer, Brown, Xxxx & Maw and Miles 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)(viii) above, Xxxxxxx
Xxxx, Slate, Xxxxxxx & Xxxx LLP, Mayer, Brown, Xxxx & Maw and Miles
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, Xxxxx
Xxxxxxx LLP and Miles 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 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.
(i) Counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them
19
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, if any, 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, 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 second 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 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
20
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) 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.
(e) 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. Upon receipt of such net
proceeds, on the Closing Date, the Operating Partnership will issue
Common Units to the Company.
(f) The Company will use its best efforts to meet the
requirements to maintain its qualification for the fiscal year ending
December 31, 2002 (and each fiscal quarter of such year) as a REIT
under the Code.
(g) The Company will use its reasonable efforts to (i)
accomplish the listing of the Equity Securities on the
New York Stock
Exchange prior to 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.
(h) For a period of ninety (90) 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, and subject to
the exceptions described below (a) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend
or otherwise transfer or dispose of, directly or indirectly (other than
to us), any Equity Security or any securities convertible into or
exercisable or exchangeable for any Equity Security or (b) enter into
any swap or other arrangement that transfers to another (other than to
us), in whole or in part, any of the economic consequences of ownership
of Equity Securities, whether any transaction described in (a) or (b)
above is to be settled by delivery of Equity Securities or other
securities, in cash or otherwise. The restrictions described in this
paragraph (i) do not apply to (w) the Equity Securities to be sold to
the Underwriters pursuant to the Underwriting Agreement; (x) Equity
Securities issuable upon the exercise of an option or warrant or the
conversion of a security outstanding on the date of the Prospectus
Supplement or pursuant to any employee or director benefit plan
existing on the date of the Prospectus Supplement; (y) stock options,
restricted stock or restricted stock units granted by the Company
pursuant to any employee or director benefit plan
21
existing on the date of the Prospectus Supplement; and (z) Equity
Securities or Common Units issued as considerations for the purchase of
a business or assets, as long as the recipients of such Equity
Securities or Common Units are not permitted to sell such securities or
Equity Securities issuable upon conversion of such Common Units until
after the expiration of such 90-day period.
(i) 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 costs and expenses incident to listing the Equity
Securities on the
New York Stock Exchange, (v) 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 (vi) 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, 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 and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities 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
22
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 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 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), and by the Company, in the case of parties indemnified
pursuant to Section 6(b). 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
23
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, in
each case as set forth in the table on the cover of the Prospectus Supplement,
bear to the aggregate Public Offering Price of the Equity Securities. 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 amount 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
24
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, any person controlling
any Underwriter or any affiliate of any Underwriter or by or on behalf of 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. The Manager may terminate this Agreement by notice
given to the Company, if after the execution and delivery of this 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 Nasdaq National Market, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities or (v) 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 which, singly or together with any other event
specified in this clause (v), makes it, in the judgment of the Manager,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Equity Securities on the terms and in the manner contemplated in the Prospectus.
If this Agreement shall be terminated by the Manager 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 for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
the 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
25
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.
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.
26
SCHEDULE I
SPECIFIED SUBSIDIARIES
Delaware Corporations
1. AIMCO-GP, Inc.
2. AIMCO-LP, Inc.
3. AIMCO/Bethesda Holdings, Inc.
Delaware Limited Partnerships
1. AIMCO Properties, L.P.
2. Casden Properties Operating Partnership, L.P.
D.C. Corporations
1. NHP Management Company
27
