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EXHIBIT 1.1
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
5,000,000 Shares
Class K Convertible Cumulative Preferred Stock
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
February 11, 1999
XXXXXXX XXXXX XXXXXX INC.
As Representative of the Several Underwriters
c/o XXXXXXX XXXXX BARNEY
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Apartment Investment and Management Company, a Maryland corporation
(the "Company"), proposes to issue and sell an aggregate of 5,000,000 shares
(the "Firm Shares") of its Class K Convertible Cumulative Preferred Stock, $0.01
par value per share (the "Preferred Stock"), to the several underwriters named
in Schedule I hereto (collectively, the "Underwriters"). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 750,000 shares (the "Additional Shares")
of Preferred Stock. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares."
The Company, through wholly-owned subsidiaries, is the sole general
partner and the principal limited partner (with an aggregate approximate 83%
ownership interest as of the date hereof) of AIMCO Properties, L.P., a Delaware
limited partnership (the "Operating Partnership"). The Company's business of
owning and managing multifamily apartment properties and its third-party
property management and other businesses are principally conducted through the
Operating Partnership and other direct and indirect subsidiaries of the Company
identified in Schedule II hereto (together with the Operating Partnership, each
a "Subsidiary" and collectively, the "Subsidiaries").
The Company wishes to confirm as follows its agreement with the
Underwriters, in connection with the several purchases of the Shares by the
Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") a "shelf"
registration statement on Form S-3 (File No. 333-61409), including a prospectus
relating to
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debt securities, preferred stock, common stock, warrants and guarantees, and
will promptly file with the Commission a prospectus supplement specifically
relating to the Shares pursuant to Rule 424 under the Securities Act of 1933, as
amended (together with the rules and regulations of the Commission thereunder,
the "Act"). Such registration statement (as amended, if applicable) was declared
effective by the Commission on December 10, 1998. As used in this Agreement, (i)
the term "Registration Statement" means such registration statement, including
exhibits, financial statements, schedules and documents incorporated by
reference therein, as amended to the date hereof, and (ii) the term "Prospectus"
collectively refers to the basic prospectus, dated November 25, 1998 (the "Basic
Prospectus"), as supplemented by the prospectus supplement, dated February 11,
1999 (the "Prospectus Supplement"), in the form first used to confirm sales of
the Shares. As used herein, the terms "Registration Statement" and "Prospectus"
shall, in each case, include the material, if any, incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act. The terms "supplement"
and "amendment" or "amend," as used herein, shall include all documents deemed
to be incorporated by reference in the Prospectus that are filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the Commission thereunder, the
"Exchange Act"), subsequent to the date of the Prospectus. As used herein, the
term "Incorporated Documents" means the documents which at the time are
incorporated by reference in the Registration Statement, the Prospectus, or any
amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE.
(a) The Company hereby agrees, subject to all the terms and conditions
set forth herein, to issue and sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Company and the Operating
Partnership herein contained and subject to all the terms and conditions set
forth herein, each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $24.125 per Share (the "Purchase Price
per Share"), the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 10 hereof).
(b) The Company also agrees, subject to all the terms and conditions
set forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company and the Operating
Partnership herein contained and subject to all the terms and conditions set
forth herein, the Underwriters shall have the right to purchase from the
Company, at the Purchase Price Per Share, pursuant to an option (the
"Over-allotment Option") that may be exercised at any time (but not more than
once) by notice to the Company given prior to 9:00 P.M., New York City time, on
the 30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of 750,000
Additional Shares. Additional Shares may be purchased only for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such
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adjustments as the Underwriters may determine in order to avoid fractional
shares) which bears the same proportion to the number of Additional Shares to be
purchased by the Underwriters as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof) bears to the aggregate number of
Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by the
Underwriters that the Underwriters propose to make a public offering of their
respective portions of the Shares 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 Underwriters' judgment is advisable and
initially to offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000,
at 10:00 A.M., New York City time, on February 18, 1999 (the "Closing Date").
The place of closing for the Firm Shares and the Closing Date may be varied by
agreement between the Underwriters and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Xxxxxxx Xxxxx Barney Inc. at such time on such date (the "Option Closing
Date"), which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than two nor later than ten business
days after the giving of the notice hereinafter referred to, as shall be
specified in a written notice from the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the Option
Closing Date for such Shares may be varied by agreement between the Underwriters
and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as the Underwriters shall request prior to 1:30 P.M., New York City time, on the
second business day preceding the Closing Date or any Option Closing Date, as
the case may be. Such certificates shall be made available to the Underwriters
in New York City for inspection and packaging not later than 9:30 A.M., New York
City time, on the business day next preceding the Closing Date or the Option
Closing Date, as the case may be. The certificates evidencing the Firm Shares
and any Additional Shares to be purchased hereunder shall be delivered to the
Underwriters on the Closing Date or the Option Closing Date, as the case may be,
against payment to the Company of the purchase price therefor in immediately
available funds.
5. AGREEMENTS OF THE COMPANY AND THE OPERATING PARTNERSHIP. The Company
and the Operating Partnership agree, jointly and severally, with the several
Underwriters as follows:
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(a) The Company and the Operating Partnership will file the Prospectus
Supplement with the Commission in a form approved by the Underwriters within the
applicable time period prescribed for filing by Rule 424 under the Act.
(b) The Company will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the Registration
Statement or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (e)
below, of any change in the Company's financial condition, business, properties,
or results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the making
of any additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact required by
the Act to be stated therein or necessary in order to make the statements
therein not misleading, or of the necessity to amend or supplement the
Prospectus (as then amended or supplemented) to comply with the Act or any other
law. If at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will, at the request of the Underwriters, furnish to
the Underwriters, without charge (i) one copy of the registration statement as
originally filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration statement, which shall
be delivered to counsel for the Underwriters, (ii) such number of conformed
copies of the registration statement as originally filed and of each amendment
thereto, but without exhibits, as the Underwriters may reasonably request, (iii)
such number of copies of the Incorporated Documents, without exhibits, as the
Underwriters may reasonably request, and (iv) up to six copies of the exhibits
to the Incorporated Documents, as the Underwriters may request.
(d) Prior to the Option Closing Date, the Company will inform the
Underwriters of its intent to file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus or file any document which
upon filing becomes an Incorporated Document, and the Company will furnish the
Underwriters with copies of any such amendment, supplement or document a
reasonable time in advance of filing; PROVIDED, the Company will not file any
such amendment, supplement or document to which the Underwriters shall
reasonably object unless such amendment, supplement or document is, or may be,
in the reasonable judgment of counsel to the Company, required to be filed by
applicable law.
(e) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter
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or dealer, the Company will expeditiously deliver to each Underwriter and each
dealer, without charge, as many copies of the Prospectus (and of any amendment
or supplement thereto) as the Underwriters may reasonably request. The Company
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky or real estate syndication laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales of Shares by any Underwriter or dealer. If
during such period of time any event shall occur as a result of which it is
necessary in the judgment of the Company or in the opinion of counsel for the
Underwriters and counsel for the Company to amend or supplement the Prospectus
(as then amended or supplemented) in order that the Prospectus will not include
any untrue statement of material fact or omit to state a fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary to supplement or amend the
Prospectus (or to file under the Exchange Act any document which, upon filing,
becomes an Incorporated Document) in order to comply with the Act or any other
law, the Company will forthwith prepare and, subject to the provisions of
paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto (or to such document), and will expeditiously furnish to the
Underwriters and dealers a reasonable number of copies thereof.
(f) The Company will cooperate with the Underwriters and with counsel
for the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky or real estate syndication laws of such jurisdictions
as the Underwriters may designate and will file such consents to service of
process or other documents necessary or appropriate in order to effect such
registration or qualification; PROVIDED that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to taxation or to service
of process in suits, other than those arising out of the offering or sale of the
Shares, in any jurisdiction where it is not now so subject.
(g) The Company will make generally available to its security holders
an earnings statement, which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement and ending not
later than 15 months thereafter, as soon as practicable after the end of such
period, which earnings statement shall satisfy the provisions of Section 11(a)
of the Act and Rule 158 of the Commission promulgated thereunder.
(h) During the period of three years hereafter, the Company will
furnish to the Underwriters as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission.
(i) If the closing for the sale of the Firm Shares or the Option
Shares does not occur due to the failure of the Company to tender the Firm
Shares or the Option Shares for
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delivery or the failure of the Company or the Operating Partnership to comply
with the terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Underwriters for all out-of-pocket expenses (including
the reasonable fees and expenses of counsel for the Underwriters) incurred by
them in connection herewith. The Company shall not be obligated to reimburse
such expenses if this Agreement is terminated pursuant to Section 10 or 11
hereof.
(j) The Company will contribute the net proceeds from the sale of the
Shares to the Operating Partnership and the Company and the Operating
Partnership will apply such net proceeds substantially in accordance with the
description set forth under the caption "Use of Proceeds" in the Prospectus
Supplement. In exchange for the contribution of such net proceeds, on the
Closing Date, the Operating Partnership will issue preferred units (the
"Preferred Units") of the Operating Partnership to the Company. The terms of
such Preferred Units will be substantially equivalent to the economic terms of
the Firm Shares. In addition, if any Additional Shares are purchased by the
several Underwriters, on the Option Closing Date, the Operating Partnership will
issue a number of additional Preferred Units based upon the number of such
Additional Shares purchased by the Underwriters.
(k) The Company will use its best efforts to meet the requirements to
maintain its qualification for the fiscal year ending December 31, 1999 (and
each fiscal quarter of such year) as a "real estate investment trust" (a "REIT")
under the Internal Revenue Code of 1986, as amended (the "Code").
(l) Except as stated in this Agreement and in the Prospectus, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Preferred Stock to facilitate
the sale or resale of the Shares in violation of Regulation M under the Exchange
Act.
(m) The Company will use its reasonable efforts to (i) accomplish the
listing of the Shares on the New York Stock Exchange within the 30-day period
after the Closing Date and (ii) maintain the listing of the Shares, 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 (the "Class A Common
Stock"), is listed, for a period of three years after the Closing Date, unless
Xxxxxxx Xxxxx Xxxxxx Inc. consents to the termination of such listing, which
consent shall not be unreasonably withheld.
(n) For a period of thirty (30) days from the date of the Prospectus
Supplement, the Company will not, without the prior written consent of Xxxxxxx
Xxxxx Barney, as representative of the Underwriters, offer for sale or sell any
shares of Class A Common Stock or securities convertible into or exercisable or
exchangeable for shares of Class A Common Stock in a public offering, other than
(A) the Shares, (B) securities issued in connection with acquisition
transactions, including, without limitation, the merger of Insignia Properties
Trust with and into the Company, and any exchange offer, (C) any securities
issued by the Operating
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Partnership and (D) any securities issued pursuant to any stock-based plan of
the Company for its employees, officers or directors..
(o) The Company will use its reasonable best efforts to ensure that
all equipment and systems to be acquired by the Company or its Subsidiaries will
be "Year 2000 Compliant" which means that they will accurately process,
calculate, compare, sequence, transmit and receive date/time data from, into,
and between the 20th and 21st centuries and the years 1999 and 2000 and leap
year calculations, except for such noncompliance that could not reasonably be
expected to have a material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its Subsidiaries taken
as a whole.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OPERATING
PARTNERSHIP. The Company and the Operating Partnership represent and warrant,
jointly and severally, to each Underwriter that:
(a) Each prospectus or preliminary prospectus included as part of the
registration statement as originally filed, or as part of any amendment or
supplement thereto that is related to the Shares, or filed pursuant to Rule 424
under the Act that is related to the Shares, complied when so filed in all
material respects with the provisions of the Act, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by or on behalf of any Underwriter expressly for use therein. The
Commission has not issued any order preventing or suspending the use of the
Prospectus.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. The Registration
Statement in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective and the Prospectus and any supplement or amendment thereto when filed
with the Commission under Rule 424(b) under the Act, complied or will comply in
all material respects with the provisions of the Act and will not at any such
times contain an 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, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the Prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), complied in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder, and any further
Incorporated Documents so filed will, when they are filed, comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue
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statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and no such further document, when it is filed, will contain an
untrue statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) 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 Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; the Class A
Common Stock issuable upon conversion of the Shares has been duly and validly
reserved for issuance and, when issued and delivered against payment therefore
in accordance with the terms of the articles of incorporation of the Company,
will be validly issued, fully paid and nonassessable; and the capital stock of
the Company conforms in all material respects to the description thereof in the
Registration Statement and the Prospectus. The Preferred Units have been duly
authorized and, when issued to the Company, will be validly issued. Except as
described in, or contemplated by, the Registration Statement and the Prospectus,
and except for options or other securities issued to employees, officers or
directors of the Company or the Operating Partnership pursuant to a stock-based
plan of the Company or the Operating Partnership, there are no outstanding
options, convertible or exchangeable securities, warrants or other rights
calling for the issuance of capital stock of the Company.
(e) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Maryland with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to qualify does not have a material adverse effect on the financial
condition, business, properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
(f) Each Subsidiary is a corporation, limited partnership, limited
liability company or trust, as the case may be, duly organized or formed and
validly existing under the laws of its jurisdiction of organization or
formation, with corporate, limited partnership, limited liability company or
trust power and authority, as the case may be, to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to conduct its business in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such qualification, except where the failure so to qualify
does not have a material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its subsidiaries, taken
as a whole.
(g) All of the shares of capital stock, partnership interests, limited
liability company membership interests or trust beneficial interests, as the
case may be, issued by the
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Subsidiaries or created by agreements to which the Subsidiaries are parties, (i)
have been duly and validly issued or created (and in the case of capital stock
are fully paid and nonassessable) and (ii) are owned or held, directly or
indirectly through Subsidiaries, by the Company in the percentage amounts set
forth on Schedule II hereto free and clear of any security interest, lien,
adverse claim, equity or other encumbrance (each of the foregoing, a "Lien"),
except for such Liens as (i) are described in the Registration Statement or the
Prospectus or, (ii) are set forth in Schedule II, or (iii) would not have a
material adverse effect on the financial condition, business, properties, or
results of operations of the Company and its subsidiaries, taken as a whole.
(h) As of the date hereof, the Company indirectly owned an aggregate
approximate 83% 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.
(i) The Company has the corporate power and authority to enter into
this Agreement and to issue, sell and deliver the Shares to the Underwriters as
provided herein. The Operating Partnership has the power and authority to enter
into this Agreement and to issue and deliver the Preferred Units to the Company
as provided herein. This Agreement and each of the agreements executed by the
executive officers of the Company pursuant to which such executive officers
agree not to offer for sale or sell shares of Class A Common Stock or securities
convertible into or exercisable or exchangeable for shares of Class A Common
Stock in a public offering, except for units of the Operating Partnership (each
a "Lock-Up Agreement") have been duly authorized, executed and delivered by the
Company, the Operating Partnership and each of the executive officers of the
Company party thereto
(j) 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 the Company or any of the
Subsidiaries, or any of their respective properties is subject, that are
required to be described in the Registration Statement or the Prospectus but are
not described as required, and there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not described or
filed as required by the Act or the Exchange Act.
(k) Neither the Company nor any of the Subsidiaries is (i) 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, or (ii) 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 the Subsidiaries, or any of
their respective properties or (iii) 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
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the Subsidiaries is a party or by which any of them or any of their respective
properties is bound, except, with respect to clauses (ii) and (iii) above, for
any defaults which, singly or in the aggregate, would not have a material
adverse effect on the financial condition, business, properties or results of
operations of the Company and its subsidiaries, taken as a whole.
(l) None of the issuance and sale of the Shares by the Company, the
issuance of the Preferred Units by the Operating Partnership, the execution,
delivery or performance of this Agreement by the Company and the Operating
Partnership, or the consummation by the Company and the Operating Partnership of
the transactions contemplated hereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the 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 Act, all of which have been or will be
effected in accordance with this Agreement, and except for the filing of the
Articles Supplementary (as hereinafter defined) with the SDAT (as hereinafter
defined), which filing with the SDAT will be made prior to the Closing Date) or
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
Subsidiaries or (ii) 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 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 the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any Lien
upon any property or assets of the Company or 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.
(m) Ernst & Young LLP and Beers & Xxxxxx PLLC, who have certified the
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), are
independent public accountants with respect to the Company and its subsidiaries
as required by the Act.
(n) The financial statements, together with related schedules and
notes, of the Company and of any properties or entities acquired by the Company
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly (i) the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries and (ii) the combined revenues and
certain expenses of the properties or entities acquired by the Company, as the
case may be, on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied
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throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included or incorporated by
reference in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) are accurately presented and prepared on a basis consistent
with such financial statements and the books and records (i) of the Company and
its subsidiaries and (ii) the properties or entities acquired by the Company, as
the case may be. The selected historical financial data of the Company set forth
under the caption "Summary Historical Financial Information" in the Prospectus
Supplement, present fairly, on the basis stated in the Prospectus Supplement,
the historical financial information of the Company included therein. The
unaudited pro forma financial statements included, or incorporated by reference,
in the Prospectus Supplement comply in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of that data. The selected pro forma financial data of the Company
set forth under the caption "Summary Pro Forma Financial and Operating
Information" and "Capitalization" in the Prospectus Supplement present fairly,
on the basis stated in the Prospectus Supplement, the pro forma financial
information of the Company included therein and have been compiled on a basis
consistent with that of the unaudited pro forma financial statements included,
or incorporated by reference, in the Prospectus.
(o) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), neither the Company nor any of the Subsidiaries has incurred any
liability or obligation, direct or contingent, or entered into any transaction,
not in the ordinary course of business, that is material to the Company and its
subsidiaries, taken as a whole, and there has not been any change in (or
repurchase or declaration of dividends or distributions on) the capital stock,
or material increase in the short-term debt or long-term debt, of the Company or
any of its subsidiaries, or any material adverse change, or any development
involving or which may reasonably be expected to involve, a prospective material
adverse change, in the financial condition, business, properties, or results of
operations of the Company and its subsidiaries, taken as a whole.
(p) Except as disclosed in the Prospectus, the Company and each
Subsidiary (i) is in compliance with all applicable federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) is in compliance with all terms and
conditions of any such permit, license or approval, except, with respect to
clauses (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 are otherwise disclosed in or contemplated by the Prospectus or would
not, singly or in the aggregate, have a material adverse effect on the financial
condition, business, properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
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(q) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties or in connection with
off-site disposal of hazardous substances) that would, singly or in the
aggregate, have a material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its subsidiaries, taken
as a whole.
(r) (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 which is material to the business of the Company and its
subsidiaries, taken as a whole, in each case free, and clear of all Liens,
except such as are described in the Prospectus or such as do not, singly or in
the aggregate, materially affect the value of such real and personal property
taken as a whole and do not materially interfere with the use made and proposed
to be made of such real and personal property by the Company and the
Subsidiaries, (ii) any real property and buildings held under lease by the
Company and the Subsidiaries are held under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and the Subsidiaries, in each case except as described in the Prospectus, (iii)
the construction, management or operation of the buildings, fixtures and other
improvements located on the apartment properties owned or controlled by the
Company ("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 its
subsidiaries, taken as a whole, (v) there do not exist any violations of any
declaration of covenants, conditions and restrictions with respect to any of the
Owned Properties, nor is there any existing state of facts or circumstances or
condition or event which could, with the giving of notice or passage of time, or
both, constitute such a violation, except where any such violation would not,
singly or in the aggregate, have a material adverse effect on the Company and
its 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 do not, singly or in the
aggregate, have a material adverse effect on the value of the Owned Properties,
taken as a whole.
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(s) The direct and indirect subsidiaries of the Company have obtained
Extended Coverage Owner's Policies of Title Insurance, to the extent available
in the pertinent jurisdiction (other than in connection with real property
located in Texas, with respect to which the Company and its 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.
(t) 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 materially and
adversely affect the financial condition, business or results of operations of
the Company and its subsidiaries, taken as a whole, except as described in or
contemplated by the Prospectus.
(u) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement and the Prospectus or
other materials, if any, permitted by the Act.
(v) (i) 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 respective 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) the Company and each
of the Subsidiaries has fulfilled and performed all 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 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
restriction that would, singly or in the aggregate, not have a material adverse
effect on the financial condition, business, properties, or results of
operations of the Company and its subsidiaries, taken as a whole.
(w) The Company and each of the Subsidiaries have filed all tax
returns required to be filed and have paid all taxes shown thereon as due and
there is no tax deficiency that has been or to the knowledge of the Company is
threatened to be asserted that could reasonably be expected to have a material
adverse effect on the financial condition, business, properties, or results of
operations of the Company and its subsidiaries, taken as a whole.
(x) No holder of any security of the Company or the Operating
Partnership has any unwaived right to require registration of shares of capital
stock or any other security of the
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Company or limited partnership units or any other security of the Operating
Partnership because of the filing of the Registration Statement or consummation
of the transactions contemplated by this Agreement.
(y) The Company and the Subsidiaries are not now, and after the sale
of the Shares to be sold hereunder and application of the net proceeds from such
sale as described in the Prospectus Supplement under the caption "Use of
Proceeds," none of them will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(z) The Company has complied with all provisions of Florida Statutes,
Section 517.075, relating to issuers doing business in Cuba.
(aa) The Company has since July 29, 1994 been organized and qualified
as a REIT under Sections 856 through 860 of the Code, has elected to be taxed as
a REIT under the Code for the taxable year ended December 31, 1994, 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, 1999 and succeeding
taxable years.
(bb) Except for this Agreement, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder's fee or other like payment with respect to the consummation of the
transactions contemplated by this Agreement.
(cc) The Company intends to apply to have the Shares listed on the New
York Stock Exchange.
(dd) In connection with the Offering, neither the Company nor any of
its Subsidiaries has, directly or indirectly, bid for, purchased or attempted to
influence any person to bid for or purchase securities of the Company in
violation of Regulation M under the Exchange Act.
(ee) To the best knowledge of the Company, except as described in the
Prospectus, all of the equipment and systems used by the Company and each of its
Subsidiaries are Year 2000 Compliant, as defined in Section 5(o) hereof.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Operating Partnership agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, the Prospectus, or in
any amendment or supplement thereto, or arising out of or based upon 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,
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liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of such Underwriter expressly for use in connection therewith. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have provided, however, that this indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission in the
Prospectus, if such untrue statement or alleged untrue statement or omission or
alleged omission is corrected in an amendment or supplement to the Prospectus
and if, having previously been furnished by or on behalf of the Company with
copies of the Prospectus, as so amended or supplemented, the Underwriter
thereafter failed to delivery such Prospectus, as so amended or supplemented,
prior to or concurrently with the sale of a Share or Shares to the person
asserting such loss, liability, claim, damage or expense who purchased such
Share or Shares that are the subject thereof from the Underwriter.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or the Operating Partnership, such
Underwriter or such controlling person shall promptly notify the Company and the
Operating Partnership and the Company and the Operating Partnership shall assume
the defense thereof, including the employment of counsel and payment of all
reasonable fees and expenses. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Company and the Operating Partnership have agreed in
writing to pay such reasonable fees and expenses, (ii) the Company and the
Operating Partnership have failed to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include such Underwriter or such controlling person, the
Company and the Operating Partnership, and such Underwriter or such controlling
person shall have been advised by its counsel that representation of such
indemnified party, the Company and the Operating Partnership by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the
Company and the Operating Partnership shall not have the obligation to assume
the defense of such action, suit or proceeding on behalf of such Underwriter or
such controlling person). It is understood, however, that the Company and the
Operating Partnership shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Underwriters and controlling persons, which firm shall be designated in
writing by Xxxxxxx Xxxxx Barney Inc., and that all such reasonable fees and
expenses shall be reimbursed as they are incurred. The Company and the Operating
Partnership shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with such
written
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consent, or if there be a final judgment for the plaintiff in any such action,
suit or proceeding, the Company and the Operating Partnership agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Operating Partnership, the Company's
directors, the Company's officers who sign the Registration Statement, and any
person who controls the Company or the Operating Partnership within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company and the Operating Partnership to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter expressly
for use in the Registration Statement, the Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company and the Operating Partnership, any of the Company's directors, any
such officer, or any such controlling person based on the Registration
Statement, the Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Company and the Operating Partnership by paragraph (b) above (except that if
the Company and the Operating Partnership shall have assumed the defense thereof
such Underwriter shall not be required or entitled to do so, but may employ
separate counsel therein and participate in the defense thereof, and the fees
and expenses of such counsel shall be at such Underwriter's expense), and the
Company and the Operating Partnership, the Company's directors, any such
officer, and any such controlling person shall have the rights and duties given
to the Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
applicable in accordance with its terms but is determined to be legally
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then an indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Operating Partnership, on the
one hand, and the Underwriters, on the other, hand from the offering of the
Shares, or (ii) if the allocation provided by clause (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 (i) above but also the relative fault of
the Company and the Operating Partnership on the one hand, and the Underwriters
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Operating Partnership on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Operating
Partnership bear to the total underwriting discounts and commissions received by
the Underwriters, in each case,
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as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and the Operating Partnership, 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 and the Operating Partnership on the one
hand or by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Operating Partnership and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by a 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
paragraph (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above 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 any claim or defending any such action,
suit or proceeding. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price of the Shares underwritten by it and distributed to the
public exceeds the amount of any damages which 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective numbers of Firm Shares set
forth opposite their names in Schedule I hereto (or such numbers of Firm Shares
increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Operating Partnership set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, the Operating Partnership,
the Company's directors or officers, or any person controlling the Company or
the Operating Partnership, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A
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successor to any Underwriter or any person controlling any Underwriter, or to
the Company, the Operating Partnership, the Company's directors or officers, or
any person controlling the Company or the Operating Partnership, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, such
post-effective amendment to the Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 424 and 430A under the
Act shall have been timely made; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Underwriters'
satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the financial condition, business, properties or results
of operations of the Company and its subsidiaries, taken as a whole, not
contemplated by the Prospectus which, in the opinion of the Underwriters, would
materially adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company which makes any statement made
in the Prospectus untrue or which, in the opinion of the Company and its counsel
or the Underwriters and their counsel, requires the making of any addition to or
change in the Prospectus in order to state a material fact required by the Act
or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Prospectus
to reflect such event or development would, in the opinion of the Underwriters,
materially adversely affect the market for the Shares.
(c) The Underwriters shall have received on the Closing Date (i) an
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, dated the Closing Date and
addressed to the Underwriters, to the effect set forth in Exhibit A hereto,
provided, however that the opinions in the third and fourth numbered paragraphs
therein (or portions thereof) may be provided by the general counsel of the
Company and (ii) an opinion of Piper & Marbury L.L.P., dated the Closing Date
and addressed to the Underwriters, to the effect set forth in Exhibit B hereto.
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 set forth in Exhibit C hereto.
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(d) The Underwriters shall have received on the Closing Date (i) an
opinion of Xxxxxx & Xxxxx LLP, counsel for the Underwriters, dated the Closing
Date and addressed to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Underwriters, and such counsel shall have
been provided by the Company with such documents and information as they may
reasonably request to enable them to pass on such matters and (ii) such other
opinions of such counsel with respect to such other related matters as the
Underwriters may reasonably request. In rendering such opinions, each such
counsel may rely, as to matters of Maryland law, on the opinion of Piper &
Marbury L.L.P.
(e) The Underwriters shall have received letters addressed to the
Underwriters, dated the date hereof and the Closing Date, from Ernst & Young
LLP, independent certified public accountants, substantially in the forms
heretofore approved by the Underwriters.
(f) The Underwriters shall have received executed copies of the
Lock-Up Agreements.
(g) (i) There shall not have been any material change in the capital
stock of the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business) from that
set forth or contemplated in the Registration Statement or the Prospectus (or
any amendment or supplement thereto); (ii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the financial
condition, business, properties, or results of operations of the Company and its
subsidiaries, taken as a whole; (iii) the Company and the Subsidiaries shall not
have incurred any liabilities or obligations, direct or contingent (whether or
not in the ordinary course of business), that are material to the Company and
its subsidiaries, taken as a whole, other than those reflected in or
contemplated by the Registration Statement or the Prospectus (or any amendment
or supplement thereto); and (iv) all the representations and warranties of the
Company and the Operating Partnership contained in this Agreement shall be true
and correct on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and the Underwriters shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to the Underwriters), to the effect set forth in this Section 8(g)
and in Section 8(h) hereof.
(h) Each of the Company and the Operating Partnership shall not have
failed at or prior to the Closing Date to have performed or complied with any of
its respective agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(i) The Company shall have duly filed the articles supplementary (the
"Articles Supplementary") designating the Preferred Stock with the State
Department of Assessments and Taxation of Maryland (the "SDAT").
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(j) The Company shall have furnished or caused to be furnished to the
Underwriters such further certificates and documents as the Underwriters shall
have reasonably requested.
(k) In connection with the Offering, neither the Company nor any of
its Subsidiaries has, directly or indirectly, bid for, purchased or attempted to
influence any person to bid for or purchase securities of the Company in
violation of Regulation M under the Exchange Act.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriters and to counsel for the Underwriters.
Any certificate or document signed by any officer of the Company or
authorized representative of the Operating Partnership and delivered to the
Underwriters, or to counsel for the Underwriters, on the Closing Date or any
Option Closing Date, shall be deemed a representation and warranty by the
Company or the Operating Partnership, as the case may be, to each Underwriter as
to the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (f) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing (or reproduction) and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, and each amendment or
supplement thereto; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with the
original issuance and sale of the Shares; (iv) the printing (or reproduction)
and delivery of this Agreement, the Blue Sky Memorandum (if any) and all other
agreements or documents printed (or reproduced) and delivered in connection with
the offering of the Shares; (v) the listing of the Shares on the New York Stock
Exchange; (vi) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky or real estate syndication laws of the
several states as provided in Section 5(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the Blue Sky Memorandum
and such registration and
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qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other reasonable expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the reasonable fees and expenses of the Company's accountants and the reasonable
fees and expenses of counsel (including local and special counsel) for the
Company. The Underwriter agrees to reimburse the Company for expenses and other
costs in connection with the offering of the Firm Shares in the amount of
$625,000 or in the amount of $718,750 if the Underwriter's Over-Allotment Option
is exercised in full.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Shares may commence, when notification of the
effectiveness of such post-effective amendment to the Registration Statement has
been released by the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying the
Underwriters, or by the Underwriters, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as the Underwriters may specify in accordance with the
Master Agreement Among Underwriters of Xxxxxxx Xxxxx Xxxxxx Inc., to purchase
the Shares which such defaulting Underwriter or Underwriters are obligated, but
fail or refuse, to purchase. If any one or more of the Underwriters shall fail
or refuse to purchase Shares which it or they are obligated to purchase on the
Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to the Underwriters and the Company for the purchase of such Shares
by one or more non-defaulting Underwriters or other party or parties approved by
the Underwriters and the Company are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not
result in termination of this Agreement, either the Underwriters 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 the Prospectus or 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 such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with the Underwriters' approval
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and the approval of the Company, purchases Shares which a defaulting Underwriter
is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the Underwriters' absolute discretion, without liability on the
part of any Underwriter to the Company by notice to the Company, if prior to the
Closing Date or any Option Closing Date (if different from the Closing Date and
then only as to the Additional Shares), as the case may be, (i) trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market shall have been suspended or materially limited,
(ii) a general moratorium on commercial banking activities in New York shall
have been declared by either federal or state authorities, or (iii) there shall
have occurred any outbreak or escalation of hostilities or other international
or domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in the Underwriters' judgment, impracticable or inadvisable
to commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to enforce contracts for
the resale of the Shares by the Underwriters. Notice of such termination may be
given to the Company by telegram, telecopy or telephone and shall be
subsequently confirmed by letter. Upon any such termination, the obligations of
the Company and the Operating Partnership to the Underwriters hereunder shall
also terminate, except for the obligations set forth in Sections 7 and 9 hereof.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth in
the last paragraph on the cover page, the stabilization legend on page S-2, and
the statements in the first, fourth, seventh (third sentence only) and eleventh
paragraphs under the caption "Underwriting" in the Prospectus Supplement,
constitute the only information furnished in writing by or on behalf of the
Underwriters as such information is referred to in Sections 6(b) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing. Notices given pursuant to this Agreement shall be delivered (i) if to
the Company or the Operating Partnership, at the office of the Company at 0000
Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxxx
Xxxxxxxxx, Chairman of the Board of Directors; or (ii) if to the Underwriters,
care of Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, the Operating Partnership, the Company's
directors and officers, and the other controlling persons referred to in Section
7 hereof and their respective successors and assigns, to the extent provided
herein, and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither the term "successor" nor the term "successors
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and assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. This Agreement
may be signed in various counterparts which together constitute one and the same
instrument. If signed in counterparts, this Agreement shall not become effective
unless at least one counterpart hereof shall have been executed and delivered on
behalf of each party hereto. Please confirm that the foregoing correctly sets
forth the agreement among the Company, the Operating Partnership and the several
Underwriters.
[SIGNATURES ON FOLLOWING PAGE]
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Very truly yours,
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ XXXXX XXXXXXXXX
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, Inc., its General Partner
By: /s/ XXXXX XXXXXXXXX
------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
Confirmed as of the date first above
mentioned.
XXXXXXX XXXXX BARNEY INC.
As Representative of the Several Underwriters
By: XXXXXXX XXXXX XXXXXX INC.
By: /s/ XXXXXX XXXXX
---------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
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Schedule I
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Underwriter Number of Shares
----------- ----------------
Xxxxxxx Xxxxx Barney Inc. 5,000,000
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Schedule II
Subsidiary
I. AIMCO-LP, Inc. (1)
II. Property Asset Management Services, Inc. (2)*
III. AIMCO/NHP Holdings, Inc. (2)
IV. AIMCO Properties, L.P. (3)
V. Property Asset Management Services, L.P. (4)*
VI. AIMCO/NHP Partners, L.P. (5)
VII. AIMCO-GP, Inc. (1)
VIII. NHP A&R Services, Inc. (2)
IX. NHP Management Company (2)*
X. Ambassador Apartments, L.P. (6)
(1) Owned 100% by the Company.
(2) The Operating Partnership holds a 95% economic non-voting preferred stock
interest and certain officers of the Company, directly or indirectly, hold a
5% economic interest and hold all of the common voting interest.
(3) AIMCO-GP, Inc. is the sole general partner with a 1% interest and AIMCO-LP,
Inc. holds an approximate 83% limited partnership interest.
(4) The Operating Partnership is the sole general partner with a 1% interest and
Property Asset Management Services, Inc. is the sole limited partner with a
99% limited partnership interest.
(5) The Operating Partnership holds a 99% limited partnership interest and CK
Properties, L.L.C., a limited liability company whose members are officers
of the Company, is the sole general partner and holds a 1% general
partnership interest.
(6) AIMCO Properties, L.P. is the sole general partner with a 1% interest and
also holds an approximate 99% limited partnership interest.
* Pledge of interests contemplated under Amendment dated January 15, 1999, to
Amended and Restated Credit Agreement, dated as of October 1, 1998 among
AIMCO Properties, L.P., the Lenders, Bank of America National Trust and
Savings Association and Bank Boston, N.A.
