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EXHIBIT 1.1
UNDERWRITING AGREEMENT
July 27, 2001
Apartment Investment and Management Company
2000 South Colorado Boulevard
Suite 2-1000
Denver, Colorado 80222
AIMCO Properties, L.P.
2000 South Colorado Boulevard
Suite 2-1000
Denver, Colorado 80222
Dear Sirs and Mesdames:
Subject to the terms and conditions set forth or incorporated by
reference herein, Apartment Investment and Management Company, a Maryland
corporation (the "Company"), hereby agrees to sell to Morgan Stanley & Co.
Incorporated (the "Underwriter"), and the Underwriter agrees to purchase from
the Company, 800,000 shares of the Company's Class R Cumulative Preferred Stock,
par value $0.01 per share (the "Equity Securities").
The Underwriter will pay for the Equity Securities upon delivery
thereof at Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois at
10:00 a.m. (New York City time) on August 1, 2001 or at such other time, not
later than 5:00 p.m. (New York City time) on August 8, 2001 as shall be
designated by the Underwriter.
All provisions contained in the document entitled Apartment Investment
and Management Company Form of Underwriting Agreement Standard Provisions
(Equity Securities) dated July 17, 2001, a copy of which is attached hereto, are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein, except that (i) if any term defined in such document is
otherwise defined herein, the definition set forth herein shall control, (ii)
all references in such document to a type of security that is not being offered
shall not be deemed to be a part of this Agreement and (iii) all references in
such document to a type of agreement that has not been entered into in
connection with the transactions contemplated hereby shall not be deemed to be a
part of this Agreement.
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Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Michael Fusco
-----------------------------
Name: Michael Fusco
Title: Executive Director
Accepted:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By: /s/ Paul J. McAuliffe
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Name: Paul J. McAuliffe
Title: Executive Vice President and Chief Financial Officer
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC., its General Partner
By: /s/ Paul J. McAuliffe
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Name: Paul J. McAuliffe
Title: Executive Vice President and Chief Financial Officer
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APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FORM OF
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(EQUITY SECURITIES)
July 17, 2001
From time to time, Apartment Investment and Management Company, a
Maryland corporation (the "COMPANY"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "UNDERWRITING
AGREEMENT"). The Underwriting Agreement, including the provisions incorporated
therein by reference, is herein sometimes referred to as this Agreement. Terms
defined in the Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Equity Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Equity Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means such
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "BASIC PROSPECTUS" means the prospectus included in
the Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Equity
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT," "AMENDMENT" and "AMEND" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
1. Representations and Warranties. The Company and AIMCO Properties,
L.P., a Delaware limited partnership (the "OPERATING PARTNERSHIP"), jointly and
severally, represent and warrant to and agree with each of the Underwriters
that:
(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
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Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such
part became effective, did not contain, and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter
through the Manager expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its direct and indirect subsidiaries, taken as a whole.
(d) Each direct and indirect subsidiary of the Company is a
corporation, limited partnership, limited liability company or trust,
as the case may be, duly organized or formed, is validly existing in
good standing under the laws of the jurisdiction of its organization or
formation, has the corporate, limited partnership, limited liability
company or trust power and authority, as the case may be, to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be in good standing, to have such power and
authority or to be so qualified would not have a material adverse
effect on the Company and its direct and indirect subsidiaries, taken
as a whole; all of the issued shares of capital stock, partnership
interests, limited liability company membership interests or trust
beneficial interests, as the case may be, of each direct and indirect
subsidiary of the Company or created by agreements to which such
subsidiaries are parties (i) have been duly and
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validly authorized and issued (and in the case of capital stock are
fully paid and non-assessable) and (ii) are owned or held, directly or
indirectly, by the Company free and clear of any security interest,
lien, adverse claim, equity or other encumbrance (each of the
foregoing, a "Lien"), other than Liens described in the Registration
Statement or the Prospectus, except with respect to clause (i) and (ii)
above, where the failure of such shares of capital stock, partnership
interests, limited liability company membership interests or trust
beneficial interests being duly and validly authorized or the existence
of such Liens would not, singly or in the aggregate, have a material
adverse effect on the Company and its direct and indirect subsidiaries,
taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Operating Partnership.
(f) The Company has an authorized capitalization as set forth
in the Prospectus. All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights; the
Equity Securities have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable and free of any preemptive
or similar rights; and the capital stock of the Company conforms in all
material respects to the description thereof in the Registration
Statement and the Prospectus. The preferred units to be issued by the
Operating Partnership in exchange for the net proceeds from the sale of
the Equity Securities (the "PREFERRED Units") have been duly authorized
and, when issued to the Company, will be validly issued. Except as
disclosed in the Registration Statement and the Prospectus, and except
for options or other securities issued to employees, officers or
directors of the Company or the Operating Partnership pursuant to a
stock-based plan of the Company or the Operating Partnership, there are
no outstanding options, convertible or exchangeable securities,
warrants or other rights calling for the issuance of capital stock of
the Company.
(g) As of the date hereof, the Company indirectly owns an
aggregate approximate 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 Preferred Units to the Company as provided in Section 5(f)
of this Agreement.
(i) Neither the Company nor any of the subsidiaries listed on
Schedule I to this Agreement (collectively, the "SPECIFIED
SUBSIDIARIES") is in violation of its certificate or articles of
incorporation or by-laws or certificates or agreements of limited
partnership, limited liability company or trust or other organizational
documents. None
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of the Company's direct or indirect subsidiaries (other than the
Specified Subsidiaries) is in violation of its certificate or articles
of incorporation or by-laws or certificates or agreements of limited
partnership, limited liability company or trust or other organizational
documents, except for such violations which would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole. Neither the Company nor
any of its direct or indirect subsidiaries is (i) in violation of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or its direct or indirect subsidiaries or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any of its direct or indirect
subsidiaries, or any of their respective properties or (ii) in default
in any material respect in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any material agreement, indenture, lease
or other instrument to which the Company or any of its direct or
indirect subsidiaries is a party or by which any of them or any of
their respective properties is bound, except, with respect to clauses
(i) and (ii) above, for any defaults which would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole.
(j) None of the issuance and sale of the Equity Securities by
the Company, the issuance of the Preferred Units by the Operating
Partnership, the execution, delivery or performance of this Agreement
by the Company and the Operating Partnership, or the consummation by
the Company and the Operating Partnership of the transactions
contemplated hereby (i) requires any consent, approval, authorization
or other order of or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the
Equity Securities under the Securities Act and the Exchange Act and
compliance with the securities or Blue Sky or real estate syndication
laws of various jurisdictions, to the extent applicable, and the filing
of the Prospectus Supplement with the Commission pursuant to Rule
424(b) under the Securities Act, all of which have been or will be
effected in accordance with this Agreement, and except for the filing
of the Articles Supplementary (as hereinafter defined) with the SDAT
(as hereinafter defined), which filing with the SDAT will be made prior
to the Closing Date (as hereinafter defined)), or (ii) conflicts or
will conflict with or constitutes or will constitute a breach of, or a
default under, the certificate or articles of incorporation or bylaws
or certificates or agreements of limited partnership, limited liability
company or trust or other organizational documents of the Company or
any of the Specified Subsidiaries, (iii) conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under,
the certificate or articles of incorporation or bylaws or certificates
or agreements of limited partnership, limited liability company or
trust or other organizational documents of any of the Company's direct
or indirect subsidiaries (other than the Specified Subsidiaries),
except, with respect to clause (iii), for such conflicts, breaches or
defaults which would not, singly or in the aggregate, have a material
adverse effect on the Company and its direct and indirect subsidiaries,
taken as a whole, or (iv) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company or
any of its direct
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or indirect subsidiaries is a party or by which any of them or any of
their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order
or decree applicable to the Company or any of its direct or indirect
subsidiaries or any of their respective properties, or will result in
the creation or imposition of any Lien upon any property or assets of
the Company or any of its direct or indirect subsidiaries pursuant to
the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, except, with respect to
clause (iv), for such conflicts, breaches, defaults, violations or
Liens which would not, singly or in the aggregate, have a material
adverse effect on the Company and its direct and indirect subsidiaries,
taken as a whole.
(k) Except as disclosed in the Registration Statement and the
Prospectus, (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) subsequent to the respective
dates as of which such information is given in the Registration
Statement and the Prospectus, there has not occurred any material
adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its direct and
indirect subsidiaries, taken as a whole.
(l) Ernst & Young LLP, which has certified 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. PricewaterhouseCoopers LLP, which has certified
the financial statements of Oxford Tax Exempt Fund II Limited
Partnership ("OTEF") incorporated by reference in the Registration
Statement and Prospectus are independent accountants with respect to
OTEF as required by the Securities Act. Reznick, Fedder and Silverman,
which has certified the financial statements of each of Oxford Holding
Corporation and subsidiaries, Oxford Realty Financial Group, Inc. and
Subsidiaries, ZIMCO Entities and Oxford Equities Corporation III, ORFG
Operations, L.L.C. and Subsidiary and Oxparc L.L.C. (collectively, the
"OXFORD ENTITIES") incorporated by reference in the Registration
Statement and Prospectus are independent accountants with respect to
each of the Oxford Entities as required by the Securities Act.
(m) The financial statements, together with related schedules
and notes, of the Company and of any properties or entities acquired,
or to be acquired, by the Company included or incorporated by reference
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), present fairly (i) the consolidated financial
position, results of operations and changes in financial position of
the Company and its subsidiaries and (ii) the combined revenues and
certain expenses of the properties or entities acquired, or to be
acquired, by the Company, as the case may be, on the basis stated in
the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial
and statistical
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information and data included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records (i)
of the Company and its subsidiaries and (ii) the properties or entities
acquired, or to be acquired, by the Company, as the case may be. The
selected historical financial data of the Company set forth under the
caption "Summary Historical Financial Information," "Ratio of Earnings
and Free Cash Flow to Fixed Charges" and "Capitalization" in the
Prospectus Supplement, present fairly, on the basis stated in the
Prospectus Supplement, the historical financial information of the
Company included therein. The unaudited pro forma financial statements
included, or incorporated by reference, in the Prospectus Supplement
comply in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of that data. The selected pro forma financial data of the
Company set forth under the caption "Summary Pro Forma Financial
Information," "Ratio of Earnings and Free Cash Flow to Fixed Charges"
and "Capitalization" in the Prospectus Supplement present fairly, on
the basis stated in the Prospectus Supplement, the pro forma financial
information of the Company included therein and have been compiled on a
basis consistent with that of the unaudited pro forma financial
statements included, or incorporated by reference, in the Prospectus.
(n) There are no legal or governmental proceedings pending or,
to the knowledge of the Company and the Operating Partnership,
threatened against the Company or any of the its direct or indirect
subsidiaries or to which any of the properties of the Company or any of
its direct or indirect subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described. There are no statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference
as exhibits to the Registration Statement that are not described, filed
or incorporated as required.
(o) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder
except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by or on behalf of such
Underwriter through the Manager expressly for use therein.
(p) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and each of its direct and indirect
subsidiaries (i) 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
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permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except with respect to (i), (ii) and (iii) above, where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its direct and indirect subsidiaries, taken as a whole.
(q) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties or in connection with off-site disposal of
hazardous waste) which would, singly or in the aggregate, have a
material adverse effect on the Company and its direct and indirect
subsidiaries, taken as a whole.
(r) Except as disclosed in the Registration Statement and the
Prospectus, there are no unwaived contracts, agreements or
understandings between the Company or the Operating Partnership and any
person granting such person the right to require the Company or the
Operating Partnership to include any securities of the Company or the
Operating Partnership with the Equity Securities registered pursuant to
the Registration Statement.
(s) Except as disclosed in the Registration Statement and the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), subsequent to the respective
dates as of which information is given in the Registration Statement
and the Prospectus, (i) neither the Company nor any of its direct or
indirect subsidiaries has incurred any liability or obligation, direct
or contingent, nor entered into any transaction not in the ordinary
course of business, in either case, that is material to the Company and
its direct and indirect subsidiaries, taken as a whole; (ii) the
Company has not purchased any of its outstanding capital stock, (iii)
the Company has not declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary and
customary dividends; and (iv) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company and
its direct and indirect subsidiaries, taken as a whole.
(t) (i) The Company and its direct and indirect subsidiaries
have good and marketable title in fee simple to all parcels of real
property (except for those easement parcels that are appurtenant to the
real property owned in fee simple by the Company and its direct and
indirect subsidiaries) and good and marketable title to all personal
property owned by them, in each case free and clear of all Liens,
except where the failure to have good and marketable title or such
Liens would not, singly or in the aggregate, have a material adverse
effect on the Company and its direct and indirect subsidiaries taken as
a whole, (ii) any real property and buildings held under lease by the
Company and its direct and indirect subsidiaries are held under valid,
subsisting and enforceable leases, except
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where failure to hold such property and buildings under valid,
subsisting and enforceable leases would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries taken as a whole, (iii) the construction,
management or operation of the buildings, fixtures and other
improvements located on the apartment properties owned or controlled by
the Company or its direct or indirect subsidiaries ("OWNED
PROPERTIES"), as presently conducted or existing is not in violation of
any applicable building code, zoning ordinance or other law or
regulation, except where any such violation would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole, (iv) neither the Company
nor any of its direct or indirect subsidiaries has received notice of
any proposed special assessment or any proposed change in any property
tax, zoning or land use laws affecting all or any portion of the Owned
Properties, except where any such assessment or change would not,
singly or in the aggregate, have a material adverse effect on the
Company and its direct and indirect subsidiaries, taken as a whole, (v)
there do not exist any violations of any declaration of covenants,
conditions and restrictions with respect to any of the Owned
Properties, nor is there any existing state of facts or circumstances
or condition or event which could, with the giving of notice or passage
of time, or both, constitute such a violation, except where any such
violation would not, singly or in the aggregate, have a material
adverse effect on the Company and its direct and indirect subsidiaries,
taken as a whole, and (vi) the improvements comprising any portion of
the Owned Properties (the "IMPROVEMENTS") are free of any and all
material physical, mechanical, structural, design and construction
defects and the mechanical, electrical and utility systems servicing
the Improvements (including, without limitation, all water, electric,
sewer, plumbing, heating, ventilation, gas and air conditioning) are in
good condition and proper working order and are free of material
defects, except for any such defects or failures to be in good
condition or proper working order which would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole.
(u) There is no strike or work stoppage existing or, to the
knowledge of the Company and the Operating Partnership, threatened
against the Company or any Specified Subsidiary. The Company does not
have any knowledge as to any intentions of any key employee or any
group of employees to leave the employ of the Company or any of its
direct or indirect subsidiaries where such departure would have a
material adverse effect on the Company and its direct and indirect
subsidiaries, taken as a whole. Except as disclosed in the Registration
Statement and the Prospectus, the Company has not established,
sponsored, maintained, made any contributions to or been obligated by
law to establish, maintain, sponsor or make any contributions to any
"employee pension benefit plan" or "employee welfare benefit plan" (as
such terms are defined in ERISA), including, without limitation, any
"multi-employer plan." The Company is in compliance with all applicable
laws relating to the employment of labor, including provisions relating
to wages, hours, equal opportunity, collective bargaining and the
payment of Social Security and other taxes, and with ERISA, except
where the failure to so comply would not have a material adverse effect
on the Company and its direct and indirect subsidiaries, taken as a
whole.
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(v) The direct and indirect subsidiaries of the Company have
obtained Extended Coverage Owner's Policies of Title Insurance, to the
extent available in the pertinent jurisdiction (other than in
connection with real property located in Texas, with respect to which
the Company and its direct and indirect subsidiaries have obtained
Texas Form T-1 Policies of Title Insurance) from title insurers of
recognized financial responsibility on all of the Owned Properties and
such policies are in full force and effect, except where any such
failure to obtain title insurance or to have such policies in full
force and effect would not, singly or in the aggregate, have a material
adverse effect on the Company and its direct and indirect subsidiaries,
taken as a whole.
(w) The Company and its direct and indirect subsidiaries self
insure, or are insured by insurers of recognized financial
responsibility, against such losses and risks and in such amounts as
are customary in the businesses in which they are engaged; and neither
the Company nor any of its direct or indirect subsidiaries has any
reason to believe that it will not be able to renew that coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the Company and its
direct and indirect subsidiaries, taken as a whole.
(x) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) the completion of the
distribution of the Equity Securities, will not distribute any offering
material in connection with the offering and sale of the Equity
Securities other than the Registration Statement and the Prospectus or
other materials, if any, permitted by the Securities Act.
(y) (i) Each of the Company and each of its direct and
indirect subsidiaries has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("PERMITS") as
are necessary to own its properties and to conduct its business in the
manner described in the Prospectus, subject to such qualifications as
may be set forth in the Prospectus, (ii) each of the Company and each
of its direct and indirect subsidiaries has fulfilled and performed all
of its material obligations with respect to such permits and to the
Company's knowledge no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or
result in any other material impairment of the rights of the holder of
any such permit, subject in each case to such qualification as may be
set forth in the Prospectus, and (iii) except as described in the
Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company or any of its direct or indirect
subsidiaries, except, with respect to clauses (i), (ii) and (iii)
above, for any such failure to obtain permits or failure to fulfill or
perform obligations, or the occurrence of events, or such restrictions
that would not, singly or in the aggregate, have a material adverse
effect on the Company and its direct and indirect subsidiaries, taken
as a whole.
(z) The Company and each of its direct and indirect
subsidiaries have filed or caused to be filed all federal, state,
local, foreign and other tax returns, reports, information returns and
statements (except for returns, reports, information returns and
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statements the failure to file which will not have a material adverse
effect on the Company and its direct and indirect subsidiaries taken as
a whole) required to be filed by them. The Company and each of its
direct and indirect subsidiaries have paid or caused to be paid all
taxes (including interest and penalties) that are shown as due and
payable on such returns or claimed in writing by any taxing authority
to be due and payable with respect to such returns, except those which
are being contested by them in good faith by appropriate proceedings
and in respect of which adequate reserves are being maintained on their
books in accordance with generally accepted accounting principles
consistently applied or those which would not, singly or in the
aggregate, have a material adverse effect on the Company and its direct
and indirect subsidiaries, taken as a whole. The Company and each of
its direct and indirect subsidiaries do not have any material
liabilities for taxes other than those incurred in the ordinary course
of business and in respect of which adequate reserves are being
maintained by it in accordance with generally accepted accounting
principles consistently applied or those which would not, singly or in
the aggregate, have a material adverse effect on the Company and its
direct and indirect subsidiaries, taken as a whole. Federal and state
income tax returns for the Company and each of its direct and indirect
subsidiaries have not been audited by the Internal Revenue Service or
state authorities; provided, however, (i) the 1997 Federal income tax
return of NHP Management Company was accepted by the Internal Revenue
Service as filed, (ii) the Federal income tax returns of Insignia
Financial Group, Inc. and its subsidiaries ("INSIGNIA") for the tax
periods ended December 31, 1996, December 31, 1997 and October 1, 1998
(i.e., the short tax year of Insignia ending when Insignia was merged
with and into the Company) are currently under examination and (iii)
various state income tax returns of the Company and/or its direct or
indirect subsidiaries are currently under examination. No deficiency
assessment with respect to or proposed adjustment of the Company's or
any of its direct or indirect subsidiaries' federal, state, local,
foreign or other tax returns is pending or, to the best of the
Company's knowledge, threatened in writing. There is no tax lien,
whether imposed by any federal, state, local or other tax authority,
outstanding against the assets, properties or business of the Company
other than statutory liens in respect of taxes that are not delinquent.
There are no applicable taxes, fees or other governmental charges
payable by the Company or any of its direct or indirect subsidiaries in
connection with the execution and delivery of this Agreement or the
issuance by the Company of the Equity Securities.
(aa) Neither the Company nor the Operating Partnership is now,
and after the sale of the Equity Securities and application of the net
proceeds from such sale as described in the Prospectus Supplement under
the caption "Use of Proceeds," neither of them will be, an "investment
company" (as such term is defined in the Investment Company Act of
1940, as amended).
(bb) The Company has since July 29, 1994 been organized and
qualified as a real estate investment trust (a "REIT") under Sections
856 through 860 of the 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, 2000, and
currently expects to continue to be organized and to operate in a
manner so as
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to qualify as a REIT in the taxable year ending December 31, 2001 and
succeeding taxable years.
(cc) The Company intends to apply to have the Equity
Securities listed on the New York Stock Exchange.
(dd) The Company for itself and on behalf of each Specified
Subsidiary maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
2. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Equity Securities as soon after this Agreement has been entered into and,
if necessary, any post-effective amendment to the Registration Statement has
become effective, as in the Manager's judgment is advisable. The terms of the
public offering of the Equity Securities are set forth in the Prospectus.
3. Payment and Delivery. Except as otherwise provided in this Section
3, payment for the Initial Equity Securities shall be made to the Company in
Federal or other funds immediately available at the time and place set forth in
the Underwriting Agreement, upon delivery to the Manager for the respective
accounts of the several Underwriters of the Initial Equity Securities. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Except as otherwise provided in this Section 3, payment for the Equity
Optional Securities shall be made to the Company in Federal or other funds
immediately available at the time and place set forth in this Agreement, upon
delivery to the Manager for the respective accounts of the several Underwriters
of the Equity Optional Securities. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Equity Securities shall be in definitive form and
registered in such names and in such denominations as the Manager shall request
in writing not later than two full business days prior to the date of delivery,
with any transfer taxes payable in connection with the transfer of the Equity
Securities to the Underwriters duly paid, against payment of the Purchase Price
therefor.
4. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Equity Securities hereunder are subject to
the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date:
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(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its direct and indirect
subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that
makes it, in the judgment of the Manager, impracticable to
market the Equity Securities on the terms and in the manner
contemplated in the Prospectus.
(b) (i) The Underwriters shall have received on the Closing
Date a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 4(a)(i)
above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
(ii) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Operating Partnership, to the effect that the
representations and warranties of the Operating Partnership contained
in this Agreement are true and correct as of the Closing Date and that
the Operating Partnership has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
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, Meagher & Flom LLP, outside counsel
for the Company, dated the Closing Date, to the effect that:
(i) This Agreement has been duly authorized, executed
and delivered by the Operating Partnership.
(ii) The Operating Partnership has partnership power
and authority to enter into the Underwriting Agreement and to
issue and deliver to the Company the Preferred Units to be
issued and delivered by the Operating Partnership as provided
in this Agreement.
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(iii) None of the issuance and sale by the Company of
the Equity Securities, the issuance of the Preferred Units by
the Operating Partnership, or the execution, delivery and
performance by the Company or the Operating Partnership of
their respective obligations under the Underwriting Agreement,
will (i) conflict with or constitute a breach of, or default
under, the certificate of incorporation of AIMCO-GP, Inc. or
AIMCO-LP, Inc. or the certificate of limited partnership or
limited partnership agreement of the Operating Partnership,
(ii) constitute a violation of, or a breach or default under,
the terms of any Applicable Contract (as defined in such
counsel's opinion) or (iii) violate or conflict with, or
result in any contravention of, any Applicable Order (as
defined in such counsel's opinion). Such counsel need not
express any opinion, however as to (a) whether the execution,
delivery or performance by the Company or the Operating
Partnership of the Underwriting Agreement will constitute a
violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or any
aspect of the financial condition or results of operations of
the Company or the Operating Partnership or (b) the
enforceability of any of the Applicable Contracts.
(iv) No Governmental Approval (as defined in such
counsel's opinion), which has not been obtained or taken and
is not in full force and effect, is required in connection
with the consummation of the transactions contemplated by this
Agreement, except such as may be required under the Act or the
Exchange Act.
(v) To such counsel's knowledge, no holder of any
security of the Company or the Operating Partnership has any
right that has not been waived under any of the Registration
Rights Agreements listed on Annex C to the Officers'
Certificate to such counsel's opinion to require registration
of any security of the Company or the Operating Partnership
because of the filing of the Registration Statement or
consummation of the transactions contemplated by the
Underwriting Agreement.
(vi) The Registration Statement has become effective
under the Securities Act, and such counsel has been advised by
the Commission that no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the best
of such counsel's knowledge, no proceedings for that purpose
have been instituted or are pending or threatened by the
Commission. The Prospectus has been filed with the Commission
pursuant to Rule 424(b) under the Securities Act.
(vii) Neither the Company nor the Operating
Partnership is and, after giving effect to the offering and
sale of the Equity Securities and the application of the
proceeds thereof as described in the Prospectus, will be an
"investment company."
(viii) Each of the documents incorporated by
reference into the Registration Statement and the Prospectus
(the "INCORPORATED DOCUMENTS"),
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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 2000 Annual Report on Form 10-K,
and as of the pricing date, and the Prospectus, as of the date
of the Prospectus Supplement appeared on their faces to be
appropriately responsive in all material respects to the
requirements of the Securities Act and the Rules and
Regulations, except that in each case such counsel need not
express any opinion as to the financial statements, including
pro forma financial statements, and schedules and other
financial or statistical data included or incorporated by
reference therein or excluded therefrom, or the exhibits
thereto, and, except to the extent expressly stated in such
counsel's opinion relating to certain tax matters delivered
pursuant to Section 4(e) of this Agreement, such counsel need
not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or the Prospectus.
In addition, such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants for the Company, the Underwriters
and counsel for the Underwriters, at which the contents of the
Registration Statement and the Prospectus (including the Incorporated
Documents) and related matters were discussed and, although such
counsel is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus (including the
Incorporated Documents), except as set forth in such counsel's opinion
relating to certain tax matters delivered pursuant to Section 4(e) of
the Underwriting Agreement, and have 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.
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(d) The Underwriters shall have received on the Closing Date
an opinion of Piper Marbury Rudnick & Wolfe LLP, dated the Closing
Date, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland.
(ii) The Company has the corporate power and
authority to own, lease, and operate its properties and to
conduct its business as described in its Charter (as defined
in such counsel's opinion).
(iii) The historical authorized capital stock of the
Company is as set forth in the Prospectus Supplement under the
caption "Capitalization" as of the date stated therein.
(iv) The Initial Equity Securities have been duly
authorized and upon issuance and delivery against payment
therefor in accordance with the terms of the Underwriting
Agreement, will be duly and validly issued, fully paid, and
non-assessable and free of any preemptive right (or, to such
counsel's knowledge, similar rights) that are contained in the
Company's Charter or arising under the Maryland General
Corporation Law that entitle or will entitle any person to
acquire any of the Initial Equity Securities upon issuance
thereof by the Company.
(v) The Company has corporate power and authority to
enter into the Underwriting Agreement and to issue, sell and
deliver to the Underwriters the Initial Equity Securities to
be issued and sold by the Company pursuant to such
Underwriting Agreement.
(vi) The Underwriting Agreement has been duly
authorized by all necessary corporation action on the part of
the Company and, assuming that it has been executed and
delivered by the Chairman or Vice Chairman of the Board of
Directors of the Company, has been duly executed and delivered
by the Company.
(vii) The authorized capital stock of the Company
conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus
under the captions "Description of Preferred Stock",
"Description of Class A Common Stock" and "Description of
Other Classes of Outstanding Stock" and in the Prospectus
Supplement under the caption "Description of Class R Preferred
Stock," in so far as such description relates to the Company's
Charter and By-Laws (as defined in such counsel's opinion) and
the Maryland General Corporation Law.
(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.
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(ix) Neither the issuance and sale of the Initial
Equity Securities, the execution, delivery or performance of
the Underwriting Agreement by the Company nor the consummation
by the Company of the transactions contemplated thereby (i)
requires any consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency
or official of the State of Maryland, (ii) conflicts or will
conflict with or constitutes or will constitute a breach of,
or a default under, the Charter or By-Laws of the Company, or
(iii) violates or will violate any statute, law, regulation,
filing, judgment, injunction, order or decree of the State of
Maryland known to us, applicable to the Company or any of its
properties.
(x) The statements under the caption "Description of
Class R Preferred Stock" in the Prospectus Supplement, insofar
as such statements constitute a summary of legal matters,
documents, or proceedings referred to therein, are accurate
summaries and fairly and correctly present the information
called for with respect to such legal matters, documents, or
proceedings in all material respects.
(xi) The statements in Item 15 of Part II of the
Registration Statement, insofar as such statements constitute
a summary of Maryland statutes or provisions of the Charter or
By-Laws of the Company referred to therein, are accurate in
all material respects.
(xii) To such counsel's knowledge, the Company is not
(i) in violation of its Charter or By-Laws, or (ii) in breach
of any applicable statute, rule or regulation or any writ,
order or decree of any court or governmental agency or body of
the State of Maryland having jurisdiction over the Company or
its properties.
(xiii) To such counsel's knowledge, there are no
material legal or governmental proceedings pending or
threatened in the State of Maryland against the Company, or to
which the Company or any of its properties is subject.
(e) The Underwriters shall also be furnished with a copy of
the tax opinion of Skadden, Arps, Slate, Meagher & Flom 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
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diversity of stock ownership, and the various qualification
tests imposed under the Code, the results of which will not be
reviewed by us. Accordingly, no assurance can be given that
the actual results of the Company's operation for any one
taxable year will satisfy the requirements for taxation as a
REIT under the Code.
(ii) Although the discussion set forth in the
Prospectus under the caption "Certain Federal Income Tax
Considerations" does not purport to discuss all possible
United States Federal income tax consequences of the purchase,
ownership, and disposition of the Equity Securities, such
discussion constitutes, in all material respects, a fair and
accurate summary under current law of the material United
States Federal income tax consequences of the purchase,
ownership and disposition of the Equity Securities by a holder
who purchases such Equity Securities, subject to the
qualifications set forth therein. The United States Federal
income tax consequences of an investment in the Equity
Securities by an investor will depend upon that holder's
particular situation, and we express no opinion as to the
completeness of the discussion set forth in "Certain Federal
Income Tax Considerations" as applied to any particular
holder.
(f) The Underwriters shall have received on the Closing Date
an opinion of Joel F. Bonder, 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 Preferred Units, have
been validly issued and, to the best of such
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counsel's knowledge, are owned of record by the Company or one
or more subsidiaries of the Company, except, with respect to
the Operating Partnership, for units of limited partnership
held by third parties. All of the outstanding shares of
capital stock of AIMCO/Bethesda Holdings, Inc. and NHP
Management Company have been validly issued and, to the best
of such counsel's knowledge, are fully paid and non-assessable
and are owned of record by the Operating Partnership. To such
counsel's knowledge, based solely upon discussions with, and
representations from, officers and other representatives of
the Company, and upon such counsel's review of the Applicable
Contracts, all of the shares of the corporation listed as
items 1,2,3 and 5 on Schedule A to such counsel's opinion, and
all of the limited partnership interests of the limited
partnerships listed as item 4 on Schedule A to such counsel's
opinion, that are owned, directly or indirectly, by the
Company, are owned free and clear of any security interests,
liens, adverse claims, equities or other encumbrances, except
that certain of the shares of Series A Preferred Stock of NHP
Management Company are pledged pursuant to the Borrower Pledge
Agreement, dated as of September 20, 2000, among the Operating
Partnership, AIMCO/Bethesda Holdings, Inc., NHP Management
Company, AIMCO Holdings L.P. and Bank of America.
(iv) The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its direct and indirect subsidiaries, taken as a whole.
(v) To such counsel's knowledge, the Company
possesses the Governmental Licenses (as defined in such
counsel's opinion) and the Company is in compliance with the
terms and conditions of all such Governmental Licenses, except
where the failure to so comply would not, singly or in the
aggregate, have a material adverse effect on the Company and
its direct and indirect subsidiaries, taken as a whole, and
all of the Governmental Licenses are valid and in full force
and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a material adverse effect
on the Company and its direct and indirect subsidiaries, taken
as a whole.
(vi) None of the issuance and sale by the Company of
the Equity Securities, the issuance of the Preferred Units by
the Operating Partnership, or the execution, delivery and
performance by the Company or the Operating Partnership of
their respective obligations under the Underwriting Agreement,
will violate or conflict with, or result in any contravention
of, any judgment, decree or order known to such counsel of any
federal or state governmental authority entered in any
proceedings to which the Company or any Specified Subsidiary
is a party or by which its property is bound.
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(vii) The statements (A) in "Item 3 - Legal
Proceedings" of the Company's most recent annual report on
Form 10-K incorporated by reference in the Prospectus and (B)
in "Item 1 - Legal Proceedings" of Part II of the Company's
quarterly 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.
(viii) After due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of the Specified Subsidiaries is a
party or to which any of the properties of the Company or any
of the Specified Subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus
and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as
required.
In addition, such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, the Underwriters and counsel for the
Underwriters, at which the contents of the Registration Statement and the
Prospectus (including the Incorporated Documents) and related matters were
discussed and, although such counsel is not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (including the
Incorporated Documents), except as set forth in opinion (vii) above, and has
made no independent check or verification thereof, on the basis of the
foregoing, no facts have come to such counsel's attention that have led such
counsel to believe that the Registration Statement (including the Incorporated
Documents), at the time it became effective and as of the date of the
Underwriting Agreement, contained an untrue 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 & Platt, 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).
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With respect to the paragraph immediately following Section
4(c)(ix) and 4(f)(viii) above, Skadden Arps, Slate, Meagher & Flom LLP,
Mayer, Brown & Platt and Joel F. Bonder 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, Skadden
Arps, Slate, Meagher & Flom LLP, Mayer, Brown & Platt and Joel F.
Bonder 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 Skadden Arps, Slate, Meagher & Flom LLP, Piper
Marbury Rudnick & Wolfe LLP and Joel F. Bonder 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) The Company shall have duly filed the articles
supplementary (the "ARTICLES SUPPLEMENTARY") designating the Equity
Securities with the State Department of Assessments and Taxation of
Maryland (the "SDAT")
(j) Counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Equity Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Operating Partnership in
connection with the issuance and sale of the Equity Securities as
herein contemplated shall be reasonably satisfactory in form and
substance to counsel for the Underwriters.
The several obligations of the Underwriters to purchase Equity Optional
Securities hereunder are subject to the delivery to the Underwriters on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Equity Optional Securities and other matters related to the
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issuance of the Equity Optional Securities, which deliveries shall be
substantially identical to those described in this Section 4.
5. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company and the Operating Partnership
covenant with each Underwriter, jointly and severally, as follows:
(a) The Company shall furnish the Manager, without charge,
three signed copies of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
the Registration Statement (without exhibits thereto) and shall furnish
the Manager in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 5(c) below, as
many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Equity Securities, the
Company shall furnish to the Manager a copy of each such proposed
amendment or supplement and shall not file any such proposed amendment
or supplement to which the Manager reasonably objects.
(c) If, during such period after the first date of the public
offering of the Equity Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary in the
judgment of the Company or in the opinion of counsel to the
Underwriters and counsel to the Company to amend or supplement the
Prospectus (as then amended or supplemented) in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, the Company
shall forthwith prepare, file with the Commission and furnish, at its
own expense, to the Underwriters and to the dealers (whose names and
addresses the Manager will furnish to the Company) to which Equity
Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) The Company will cooperate with the Underwriters and with
counsel for the Underwriters in connection with the registration or
qualification of the Equity Securities for offering and sale by the
several Underwriters and by dealers under the securities or Blue Sky or
real estate syndication laws of such jurisdictions as the Underwriters
may designate and will file such consents to service of process or
other documents necessary or appropriate in order to effect such
registration or qualification;
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provided that in no event shall the Company be obligated to qualify do
so business in any jurisdiction where it is not now so qualified to
take any action which would subject it to taxation or to service of
process in suits, other than those arising out of the offering or sale
of the Equity Securities, in any jurisdiction where it is not now so
subject.
(e) The Company shall make generally available to the
Company's security holders and to the Manager as soon as practicable an
earnings statement covering a twelve month period beginning on the
first day of the first full fiscal quarter after the date of this
Agreement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder. If such fiscal quarter is the last fiscal
quarter of the Company's fiscal year, such earnings statement shall be
made available not later than 90 days after the close of the period
covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(f) The Company shall contribute the net proceeds from the
sale of the Equity Securities to the Operating Partnership. The
Operating Partnership shall apply such net proceeds substantially in
accordance with the description set forth under the caption "Use of
Proceeds" in the Prospectus Supplement. In exchange for the
contribution of such net proceeds, on the Closing Date, the Operating
Partnership will issue the Preferred Units to the Company. The terms of
such Preferred Units will be substantially equivalent to the economic
terms of the Equity Securities.
(g) The Company will use its best efforts to meet the
requirements to maintain its qualification for the fiscal year ending
December 31, 2001 (and each fiscal quarter of such year) as a REIT
under the Code.
(h) The Company will use its reasonable efforts to (i)
accomplish the listing of the Equity Securities on the New York Stock
Exchange within the 30-day period after the issuance thereof and (ii)
maintain the listing of the Equity Securities, on the New York Stock
Exchange or on any other national securities exchange on which the
Company's class A common stock, par value $.01 per share, is listed,
for a period of three years following the Closing Date, unless Morgan
Stanley & Co. Incorporated consents to the termination of such listing,
which consent shall not be unreasonably withheld.
(i) For a period of thirty (30) days from the date of the
Prospectus Supplement, the Company will not, without the prior written
consent of the Manager on behalf of the Underwriters, offer for sale or
sell any Equity Securities to be sold under this Agreement, any shares
of preferred stock or any other securities which are substantially
similar to the Equity Securities to be sold under this Agreement.
(j) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
shall pay or cause to be paid all expenses incident to the performance
of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Equity
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Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Equity Securities to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or legal investment memorandum in connection
with the offer and sale of the Equity Securities under state law and
all expenses in connection with the qualification of the Equity
Securities for offer and sale under state law as provided in Section
5(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Equity
Securities by the National Association of Securities Dealers, Inc., (v)
any fees charged by the rating agencies for the rating of the Equity
Securities, (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Securities and all costs and expenses incident to
listing the Equity Securities on the New York Stock Exchange, (vii) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Equity Securities, including, without limitation,
expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show and (viii) all
other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in
this Section. It is understood, however, that except as provided in
this Section, Section 6 entitled "Indemnity and Contribution," and the
last paragraph of Section 7 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, and any advertising expenses connected with any offers they
may make.
6. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon
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information relating to any Underwriter furnished to the Company in writing by
or on behalf of such Underwriter through the Manager expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Underwriter, but only
with reference to information relating to such Underwriter furnished to
the Company in writing by or on behalf of such Underwriter through the
Manager expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either Section 6(a) or 6(b),
such person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties
indemnified pursuant to Section 6(a) above, and by the Company, in the
case of parties indemnified pursuant to Section 6(b) above. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with
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such request prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in Section
6(a) or 6(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering
of the Equity Securities or (ii) if the allocation provided by clause
6(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause 6(d)(i) above but also the relative fault of the Company on the
one hand and of the Underwriters on the other hand in connection with
the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the
offering of the Equity Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of such
Equity Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate Price to Public of the Equity
Securities, in each case as set forth in the table on the cover of the
Prospectus Supplement. The relative fault of the Company on the one
hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or
by the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 6 are several in proportion to the respective
principal amounts of Equity Securities they have purchased hereunder,
and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 6(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6,
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no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Equity Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 6 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or the Company,
its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Equity Securities.
7. Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange or the
National Association of Securities Dealers, Inc., (ii) trading of any securities
of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Manager, is material and adverse and (b) in the
case of any of the events specified in clauses 7(a)(i) through 7(a)(iv), such
event, singly or together with any other such event, makes it, in the judgment
of the Manager, impracticable to market the Equity Securities on the terms and
in the manner contemplated in the Prospectus.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
8. Defaulting Underwriters. If, on the Closing Date, or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Equity Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate
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amount of Equity Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Equity Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Equity Securities set forth opposite their respective names in the
Underwriting Agreement bears to the aggregate amount of Equity Securities set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as the Manager may specify, to purchase the Equity Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the amount of Equity
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such amount of Equity Securities without the written consent of
such Underwriter. If, on the Closing Date, or the Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Equity Securities and the aggregate amount of Equity Securities with respect to
which such default occurs is more than one-tenth of the aggregate amount of
Equity Securities to be purchased on such date, and arrangements satisfactory to
the Manager and the Company for the purchase of such Equity Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either the Manager or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
9. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
10. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
11. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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