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EXHIBIT 99.1
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
2,000,000 Shares
9 1/2% Class H Cumulative Preferred Stock
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
August 11, 1998
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
As Representatives of the Several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center, North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
Apartment Investment and Management Company, a Maryland corporation
(the "Company"), proposes to issue and sell an aggregate of 2,000,000 shares
(the "Firm Shares") of its 9 1/2% Class H Cumulative Preferred Stock, $0.01 par
value per share (the "Preferred Stock"), to the several underwriters named in
Schedule I hereto (collectively, the "Underwriters"), for whom Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
Prudential Securities Incorporated and Smith Barney Inc. are acting as
representatives (in such capacity, the "Representatives"). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional 300,000 shares (the "Additional Shares")
of Preferred Stock. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares".
The Company through wholly-owned subsidiaries is the sole general
partner and the principal limited partner (with an aggregate approximate 88%
ownership interest as of the date hereof) of AIMCO Properties, L.P., a Delaware
limited partnership (the "Operating Partnership"). The Company's business of
owning and managing multifamily apartment properties and its third-party
property management and other businesses are principally conducted, directly or
indirectly, through the Operating Partnership.
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The Company wishes to confirm as follows its agreement with the
Underwriters, in connection with the several purchases of the Shares by the
Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") a "shelf"
registration statement on Form S-3 (File No. 333-26415), including a prospectus
relating to debt securities, preferred stock, common stock and warrants, and
will promptly file with the Commission a prospectus supplement specifically
relating to the Shares pursuant to Rule 424 under the Securities Act of 1933, as
amended (together with the rules and regulations of the Commission thereunder,
the "Act"). Such registration statement (as amended, if applicable) was declared
effective by the Commission on May 23, 1997. As used in this Agreement, (i) the
term "Registration Statement" means such registration statement, including
exhibits, financial statements and schedules, as amended to the date hereof,
(ii) the term "Prospectus" collectively refers to the basic prospectus dated May
22, 1997 (the "Basic Prospectus"), as supplemented by the prospectus supplement
dated August 11, 1998 (the "Prospectus Supplement"), in the form first used to
confirm sales of the Shares and (iii) the term "preliminary prospectus"
collectively refers to the Basic Prospectus, as supplemented by the preliminary
prospectus supplement dated July 30, 1998. As used herein, the terms
"Registration Statement", "Prospectus" and "preliminary prospectus" shall in
each case include the documents incorporated or deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act which are filed
by the Company with the Commission pursuant to the Exchange Act (as defined
below) on or prior to the date of the Prospectus Supplement. The terms
"supplement" and "amendment" or "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed by the Company with the Commission pursuant to the Securities Exchange Act
of 1934, as amended (together with the rules and regulations of the Commission
thereunder, the "Exchange Act"), subsequent to the date of the Prospectus
Supplement. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated or deemed to be incorporated by
reference in the Registration Statement, the Prospectus, the preliminary
prospectus, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE.
A. The Company hereby agrees, subject to all the terms and
conditions set forth herein, to issue and sell to each Underwriter and,
upon the basis of the representations, warranties and agreements of the
Company and the Operating Partnership herein contained and subject to
all the terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase
price of $24.2125 per Share (the "Purchase Price per Share"), the
number of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 10 hereof).
B. The Company also agrees, subject to all the terms and
conditions set forth herein, to sell to the Underwriters, and, upon the
basis of the representations, warranties and agreements of the Company
and the Operating Partnership herein contained and subject to all the
terms and conditions set forth herein, the Underwriters shall have the
right to purchase from the Company, at the Purchase Price Per
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Share, pursuant to an option (the "Over-allotment Option") which may be
exercised at any time in whole or from time to time in part by notice
to the Company given prior to 9:00 P.M., New York City time, on the
30th day after the date of the Prospectus Supplement (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the New York Stock Exchange is open for trading),
up to an aggregate of 300,000 Additional Shares. Additional Shares may
be purchased only for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. Upon any exercise of
the over-allotment option, each Underwriter, severally and not jointly,
agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as the Underwriters may determine in order
to avoid fractional shares) which bears the same proportion to the
number of Additional Shares to be purchased by the Underwriters at such
time as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof) bears to the aggregate
number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by the
Representatives that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after this Agreement has been entered
into and, if necessary, any post-effective amendment to the Registration
Statement has become effective as in the Representatives' judgment is advisable
and initially to offer the Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Brown & Wood llp, 555 California Street, San Francisco, California 94104, at
9:00 A.M.. New York City time, on August 14, 1998 (the "Closing Date"). The
place of closing for the Firm Shares and the Closing Date may be varied by
agreement between the Representatives and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Brown & Wood llp, at such time on such date (each, an "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from the Representatives to the Company of the Underwriters'
determination to purchase a number, specified in such notice, of Additional
Shares. The place of closing for any Additional Shares and any Option Closing
Date for such Shares may be varied by agreement between the Representatives and
the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as the Representatives shall request at least one full business day preceding
the Closing Date or any Option Closing Date, as the case may be. Such
certificates shall be made available to the Underwriters in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or such Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to the Underwriters on the
Closing Date or the relevant Option Closing Date, as the
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case may be, against payment to the Company of the purchase price therefor in
immediately available funds.
5. AGREEMENTS OF THE COMPANY AND THE OPERATING PARTNERSHIP. The Company
and the Operating Partnership agree, jointly and severally, with the several
Underwriters as follows:
A. To file the Prospectus Supplement in a form approved by the
Representatives with the Commission within the applicable time period
prescribed for filing by Rule 424 under the Act.
B. The Company will advise the Representatives promptly and,
if requested by the Representatives, will confirm such advice in
writing: (i) of any request by the Commission for amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information; (ii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or of the suspension of qualification of the Shares for offering or
sale in any jurisdiction or the initiation of any proceeding for such
purpose; and (iii) within the period of time referred to in the first
sentence of paragraph (E) below, of any change in the Company's
financial condition, business, properties, or results of operations, or
of the happening of any event, which makes any statement of a material
fact made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus
(as then amended or supplemented) in order to state a material fact
required by the Act to be stated therein or necessary in order to make
the statements therein not misleading, or of the necessity to amend or
supplement the Prospectus (as then amended or supplemented) to comply
with the Act or any other law. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
C. The Company will furnish to the Representatives, without
charge (i) one signed copy of the registration statement as originally
filed with the Commission and of each amendment thereto, including
financial statements and all exhibits to the registration statement,
which shall be delivered to counsel for the Underwriters, (ii) such
number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as the
Representatives may reasonably request, (iii) such number of copies of
the Incorporated Documents, without exhibits, as the Representatives
may reasonably request, and (iv) up to six copies of the exhibits to
the Incorporated Documents, as the Representatives may request.
D. Prior to the end of the period of time referred to in the
first sentence in subsection (E) below, the Company will inform the
Representatives of its intent to file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus or file
any document which upon filing becomes an Incorporated Document, and
the Company will furnish the Representatives with copies of any such
amendment, supplement or document a reasonable amount of time in
advance of
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filing; provided, the Company will not file any such amendment,
supplement or document to which the Representatives shall reasonably
object unless such amendment, supplement or document is required to be
filed by applicable law.
E. As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the
opinion of counsel for the Underwriters a prospectus is required by the
Act to be delivered in connection with sales by any Underwriter or
dealer, the Company will expeditiously deliver to each Underwriter and
each dealer, without charge, as many copies of the Prospectus (and of
the amendment or supplement thereto) as the Underwriters may reasonably
request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of
the Act and with the securities or Blue Sky and real estate syndication
laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold,
both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales of Shares by any Underwriter
or dealer. If during such period of time any event shall occur as a
result of which it is necessary in the judgment of the Company or in
the opinion of counsel for the Underwriters or counsel for the Company
to amend or supplement the Prospectus (as then amended or supplemented)
in order that the Prospectus will not include any untrue statement of a
material fact or omit to state a fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend
the Prospectus (or to file under the Exchange Act any document which,
upon filing, becomes an Incorporated Document) in order to comply with
the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (D) above, file with the
Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Underwriters and
dealers a reasonable number of copies thereof.
F. The Company will cooperate with the Representatives and
with counsel for the Underwriters in connection with the registration
or qualification of the Shares for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky or real
estate syndication laws of such jurisdictions as the Underwriters may
designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration
or qualification; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action which would subject it to
taxation or to service of process in suits, other than those arising
out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.
G. The Company will timely file such reports pursuant to the
Exchange Act as are necessary in order to make generally available to
its security holders as soon as practicable an earnings statement for
the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the Act.
H. During the period of three years hereafter, the Company
will
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furnish to the Underwriters as soon as available, a copy of each report
of the Company mailed to stockholders or filed with the Commission.
I. If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by notice
given by the Representatives terminating this Agreement pursuant to
Section 10 or Section 11 hereof) or if this Agreement shall be
terminated by the Representatives because of any failure or refusal on
the part of the Company or the Operating Partnership to comply with the
terms or fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees and expenses of counsel for the
Underwriters) incurred by them in connection herewith.
J. The Company will contribute the net proceeds from the sale
of the Shares to the Operating Partnership (directly or through one or
more of its wholly-owned subsidiaries) and the Operating Partnership
will apply such net proceeds substantially in accordance with the
description set forth under the caption "Use of Proceeds" in the
Prospectus Supplement. In exchange for the contribution of such net
proceeds, on the Closing Date, the Operating Partnership will issue
preferred units (the "Preferred Units") of the Operating Partnership to
the Company (or one or more of its wholly-owned subsidiaries). The
terms of such Preferred Units will be substantially equivalent to the
economic terms of the Firm Shares. In addition, if any Additional
Shares are purchased by the several Underwriters, on the relevant
Option Closing Date, the Operating Partnership will issue a number of
additional Preferred Units based upon the number of such Additional
Shares purchased by the Underwriters.
K. The Company will use its best efforts to meet the
requirements to maintain its qualification for the fiscal year ending
December 31, 1998 (and each fiscal quarter of such year) as a "real
estate investment trust" (a "REIT") under the Internal Revenue Code of
1986, as amended (the "Code").
L. The Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Preferred Stock to facilitate the sale or resale of the Shares in
violation of Regulation M under the Exchange Act.
M. The Company will use its reasonable efforts to (i)
accomplish the listing of the Shares on the New York Stock Exchange
within the 30 day period after the Closing Date and (ii) maintain the
listing of the Shares on the New York Stock Exchange or on any other
national securities exchange on which the Company's class A common
stock, par value $.01 per share (the "Class A Common Stock"), is
listed, for a period of three years after the Closing Date, unless
Merrill Lynch consents to the termination of such listing, which
consent shall not be unreasonably withheld.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OPERATING
PARTNERSHIP. The Company and the Operating Partnership represent and
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warrant, jointly and severally, to each Underwriter that:
A. Each prospectus or preliminary prospectus included as part
of the registration statement as originally filed, or as part of any
amendment or supplement thereto that is related to the Shares, or filed
pursuant to Rule 424 under the Act that is related to the Shares,
complied when so filed in all material respects with the provisions of
the Act, except that this representation and warranty does not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or
on behalf of any Underwriter through Merrill Lynch expressly for use
therein. The Commission has not issued any order preventing or
suspending the use of the Prospectus.
B. The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any
supplement or amendment thereto when filed with the Commission under
Rule 424(b) under the Act complied or will comply, as the case may be,
in all material respects with the provisions of the Act and did not or
will not, as the case may be, at any such times contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or
on behalf of any Underwriter through Merrill Lynch expressly for use
therein.
C. The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), complied in all material
respects with the requirements of the Exchange Act, and any further
Incorporated Documents so filed will, when they are filed, comply in
all material respects with the requirements of the Exchange Act; no
such document when it was filed (or, if an amendment with respect to
any such document was filed, when such amendment was filed), contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when
it is filed, will contain an untrue statement of a material fact or
will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
D. All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the
Shares have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive or similar rights; and the authorized and outstanding
capital stock of the Company conforms
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in all material respects to the description thereof in the Registration
Statement and the Prospectus. The Preferred Units, when issued to the
Company (or one or more of its wholly-owned subsidiaries), will have
been duly authorized and validly issued by the Operating Partnership.
Except as described in, or contemplated by, the Registration Statement
and the Prospectus, there are no outstanding options, convertible or
exchangeable securities, warrants or other rights calling for the
issuance of capital stock of the Company or equity, partnership,
membership or beneficial interests in the subsidiaries of the Company
identified in Schedule II hereto (individually, a "Subsidiary" and,
collectively, the "Subsidiaries").
E. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Maryland with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to conduct its
business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure so to
qualify does not have a material adverse effect on the financial
condition, business, properties, or results of operations of the
Company and its subsidiaries, taken as a whole.
F. Each Subsidiary is a corporation, limited partnership,
limited liability company or trust, as the case may be, duly organized
or formed and validly existing under the laws of its jurisdiction of
organization or formation, with corporate, limited partnership, limited
liability company or trust power and authority, as the case may be, to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus, and is duly
qualified to conduct its business in each jurisdiction or place where
the nature of its properties or the conduct of its business requires
such qualification, except where the failure so to qualify does not
have a material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
G. All of the shares of capital stock, partnership interests,
limited liability company membership interests or trust beneficial
interests, as the case may be, issued by the Subsidiaries or created by
agreements to which the Subsidiaries are parties, (i) have been duly
and validly issued or created (and in the case of capital stock are
fully paid and nonassessable) and (ii) are owned or held, directly or
indirectly through Subsidiaries, by the Company in the percentage
amounts set forth on Schedule II hereto free and clear of any security
interest, lien, adverse claim, equity or other encumbrance (each of the
foregoing, a "Lien"), except for such Liens as (i) are described in the
Registration Statement or the Prospectus, or (ii) are set forth in
Schedule II, or (iii) would not have a material adverse effect on the
financial condition, business, properties, or results of operations of
the Company and its subsidiaries, taken as a whole.
H. As of the date hereof, the Company indirectly owned, in the
aggregate, approximately an 88% 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
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Operating Partnership.
I. The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to the
Underwriters as provided herein. The Operating Partnership has the
power and authority to enter into this Agreement and to issue and
deliver the Preferred Units to the Company or one or more of its
wholly-owned subsidiaries as provided herein. This Agreement has been
duly authorized, executed and delivered by the Company and the
Operating Partnership.
J. There are no legal or governmental proceedings pending or,
to the knowledge of the Company and the Operating Partnership,
threatened, against the Company or any of the Subsidiaries, or to which
the Company or any of the Subsidiaries or any of their respective
properties is subject, that are required to be described in the
Registration Statement, or the Prospectus or the Incorporated Documents
but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to
be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required by the Act or the
Exchange Act.
K. Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or
certificates or agreements of limited partnership, limited liability
company or trust or other organizational documents, or (ii) in
violation of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of
any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of
their respective properties or (iii) in default in any material respect
in the performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or any of their respective properties is bound, except, with
respect to clauses (ii) and (iii) above, for any defaults which, singly
or in the aggregate, would not have a material adverse effect on the
financial condition, business, properties or results of operations of
the Company and its subsidiaries, taken as a whole.
L. None of the issuance and sale of the Shares by the Company,
the issuance of the Preferred Units by the Operating Partnership, the
execution, delivery or performance of this Agreement by the Company and
the Operating Partnership, or the consummation by the Company and the
Operating Partnership of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may be required for the registration of the Shares under the Act and
the Exchange Act and compliance with the securities or Blue Sky or real
estate syndication laws of various jurisdictions, to the extent
applicable, and the filing of the preliminary prospectus supplement and
the Prospectus Supplement with the Commission pursuant to Rule 424(b)
under the Act, all of which have been or will be effected in accordance
with this Agreement, and except for the filing of the Articles
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Supplementary (as hereinafter defined) with the SDAT (as hereinafter
defined), which filing with the SDAT will be made prior to the Closing
Date) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws or certificates or agreements of limited
partnership, limited liability company or trust or other organizational
documents of the Company or any of the Subsidiaries or (ii) conflicts
or will conflict with or constitutes or will constitute a breach of, or
a default under, any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or any of their respective properties may be bound, or violates
or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the
Subsidiaries or any of their respective properties, or will result in
the creation or imposition of any Lien upon any property or assets of
the Company or any of the Subsidiaries pursuant to the terms of any
agreement or instrument to which any of them is a party or by which any
of them may be bound or to which any of the property or assets of any
of them is subject.
M. Ernst & Young LLP, Arthur Andersen LLP, and Deloitte &
Touche LLP who have certified the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are (or were)
independent public accountants with respect to the entities covered by
their respective audit reports included or incorporated by reference in
the Registration Statement and the Prospectus, as required by the Act.
N. The financial statements, together with related schedules
and notes, of (A) the Company included or incorporated by reference in
the Registration Statement or the Prospectus (or any amendment or
supplement thereto), (B) the other entities whose financial statements
are included or incorporated by reference in the Registration Statement
or the Prospectus (or any amendment or supplement thereto) and (C) if
applicable, any properties whose financial statements are included or
incorporated by reference in the Registration Statement or the
Prospectus (or 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, (ii) the
financial position, results of operations and changes in financial
position (on a consolidated or combined basis, if applicable), or the
combined revenues and certain expenses, as the case may be, of such
other entities, and (iii) the combined revenues and certain expenses of
any such properties, as the case may be, on the basis stated or
incorporated by reference in the Registration Statement or the
Prospectus, as the case may be, at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein, and the other financial
and statistical information and data included or incorporated by
reference in the Registration Statement or 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, as the case may be, whose financial statements are
included or incorporated by reference in the Registration Statement or
the Prospectus. The selected historical financial
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data of the Company (and its predecessors) set forth under the captions
"Summary Historical Financial Information of AIMCO" and "Summary Pro
Forma Financial and Operating Information of AIMCO" in the Prospectus
Supplement present fairly, on the basis stated in the Prospectus
Supplement, the historical financial information of the Company (and
its predecessors) included therein. The selected historical and pro
forma financial data of any other entity or property included or
incorporated by reference in the Registration Statement or the
Prospectus present fairly, on the basis stated or incorporated by
reference in the Registration Statement or the Prospectus, as the case
may be, the historical or pro forma, as the case may be, financial
information of such entity or property, as the case may be. The
unaudited pro forma financial statements included, or incorporated by
reference, in the Prospectus comply in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of that data. The selected pro forma
financial data of the Company set forth under the caption "Summary Pro
Forma Financial and Operating Information of AIMCO" and "Capitalization
of AIMCO" in the Prospectus Supplement present fairly, on the basis
stated in the Prospectus Supplement, the pro forma financial
information of the Company included therein and have been compiled on a
basis consistent with that of the unaudited pro forma financial
statements included, or incorporated by reference, in the Prospectus.
O. Except as disclosed in or contemplated by the Registration
Statement and the Prospectus, subsequent to the respective dates as of
which such information is given in the Registration Statement and the
Prospectus, neither the Company nor any of the Subsidiaries has
incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is
material to the Company and its subsidiaries, taken as a whole, and
there has not been any change in (or repurchase or declaration of
dividends or distributions on) the capital stock, or material increase
in the short-term debt or long-term debt, of the Company or any of its
subsidiaries or any material adverse change, or any development
involving or which may reasonably be expected to involve, a prospective
material adverse change, in the financial condition, business,
properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
P. The Company and each Subsidiary (i) is in compliance with
all applicable federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except,
with respect to clauses (i), (ii) and (iii) above, where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals are
otherwise disclosed in or contemplated by the Prospectus or would not,
singly or in the aggregate, have a material adverse effect on the
financial condition, business, properties, or results of operations of
the Company and its subsidiaries, taken as a whole.
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Q. There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties or in connection with off-site disposal of
hazardous substances) that would, singly or in the aggregate, have a
material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
R. (i) The Company and the Subsidiaries have good and
marketable title in fee simple to all parcels of real property (except
for those easement parcels that are appurtenant to the real property
owned in fee simple by the Company and the Subsidiaries) and good and
marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, taken as
a whole, in each case free and clear of all Liens, except as otherwise
described in the Prospectus or such as do not, singly or in the
aggregate, materially affect the value of such real and personal
property taken as a whole and do not materially interfere with the use
made and proposed to be made of such real and personal property by the
Company and the Subsidiaries; (ii) any real property and buildings held
under lease by the Company and the Subsidiaries are held under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and the Subsidiaries, in
each case except as described in the Prospectus, (iii) the
construction, management and operation of the buildings, fixtures and
other improvements located on the Company's "Owned Properties" (as such
term is defined in the Prospectus Supplement), 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 subsidiaries taken as a whole, (iv) neither the
Company nor any of the Subsidiaries has received notice of any proposed
special assessment or any proposed change in any property tax, zoning
or land use laws affecting all or any portion of the Owned Properties,
except where any such assessment or change would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole, (v) there do not exist any violations
of any declaration of covenants, conditions and restrictions with
respect to any of the Owned Properties, nor is there any existing state
of facts or circumstances or condition or event which could, with the
giving of notice or passage of time, or both, constitute such a
violation, except where any such violation would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and (vi) the improvements comprising
any portion of the Owned Properties (the "Improvements") are free of
any and all material physical, mechanical, structural, design and
construction defects and the mechanical, electrical and utility systems
servicing the Improvements (including, without limitation, all water,
electric, sewer, plumbing, heating, ventilation, gas and air
conditioning) are in good condition and proper working order and are
free of material defects, except for any such defects or failures to be
in good condition or proper working order which do not, singly or in
the aggregate, have a material adverse effect on the value of the Owned
Properties,
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taken as a whole.
S. The direct and indirect subsidiaries of the Company have
obtained Extended Coverage Owner's Policies of Title Insurance, to the
extent available in the pertinent jurisdiction (other than in
connection with real property located in Texas, with respect to which
the Company and its subsidiaries have obtained Texas Form T-1 Policies
of Title Insurance) from title insurers of recognized financial
responsibility on all of the Owned Properties and such policies are in
full force and effect, except where the failure to obtain such title
insurance would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
T. The Company and the Subsidiaries self insure or are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are customary in the businesses in
which they are engaged; and neither the Company nor any of the
Subsidiaries has any reason to believe that it will not be able to
renew that coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not materially and adversely affect
the financial condition, business, properties or results of operations
of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
U. The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection
with the offering and sale of the Shares other than the Registration
Statement, the Prospectus and the preliminary prospectus.
V. (i) The Company and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own its
respective properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be
set forth in the Prospectus, (ii) the Company and each of the
Subsidiaries has fulfilled and performed all its material obligations
with respect to such Permits and to the Company's knowledge no event
has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the
Prospectus and (iii) except as described in the Prospectus, none of
such Permits contains any restriction that is materially burdensome to
the Company or any of the Subsidiaries, except, with respect to clauses
(i), (ii) and (iii) above, for any such failure to obtain Permits or
failure to fulfill or perform obligations, or the occurrence of events,
or such restriction that would, singly or in the aggregate, not have a
material adverse effect on the financial condition, business,
properties, or results of operations of the Company and its
subsidiaries, taken as a whole.
W. The Company and each of the Subsidiaries have filed all tax
returns required to be filed and have paid all taxes shown thereon as
due and there is no tax deficiency that has been or, to the knowledge
of the Company, is threatened to be
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asserted that could reasonably be expected to have a material adverse
effect on the financial condition, business, properties, or results of
operations of the Company and its subsidiaries taken as a whole.
X. No holder of any security of the Company or the Operating
Partnership has any right to require registration of shares of capital
stock or any other security of the Company or limited partnership units
or any other security of the Operating Partnership because of the
filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.
Y. The Company and the Subsidiaries are not now, and after the
sale of the Shares to be sold hereunder and application of the net
proceeds from such sale as described in the Prospectus Supplement under
the caption "Use of Proceeds," none of them will be, an "investment
company" or an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended.
Z. The Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business in Cuba.
AA. The Company has, since its initial taxable year ended
December 31, 1994, been organized and qualified as a REIT under
Sections 856 through 860 of the Code, has elected to be taxed as a REIT
under the Code for the taxable year ended December 31, 1994, currently
expects to continue to be organized and to operate in a manner so as to
qualify as a REIT in the taxable year ending December 31, 1998 and
succeeding taxable years and, after consummation of the Insignia Merger
(as defined in the Prospectus), will take such action as may be
necessary to qualify as a REIT for the taxable year ending December 31,
1998.
AB. Except for this Agreement, there are no contracts,
agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter
for a brokerage commission, finder's fee or other like payment with
respect to the consummation of the transactions contemplated by this
Agreement.
AC. The Company has applied to have the Shares listed on the
New York Stock Exchange.
AD. In connection with the offering of the Shares, neither the
Company nor any of its subsidiaries has, directly or indirectly, bid
for, purchased or attempted to influence any person to bid for or
purchase securities of the Company in violation of Regulation M under
the Exchange Act.
7. INDEMNIFICATION AND CONTRIBUTION.
A. The Company and the Operating Partnership agree, jointly
and severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the
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Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
the Prospectus, any preliminary prospectus, or any amendment or
supplement to any of the foregoing, or arising out of or based upon any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity with
the information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter through Merrill Lynch
expressly for use in connection therewith. The foregoing indemnity
agreement shall be in addition to any liability which the Company or
the Operating Partnership may otherwise have.
B. If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of
which indemnity may be sought against the Company or the Operating
Partnership, such Underwriter or such controlling person shall promptly
notify the Company and the Operating Partnership and the Company and
the Operating Partnership shall assume the defense thereof, including
the employment of counsel and payment of all reasonable fees and
expenses. Such Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and
expenses of such separate counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Company and the
Operating Partnership have agreed in writing to pay such reasonable
fees and expenses, (ii) the Company and the Operating Partnership have
failed to assume the defense and employ counsel, or (iii) the named
parties to any such action, suit or proceeding (including any impleaded
parties) include such Underwriter or such controlling person and the
Company or the Operating Partnership, and such Underwriter or such
controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company or the
Operating Partnership, as the case may be, by the same counsel would be
inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them
(in which case the Company and the Operating Partnership shall not have
the right to assume the defense of such action, suit or proceeding on
behalf of such Underwriter or such controlling person). It is
understood, however, that the Company and the Operating Partnership
shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling
persons, which firm shall be designated in writing by Merrill Lynch,
and that all such reasonable fees and expenses shall be reimbursed as
they are incurred. Neither the Company nor the Operating Partnership
shall be liable for any settlement of any such action, suit or
proceeding effected without its
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written consent, but if settled with such written consent, or if there
be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company and the Operating Partnership agree, jointly
and severally, to indemnify and hold harmless any Underwriter, to the
extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense
by reason of such settlement or judgment.
C. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Operating Partnership,
the Company's directors, the Company's officers who signed the
Registration Statement, and any person who controls the Company or the
Operating Partnership within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Operating Partnership to each
Underwriter, but only with respect to untrue statements or omissions or
alleged untrue statements or omissions made in the Registration
Statement, the Prospectus, the preliminary prospectus or any amendment
or supplement to any of the foregoing in reliance upon and in
conformity with information relating to such Underwriter furnished in
writing to the Company by or on behalf of such Underwriter through
Merrill Lynch expressly for use in the Registration Statement, the
Prospectus, the preliminary prospectus or any amendment or supplement
to any of the foregoing. If any action, suit or proceeding shall be
brought against the Company and the Operating Partnership, any of the
Company's directors, any such officer, or any such controlling person
based on the Registration Statement, the Prospectus, any preliminary
prospectus or any amendment or supplement to any of the foregoing and
in respect of which indemnity may be sought against any Underwriter
pursuant to this paragraph (C), such Underwriter shall have the rights
and duties given to the Company and the Operating Partnership by
paragraph (B) above (except that if the Company and the Operating
Partnership shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein
and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company
and the Operating Partnership, the Company's directors, any such
officer, and any such controlling person shall have the rights and
duties given to the Underwriters by paragraph (B) above. The foregoing
indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
D. If the indemnification provided for in this Section 7 is
applicable in accordance with its terms but is determined to be legally
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
expenses, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Operating
Partnership on the one hand and the Underwriters on the other hand from
the offering of the Shares, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company and the
Operating Partnership on the one hand and the Underwriters on the other
in connection with the statements or omissions
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that resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Operating Partnership on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Operating
Partnership bear to the total underwriting discount received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company and the Operating
Partnership on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company or the Operating Partnership on the one hand or
by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
E. The Company, the Operating Partnership and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by a pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in paragraph (D) above. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in paragraph (D) above
shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating any claim or defending any such
action, suit or proceeding. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 7 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule I hereto (or
such numbers of Firm Shares increased as set forth in Section 10
hereof) and not joint.
F. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless (i) such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
action, suit or proceeding and (ii) such settlement does not include a
statement as to, or an omission of, fault, culpability or a failure to
act by or on behalf of such indemnified party.
G. Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall
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be paid by the indemnifying party to the indemnified party as such
losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company and the Operating
Partnership set forth in this Agreement shall remain operative and in
full force and effect, regardless of (i) any investigation made by or
on behalf of any Underwriter or any person controlling any Underwriter,
the Company, the Operating Partnership, the Company's directors or
officers, or any person controlling the Company or the Operating
Partnership, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or to the
Company, the Operating Partnership, the Company's directors, the
Company's officers who signed the Registration Statement or any person
controlling the Company or the Operating Partnership, shall be entitled
to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
A. If, at the time this Agreement is executed and delivered,
it is necessary for a post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares
may commence, such post-effective amendment to the Registration
Statement shall have become effective not later than 5:30 P.M., New
York City time, on the date hereof, or at such later date and time as
shall be consented to in writing by the Representatives, and all
filings, if any, required by Rules 424 and 430A under the Act shall
have been timely made; no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, threatened by the Commission, and any
request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the Representatives' satisfaction.
B. Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the financial condition, business,
properties or results of operations of the Company and its
subsidiaries, taken as a whole, not contemplated by the Prospectus
which, in the opinion of the Representatives, would materially
adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Company or any of its
subsidiaries which makes any statement made in the Prospectus untrue or
which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to
or change in the Prospectus in order to state a material fact required
by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development
would, in the opinion of the Representatives, materially adversely
affect the market for the Shares,
C. The Representatives shall have received on the Closing Date
(i)
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an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, dated the
Closing Date and addressed to the Underwriters, to the effect set forth
in Exhibit A hereto, provided, that the opinions set forth in
paragraphs 8 and 9 thereof may be set forth in a separate opinion of
such counsel, (ii) an opinion of Piper & Marbury L.L.P., dated the
Closing Date and addressed to the Underwriters, to the effect set forth
in Exhibit B hereto, and (iii) an opinion of the General Counsel of the
Company, dated the Closing Date and addressed to the Underwriters, to
the effect set forth in Exhibit C. In addition, the Representatives
shall also have been furnished with a copy of the opinion dated October
18, 1995 and reliance letter dated the Closing Date of Florida counsel
and a copy of the opinions of Altheimer & Gray dated May 8, 1998 (or
any subsequent opinions issued in lieu of such opinions dated May 8,
1998) and any related reliance letters delivered to Skadden, Arps,
Slate, Meagher & Flom LLP, all delivered in connection with the opinion
referred to in clause (i) of this paragraph.
D. The Underwriters shall have received on the Closing Date an
opinion of Brown & Wood LLP, counsel for the Underwriters, dated the
Closing Date and addressed to the Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which
opinion shall be satisfactory in all respects to the Representatives,
and such counsel shall have been provided by the Company with such
documents and information as they may reasonably request to enable them
to pass on such matters. In rendering such opinion, such counsel may
rely, as to matters of Maryland law, on the opinion of Piper & Marbury
L.L.P.
E. The Representatives shall have received letters addressed
to the Underwriters, dated the date hereof and the Closing Date, from
Ernst & Young LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Representatives.
F. (i) There shall not have been any material change in the
capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary
course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus; (ii) there shall not have
been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as may otherwise
be stated in the Registration Statement and Prospectus, any material
adverse change in the financial condition, business, properties, or
results of operations of the Company and its subsidiaries, taken as a
whole; (iii) the Company and its subsidiaries shall not have incurred
any liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business), that are material to the Company and
its subsidiaries, taken as a whole, other than those reflected in or
contemplated by the Registration Statement or the Prospectus; and (iv)
all the representations and warranties of the Company and the Operating
Partnership contained in this Agreement shall be true and correct on
and as of the date hereof and on and as of the Closing Date as if made
on and as of the Closing Date, and the Representatives shall have
received a certificate, dated the Closing Date and signed by the chief
executive officer and the chief financial officer of the Company (or
such other officers as are acceptable to the Representatives) to the
effect set forth in this Section 8(F)
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and in Section 8(G) hereof.
G. Each of the Company and the Operating Partnership shall not
have failed at or prior to the Closing Date to have performed or
complied with any of its respective agreements herein contained and
required to be performed or complied with by it hereunder at or prior
to the Closing Date.
H. The Company shall have duly filed the articles
supplementary (the "Articles Supplementary") designating the Preferred
Stock with the State Department of Assessments and Taxation of Maryland
(the "SDAT").
I. At the Closing Date, the Shares shall have a rating of at
least "BB" by Duff & Phelps Credit Rating Co. and "ba3" by Moody's
Investors Service, Inc., and the Company shall have delivered to the
Representatives a letter, dated as of such date, from each such rating
organization, or other evidence satisfactory to the Representatives,
confirming that the Shares have such ratings. Since the date hereof,
there shall not have occurred a downgrading in the rating assigned to
the Shares or any of the Company's other securities by any such rating
organization, and no such rating organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of the Shares or any of the Company's
other securities.
J. The Company shall have furnished or caused to be furnished
to the Representatives such further certificates and documents as the
Representatives shall have reasonably requested.
K. In connection with the Offering, the Company has not,
directly or indirectly, bid for, purchased or attempted to influence
any person to bid for or purchase securities of the Company in
violation of Regulation M under the Exchange Act.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Representatives and to counsel for the
Underwriters.
Any certificate or document signed by any officer of the Company or
authorized representative of the Operating Partnership or its general partner
and delivered to the Representatives or to counsel for the Underwriters on the
Closing Date or any Option Closing Date, shall be deemed a joint and several
representation and warranty by the Company and the Operating Partnership to each
Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the satisfaction on and as of the relevant
Option Closing Date of the conditions set forth in this Section 8, except that,
if such Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (C) through (F) shall be dated
the Option Closing Date in question and the opinions called for by paragraphs
(C) and (D) shall be revised to reflect the sale of Additional Shares. Without
limitation to the foregoing, the several
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obligations of the Underwriters to purchase Additional Shares hereunder on any
Option Closing Date are subject to the conditions set forth in paragraph (I)
above.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing (or reproduction) and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prospectus, the preliminary prospectus,
and each amendment or supplement to any of them, (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prospectus, the preliminary prospectus, the Incorporated Documents, and all
amendments or supplements to any of them, as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the original issuance and sale of
the Shares; (iv) the printing (or reproduction) and delivery of this Agreement,
the Blue Sky Memorandum (if any) and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the listing of the Shares on the New York Stock Exchange; (vi) the registration
or qualification of the Shares for offer and sale under the securities or Blue
Sky or real estate syndication laws of the several states as provided in Section
5(G) hereof (including the reasonable fees, expenses and disbursements of
counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the Blue Sky Memorandum and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other reasonable expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Shares; and (ix)
the reasonable fees and expenses of the Company's accountants and the reasonable
fees and expenses of counsel (including local and special counsel) for the
Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective;
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective
before the offering of the Shares may commence, when notification of the
effectiveness of such post-effective amendment to the Registration Statement has
been released by the Commission. Until such time as this Agreement shall have
become effective, it may be terminated by the Company, by notifying the
Representatives, or by the Representatives, by notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date
or on an Option Closing Date, and the aggregate number of Shares which such
defaulting Underwriter or Underwriters are obligated but fail or refuse to
purchase is not more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on such date, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any one or more of
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the Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date or on an Option Closing Date and the
aggregate number of Shares with respect to which such default occurs is more
than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on such date and arrangements satisfactory to the
Underwriters and the Company for the purchase of such Shares by one or more
non-defaulting Underwriters or other party or parties approved by the
Underwriters and the Company are not made within 36 hours after such default,
this Agreement or, with respect to any Option Closing Date which occurs after
the Closing Date, the obligations of the several Underwriters to purchase and of
the Company to sell the Additional Shares to be purchased and sold on such
Option Closing Date, will terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case which does not
result in termination of this Agreement or, in the case of any Option Closing
Date which is after the Closing Date, which does not result in a termination of
the obligations of the several Underwriters to purchase and of the Company to
sell the relevant Additional Shares, as the case may be, either the
Representatives or the Company shall have the right to postpone the Closing Date
or the relevant Option Closing Date, as the case may be, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with the Representatives' approval and the approval of
the Company, purchases Shares which a defaulting Underwriter is obligated, but
fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the Representatives' absolute discretion, without liability on
the part of any Underwriter to the Company by notice to the Company, if prior to
the Closing Date or any Option Closing Date (if different from the Closing Date
and then only as to the Additional Shares), as the case may be, (i) trading in
any securities of the Company shall have been suspended or materially limited,
or trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York shall have been declared by either federal or state authorities, or
(iii) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in the Representatives' judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus Supplement or to enforce contracts for the resale of the Shares by
the Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
Upon any such termination, the obligations of the Company and the Operating
Partnership to the Underwriters hereunder shall also terminate, except for the
obligations set forth in Sections 7 and 9 hereof.
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12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the third sentence of the third paragraph and the last paragraph on the cover
page of the Prospectus Supplement, the stabilization legend on page S-2 of the
Prospectus Supplement, and the statements in the second, fifth (fourth sentence
only), sixth, seventh, eighth and tenth (solely insofar as relates to the
Underwriters and the Representatives) paragraphs under the caption
"Underwriting" in the Prospectus Supplement, constitute the only information
furnished in writing by or on behalf of the Underwriters, through Merrill Lynch,
as such information is referred to in Sections 6(A), 6(B) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or the Operating
Partnership, at the office of the Company at 1873 South Bellaire Street, 17th
Floor, Denver, Colorado 80222, Attention: Mr. Terry Considine, Chairman of the
Board of Directors; or (ii) if to the Underwriters, care of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, 10877 Wilshire Boulevard, Suite 1900, Los
Angeles, California 90024, Attention: Paul Meurer.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, the Operating Partnership, the Company's
directors, the Company's officers who signed the Registration Statement, and the
other controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. This Agreement
may be signed in various counterparts which together constitute one and the same
instrument. If signed in counterparts, this Agreement shall not become effective
unless at least one counterpart hereof shall have been executed and delivered on
behalf of each party hereto. Please confirm that the foregoing correctly sets
forth the agreement among the Company, the Operating Partnership and the several
Underwriters.
[SIGNATURES ON FOLLOWING PAGE]
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Very truly yours,
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
Name: Peter Kompaniez
Title: President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, Inc., its General Partner
By:
Name: Peter Kompaniez
Title: Vice President
Confirmed as of the date first above mentioned.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
As Representatives of the Several Underwriters
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
Form themselves and as representatives of the
Underwriters named in Schedule I hereto.