UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 9, 2014
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Maryland | 1-13232 | 84-1259577 | ||
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
AIMCO PROPERTIES, L.P.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 0-24497 | 84-1275621 | ||
(State or Other Jurisdiction
of Incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
4582 SOUTH ULSTER STREET
SUITE 1100, DENVER, CO |
80237 | |
(Address of Principal Executive Offices) | (ZIP Code) |
Registrants Telephone Number, Including Area Code: (303) 757-8101
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement |
Underwriting Agreement
On May 9, 2014, Apartment Investment and Management Company (the Company) and AIMCO Properties, L.P., the operating partnership which holds all of the Companys assets and manages the daily operations of the Companys business and assets (the Operating Partnership), entered into an underwriting agreement (the Underwriting Agreement) with Wells Fargo Securities, LLC, relating to the issuance and sale pursuant to an underwritten public offering (the Offering) of 5,000,000 shares of the Companys Class A Cumulative Preferred Stock, par value $.01 per share (the Class A Preferred Stock).
The Underwriting Agreement contains customary representations and warranties, covenants, indemnification provisions and closing conditions. The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Company estimates that its net proceeds from the Offering will be approximately $120.9 million. The Company intends to use a portion of the net proceeds from the Offering to repay indebtedness under its revolving credit facility, and it intends to use the remaining net proceeds for general corporate purposes, which may include repayment of non-recourse property debt. The Offering is expected to close on May 16, 2014, subject to customary closing conditions.
The underwriter or its affiliates from time to time perform investment banking and other financial services for us and our affiliates for which they receive advisory or transaction fees, as applicable, plus out-of-pocket expenses, of the nature and in amounts customary in the industry for these financial services. In the ordinary course of their various business activities, the underwriter and its respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments.
Amendment to Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P.
On May 13, 2014, AIMCO-GP, Inc., a wholly owned subsidiary of the Company and the general partner of the Operating Partnership, entered into the Seventh Amendment (the Seventh Amendment) to the Fourth Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of July 29, 1994 and amended and restated as of February 28, 2007, to permit the issuance of Class A Partnership Preferred Units of the Operating Partnership, which have substantially identical economic terms as the Class A Preferred Stock.
The foregoing description of the Seventh Amendment is qualified in its entirety by reference to the Seventh Amendment, a copy of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.03 | Material Modification to Rights of Security Holders. |
On May 13, 2014, the Company filed Articles Supplementary (the Articles Supplementary) with the Department of Assessments and Taxation of the State of Maryland relating to the Class A Preferred Stock, which Articles Supplementary were effective on filing. The Articles Supplementary classify 5,000,000 authorized but unissued shares of the Companys Class A Common Stock, par value $.01 per share (Common Stock) into 5,000,000 shares of Class A Preferred Stock. The Class A Preferred Stock entitles the holders thereof to cumulative cash dividends payable quarterly in an amount per share equal to $0.42969 per quarter. The liquidation preference for the Class A Preferred Stock is $25.00 per share, plus an amount equal to accumulated, accrued and unpaid dividends, whether or not earned or declared.
The Class A Preferred Stock is not redeemable prior to May 16, 2019, except (i) in limited circumstances relating to the ownership limitation necessary to preserve the Companys qualification as a real estate investment trust for federal income tax purposes, and (ii) as described below upon a Change of Control (as defined in the Articles Supplementary). On or after May 16, 2019, the Company may, at its option, redeem the Class A Preferred Stock at any time in whole, or from time to time in part, for cash at a price per share equal to the liquidation preference of $25.00, plus any accumulated, accrued and unpaid dividends, to, but excluding, the date of redemption. In addition, upon the occurrence of a Change of Control, the Company may, at its option, redeem the Class A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for cash at a price of $25.00 per share plus, subject to exceptions, any accumulated, accrued and unpaid dividends to, but excluding, the date of redemption. If the Company exercises any of its redemption rights relating to the Class A Preferred Stock, the holders of such redeemed shares will not have the conversion rights described below. The shares of Class A Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Company redeems or otherwise repurchases them or they become convertible and are converted in connection with a Change of Control.
Upon the occurrence of a Change of Control, each holder of Class A Preferred Stock will have the right (unless the Company has already provided notice of its election to redeem some or all of the shares of Class A Preferred Stock held by such holder, in which case such holder will have the right only with respect to shares of Class A Preferred Stock that are not called for redemption) to convert some or all of the Class A Preferred Stock held by such holder into a number of shares of Common Stock determined by a formula, in each case, on the terms and subject to the conditions described in the Articles Supplementary, including provisions for the receipt, under specified circumstances, of alternative consideration.
The shares of Class A Preferred Stock are subject to certain restrictions on ownership and transfer designed to preserve the Companys qualification as a real estate investment trust for federal income tax purposes.
The Class A Preferred Stock ranks prior to the Class A Common Stock of the Company, and on the same level as the Companys remaining outstanding shares of preferred stock, with respect to the payment of dividends and distributions upon liquidation, dissolution or winding up. Holders of shares of the Class A Preferred Stock generally do not have any voting rights. If, however, the Company has not paid dividends on the Class A Preferred Stock or any other series of preferred stock for six or more quarterly periods, whether or not consecutive, holders of the Class A Preferred Stock, together with holders of other classes of preferred stock that are entitled to similar voting rights, will be entitled to elect two additional directors to the Companys board of directors until all unpaid dividends on the Class A Preferred Stock and such other series of preferred stock have been paid or declared and set apart for payment and dividends thereon for the current quarterly period have been declared and paid or declared and set apart for payment. Certain material adverse changes to the terms of the Class A Preferred Stock cannot be made without the affirmative vote of at least 66-2/3% of the outstanding shares of Class A Preferred Stock.
The foregoing description of the Articles Supplementary is qualified in its entirety by reference to the Articles Supplementary, which is incorporated by reference as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
The disclosure provided under Item 3.03 above is incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits |
Exhibit
|
Description |
|
1.1 | Underwriting Agreement, dated May 9, 2014, among Apartment Investment and Management Company, AIMCO Properties, L.P. and Wells Fargo Securities, LLC | |
3.1 | Articles Supplementary relating to the Class A Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registrants registration statement on Form 8-A filed on May 14, 2014) | |
5.1 | Opinion of DLA Piper LLP (US) | |
8.1 | Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP | |
10.1 | Seventh Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 13, 2014 | |
12.1 | Statement of Computation of Ratio of Earnings to Fixed Charges | |
23.1 | Consent of DLA Piper LLP (US) (included in Exhibit 5.1) | |
23.2 | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY |
||||||||
Date: May 15, 2014 | By: |
/s/ Ernest M. Freedman |
||||||
Name: | Ernest M. Freedman | |||||||
Title: |
Executive Vice President and
Chief Financial Officer |
|||||||
Date: May 15, 2014 | AIMCO PROPERTIES, L.P. | |||||||
By: | AIMCO-GP, Inc., | |||||||
Its General Partner | ||||||||
By: |
/s/ Ernest M. Freedman |
|||||||
Name: | Ernest M. Freedman | |||||||
Title: |
Executive Vice President and
Chief Financial Officer |
EXHIBIT INDEX
Exhibit
|
Description |
|
1.1 | Underwriting Agreement, dated May 9, 2014, among Apartment Investment and Management Company, AIMCO Properties, L.P. and Wells Fargo Securities, LLC | |
3.1 | Articles Supplementary relating to the Class A Cumulative Preferred Stock (incorporated by reference to Exhibit 3.3 to the Registrants registration statement on Form 8-A filed on May 14, 2014) | |
5.1 | Opinion of DLA Piper LLP (US) | |
8.1 | Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP | |
10.1 | Seventh Amendment to the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of May 13, 2014 | |
12.1 | Statement of Computation of Ratio of Earnings to Fixed Charges | |
23.1 | Consent of DLA Piper LLP (US) (included in Exhibit 5.1) | |
23.2 | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1) |
Exhibit 1.1
EXECUTION VERSION
Apartment Investment and Management Company
5,000,000 Shares
of Class A Cumulative Preferred Stock
($.01 par value)
Underwriting Agreement
New York, New York
May 9, 2014
Wells Fargo Securities, LLC
550 South Tryon Street, 5th Floor
Charlotte, North Carolina 28202-4200
Ladies and Gentlemen:
Apartment Investment and Management Company, a corporation organized under the laws of Maryland (the Company), and AIMCO Properties, L.P., a Delaware limited partnership (the Operating Partnership), of which the Companys wholly-owned subsidiary, AIMCO-GP, Inc., a Delaware corporation (the OP General Partner), is the sole general partner, confirm their agreement with Wells Fargo Securities, LLC (the Underwriter), with respect to the issue and sale by the Company of an aggregate of 5,000,000 shares of Class A Cumulative Preferred Stock, $.01 par value per share (the Class A Preferred Stock), of the Company (said shares to be issued and sold by the Company being hereinafter called the Securities). Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. Certain terms used herein are defined in Section 20 hereof.
1. Representations and Warranties . The Company represents and warrants to, and agrees with, the Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission an automatic shelf registration statement, as defined in Rule 405 (the file number of which is set forth in Schedule I hereto) on Form S-3, including a related Base Prospectus, for registration under the Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution Time, became effective upon filing. The Company may have filed with the Commission, as part of an amendment to the
Registration Statement or pursuant to Rule 424(b), one or more preliminary prospectus supplements relating to the Securities, each of which has previously been furnished to you. The Company will file with the Commission a final prospectus supplement relating to the Securities in accordance with Rule 424(b). As filed, such final prospectus supplement shall contain all information required by the Act and the rules thereunder, and, except to the extent the Underwriter shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x). The initial Effective Date of the Registration Statement was not earlier than the date three years before the Execution Time.
(b) On each Effective Date, the Registration Statement did, and when the Final Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein), the Final Prospectus (and any supplement thereto) will comply in all material respects with the applicable requirements of the Act and the Exchange Act and the respective rules thereunder; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus (together with any supplement thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of the Underwriter specifically for inclusion in the Registration Statement or the Final Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by or on behalf of the Underwriter consists of the information described as such in Section 8 hereof.
(c) (i) The Disclosure Package and the price to the Underwriter, the number of Securities to be included on the cover page of the Final Prospectus, when taken together as a whole and (ii) each electronic road show when taken together as a whole with the Disclosure Package and the price to the Underwriter, the number of Securities to be included on the cover page of the Final Prospectus, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of the Underwriter consists of the information described as such in Section 8 hereof.
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(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Securities in reliance on the exemption in Rule 163 and (iv) at the Execution Time (with such date being used as the determination date for purposes of this clause (iv)), the Company was or is (as the case may be) a well-known seasoned issuer as defined in Rule 405. The Company agrees to pay the fees required by the Commission relating to the Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Securities and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus does not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference and any prospectus supplement deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Underwriter specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of the Underwriter consists of the information described as such in Section 8 hereof.
(g) The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied, comply and will comply in all material respects with the requirements of the Exchange Act and, when read together with the other information in the Registration Statement, the Disclosure Package or the Final Prospectus, (a) at the time the Registration Statement became effective, (b) on the date hereof, (c) at the Applicable Time and (d) at the Closing Time, did not and will not include 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, in the light of the circumstances under which they were made, not misleading.
(h) Except as otherwise disclosed in the Registration Statement, the Disclosure Package and the Final Prospectus, subsequent to the respective dates as of which information is given in the Registration Statement, the Disclosure Package or the Prospectus: (i) there has been no material adverse change in the condition, financial or
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otherwise, or in the properties, earnings, business or prospects of the Company, the Operating Partnership and the Subsidiaries (as defined below) considered as one enterprise, whether or not arising in the ordinary course of business (a Material Adverse Effect), (ii) there have been no transactions entered into by the Company, the Operating Partnership or any Subsidiary, other than those in the ordinary course of business, which are material with respect to the Company, the Operating Partnership and the Subsidiaries considered as one enterprise and (iii) except for regular quarterly dividends on the Companys outstanding Class A Common Stock, $.01 par value per share (the Common Stock), in amounts per share that are consistent with past practice, regular quarterly dividends on the Companys outstanding preferred stock and regular quarterly distributions on the Operating Partnerships partnership common units, partnership preferred units and high performance partnership units, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital shares or any distribution by the Operating Partnership with respect to any of its limited partnership interests.
(i) The Company has been duly incorporated and is validly existing as a corporation and is in good standing under the laws of the State of Maryland, with full corporate power and authority to own and lease its properties and to conduct its business as described in the Registration Statement, the Disclosure Package and the Final Prospectus and to enter into and perform its obligations under this Agreement. The Company is duly qualified or registered as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification or registration is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(j) The Operating Partnership has been duly formed and is validly existing as a limited partnership and is in good standing under the laws of the State of Delaware and has the partnership power and partnership authority under the Operating Partnership Agreement (as defined below) and the Delaware Revised Uniform Limited Partnership Act to own, lease and operate its properties and to conduct the business in which it is engaged as described in the Registration Statement, the Disclosure Package and the Final Prospectus and to enter into and perform its obligations hereunder. The Operating Partnership is duly qualified or registered as a foreign partnership to transact business and is in good standing in each jurisdiction in which such qualification or registration is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or register would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The OP General Partner is the sole general partner of the Operating Partnership and holds such number and/or percentage of partnership common units, partnership preferred units and high performance partnership units of the Operating Partnership as disclosed in the Registration Statement and the Prospectus as of the dates set forth therein, free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances. The Fourth Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of July 29, 1994 and restated as of February 28, 2007,
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as amended by the First Amendment thereto, dated as of December 31, 2007, the Second Amendment thereto, dated as of July 30, 2009, the Third Amendment thereto, dated as of September 2, 2010, the Fourth Amendment thereto, dated as of July 26, 2011, the Fifth Amendment thereto, dated as of August 24, 2011 and the Sixth Amendment thereto, dated as of December 31, 2011 (collectively, the Operating Partnership Agreement), is in full force and effect.
(k) The only Subsidiaries of the Company that may constitute a significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X are the Subsidiaries listed on Exhibit 21.1 to the Companys Annual Report on Form 10-K for the year ended December 31, 2013. Each of the Subsidiaries of the Company or the Operating Partnership has been duly incorporated or organized and is validly existing as a corporation, limited partnership, limited liability limited partnership, general partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction in which it is chartered or organized and has the requisite power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Disclosure Package and the Final Prospectus, and is duly qualified or registered as a foreign corporation, limited partnership, limited liability limited partnership, general partnership or limited liability company, as applicable, and is in good standing in the jurisdiction in which such qualification or registration is required, whether by reason of the ownership or leasing of property or the conduct of business, except in each case where the failure to so qualify or register would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All the outstanding shares of capital stock, partnership interests, limited liability company interests or other equivalent equity interests of each such Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable, and, except (i) as otherwise set forth in each of the Registration Statement and the Final Prospectus and (ii) the shares of capital stock, partnership interests, limited liability company interests or other equivalent equity interests of Subsidiaries that are pledged under those certain Security Agreements, dated as of December 13, 2011, pursuant to which the Company, the Operating Partnership and AIMCO/Bethesda Holdings, Inc. (collectively, the Borrowers) and certain Subsidiaries granted a security interest in, and pledged, certain collateral to KeyBank National Association, as administrative agent (in such capacity, the Administrative Agent) for the lenders under the Senior Secured Credit Agreement, dated as of December 13, 2011, as amended, among the Borrowers, the financial institutions from time to time party thereto and the Administrative Agent, all outstanding shares of capital stock, partnership interests, limited liability company interests or other equivalent equity interest of the Subsidiaries are owned by the Company or the Operating Partnership, as applicable, either directly or through Subsidiaries free and clear of any perfected security interest or any other security interests, mortgages, pledges, liens, encumbrances, claims in law or in equity, and none of the outstanding shares of capital stock, partnership interests, limited liability company interests or other equivalent equity interests of the Subsidiaries were issued in violation of the preemptive or similar rights of any security of each Subsidiary, except such violations as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
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(l) This underwriting agreement (the Agreement) and the transactions contemplated herein have been duly authorized by the Company and the Operating Partnership, and this Agreement has been duly executed and delivered by the Company and the Operating Partnership.
(m) The Company has an authorized capitalization as set forth in the Disclosure Package and the Final Prospectus. All of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued by the Company and are fully paid and non-assessable, and none of the outstanding shares of capital stock of the Company were issued in violation of preemptive or other similar rights of any security holder of the Company.
(n) The Securities have been duly authorized and reserved for issuance, sale and delivery pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration provided for herein, will be validly issued, fully paid and non-assessable. The Securities conform in all material respects to all statements relating thereto contained in the Registration Statement, the Disclosure Package and the Final Prospectus. No holder of the Securities will be subject to personal liability by reason of being such a holder. The issuance of the Securities is not subject to the preemptive or other similar rights of any security holder of the Company.
(o) The shares of Common Stock issuable upon conversion of any of the Securities have been duly authorized and reserved for issuance upon such conversion and such shares, when issued and delivered upon such conversion, will be validly issued, fully paid and non-assessable. The Common Stock so issuable upon conversion of the Securities shall conform on any date such shares are issued in all material respects to all statements relating thereto contained in the Registration Statement, the Disclosure Package and the Final Prospectus. No holder of such shares will be subject to personal liability by reason of being such a holder. The issuance of such shares of Common Stock will not be subject to the preemptive or other similar rights of any security holder of the Company.
(p) None of the Company, the Operating Partnership or any Significant Subsidiary is (i) in violation of its charter, partnership agreement, by-laws or other governing instrument (Governing Instruments) or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company, the Operating Partnership or any Significant Subsidiary is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company, the Operating Partnership or any Significant Subsidiary is subject (collectively, Agreements and Instruments), except for such defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or (iii) in violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company, the Operating Partnership or any Significant Subsidiary or any of their assets, properties or operations (Laws), except for such violations that would not, individually or in the
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aggregate, reasonably be expected to result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and in the Disclosure Package and the Final Prospectus (including the issuance and sale of the Securities and the use of the aggregate net proceeds from the sale of the Securities as described in the Disclosure Package and the Final Prospectus under the caption Use of Proceeds) and compliance by the Company and the Operating Partnership with their respective obligations hereunder have been duly authorized by all necessary corporate or limited partnership action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the Operating Partnership or any Subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the Governing Instruments of the Company, the Operating Partnership or any Significant Subsidiary or, except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, of any Laws. As used herein, a Repayment Event means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holders behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, the Operating Partnership or any Significant Subsidiary.
(q) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company or the Operating Partnership of their respective obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except (i) for the filing of Articles Supplementary relating to the Class A Preferred Stock with the State Department of Assessments and Taxation of the State of Maryland and (ii) such as have already been obtained or will be obtained under the Act or under state securities laws or the rules of the Financial Industry Regulatory Authority, Inc. (FINRA).
(r) There is no action, arbitration, suit, proceeding, inquiry or investigation before or brought by any arbitrator or court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Operating Partnership, threatened, against or affecting the Company, the Operating Partnership or any Subsidiary, which is required to be disclosed in the Registration Statement, the Disclosure Package or the Final Prospectus (other than as disclosed therein), or which might reasonably be expected to result in a Material Adverse Effect or which might reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Company or the Operating Partnership of their respective obligations hereunder.
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(s) The financial statements of the Company and its consolidated Subsidiaries set forth in or incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, together with the related schedules and notes, present fairly the financial position, results of operations and cash flows of the Company and its consolidated Subsidiaries at the dates and for the periods specified, and, except as disclosed in the notes thereto, such financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, set forth in or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus present fairly in accordance with GAAP the information required to be stated therein. Any selected historical operating and financial data set forth in or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with the books and records of the Company and that of the audited financial statements set forth in or incorporated by reference in the Registration Statement or the Final Prospectus. The financial statements of the businesses or properties acquired or proposed to be acquired, if any, included in, or incorporated by reference into, the Registration Statement, the Disclosure Package or the Final Prospectus present fairly in all material respects the information set forth therein, have been prepared in conformity with GAAP applied on a consistent basis and otherwise have been prepared in accordance with the applicable financial statement requirements of Rule 3-05 or Rule 3-14 of Regulation S-X with respect to real estate operations acquired or to be acquired. In addition, any pro forma financial statements and the related notes thereto set forth in or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus present fairly in all material respects the information shown therein, have been prepared in accordance with the Commissions rules and guidelines with respect to pro forma financial statements and have been properly compiled on the basis described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein; other than as set forth therein, the Company is not required to include any financial statements or pro forma financial statements in the Registration Statement, the Disclosure Package or the Final Prospectus under the Act or any document required to be filed with the Commission under the Exchange Act. All disclosures contained in the Registration Statement, the Disclosure Package or the Final Prospectus regarding non-GAAP financial measures (as such term is defined by the rules and regulations of the Commission) comply with Regulation G and Item 10 of Regulation S-K, to the extent applicable. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(t) The Company, the Operating Partnership, the Subsidiaries and, to the knowledge of the Company, any joint venture that is not a Subsidiary, in which the Company, the Operating Partnership or any Subsidiary owns an interest, as the case may be, have good and marketable title to all real property owned by them, and good title to
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all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind, except (i) such mortgages, pledges, liens, security interests, claims, restrictions or encumbrances in connection with mortgages entered into in the ordinary course consistent with past practice, (ii) as otherwise stated in the Registration Statement, the Disclosure Package and the Final Prospectus or (iii) those which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each of the properties of any of the Company, the Operating Partnership or the Subsidiaries complies with all applicable codes and zoning laws and regulations except in any case where such non-compliance would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; and none of the Company, the Operating Partnership or any Subsidiary has knowledge of any pending or threatened condemnation, zoning change or other proceeding or action that will in any manner affect the size of, use of, improvements on, construction on, or access to the properties of any of the Company, the Operating Partnership or any Subsidiary except in any case where such action or proceeding would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All of the leases and subleases material to the business of the Company, the Operating Partnership and the Subsidiaries considered as one enterprise, and under which the Company, the Operating Partnership or any Subsidiary holds properties described in the Registration Statement and the Final Prospectus, are in full force and effect, and none of the Company, the Operating Partnership or any Subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company, the Operating Partnership or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company, the Operating Partnership or any Subsidiary of the continued possession of the leased or subleased premises under any such lease or sublease, except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To the knowledge of the Company, except as described in the Registration Statement, the Disclosure Package and the Final Prospectus, no tenant under any lease to which the Company, the Operating Partnership or any Subsidiary leases any portion of its property is in default under such lease, except for any defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(u) Title insurance in favor of the Company, the Operating Partnership and the Subsidiaries has been obtained with respect to each property owned by any such entity in an amount that is customary for companies engaged in the same or similar businesses, except where the failure to maintain such title insurance would not reasonably be expected to result in a Material Adverse Effect.
(v) The mortgages and deeds of trust encumbering the properties and assets described in the Registration Statement, the Disclosure Package and the Final Prospectus (i) are not convertible (in the absence of foreclosure) into an equity interest in the property or asset described therein or in the Company, the Operating Partnership or any Subsidiary, nor does any of the Company, the Operating Partnership or any Subsidiary hold a participating interest therein, (ii) except as set forth in the Registration Statement, the Disclosure Package and the Final Prospectus, are not cross-defaulted to any
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indebtedness other than indebtedness of the Company or any of the Subsidiaries and (iii) are not cross-collateralized to any property not owned by the Company, the Operating Partnership or any of the Subsidiaries, except, in each case, as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(w) To the knowledge of the Company and the Operating Partnership, the real property of the Company, the Operating Partnership and the Subsidiaries is free of material structural defects and all building systems contained therein are in reasonably good working order in all material respects, subject to ordinary wear and tear or, strategic business decisions regarding maintenance thereof.
(x) All U.S. federal income tax returns of the Company, the Operating Partnership and the Subsidiaries required by law to be filed have been filed and all taxes shown by such returns, which are due and payable, have been paid. No assessment in respect of U.S. federal income taxes has been made to date against the Company, the Operating Partnership or any of the Subsidiaries that would reasonably be expected to result in a Material Adverse Effect. The Company, the Operating Partnership and the Subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company, the Operating Partnership and the Subsidiaries, except for such taxes, if any, as are being contested in good faith or would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Company, the Operating Partnership and the Subsidiaries in respect of any income, partnership and corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(y) Commencing with its taxable year ended December 31, 1994, the Company has been organized and operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a REIT) under the Internal Revenue Code of 1986, as amended (the Code), and the Companys actual and proposed method of operation as described in the Registration Statement, the Disclosure Package and the Final Prospectus will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code. The Operating Partnership will be taxed as a partnership for federal income tax purposes.
(z) Neither the Company nor the Operating Partnership is, or upon the issuance and sale of the Securities and the application of the net proceeds therefrom as described in the Disclosure Package and the Final Prospectus will be, an investment company as such term is defined in the Investment Company Act.
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(aa) The accounting firm that certified the financial statements and supporting schedules incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus is an independent registered public accounting firm as required by the Act, the Exchange Act and the Public Company Accounting Oversight Board (United States).
(bb) Except as described in the Registration Statement, the Disclosure Package and the Final Prospectus or except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (i) none of the Company, the Operating Partnership or any of the Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, Hazardous Materials) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, Environmental Laws), (ii) the Company, the Operating Partnership and the Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or, to the knowledge of the Company, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violations, investigations or proceedings relating to any Environmental Law against the Company, the Operating Partnership or any of the Subsidiaries and (iv) there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company, the Operating Partnership or any of the Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(cc) The Company, the Operating Partnership and the Subsidiaries carry or are entitled to the benefits of insurance in such amounts and covering such risks as is customary for companies engaged in the same or similar business, and all such insurance is in full force and effect. None of the Company, the Operating Partnership or any Subsidiary has any reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Effect.
(dd) Each of the Company, the Operating Partnership and the Subsidiaries possesses such permits, licenses, approvals, consents and other authorizations (collectively, Governmental Licenses) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where failure to possess any such Governmental Licenses would not,
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individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; the Company, the Operating Partnership and the Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, individually or in the aggregate, result in a Material Adverse Effect; and none of the Company, the Operating Partnership or any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which if the subject of an unfavorable decision, ruling or finding, would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(ee) No labor dispute with the employees of the Company, the Operating Partnership or any Subsidiary exists or, to the knowledge of the Company or the Operating Partnership, is imminent, which would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(ff) There are no contracts or documents which are required to be described in the Registration Statement, the Disclosure Package or the Final Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.
(gg) The Company, the Operating Partnership and the Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, Intellectual Property) necessary to carry on the business now operated by them, and none of the Company, the Operating Partnership or any Subsidiary has received any written notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company, the Operating Partnership or any Subsidiary therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.
(hh) The Company, the Operating Partnership and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with managements general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with managements 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
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any differences. Except as described in the Disclosure Package and the Final Prospectus, since the end of the Companys most recent audited fiscal year, there has been (1) no material weakness in the Companys internal control over financial reporting (whether or not remediated) and (2) no change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting. The Company, the Operating Partnership and the Subsidiaries employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms, and is accumulated and communicated to the Companys management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.
(ii) None of the Company, the Operating Partnership or any Significant Subsidiary, nor, to the knowledge of the Company or the Operating Partnership, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any Significant Subsidiary is aware of or has taken any action, directly or indirectly, that would reasonably be expected to result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA, and the Company, the Operating Partnership, any Significant Subsidiary and, to the knowledge of the Company or the Operating Partnership, the Companys affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(jj) The operations of the Company, the Operating Partnership and each Significant Subsidiary are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company, the Operating Partnership, or any Significant Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or the Operating Partnership, threatened.
(kk) None of the Company, the Operating Partnership, any Significant Subsidiary or, to the knowledge of the Company or the Operating Partnership, any director, officer, agent, employee, affiliate or person acting on behalf of the Company,
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the Operating Partnership or any Significant Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC); and the Company, the Operating Partnership or any Significant Subsidiary will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(ll) There is and has been no failure on the part of the Company, the Operating Partnership or any Subsidiary or any of the directors or officers of the Company, the Operating Partnership or any Subsidiary, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(mm) Except as described in the Registration Statement, the Disclosure Package and the Final Prospectus, no holders of securities or other equity interests of the Company or the Operating Partnership have rights to have any such securities registered pursuant to the Registration Statement or in connection with the transactions contemplated by this Agreement.
(nn) Any statistical and market-related data included in the Registration Statement, the Disclosure Package and the Final Prospectus are based on or derived from sources that the Company believes to be reliable and accurate in all material respects, and the Company has obtained the written consent to the use of such data from such sources, where required.
(oo) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the New York Stock Exchange, nor has the Company received any notification that the Commission or the New York Stock Exchange is contemplating terminating such registration or listing.
(pp) Except as described in the Disclosure Package and the Final Prospectus, none of the Company, the Operating Partnership or any Subsidiary is a party to any contract, agreement or understanding with any person (other than as contemplated by this Agreement) that would give rise to a valid claim against the Company, the Operating Partnership or any Subsidiary or the Underwriter for a brokerage commission, finders fee or like payment in connection with the offering and sale of the Securities.
Any certificate signed by any officer of the Company or the Operating Partnership delivered to the Underwriter or to counsel for the Underwriter pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company or the Operating Partnership, as applicable, to the Underwriter as to the matters covered thereby as of the date or dates indicated in such certificate.
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2. Purchase and Sale . Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees to purchase from the Company, at the purchase price set forth in Schedule I hereto, the Securities.
3. Delivery and Payment . Delivery of and payment for the Securities shall be made on the date and at the time specified in Schedule I hereto or at such time on such later date not more than three Business Days after the foregoing date as the Underwriter shall designate, which date and time may be postponed by agreement between the Underwriter and the Company (such date and time of delivery and payment for the Securities being herein called the Closing Date). Delivery of the Securities shall be made to the Underwriter against payment by the Underwriter of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Underwriter shall otherwise instruct.
4. Offering by Underwriter . It is understood that the Underwriter proposes to offer the Securities for sale to the public as set forth in the Final Prospectus.
5. Agreements . The Company and the Operating partnership agree with the Underwriter that:
(a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement (including the Final Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. The Company will cause the Final Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Underwriter with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to the Underwriter of such timely filing. The Company will promptly advise the Underwriter (i) when the Final Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or the Staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Final Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.
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(b) If, at any time prior to the filing of the Final Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company will (i) notify promptly the Underwriter so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement to you in such quantities as you may reasonably request.
(c) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at such time not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Final Prospectus, the Company promptly will (i) notify the Underwriter of any such event, (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its best efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Final Prospectus and (iv) supply any supplemented Final Prospectus to you in such quantities as the Underwriter may reasonably request.
(d) As soon as practicable, the Company will make generally available to its security holders and to the Underwriter an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(e) The Company will furnish to the Underwriter and counsel for the Underwriter, without charge, so long as delivery of a prospectus by the Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and any supplement thereto as the Underwriter may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering.
(f) The Company will arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the Underwriter may designate and will maintain such qualifications in effect so long as required for the distribution of
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the Securities; 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 that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(g) The Company agrees that, unless it has or shall have obtained the prior written consent of the Underwriter, and the Underwriter agrees with the Company that, unless it has or shall have obtained the prior written consent of the Company, as the case may be, the Company and the Underwriter, as applicable, has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a free writing prospectus (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule II hereto and any electronic road show. Any such free writing prospectus consented to by the Underwriter or the Company is hereinafter referred to as a Permitted Free Writing Prospectus. The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
(h) From the date of this Agreement through, and including, the 30th day after the date of the Final Prospectus, the Company will not offer, sell, contract to sell or otherwise dispose of, any preferred securities of the Company that are substantially similar to the Securities, including any securities that are convertible into or exchangeable for, or that represent the right to receive, any such substantially similar securities, without the prior written consent of the Underwriter, other than the Securities.
(i) The Company will reserve and keep available at all times, free of preemptive rights or other similar rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to satisfy any obligations to issue such shares upon conversion of the Securities.
(j) The Company will use its reasonable best efforts to cause the Securities to be listed on the New York Stock Exchange within 30 days of the Closing Date. The Company will also register the Securities under Section 12(b) of the Exchange Act.
(k) The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(l) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing
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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, each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the Securities on the New York Stock Exchange; (vi) any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriter relating to such registration and qualification); (vii) any filings required to be made with FINRA (including filing fees and the reasonable fees and expenses of counsel for the Underwriter relating to such filings); (viii) the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Companys accountants and the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident to the performance by the Company of its obligations hereunder.
(m) The Company intends to operate in conformity with the requirements for qualification as a real estate investment trust under the Code for each of its taxable years for so long as the Board of Directors of the Company deems it in the best interests of the Companys security holders to remain so qualified.
6. Conditions to the Obligations of the Underwriter . The obligations of the Underwriter to purchase the Securities shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time and the Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b); any material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, to have furnished to the Underwriter their opinion and negative assurance letter, each dated the Closing Date and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.
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In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of New York or the Federal laws of the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Underwriter and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.
(c) The Company shall have requested and caused DLA Piper LLP (US), counsel for the Company, to have furnished to the Underwriter their opinion, dated the Closing Date and addressed to the Underwriter, in form and substance reasonably satisfactory to the Underwriter.
In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of Maryland or the Federal laws of the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Underwriter and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.
(d) The Underwriter shall have received from Jones Day, counsel for the Underwriter, such opinion or opinions, dated the Closing Date and addressed to the Underwriter, with respect to the issuance and sale of the Securities, the Registration Statement, the Disclosure Package, the Final Prospectus (together with any supplement thereto) and other related matters as the Underwriter may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Underwriter a certificate of the Company, signed by the Chairman of the Board or the President and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Disclosure Package, the Final Prospectus and any supplements or amendments thereto, as well as each electronic road show used in connection with the offering of the Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
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(ii) no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Companys knowledge, threatened; and
(iii) since the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto), there has been no material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company, the Operating Partnership and their subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and caused Ernst & Young LLP to have furnished to the Underwriter, at the Execution Time and at the Closing Date, letters (which may refer to letters previously delivered to the Underwriter), dated as of the Execution Time and as of the Closing Date, respectively, in form and substance satisfactory to the Underwriter, 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 or incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus.
(g) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any amendment or supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any amendment or supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Underwriter, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Final Prospectus (exclusive of any amendment or supplement thereto).
(h) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the Companys debt securities by any nationally recognized statistical rating organization (as defined in Section 3(a)(62) of the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
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(i) Prior to the Closing Date, the Company shall have furnished to the Underwriter such further information, certificates and documents as the Underwriter may reasonably request.
(j) The Company shall have furnished to the Underwriter a certificate of the principal financial or accounting officer of the Company, at the Execution Time and at the Closing Date, to the effect that the signer of such certificate is familiar with the accounting, operations and records systems of the Company, certifying that certain statements in identified pages of the Companys proxy statement are, to the knowledge of the signer, accurate in all material respects and such other matters as the Underwriter shall reasonably request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Underwriter and counsel for the Underwriter, this Agreement and all obligations of the Underwriter hereunder may be canceled at, or at any time prior to, the Closing Date by the Underwriter. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of Jones Day, counsel for the Underwriter, at 901 Lakeside Avenue, Cleveland, Ohio 44114, on the Closing Date.
7. Reimbursement of Underwriters Expenses . If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriter set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by the Underwriter, the Company will reimburse the Underwriter on demand for all expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by the Underwriter in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution .
(a) The Company and the Operating Partnership, jointly and severally, agree to indemnify and hold harmless the Underwriter, the directors, officers, employees and agents of the Underwriter and each person who controls the Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which it may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Securities, the Final Prospectus, or any Issuer Free Writing Prospectus, or in any
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amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided , however , that the Company and the Operating Partnership will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Underwriter specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company and the Operating Partnership may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company and the Operating Partnership, each of their directors, each of their officers who signs the Registration Statement, and each person who controls the Company or the Operating Partnership within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity to the Underwriter, but only with reference to written information relating to the Underwriter furnished to the Company by or on behalf of the Underwriter specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which the Underwriter may otherwise have. The Company and the Operating Partnership acknowledge that the statements set forth (i) in the second to last paragraph of the cover page regarding delivery of the Securities and (ii) under the heading Underwriting, in the third, ninth and tenth paragraphs and the last sentence of the eighth paragraph constitute the only information furnished in writing by or on behalf of the Underwriter for inclusion in any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying partys choice at the indemnifying partys expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided , however , that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying partys election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ
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separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Operating Partnership, jointly and severally, and the Underwriter agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively, Losses) to which the Company, the Operating Partnership and the Underwriter may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and the Operating Partnership on the one hand and by the Underwriter on the other from the offering of the Securities; provided , however , that in no case shall the Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by the Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company, and the Operating Partnership, jointly and severally, and the Underwriter shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Operating Partnership on the one hand and of the Underwriter on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company and the Operating Partnership shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Company, and benefits received by the Underwriter shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company or the Operating Partnership on the one hand or the Underwriter on the
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other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company, the Operating Partnership and the Underwriter agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who controls the Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as the Underwriter, and each person who controls the Company or the Operating Partnership within the meaning of either the Act or the Exchange Act, each officer of the Company or the Operating Partnership who shall have signed the Registration Statement and each director of the Company and the Operating Partnership shall have the same rights to contribution as the Company and the Operating Partnership, subject in each case to the applicable terms and conditions of this paragraph (d).
9. [Intentionally omitted.]
10. Termination . This Agreement shall be subject to termination in the absolute discretion of the Underwriter, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such delivery and payment (i) trading in the Companys Common Stock shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Underwriter, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by any Preliminary Prospectus or the Final Prospectus (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive . The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriter set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices . All communications hereunder will be in writing and effective only on receipt, and, if sent to the Underwriter, will be mailed, delivered or faxed to Wells Fargo Securities, LLC, 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attention: Transaction Management, facsimile (704) 410-0326; or, if sent to the Company, will be mailed, delivered or faxed to (303) 300-3260 and confirmed to it at 4582 South Ulster Street, Suite 1100, Denver, Colorado 80237, attention of the Legal Department.
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13. Successors . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder.
14. No Fiduciary Duty . The Company and the Operating Partnership hereby acknowledge that (a) the purchase and sale of the Securities pursuant to this Agreement is an arms-length commercial transaction between the Company, on the one hand, and the Underwriter and any affiliate through which the Underwriter may be acting, on the other, (b) the Underwriter is acting as principal and not as an agent or fiduciary of the Company or the Operating Partnership and (c) the Companys engagement of the Underwriter in connection with the offering and the process leading up to the offering is as an independent contractor and not in any other capacity. Furthermore, the Company and the Operating Partnership agree that they are solely responsible for making their own judgments in connection with the offering (irrespective of whether the Underwriter has advised or is currently advising the Company or the Operating Partnership on related or other matters). The Company and the Operating Partnership agree that they will not claim that the Underwriter has rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or the Operating Partnership, in connection with such transaction or the process leading thereto.
15. Integration . This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriter with respect to the subject matter hereof.
16. Applicable Law . This Agreement will 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.
17. Waiver of Jury Trial . The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
18. Counterparts . This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
19. Headings . The section headings used herein are for convenience only and shall not affect the construction hereof.
20. Definitions . The terms that follow, when used in this Agreement, shall have the meanings indicated.
Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
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Applicable Time shall mean 5:38 p.m. (New York City time) on May 9, 2014.
Base Prospectus shall mean the base prospectus referred to in paragraph 1(a) above contained in the Registration Statement at the Execution Time.
Business Day shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
Commission shall mean the Securities and Exchange Commission.
Disclosure Package shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing Prospectuses, if any, identified in Schedule II hereto, and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
Effective Date shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
Execution Time shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
Final Prospectus shall mean the prospectus supplement relating to the Securities that was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base Prospectus.
Free Writing Prospectus shall mean a free writing prospectus, as defined in Rule 405.
Investment Company Act means the Investment Company Act of 1940, as amended.
Issuer Free Writing Prospectus shall mean an issuer free writing prospectus, as defined in Rule 433.
Preliminary Prospectus shall mean any preliminary prospectus supplement to the Base Prospectus referred to in paragraph 1(a) above which is used prior to the filing of the Final Prospectus, together with the Base Prospectus.
Registration Statement shall mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.
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Rule 158, Rule 163, Rule 164, Rule 172, Rule 405, Rule 415, Rule 424, Rule 430B, Rule 433, Rule 456, Rule 457 and Rule 462 refer to such rules under the Act.
Significant Subsidiary means a Significant Subsidiary as defined in Rule 405.
Subsidiary means a corporation, general partnership, limited partnership, limited liability limited partnership, limited liability company or other entity, a majority of the outstanding voting or capital stock, partnership, membership or other voting or equity interests or general, limited or limited liability limited partnership interests, as the case may be, of which is majority owned or controlled, directly or indirectly, by the Company, the Operating Partnership or one or more other Subsidiaries of the Company or the Operating Partnership. The Operating Partnership is a Subsidiary of the Company.
Well-Known Seasoned Issuer shall mean a well-known seasoned issuer, as defined in Rule 405.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the Underwriter.
Very truly yours,
Apartment Investment and Management Company |
||
By: |
/s/ Ernest M. Freedman |
|
Name: Ernest M. Freedman | ||
Title: Executive Vice President and Chief Financial Officer |
||
AIMCO Properties, L.P. |
||
By: |
AIMCO-GP, Inc. Its general partner |
|
By: |
/s/ Ernest M. Freedman |
|
Name: Ernest M. Freedman | ||
Title: Executive Vice President and Chief Financial Officer |
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Wells Fargo Securities, LLC | ||
By: |
/s/ Carolyn Hurley |
|
Name: Carolyn Hurley | ||
Title: Director |
SCHEDULE I
Underwriting Agreement dated May 9, 2014
Registration Statement No. 333-195133
Underwriter: Wells Fargo Securities, LLC
Title, Purchase Price and Description of Securities:
Title: Class A Cumulative Preferred Stock
Number of Securities to be sold by the Company: 5,000,000
Price per Share to the Underwriter: $24.2125
Closing Date, Time and Location: May 16, 2014 at 10:00 a.m. at Jones Day, 901 Lakeside Avenue, Cleveland, Ohio 44114
Type of Offering: Delayed (T + 5)
SCHEDULE II
Schedule of Free Writing Prospectuses included in the Disclosure Package
1. | APARTMENT INVESTMENT AND MANAGEMENT COMPANY, 6.875% Class A Cumulative Preferred Stock (Liquidation Preference $25.00 per share), FINAL PRICING TERMS, dated May 9, 2014 |
Exhibit 5.1
DLA Piper LLP (US) The Marbury Building 6225 Smith Avenue Baltimore, Maryland 21209-3600 www.dlapiper.com
T 410.580.3000 F 410.580.3001 |
May 15, 2014
Apartment Investment and Management Company
4582 South Ulster Street, Suite 1100
Denver, Colorado 80237
Re: | Offering of Class A Cumulative Preferred Stock |
Ladies and Gentlemen:
We have acted as special Maryland counsel to Apartment Investment and Management Company, a Maryland corporation (the Company), and have been requested to render this opinion in connection with the registration under the Securities Act of 1933, as amended (the Securities Act), pursuant to a Registration Statement on Form S-3 of the Company (Registration No. 333-195133) and any amendments through the date hereof (the Registration Statement), prepared and filed with the Securities and Exchange Commission (the Commission) and effective on April 8, 2014, including a base prospectus, dated April 8, 2014, included therein at the time the Registration Statement became effective (the Base Prospectus), the preliminary prospectus supplement, dated May 9, 2014 and filed by the Company with the Commission on May 9, 2014 pursuant to Rule 424(b)(5) under the Securities Act (together with the Base Prospectus, the Preliminary Prospectus), and the prospectus supplement, dated May 9, 2014 and filed by the Company with the Commission on May 13, 2014 pursuant to Rule 424(b)(5) under the Securities Act (the Prospectus Supplement, and together with the Base Prospectus, the Prospectus), for offering by the Company of 5,000,000 shares (the Shares) of Class A Cumulative Preferred Stock, par value $.01 per share, of the Company (the Class A Preferred Stock) pursuant to an Underwriting Agreement, dated May 9, 2014 (the Underwriting Agreement), among the Company, AIMCO Properties, L.P., a Delaware limited partnership, and Wells Fargo Securities, LLC. The Shares are convertible in certain circumstances into shares of Class A Common Stock, par value $.01 per share, of the Company (the Class A Common Stock). This opinion is being provided at your request in connection with the filing of a Current Report on Form 8-K and supplements our opinion, dated April 8, 2014, previously filed as Exhibit 5.1 to the Registration Statement.
In rendering the opinion expressed herein, we have reviewed the following documents (the Documents):
(a) the charter of the Company, certified by the State Department of Assessments and Taxation of the State of Maryland (the SDAT), including the articles supplementary relating to the Class A Preferred Stock (collectively, the Charter);
(b) the bylaws of the Company (the Bylaws), as in effect on the date hereof, as certified by an officer of the Company;
(c) the Underwriting Agreement;
Apartment Investment and Management Company
May 15, 2014
Page 2
(d) the Registration Statement;
(e) the Preliminary Prospectus;
(f) the Prospectus;
(g) resolutions of the Board of Directors of the Company or a committee thereof relating to the authorization and issuance of the Shares, the reservation of the shares of Class A Common Stock issuable upon conversion of the Shares (the Conversion Shares), and the authorization of the Underwriting Agreement and the transactions contemplated thereby, certified by an officer of the Company;
(h) a certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
(i) a certificate executed by an officer of the Company (the Certificate), dated as of the date hereof, as to certain factual matters; and
(j) such other documents as we have considered necessary to the rendering of the opinion expressed below.
In examining the Documents, and in rendering the opinion set forth below, we have assumed the following: (a) each of the parties to the Documents (other than the Company) has duly and validly executed and delivered each of the Documents and each instrument, agreement and other document executed in connection with the Documents to which such party is a signatory, and each such partys (other than the Companys) obligations set forth in the Documents are its legal, valid and binding obligations, enforceable in accordance with their respective terms; (b) each person executing any such instrument, agreement or other document on behalf of any such party (other than the Company) is duly authorized to do so; (c) each natural person executing any such instrument, agreement or other document is legally competent to do so; (d) the Documents accurately describe and contain the mutual understandings of the parties, there are no oral or written modifications of or amendments or supplements to the Documents and there has been no waiver of any of the provisions of the Documents by actions or conduct of the parties or otherwise; and (e) all documents submitted to us as originals are authentic, all documents submitted to us as certified or photostatic copies or telecopies or portable document file (.PDF) copies conform to the original documents (and the authenticity of the originals of such copies), all signatures on all documents submitted to us for examination (and including signatures on photocopies, telecopies and .PDF copies) are genuine and all public records reviewed are accurate and complete. As to certain factual matters, we have relied on the Certificate as to the factual matters set forth therein, which we assume to be accurate and complete.
Based upon and subject to the foregoing and having regard for such legal considerations we deem relevant, we are of the opinion that, as of the date hereof:
(1) The Shares have been duly authorized and, upon issuance and delivery against payment therefor in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid and non-assessable.
Apartment Investment and Management Company
May 15, 2014
Page 3
(2) The Conversion Shares have been duly authorized and validly reserved for issuance and, when issued and delivered in accordance with the terms of the Charter upon conversion of the Shares, will be validly issued, fully paid and non-assessable.
The opinions set forth herein are subject to additional assumptions, qualifications and limitations as follows:
(a) We have made no investigation of, and we express no opinion as to, the laws of any jurisdiction other than the laws of the State of Maryland. To the extent that any documents referred to herein are governed by the laws of a jurisdiction other than the State of Maryland, we have assumed that the laws of such jurisdiction are the same as the laws of the State of Maryland.
(b) We further assume that neither the issuance and sale of the Shares, nor the issuance of the Conversion Shares, will cause the Company to exceed the applicable limit of the authorized capital stock of the Company, as provided in the Charter.
(c) This opinion concerns only the effect of the laws (exclusive of the principles of conflict of laws) of the State of Maryland as currently in effect. We assume no obligation to supplement this opinion if any applicable laws change after the date hereof or if any facts or circumstances come to our attention after the date hereof that might change this opinion.
(d) We express no opinion as to compliance with the securities (or blue sky) laws or the real estate syndication laws of the State of Maryland.
(e) We assume that the issuance of the Shares and the Conversion Shares, respectively, by the Company will not cause any person to violate any of the provisions of the Charter relating to the Initial Holder Limit, the Look-Through Ownership Limit or the Ownership Limit (as those terms are defined in the provisions in the Charter that are applicable to the Shares and the Conversion Shares, respectively), and that the Company will not issue any shares of capital stock other than the Shares and the Conversion Shares.
(f) This opinion is limited to the matters set forth herein, and no other opinion should be inferred beyond the matters expressly stated.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Current Report on Form 8-K and to the reference to our firm under the heading Legal Matters in the Prospectus Supplement relating to the Shares. In giving our consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ DLA PIPER LLP (US)
DLA PIPER LLP (US)
Exhibit 8.1
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
May 15, 2014
Apartment Investment and Management Company
4582 S. Ulster Street
Suite 1100
Denver, Colorado 80237
Re: | Material United States Federal Income Tax Consequences |
Ladies and Gentlemen:
You have requested our opinion concerning certain U.S. federal income tax considerations in connection with the offering (the Offering) of shares of Class A Cumulative Preferred Stock (the Class A Preferred Stock) of Apartment Investment and Management Company, a Maryland corporation (AIMCO), pursuant to a registration statement on Form S-3 (Registration No. 333-195133) filed by AIMCO with the Securities and Exchange Commission (the Commission) on April 8, 2014 (such registration statement, as so amended, the Registration Statement), the base prospectus, dated April 8, 2014, included with the Registration Statement (the Base Prospectus) and the prospectus supplement dated May 13, 2013 (the Prospectus Supplement and, together with the Base Prospectus, the Prospectus). All capitalized terms used herein, unless otherwise specified, shall have the meanings assigned to them in the Prospectus.
We have acted as counsel to AIMCO in connection with the Offering, and we have assisted in the preparation of the Registration Statement, the Prospectus and certain other documents. In formulating our opinion, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statement, the Prospectus and such other documentation and information provided by AIMCO as is relevant to the Offering and necessary to prepare the Registration Statement and the Prospectus or as we have deemed necessary or appropriate as a basis for the opinion set forth herein. In addition, AIMCO has provided us with certain representations and covenants of officers of AIMCO relating to, among other things, properties, assets, income, distributions, stockholder ownership, organizational structure and other requirements, and the past, present and future conduct of AIMCOs business
Apartment Investment and Management Company
May 15, 2014
Page 2
operations. We have assumed that such statements, representations and covenants are true as of the date hereof, and will continue to be true, without regard to any qualification as to knowledge and belief. For purposes of our opinion, we have not assumed any responsibility for investigating or independently verifying the facts and representations set forth in such documents, the partnership agreements and organizational documents for each of the corporations, partnerships and limited liability companies in which AIMCO holds a direct or indirect interest (the Subsidiaries), the Registration Statement, the Prospectus, or any other document, and we have not undertaken any independent review of such information. In particular, we note that AIMCO engages in transactions in connection with which we have not provided legal advice, and have not reviewed, and of which we may be unaware. We have, consequently, assumed and relied on AIMCOs representations that the information presented in such documents or otherwise furnished to us accurately and completely describes all material facts relevant to our opinion.
In rendering our opinion, we have assumed that the transactions contemplated by the foregoing documents have been or will be consummated in accordance with the operative documents, and that such documents accurately reflect the material facts of such transactions. In addition, our opinion is based on the correctness of the assumption that there have been no changes in the applicable laws of the State of Maryland or any other state under the laws of which any of the Subsidiaries have been formed. In rendering our opinion, we have also considered and relied upon the Internal Revenue Code of 1986, as amended (the Code), the regulations promulgated thereunder (the Regulations), administrative rulings and other interpretations of the Code and the Regulations by the courts and the Internal Revenue Service, all as they exist as of the date hereof. It should be noted that the Code, Regulations, judicial decisions, and administrative interpretations are subject to change at any time (possibly with retroactive effect). Any change which is made after the date hereof in any of the foregoing bases for our opinion could affect our conclusions herein. There can be no assurances, moreover, that any of the opinions expressed herein will be accepted by the Internal Revenue Service or, if challenged, by a court.
Based upon and subject to the foregoing, for U.S. federal income tax purposes we are of the opinion that:
1. Commencing with AIMCOs initial taxable year ended December 31, 1994, AIMCO was organized in conformity with the requirements for qualification as a real estate investment trust (REIT) under the Code, and its actual method of operation has enabled, and its proposed method of operation will enable, AIMCO to meet the requirements for qualification and taxation as a REIT under the Code.
2. Although the discussion set forth in the Base Prospectus under the caption Material United States Federal Income Tax Considerations, as supplemented by the discussion set forth in the Prospectus Supplement under the caption Material United States Federal Income Tax Considerations, does not purport to discuss all possible U.S. federal income tax
Apartment Investment and Management Company
May 15, 2014
Page 3
consequences of the acquisition, ownership, and disposition of the Class A Preferred Stock, the discussion, although general in nature, constitutes, in all material respects, a fair and accurate summary under current law of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of the Class A Preferred Stock by a holder who acquires such Class A Preferred Stock, subject to the qualifications set forth therein. The U.S. federal income tax consequences of an investment in the Class A Preferred Stock by an investor will depend upon that holders particular situation, and we express no opinion as to the completeness of the discussion set forth in the Base Prospectus under the caption Material United States Federal Income Tax Considerations, as supplemented by the discussion set forth in the Prospectus Supplement under the caption Material United States Federal Income Tax Considerations, as applied to any particular holder.
Other than as expressly stated above, we express no opinion on any issue relating to AIMCO or to any investment therein. AIMCOs qualification and taxation as a REIT depend upon its ability to meet, through actual annual operating results, certain requirements including requirements relating to distribution levels and diversity of stock ownership, and the various qualification tests imposed under the Code, the results of which are not reviewed by us. Accordingly, no assurance can be given that the actual results of AIMCOs operation for any particular taxable year satisfy the requirements for taxation as a REIT under the Code.
This opinion has been prepared for you in connection with the transaction described herein. We consent to the filing of this opinion as an exhibit to a Current Report on Form 8-K, which will be incorporated by reference in the Registration Statement, and to the reference to Skadden, Arps, Slate, Meagher & Flom LLP under the caption Legal Matters in the Registration Statement and the Prospectus. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission. This opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise our opinion to reflect any legal developments or factual matters arising subsequent to the date hereof, or the impact of any information, document, certificate, record, statement, representation, covenant, or assumption relied upon herein that becomes incorrect or untrue.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit 10.1
SEVENTH AMENDMENT TO THE
FOURTH AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P.
This SEVENTH AMENDMENT TO THE FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF AIMCO PROPERTIES, L.P., dated as of May 13, 2014 (this Amendment), is being executed by AIMCO-GP, Inc., a Delaware corporation (the General Partner), as the general partner of AIMCO Properties, L.P., a Delaware limited partnership (the Partnership), pursuant to the authority conferred on the General Partner by Section 7.3.C(7) of the Fourth Amended and Restated Agreement of Limited Partnership of AIMCO Properties, L.P., dated as of July 29, 1994 and restated as of February 28, 2007, as amended and/or supplemented from time to time (including all the exhibits thereto, the Agreement). Capitalized terms used, but not otherwise defined herein, shall have the respective meanings ascribed thereto in the Agreement.
WHEREAS, pursuant to Section 4.2.A of the Agreement, the General Partner (i) is authorized to cause the Partnership to issue additional Partnership Preferred Units, for any Partnership purpose, at any time or from time to time, to the Partners or to other Persons, for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, and (ii) is authorized to determine the designations, preferences and relative, participating, optional or other special rights, powers and duties of Partnership Preferred Units.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
(a) The Agreement is hereby amended by the addition of a new exhibit, entitled Exhibit Y , in the form attached hereto, which shall be attached to and made a part of the Agreement.
(b) Except as specifically amended hereby, the terms, covenants, provisions and conditions of the Agreement shall remain unmodified and continue in full force and effect and, except as amended hereby, all of the terms, covenants, provisions and conditions of the Agreement are hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.
GENERAL PARTNER: | ||
AIMCO-GP, INC. | ||
By: |
/s/ Ernest M. Freedman |
|
Name: | Ernest M. Freedman | |
Title: |
Executive Vice President and
Chief Financial Officer |
EXHIBIT Y
PARTNERSHIP UNIT DESIGNATION OF THE
CLASS A PARTNERSHIP PREFERRED UNITS
OF AIMCO PROPERTIES, L.P.
1. | Number of Units and Designation. |
A class of Partnership Preferred Units is hereby designated as Class A Partnership Preferred Units, and the number of Partnership Preferred Units constituting such class shall be five million (5,000,000).
2. | Definitions. |
For purposes of the Class A Partnership Preferred Units, the following terms shall have the meanings indicated in this Section 2, and capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Agreement:
Agreement shall mean the Fourth Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of July 29, 1994, amended and restated as of February 28, 2007, as amended.
Alternative Form Consideration shall have the meaning set forth in the Articles Supplementary for the Class A Preferred Stock.
Class A Partnership Preferred Unit means a Partnership Preferred Unit with the designations, preferences and relative, participating, optional or other special rights, powers and duties as are set forth in this Exhibit Y . It is the intention of the General Partner that each Class A Partnership Preferred Unit shall be substantially the economic equivalent of one share of Class A Preferred Stock.
Class A Preferred Stock means the Class A Cumulative Preferred Stock, par value $.01 per share, of the Previous General Partner.
Code shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor thereto, as interpreted by any applicable regulations or other administrative pronouncements as in effect from time to time.
Common Stock shall mean the Class A Common Stock, par value $.01 per share, of the Previous General Partner.
Distribution Payment Date shall mean any date on which cash dividends are paid on outstanding shares of the Class A Preferred Stock.
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Distribution Record Date shall have the meaning set forth in Section 3 of this Exhibit Y .
Junior Partnership Units shall have the meaning set forth in paragraph (c) of Section 7 of this Exhibit Y .
Parity Partnership Units shall have the meaning set forth in paragraph (b) of Section 7 of this Exhibit Y .
Partnership shall mean AIMCO Properties, L.P., a Delaware limited partnership.
Senior Partnership Units shall have the meaning set forth in paragraph (a) of Section 7 of this Exhibit Y .
3. | Distributions. |
On every Distribution Payment Date, the holders of Class A Partnership Preferred Units shall be entitled to receive distributions payable in cash in an amount per Class A Partnership Preferred Unit equal to the per share dividend payable on the Class A Preferred Stock on such Distribution Payment Date. Each such distribution shall be payable to the holders of record of the Class A Partnership Preferred Units, as they appear on the records of the Partnership at the close of business on the record date (the Distribution Record Date) for the dividend payable with respect to the Class A Preferred Stock on such Distribution Payment Date. Holders of Class A Partnership Preferred Units shall not be entitled to any distributions on the Class A Partnership Preferred Units, whether payable in cash, property or stock, except as provided herein.
4. | Liquidation Preference. |
(a) In the event of any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, before any payment or distribution of the Partnership (whether capital, surplus or otherwise) shall be made to or set apart for the holders of Junior Partnership Units, the holders of Class A Partnership Preferred Units shall be entitled to receive Twenty-Five Dollars ($25.00) per Class A Partnership Preferred Unit (the Liquidation Preference), plus an amount per Class A Partnership Preferred Unit equal to all dividends (whether or not declared or earned) accumulated, accrued and unpaid on one share of Class A Preferred Stock to the date of final distribution to such holders; but such holders shall not be entitled to any further payment. Until the holders of the Class A Partnership Preferred Units have been paid the Liquidation Preference in full, plus an amount equal to all dividends (whether or not declared or earned) accumulated, accrued and unpaid on the Class A Preferred Stock to the date of final distribution to such holders, no payment shall be made to any holder of Junior Partnership Units upon the liquidation, dissolution or winding up of the Partnership. If, upon any liquidation, dissolution or winding up of the Partnership, the assets of the Partnership, or proceeds thereof, distributable among the holders of Class A Partnership Preferred Units shall be insufficient to pay in full the preferential amount aforesaid and liquidating payments on any Parity Partnership Units, then such assets, or
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the proceeds thereof, shall be distributed among the holders of Class A Partnership Preferred Units and any such Parity Partnership Units ratably in the same proportion as the respective amounts that would be payable on such Class A Partnership Preferred Units and any such other Parity Partnership Units if all amounts payable thereon were paid in full. For the purposes of this Section 4, (i) a consolidation or merger of the Partnership with one or more partnerships, or (ii) a sale or transfer of all or substantially all of the Partnerships assets shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Partnership.
(b) Upon any liquidation, dissolution or winding up of the Partnership, after payment shall have been made in full to the holders of Class A Partnership Preferred Units and any Parity Partnership Units, as provided in this Section 4, any other series or class or classes of Junior Partnership Units shall, subject to the respective terms thereof, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Class A Partnership Preferred Units and any Parity Partnership Units shall not be entitled to share therein.
5. | Redemption. |
Class A Partnership Preferred Units shall be redeemable by the Partnership as follows:
(a) At any time that the Previous General Partner exercises its right to redeem all or any of the shares of Class A Preferred Stock, the General Partner shall cause the Partnership to redeem an equal number of Class A Partnership Preferred Units, at a redemption price per Class A Partnership Preferred Unit payable in cash and equal to the same price per share paid by the Previous General Partner to redeem the Class A Preferred Stock. In the event of a redemption of Class A Partnership Preferred Units, if the redemption date occurs after a dividend record date for the Class A Preferred Stock and on or prior to the related Distribution Payment Date, the distribution payable on such Distribution Payment Date in respect of such Class A Partnership Preferred Units called for redemption shall be payable on such Distribution Payment Date to the holders of record of such Class A Partnership Preferred Units on the applicable dividend record date, and shall not be payable as part of the redemption price for such Class A Partnership Preferred Units.
(b) If the Partnership shall redeem Class A Partnership Preferred Units pursuant to paragraph (a) of this Section 5, from and after the redemption date (unless the Partnership shall fail to make available the amount of cash necessary to effect such redemption), (i) except for payment of the redemption price, the Partnership shall not make any further distributions on the Class A Partnership Preferred Units so called for redemption, (ii) said units shall no longer be deemed to be outstanding, and (iii) all rights of the holders thereof as holders of Class A Partnership Preferred Units of the Partnership shall cease except the rights to receive the cash payable upon such redemption, without interest thereon; provided, however, that if the redemption date occurs after dividend record date for the Class A Preferred Stock and on or prior to the related Distribution Payment Date, the full distribution payable on such Distribution Payment Date in respect
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of such Class A Partnership Preferred Units called for redemption shall be payable on such Distribution Payment Date to the holders of record of such Class A Partnership Preferred Units on the applicable dividend record date notwithstanding the prior redemption of such Class A Partnership Preferred Units. No interest shall accrue for the benefit of the holders of the Class A Partnership Preferred Units to be redeemed on any cash set aside by the Partnership.
(c) If fewer than all the outstanding Class A Partnership Preferred Units are to be redeemed, units to be redeemed shall be selected by the Partnership from outstanding Class A Partnership Preferred Units not previously called for redemption by any method determined by the General Partner in its discretion. Upon any such redemption, the General Partner shall amend Exhibit A to the Agreement as appropriate to reflect such redemption.
6. | Status of Reacquired Units. |
All Class A Partnership Preferred Units which shall have been issued and reacquired in any manner by the Partnership shall be deemed cancelled.
7. | Conversion |
Class A Partnership Preferred Units shall be convertible as follows:
(a) Upon any conversion of shares of Class A Preferred Stock into shares of Common Stock, a number of Class A Partnership Preferred Units equal to the number of shares of Class A Preferred Stock so converted shall be automatically converted into a number of Partnership Common Units equal to the number of shares of Common Stock issuable with respect to the shares of Class A Preferred Stock so converted. Upon any conversion of shares of Class A Preferred Stock into Alternative Form Consideration, a number of Class A Partnership Preferred Units equal to the number of shares of Class A Preferred Stock so converted shall be automatically converted into the same type and amount of Alternative Form Consideration as is deliverable with respect to the shares of Class A Preferred Stock so converted. Each conversion of Class A Partnership Preferred Units shall be deemed to have been effected at the same date and time as the corresponding conversion of Class A Preferred Stock.
(b) Holders of Class A Partnership Preferred Units at the close of business on a Distribution Record Date shall be entitled to receive the distribution payable on such units on the corresponding Distribution Payment Date notwithstanding the conversion thereof after such Distribution Record Date and on or prior to such Distribution Payment Date.
(c) If, upon any conversion of Class A Preferred Stock, the Previous General Partner is required to make a cash payment in lieu of issuing any fractional shares of Common Stock, then, in connection with the corresponding conversion of Class A Partnership Preferred Units, the Partnership shall make an equal cash payment to the holder of such converted Class A Partnership Preferred Units.
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(d) The Partnership will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of (i) the issue or delivery of Partnership Common Units or other securities or property on conversion of Class A Partnership Preferred Units pursuant hereto, and (ii) the issue or delivery of Common Stock or other securities or property on conversion of Class A Preferred Stock pursuant to the terms hereof.
8. | Ranking. |
Any class or series of Partnership Units of the Partnership shall be deemed to rank:
(a) prior or senior to the Class A Partnership Preferred Units, as to the payment of distributions and as to distributions of assets upon liquidation, dissolution or winding up, if the holders of such class or series shall be entitled to the receipt of distributions and of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Class A Partnership Preferred Units (Senior Partnership Units);
(b) on a parity with the Class A Partnership Preferred Units, as to the payment of distributions and as to distribution of assets upon liquidation, dissolution or winding up, whether or not the distribution rates, distribution payment dates or redemption or liquidation prices per unit or other denomination thereof be different from those of the Class A Partnership Preferred Units if (i) such class or series of Partnership Units shall be Class Z Partnership Preferred Units, Series A Community Reinvestment Act Perpetual Partnership Preferred Units, Class One Partnership Preferred Units, Class Two Partnership Preferred Units, Class Three Partnership Preferred Units, Class Four Partnership Preferred Units, Class Six Partnership Preferred Units or Class Seven Partnership Preferred Units, or (ii) the holders of such class or series of Partnership Units and the Class A Partnership Preferred Units shall be entitled to the receipt of distributions and of amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid distributions per unit or other denomination or liquidation preferences, without preference or priority one over the other (the Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively, as Parity Partnership Units); and
(c) junior to the Class A Partnership Preferred Units, as to the payment of distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if (i) such class or series of Partnership Units shall be Partnership Common Units or Class I High Performance Partnership Units, or (ii) the holders of Class A Partnership Preferred Units shall be entitled to receipt of distributions or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of such class or series of Partnership Units (the Partnership Units referred to in clauses (i) and (ii) of this paragraph being hereinafter referred to, collectively, as Junior Partnership Units).
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9. | Special Allocations. |
(a) Gross income and, if necessary, gain shall be allocated to the holders of Class A Partnership Preferred Units for any Fiscal Year (and, if necessary, subsequent Fiscal Years) to the extent that the holders of Class A Partnership Preferred Units receive a distribution on any Class A Partnership Preferred Units (other than an amount included in any redemption pursuant to Section 5 hereof) with respect to such Fiscal Year.
(b) If any Class A Partnership Preferred Units are redeemed pursuant to Section 5 hereof, for the Fiscal Year that includes such redemption (and, if necessary, for subsequent Fiscal Years) (a) gross income and gain (in such relative proportions as the General Partner in its discretion shall determine) shall be allocated to the holders of Class A Partnership Preferred Units to the extent that the redemption amounts paid or payable with respect to the Class A Partnership Preferred Units so redeemed exceeds the aggregate Capital Contributions (net of liabilities assumed or taken subject to by the Partnership) per Class A Partnership Preferred Unit allocable to the Class A Partnership Preferred Units so redeemed and (b) deductions and losses (in such relative proportions as the General Partner in its discretion shall determine) shall be allocated to the holders of Class A Partnership Preferred Units to the extent that the aggregate Capital Contributions (net of liabilities assumed or taken subject to by the Partnership) per Class A Partnership Preferred Unit allocable to the Class A Partnership Preferred Units so redeemed exceeds the redemption amount paid or payable with respect to the Class A Partnership Preferred Units so redeemed.
10. | Restrictions on Ownership. |
The Class A Partnership Preferred Units shall be owned and held solely by the General Partner or the Special Limited Partner.
11. | General. |
(a) The ownership of Class A Partnership Preferred Units may (but need not, in the sole and absolute discretion of the General Partner) be evidenced by one or more certificates. The General Partner shall amend Exhibit A to the Agreement from time to time to the extent necessary to reflect accurately the issuance of, and subsequent conversion, redemption, or any other event having an effect on the ownership of, Class A Partnership Preferred Units.
(b) The rights of the General Partner and the Special Limited Partner, in their capacity as holders of the Class A Partnership Preferred Units, are in addition to and not in limitation of any other rights or authority of the General Partner or the Special Limited Partner, respectively, in any other capacity under the Agreement or applicable law. In addition, nothing contained herein shall be deemed to limit or otherwise restrict the authority of the General Partner or the Special Limited Partner under the Agreement, other than in their capacity as holders of the Class A Partnership Preferred Units.
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Exhibit 12.1
Apartment Investment and Management Company
Ratios of Earnings to Fixed Charges
(in thousands)
Three Months Ended | Year Ended December 31, | |||||||||||||||||||||||
March 31, 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||||||
Earnings: |
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Income (loss) from continuing operations before taxes and income or loss from equity investees |
$ | 9,200 | $ | 31,711 | $ | (15,206 | ) | $ | (124,457 | ) | $ | (154,472 | ) | $ | (197,408 | ) | ||||||||
Add: |
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Fixed charges |
61,779 | 262,492 | 253,924 | 294,169 | 279,772 | 283,630 | ||||||||||||||||||
Amortization of capitalized interest |
2,061 | 4,207 | 5,368 | 7,012 | 7,766 | 7,861 | ||||||||||||||||||
Distributed income of equity investees |
127 | 699 | 1,427 | 1,796 | 1,231 | 4,893 | ||||||||||||||||||
Subtract: |
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Capitalized interest |
(4,254 | ) | (17,608 | ) | (16,513 | ) | (13,363 | ) | (11,373 | ) | (9,938 | ) | ||||||||||||
Preferred OP Unit distributions |
(1,605 | ) | (6,423 | ) | (6,496 | ) | (6,683 | ) | (4,964 | ) | (6,288 | ) | ||||||||||||
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Total earnings (A) |
$ | 67,308 | $ | 275,078 | $ | 222,504 | $ | 158,474 | $ | 117,960 | $ | 82,750 | ||||||||||||
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Fixed charges: |
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Interest expense |
55,641 | 237,048 | 229,373 | 272,315 | 261,221 | 264,826 | ||||||||||||||||||
Estimate of interest within rental expense |
279 | 1,413 | 1,542 | 1,808 | 2,214 | 2,578 | ||||||||||||||||||
Capitalized interest |
4,254 | 17,608 | 16,513 | 13,363 | 11,373 | 9,938 | ||||||||||||||||||
Preferred OP Unit distributions |
1,605 | 6,423 | 6,496 | 6,683 | 4,964 | 6,288 | ||||||||||||||||||
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Total fixed charges (B) |
$ | 61,779 | $ | 262,492 | $ | 253,924 | $ | 294,169 | $ | 279,772 | $ | 283,630 | ||||||||||||
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Preferred stock dividends |
697 | 2,804 | 27,262 | 49,756 | 53,844 | 52,215 | ||||||||||||||||||
Redemption related preferred issuance costs |
(243 | ) | | 22,626 | (3,904 | ) | (254 | ) | (1,649 | ) | ||||||||||||||
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Total preferred stock dividends |
454 | 2,804 | 49,888 | 45,852 | 53,590 | 50,566 | ||||||||||||||||||
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Total fixed charges and preferred stock dividends (C) |
$ | 62,233 | $ | 265,296 | $ | 303,812 | $ | 340,021 | $ | 333,362 | $ | 334,196 | ||||||||||||
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Ratio of earnings to fixed charges (A divided by B) (1) |
1.09 | 1.05 | (1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||
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Ratio of earnings to fixed charges and preferred stock dividends (A divided by C) |
1.08 | 1.04 | (2 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||
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(1) During the period indicated, earnings were insufficient to cover fixed charges by: |
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n/a | n/a | $ | 31,420 | $ | 135,695 | $ | 161,812 | $ | 200,880 | |||||||||||||||
(2) During the period indicated, earnings were insufficient to cover fixed charges and preferred stock dividends by: |
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n/a | n/a | $ | 81,308 | $ | 181,547 | $ | 215,402 | $ | 251,446 |