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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) APRIL 16, 1997
------------------------
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
-------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 1-13232 84-1259577
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1873 SOUTH BELLAIRE STREET, SUITE 1700 DENVER, CO 80222-4348
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 757-8101
--------------------
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. OTHER EVENTS
FIRST QUARTER RESULTS
On April 23, 1997, Apartment Investment and Management Company
("AIMCO") announced its results for the first quarter of 1997. Cash Earned
For Shareholders ("CEFS") was $10,979,000 or $0.56 per common share for the
quarter ended March 31, 1997, compared to $6,768,000 or $0.49 per common
share for the quarter ended March 31, 1996, a 14.3% increase on a per share
basis. AIMCO measures its economic profitability based on Funds From
Operations less a minimum annual provision for capital replacements of $300
per apartment unit, which AIMCO defines as CEFS. Funds From Operations for
the first quarter of 1997 equaled $12,512,000 or $0.64 per common share,
compared to $7,888,000 or $0.57 per common share for the quarter ended March
31, 1996, a 12.3% increase on a per share basis. On April 24, 1997, AIMCO
announced the declaration of a cash dividend of $0.4625 per common share for
the quarter ended March 31, 1997, payable on May 15, 1997 to shareholders of
record on May 8, 1997. Copies of AIMCO's press releases, dated April 23, 1997
and April 24, 1997, are included as exhibits to this report and incorporated
herein by this reference.
PROPOSED ACQUISITIONS
On April 21, 1997, AIMCO entered into an Agreement and Plan of
Merger, dated as of April 21, 1997 (the "Merger Agreement"), with NHP
Incorporated, a Delaware corporation ("NHP"), and AIMCO/NHP Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of AIMCO ("Merger
Sub"), pursuant to which Merger Sub will be merged with and into NHP (the
"Merger"). In the Merger, holders of common stock, par value $.01 per share
("NHP Common Stock"), of NHP may elect to receive, for each share, either (i)
0.74766 shares of Class A Common Stock, par value $.01 per share ("AIMCO
Common Stock"), of AIMCO, or (ii) a combination of 0.37383 shares of AIMCO
Common Stock and $10 in cash. NHP has indicated that, as of March 7, 1997,
12,652,439 shares of NHP Common Stock were issued and outstanding (excluding
options). The Merger Agreement also provides for NHP to distribute rights
("Rights") to its stockholders that will entitle them to receive shares of
NHP Financial Services, Ltd., a Delaware corporation ("NHP Financial"), NHP's
commercial mortgage banking subsidiary, upon the effectiveness of the Merger
or on December 1, 1997 if the Merger has not yet occurred. The Merger is
conditioned on, among other things, the approval of the stockholders of AIMCO
and NHP (excluding AIMCO) and certain governmental approvals. A copy of the
Merger Agreement is included as an exhibit to this report and incorporated
herein by this reference.
On April 16, 1997, AIMCO entered into a Stock Purchase Agreement,
dated as of April 16, 1997 (the "Stock Purchase Agreement"), with Demeter
Holdings Corporation, a Massachusetts corporation ("Demeter"), and Capricorn
Investors, L.P., a Delaware limited partnership ("Capricorn"), which provides
for AIMCO to acquire all of the 5,619,695 shares of NHP Common Stock
currently owned by Demeter, and all of the 1,310,427 shares of NHP Common
Stock currently owned by Capricorn. As payment for each share of NHP Common
Stock acquired, AIMCO will (i) either pay $20 per share in cash or issue
0.74766 shares of AIMCO Common Stock, and (ii) deliver the shares of NHP
Financial that AIMCO receives in respect of the Rights relating to each share
of NHP Common Stock acquired. Under the Stock Purchase Agreement, AIMCO is
obligated to pay Demeter at least $59.5 million in cash. The shares of NHP
Common Stock to be acquired by AIMCO pursuant to the Stock Purchase Agreement
represent approximately 53% of NHP Common Stock. A copy of the Stock Purchase
Agreement is included as an exhibit to this report and incorporated herein by
this reference.
AIMCO is continuing to negotiate the terms of a definitive agreement
with Demeter, Capricorn and Phemus Corporation, a Massachusetts corporation and
an affiliate of Demeter, relating to the acquisition of certain entities that
own interests in conventional and affordable multifamily apartment properties
managed primarily by NHP. In connection with the Merger Agreement, NHP has
agreed to waive its right of first refusal to purchase these
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entities, effective May 3, 1997, provided that such an agreement is entered into
on satisfactory terms no later than May 31, 1997.
A copy of AIMCO's press release, dated April 21, 1997, relating to the
Merger Agreement, the Stock Purchase Agreement and related transactions is
included as an exhibit to this report and incorporated herein by this reference.
In March 1997, AIMCO entered into an agreement to acquire
Stonebrook Apartments ("Stonebrook") a 244-unit apartment community located
in Orlando, Florida. The purchase price is $11.0 million, which includes the
assumption of $6.5 million of existing mortgage indebtedness that bears
interest at 7.25% per annum and matures in January 1999. The purchase price
includes estimated closing costs and approximately $0.2 million for initial
capital expenditures at the property.
In April 1997, AIMCO entered into an agreement to acquire The
Bay Club ("Bay Club") at Aventura, a 702-unit luxury high rise apartment
community located in Aventura, Florida. The purchase price is $71 million,
which includes the assumption of $49 million of existing mortgage indebtedness
that bears interest at 7.98% per annum and matures in November 2001. The
purchase price includes estimated closing costs and approximately $0.3 million
for initial capital expenditures at the property.
AIMCO expects to finance the cash portion of the consideration
required for these acquisitions through the incurrence of additional
indebtedness, which may include additional borrowings under AIMCO's existing
credit facility and (i) with respect to the consideration required pursuant
to the Merger Agreement and the Stock Purchase Agreement, issuances of
capital stock and (ii) with respect to the acquisitions of Stonebrook and Bay
Club, issuances of preferred stock.
The completion of each of the above-described transactions is subject
to a number of contingencies, including in some cases, AIMCO's satisfactory
completion of due diligence and obtaining approvals of governmental
authorities, shareholders and other third parties. Accordingly, there can be
no assurance that any of the above-described transactions will be completed.
REFINANCINGS
In April 1997 (with the final financing expected to be completed on
April 28), 23 affiliates of AIMCO completed a series of financings secured by
27 individual multifamily apartment communities by borrowing an aggregate of
$108 million from an institutional lender on a fully amortizing, fixed rate
basis with a term of 20 years and bears an all-in interest rate of 7.6% per
year. The net proceeds of the financings were used to partially repay
short term secured floating rate debt.
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Exhibit
Number Description
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2.1 Agreement and Plan of Merger, dated as of April 21, 1997, by and
among Apartment Investment and Management Company, AIMCO/NHP
Acquisition Corp. and NHP Incorporated.
2.2 Stock Purchase Agreement, dated as of April 16, 1997, by and
among Apartment Investment and Management Company, Demeter
Holdings Corporation and Capricorn Investors, L.P.
99.1 Press Release of Apartment Investment and Management Company,
dated April 23, 1997.
99.2 Press Release of Apartment Investment and Management Company,
dated April 24, 1997.
99.3 Press Release of Apartment Investment and Management Company,
dated April 21, 1997.
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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 thereunto duly authorized.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
Date: April 24, 1997 By: /s/ LEEANN MOREIN
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Leeann Morein
Senior Vice President, Chief Financial
Officer and Secretary
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of April 21, 1997
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
AIMCO/NHP ACQUISITION CORP.
and
NHP INCORPORATED
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.......................................................1
ARTICLE II
THE MERGER
SECTION 2.1 The Merger..................................................... 10
SECTION 2.2 Effective Time of the Merger................................... 11
SECTION 2.3 Closing........................................................ 11
SECTION 2.4 Effects of the Merger.......................................... 11
SECTION 2.5 Certificate of Incorporation and By-Laws....................... 11
SECTION 2.6 Directors...................................................... 11
SECTION 2.7 Officers....................................................... 12
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 Conversion of Capital Stock of
Merger Sub.................................................... 12
SECTION 3.2 Conversion of Capital Stock of NHP............................. 12
SECTION 3.3 NHP Common Stock Elections; Exchange of Certificates............ 14
SECTION 3.4 AIMCO Ownership Limit............................................16
SECTION 3.5 Dividends, Fractional Shares, Etc................................16
SECTION 3.6 NHP Stock Options................................................19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NHP
SECTION 4.1 Organization and Qualifications; Subsidiaries................... 21
SECTION 4.2 Certificate of Incorporation and Bylaws. ...................... 22
SECTION 4.3 Capitalization.................................................. 22
SECTION 4.4 Authority Relative to This Agreement............................ 23
SECTION 4.5 No Conflict; Required Filings and Consents;
Certain Contracts.............................................. 23
SECTION 4.6 Compliance...................................................... 24
SECTION 4.7 SEC Reports and Financial Statements............................ 24
SECTION 4.8 Absence of Certain Changes or Events............................ 25
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SECTION 4.9 Litigation...................................................... 26
SECTION 4.10 Registration Statements and Proxy
Statement/Prospectus........................................... 26
SECTION 4.11 Employee Benefit Plans......................................... 27
SECTION 4.12 Brokers........................................................ 28
SECTION 4.13 Taxes.......................................................... 28
SECTION 4.14 Opinion of Financial Advisor................................... 29
SECTION 4.15 Reliance....................................................... 29
SECTION 4.16 Management Arrangements.........................................29
SECTION 4.17 Disclosure .....................................................30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIMCO
AND MERGER SUB
SECTION 5.1 Organization and Qualifications; Subsidiaries................... 30
SECTION 5.2 Charter and Bylaws.............................................. 30
SECTION 5.3 Capitalization.................................................. 31
SECTION 5.4 Authority Relative to This Agreement........................... 31
SECTION 5.5 No Conflict; Required Filings and Consents...................... 32
SECTION 5.6 Compliance...................................................... 33
SECTION 5.7 SEC Reports and Financial Statements............................ 33
SECTION 5.8 Absence of Certain Changes or Events............................ 34
SECTION 5.9 Litigation...................................................... 34
SECTION 5.10 Registration Statements and Proxy Statement/
Prospectus..................................................... 34
SECTION 5.11 Employee Benefit Plans..........................................35
SECTION 5.12 Brokers........................................................ 36
SECTION 5.13 Taxes.......................................................... 36
SECTION 5.14 REIT Status.................................................... 37
SECTION 5.15 Reliance .......................................................37
SECTION 5.16 Stock Purchase Agreement .......................................38
SECTION 5.17 Financial Capability ...........................................38
SECTION 5.18 Qualified Purchaser ............................................38
SECTION 5.19 Disclosure......................................................38
ARTICLE VI
COVENANTS
SECTION 6.1 Notification of Certain Matters................................. 38
SECTION 6.2 Further Action, Reasonable Efforts;
Consents and Approvals......................................... 39
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SECTION 6.3 Conduct of Business of NHP Pending
the Closing.................................................... 39
SECTION 6.4 Conduct of Business of AIMCO Pending
the Closing.................................................... 41
SECTION 6.5 Access to Information........................................... 41
SECTION 6.6 No Solicitation................................................. 41
SECTION 6.7 Stockholder Meetings............................................ 43
SECTION 6.8 Registration Statements and Joint Proxy Statement/
Prospectus..................................................... 43
SECTION 6.9 Letters of Accountants.......................................... 45
SECTION 6.10 Accelerations.................................................. 45
SECTION 6.11 Public Announcements........................................... 45
SECTION 6.12 Blue Sky....................................................... 46
SECTION 6.13 NYSE Listing................................................... 46
SECTION 6.14 Affiliates..................................................... 46
SECTION 6.15 Indemnification with Respect to the Registration/
Statement...................................................... 46
SECTION 6.16 Spin-Off....................................................... 48
SECTION 6.17 Consent to Certain Transactions.................................48
SECTION 6.18 Directors' and Officers' Indemnification and
Insurance ......................................................49
SECTION 6.19 NHP Employees ..................................................50
SECTION 6.20 Directors.......................................................50
SECTION 6.21 Financing ......................................................51
SECTION 6.22 Separation Agreement ...........................................52
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to Each Party's Obligation to
Effect the Merger.............................................. 51
SECTION 7.2 Conditions to Obligations of NHP to
Effect the Merger.............................................. 52
SECTION 7.3 Conditions to Obligations of AIMCO and Merger
Sub to Effect the Merger....................................... 53
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT AND CLOSING
SECTION 8.1 Termination..................................................... 54
SECTION 8.2 Effect of Termination........................................... 56
SECTION 8.3 Amendment or Supplement......................................... 56
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SECTION 8.4 Extension of Time, Waiver, Etc.................................. 57
SECTION 8.5 Termination Fee..................................................57
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Governing Law................................................... 58
SECTION 9.2 Entire Agreement................................................ 58
SECTION 9.3 Modification; Waiver............................................ 58
SECTION 9.4 Notices......................................................... 58
SECTION 9.5 Expenses........................................................ 60
SECTION 9.6 Assignment...................................................... 60
SECTION 9.7 Survival........................................................ 60
SECTION 9.8 Severability.................................................... 60
SECTION 9.9 Successors and Assigns; Third Parties........................... 61
SECTION 9.10 Counterparts................................................... 61
SECTION 9.11 Interpretation; References..................................... 61
SECTION 9.12 Jurisdiction .................................................. 61
SECTION 9.13 Exhibits and Schedules......................................... 62
SECTION 9.14 Attorneys' Fees................................................ 62
SECTION 9.15 Waiver of Jury Trial........................................... 62
SECTION 9.16 Further Assurances............................................. 62
SECTION 9.17 Negotiation of Agreement....................................... 62
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DISCLOSURE SCHEDULE
Schedule 4.5 -- Conflicts
Schedule 4.6 -- Compliance
Schedule 4.8 -- Absence of Certain Changes or Events
Schedule 4.9 -- Litigation
Schedule 4.16 -- Management Arrangements
Schedule 6.3 -- Conduct of Business of NHP Pending the Closing
Schedule 6.18 -- Current Directors and Officers Liability Insurance Policies
EXHIBITS
Exhibit A -- Rule 145 Affiliate Agreement
Exhibit B -- Registration Rights Agreement
Exhibit C-1 -- Form of Legal Opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, Counsel to AIMCO and Merger Sub
Exhibit C-2 -- Form of Legal Opinion of Piper & Marbury L.L.P., Maryland
Counsel to AIMCO
Exhibit D-1 -- Form of Legal Opinion of Wilmer, Cutler & Pickering, Counsel
to NHP
Exhibit D-2 -- Form of Legal Opinion of Arent Fox Kintner Plotkin & Kahn,
Special Counsel to NHP
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 21, 1997 (the
"AGREEMENT"), by and among APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a
Maryland corporation ("AIMCO"), AIMCO/NHP ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of AIMCO ("MERGER SUB"), and NHP
INCORPORATED, a Delaware corporation ("NHP").
WHEREAS, the Boards of Directors of AIMCO, Merger Sub and NHP have
determined that the merger of Merger Sub with and into NHP on the terms set
forth herein (the "MERGER"), with NHP surviving as a wholly owned subsidiary of
AIMCO, is advisable and in the best interests of their respective corporations
and stockholders and have approved this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The capitalized terms used in this Agreement
and not otherwise defined shall have the following meanings (unless the context
otherwise requires, such capitalized terms shall include the singular and plural
and the conjunctive and disjunctive forms of the terms defined):
"AIMCO COMMON STOCK" shall mean Class A Common Stock, par value $.01
per share, of AIMCO.
"AIMCO CONFIDENTIALITY AGREEMENT" shall mean the letter agreement,
dated January 15, 1997, from AIMCO to NHP.
"AIMCO MEETING" shall have the meaning set forth in SECTION 6.7.
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"AIMCO OPTION PLANS" shall have the meaning set forth in SECTION 5.3.
"AIMCO REGISTRATION STATEMENT" shall have the meaning set forth in
SECTION 6.8.
"AIMCO SEC REPORTS" shall have the meaning set forth in SECTION 5.7.
"AIMCO STOCK ISSUANCE" shall have the meaning set forth in SECTION
5.4.
"AIMCO STOCKHOLDER APPROVAL" shall have the meaning set forth in
SECTION 5.4.
"ACQUISITION PROPOSAL" shall have the meaning set forth in SECTION
6.6.
"BENEFIT PLAN" shall mean, with respect to any Person, any plan,
program, arrangement, practice or contract which provides benefits or
compensation to or on behalf of employees, former employees, consultants,
officers or directors of such Person or any of such Person's subsidiaries,
including, without limitation, any employee pension benefit plan (whether or not
insured), as defined in Section 3(2) of ERISA, any employee welfare benefit
plan (whether or not insured), as defined in Section 3(1) of ERISA, any stock
bonus, stock ownership, stock option, stock purchase, stock appreciation right,
phantom stock, or other stock plan (whether qualified or non-qualified), and any
pension, welfare, termination, employment, severance, retirement, bonus,
deferred compensation, incentive compensation, insurance (whether life, accident
and health, or other and whether key man, group, workers compensation, or
other), profit sharing, disability, thrift, day care, legal services, leave of
absence, layoff, or supplemental or excess benefit plan, and any other benefit
contract, arrangement, or procedure having the effect of a plan, whether formal,
informal, written or oral, that is (or was at any time) sponsored maintained or
contributed to by such Person or by any trade or business (whether or not
incorporated) which, together with such Person, would be deemed a "single
employer" within the meaning of Section 4001 of ERISA, within the last six
years.
"BLUE SKY LAWS" shall have the meaning set forth in SECTION 4.5.
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"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York City are not required to be open.
"CAPRICORN" shall mean Capricorn Investors, L.P., a Delaware limited
partnership.
"CERTIFICATE OF MERGER" shall have the meaning set forth in SECTION
2.2.
"CERTIFICATES" shall have the meaning set forth in SECTION 3.2.
"CLAIM" shall have the meaning set forth in SECTION 6.18.
"CLASS B COMMON STOCK" shall have the meaning set forth in SECTION
5.3.
"CLOSING" shall have the meaning set forth in SECTION 2.3.
"CLOSING DATE" shall have the meaning set forth in SECTION 2.3.
"COBRA" shall have the meaning set forth in SECTION 4.11.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONSENTS" shall have the meaning set forth in SECTION 6.2.
"CONTRACT" shall mean, with respect to any Person, any note, bond,
indenture, lease, license, permit, franchise, deed of trust, mortgage, loan
agreement or other document, instrument, obligation or agreement, oral or
written, to which such Person or any of its subsidiaries is a party or by which
any of them or their assets or properties is bound or affected.
"DEMETER" shall mean Demeter Holdings Corporation, a Massachusetts
corporation.
"DGCL" means the General Corporation Law of the State of Delaware.
"DISSENTING SHARES" shall have the meaning set forth in SECTION 3.2.
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"DLJ" shall have the meaning set forth in SECTION 4.12.
"EFFECTIVE TIME" shall have the meaning set forth in SECTION 2.2.
"ELECTION DEADLINE" shall have the meaning set forth in SECTION 3.3.
"ELECTION FORM" shall have the meaning set forth in SECTION 3.3.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended (including without limitation any successor act), and the rules
and regulations promulgated thereunder.
"EXCESS SHARES" shall have the meaning set forth in SECTION 3.4.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE AGENT" shall have the meaning set forth in SECTION 3.3.
"EXCHANGE RATIO" shall have the meaning set forth in SECTION 3.2.
"FAIRNESS OPINION" shall have the meaning set forth in SECTION 4.14.
"GAAP" shall mean generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"GOVERNMENTAL AUTHORITY" shall mean any government or any agency,
bureau, board, commission, court, judicial or quasi-judicial body, department,
authority, official, political subdivision, tribunal or other instrumentality of
any government, whether Federal, state or local, domestic or foreign.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency.
"INDEMNIFIED OFFICERS/DIRECTORS" shall have the meaning set forth in
SECTION 6.18.
"INDEMNIFIED PARTY" shall have the meaning set forth in SECTION 6.15.
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"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION 6.15.
"INDEPENDENT COMMITTEE" shall mean NHP's committee of independent
directors, comprised of Messrs. Bodman, Creighton and Cutler, established by
resolutions adopted by the NHP Board of Directors as of February 24, 1997.
"LAW" shall mean any law, statute, rule, regulation, ordinance, decree
or order of any Governmental Authority.
"LETTER AGREEMENT" shall mean that certain letter agreement, dated
February 13, 1997, among AIMCO, Demeter, Phemus and Capricorn.
"LIEN" shall mean any mortgage, pledge, assessment, security interest,
lease, sublease, lien, adverse claim, levy, charge, option, right of others or
restriction (whether on voting, sale, transfer, disposition or otherwise) or
other encumbrance of any kind, whether imposed by agreement, understanding, law
or equity, or any conditional sale contract, title retention contract or other
contract to give or to refrain from giving any of the foregoing.
"LOSSES" shall have the meaning set forth in SECTION 6.18.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
material adverse effect on (i) the validity or enforceability of this Agreement,
(ii) the ability of such Person to perform its obligations under this Agreement
or (iii) the business, assets, condition or results of operations of such Person
and its subsidiaries, taken as a whole.
"MATERIAL SUBSIDIARY" shall mean, with respect to any Person, a
subsidiary of such Person that (i) constitutes a "significant subsidiary" of
such Person, within the meaning of Rule 1-02 of Regulation S-X of the SEC, (ii)
has a direct or indirect ownership interest in any other subsidiary of such
Person that is a Material Subsidiary of such Person, or (iii) is otherwise
material to the business or operations of such Person and its subsidiaries,
taken as a whole.
"MATURITY TIME" shall have the meaning set forth in the Rights
Agreement.
"MAXIMUM PREMIUM" shall have the meaning set forth in SECTION 6.18.
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"MERGER CONSIDERATION" shall mean the Stock Consideration or the Mixed
Consideration.
"MERGER FILING" shall have the meaning set forth in SECTION 2.2.
"MIXED CONSIDERATION" shall have the meaning set forth in SECTION 3.2.
3.2.
"MIXED ELECTION" shall have the meaning set forth in SECTION 3.2.
"MORTGAGE SUBSIDIARY" shall mean NHP Financial Services, Ltd., a
Delaware corporation.
"MORTGAGE SUB STOCK" shall mean common stock, par value $.01 per
share, of the Mortgage Subsidiary.
"MS REGISTRATION STATEMENT" shall have the meaning set forth in
SECTION 6.8.
"NHP COMMON STOCK" shall mean the common stock, par value, $.01 per
share, of NHP.
"NHP CONFIDENTIALITY AGREEMENT" shall mean the letter agreement, dated
January 15, 1997, from NHP to AIMCO.
"NHP MEETING" shall have the meaning set forth in SECTION 6.7.
"NHP OPTION PLANS" shall have the meaning set forth in SECTION 4.3.
"NHP SEC REPORTS" shall have the meaning set forth in SECTION 4.7.
"NHP STOCK OPTIONS" shall have the meaning set forth in SECTION 4.3.
"NHP STOCKHOLDER APPROVAL" shall have the meaning set forth in SECTION
SECTION 6.7.
"NHP'S FREE CASH FLOW" shall mean, for any period, the amount of NHP's
earnings before interest, taxes, depreciation and amortization for such period,
less (i) the amount of cash payments made or obligated to be made in respect of
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taxes and interest during such period, and (ii) $500,000 for each month (or
ratable portion thereof) included in such period.
"NHP'S TRANSACTION COSTS" shall mean, for any period, all of NHP's
termination, severance and transaction costs arising during such period in
respect of the Spin-Off and the Merger.
"NYSE" means the New York Stock Exchange, Inc.
"NOTICES" shall have the meaning set forth in SECTION 9.4.
"OPTION" shall mean, with respect to any Person, any option, warrant,
call, right, subscription, convertible or exchangeable security or other right,
agreement, arrangement or commitment of any kind or character to which such
Person or any of its subsidiaries is a party relating to the issued or unissued
capital stock of such Person or any of its subsidiaries, or obligating such
Person or any of its subsidiaries to issue, transfer, grant or sell any shares
of capital stock of, or other equity interest in, or securities convertible into
or exchangeable for any capital stock or other equity interest in, such Person
or any of its subsidiaries.
"ORGANIZATIONAL DOCUMENTS" shall mean (i) with respect to a
corporation, its certificate or articles of incorporation and bylaws, (ii) with
respect to any limited liability company, its certificate of formation, articles
of organization, regulations, operating agreement and limited liability company
agreement, as applicable, (iii) with respect to any limited partnership, its
certificate of limited partnership and limited partnership agreement, (iv) with
respect to any general partnership, its partnership agreement, and (v) all other
similar organizational documents.
"OUTSIDE DATE" shall have the meaning set forth in SECTION 7.1.
"PERSON" shall mean any natural person, corporation, general
partnership, limited partnership, limited liability company, limited liability
partnership, proprietorship, trust, union, association, court, tribunal, agency,
government, department, commission, self-regulatory organization, arbitrator,
board, bureau, instrumentality or other entity, enterprise, authority or
business organization.
"PHEMUS" shall mean Phemus Corporation, a Massachusetts corporation.
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"PREFERRED STOCK" shall have the meaning set forth in SECTION 5.3.
"PROXY STATEMENT/PROSPECTUS" shall have the meaning set forth in
SECTION 6.8.
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning set forth in
SECTION 6.14.
"REAL ESTATE ACQUISITION AGREEMENT" shall mean the Real Estate
Acquisition Agreement to be entered into by and among AIMCO, AIMCO Properties,
L.P., Demeter, Phemus, Capricorn and/or certain related entities on terms
substantially in accordance with the Letter Agreement, provided that AIMCO and
its affiliates may acquire, directly or indirectly, all of the real property
interests identified in the Letter Agreement for consideration substantially
equivalent to the values attributed to such interests in the Letter Agreement.
"REIT STATUS" shall mean, with respect to any Person, (a) the
qualification of such Person as a real estate investment trust under Sections
856 through 860 of the Code, (b) the applicability to such Person and its
shareholders of the method of taxation provided for in Sections 857 ET SEQ. of
the Code, and (c) the qualification and taxation of such Person as a real
estate investment trust under analogous provisions of state and local law in
each state and jurisdiction in which such Person owns property, operates or
conducts business.
"REPRESENTATIVES" means, with respect to any Person, the officers,
directors, employees, auditors and other agents and representatives of such
Person.
"RIGHT" shall have the meaning set forth in the Rights Agreement.
"RIGHT OF FIRST REFUSAL AGREEMENT" shall mean the Right of First
Refusal Agreement, dated as of August 18, 1995, by and among NHP, NHP Partners,
Inc., The National Housing Partnership, Demeter Holdings Corporation, NHP
Partners Limited Partnership, NHP Partners Two Limited Partnership, NHP Partners
LLC, NHP Partners Two LLC, Capricorn Investors, L.P., and J. Roderick Heller,
III.
"RIGHTS AGREEMENT" shall mean the Rights Agreement, dated as of April
21, 1997, by and between NHP, the Mortgage Subsidiary and The First National
Bank of Boston, as Rights Agent.
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"RIGHTS CONSIDERATION" shall have the meaning set forth in SECTION
3.2.
"RULE 145 AFFILIATE AGREEMENT" shall have the meaning set forth in
SECTION 6.14.
"RULE 145 AFFILIATES" shall have the meaning set forth in SECTION
6.14.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SENIOR PREFERRED STOCK" shall have the meaning set forth in SECTION
5.3.
"SPIN-OFF" shall mean the distribution of Rights and Mortgage Sub
Stock pursuant to the Rights Agreement.
"STOCK AND ASSET TRANSFER RESTRICTIONS AGREEMENT" shall mean the Stock
and Asset Transfer Restrictions Agreement, dated as of December 10, 1993, by and
among Oxford Holding Corporation, Oxford Management Company, Inc., Oxford
Retirement Services, Inc., Oxford Realty Services Corp., Oxford Development
Corporation, NHP-HG, Inc., NHP, Inc., NHP Property Management, Inc., Oxford
Asset Management Corporation and Leo E. Zickler.
"STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement,
dated as of April 16, 1997, by and among AIMCO, Demeter, and Capricorn.
"SUBSIDIARY" shall mean, with respect to any Person, (i) any
corporation with respect to which such Person, directly or indirectly through
one or more subsidiaries, (a) owns more than 50% of the outstanding shares of
capital stock having generally the right to vote in the election of directors or
(b) has the power, under ordinary circumstances, to elect, or to direct the
election of, a majority of the board of directors of such corporation, (ii) any
partnership with respect to which (a) such Person or a subsidiary of such Person
is a general partner, (b) such Person and its subsidiaries together own more
than 50% of the interests therein, or (c) such Person and its subsidiaries have
the right to appoint or elect or direct the appointment or election of a
majority of the directors or other Person or body responsible for the governance
or management thereof, (iii) any limited liability company with
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respect to which (a) such Person or a subsidiary of such Person is the manager
or managing member, (b) such Person and its subsidiaries together own more than
50% of the interests therein, or (c) such Person and its subsidiaries have the
right to appoint or elect or direct the appointment or election of a majority of
the directors or other Person or body responsible for the governance or
management thereof, or (iv) any other entity in which such Person has, and/or
one or more of its subsidiaries have, directly or indirectly, (a) at least a 50%
ownership interest or (b) the power to appoint or elect or direct the
appointment or election of a majority of the directors or other Person or body
responsible for the governance or management thereof.
"SUIT" shall have the meaning set forth in SECTION 9.12.
"SURVIVING CORPORATION" shall have the meaning set forth in SECTION
2.1.
"TAX" or "TAXES" shall mean all Federal, state, local and foreign
taxes and other assessments and governmental charges of a similar nature
(whether imposed directly or through withholdings), including any interest,
penalties and additions to Tax applicable thereto.
"TAX RETURNS" shall mean all Federal, state, local and foreign
returns, declarations, statements, reports, schedules, forms and information
returns relating to Taxes, and all amendments thereto.
"TRANSACTIONS" means the transactions contemplated by this Agreement
in ARTICLE II.
"TRIGGERING EVENT" shall have the meaning set forth in SECTION 6.10.
"WARN ACT" shall have the meaning set forth in SECTION 6.19.
ARTICLE II
THE MERGER
SECTION 2.1 THE MERGER. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time, in accordance with the DGCL, Merger
Sub shall be merged with and into NHP in accordance with this Agreement and the
separate existence of Merger Sub shall cease. NHP shall be the surviving
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corporation in the Merger (hereinafter sometimes referred to as the "SURVIVING
CORPORATION").
SECTION 2.2 EFFECTIVE TIME OF THE MERGER. Upon the terms and subject
to the conditions hereof, a certificate of merger (the "CERTIFICATE OF MERGER")
shall be duly prepared, executed and acknowledged by the Surviving Corporation
and thereafter delivered to the Secretary of State of the State of Delaware, for
filing on the Closing Date (as defined in SECTION 2.3). The Merger shall become
effective as of the date and at such time as the Certificate of Merger pursuant
to Section 251 of the DGCL and any other documents necessary to effect the
Merger in accordance with the DGCL are duly filed (the "MERGER FILING") with the
Secretary of State of the State of Delaware or at such subsequent date or time
as shall be agreed by AIMCO and NHP and specified in the Certificate of Merger
(the time the Merger becomes effective pursuant to the DGCL being referred to
herein as the "EFFECTIVE TIME").
SECTION 2.3 CLOSING. Subject to the satisfaction or waiver of all of
the conditions to closing contained in ARTICLE VII, the closing of the Merger
(the "CLOSING") will take place at 10:00 a.m., New York City time, on a date to
be specified by the parties, which shall be no later than the fifth Business Day
(as defined below) after the satisfaction or waiver of the conditions to Closing
contained in ARTICLE VII, at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022, unless another date, time or
place is agreed to in writing by the parties hereto. The date and time at which
the Closing occurs is referred to herein as the "CLOSING DATE."
SECTION 2.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of NHP and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of NHP and Merger Sub shall
become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.5 CERTIFICATE OF INCORPORATION AND BY-LAWS. The
Certificate of Incorporation of Merger Sub in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation until amended in accordance with the terms thereof and with
applicable law. The By-Laws of Merger Sub in effect immediately prior to the
Effective Time shall be the By-Laws of the Surviving Corporation until amended
in accordance with the terms thereof and with applicable law.
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SECTION 2.6 DIRECTORS. The directors of Merger Sub immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office from the Effective Time in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation and until
his or her successor is duly elected and qualified.
SECTION 2.7 OFFICERS. The officers of NHP immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office from the Effective Time in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation and until his or her
successor is duly appointed and qualified.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 CONVERSION OF CAPITAL STOCK OF MERGER SUB. At the
Effective Time, each issued and outstanding share of common stock, par value
$.01 per share, of Merger Sub shall be converted into and become one fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 3.2 CONVERSION OF CAPITAL STOCK OF NHP.
(a) Except as otherwise provided in SECTION 3.4, and subject to
SECTIONS 3.2(C) and (D), at the Effective Time, each issued and outstanding
share of NHP Common Stock shall be converted into one of the following:
(i) for each such share of NHP Common Stock with respect to which an
election to receive a combination of AIMCO Common Stock and cash has been
effectively made and not revoked or lost, pursuant to SECTION 3.3 (the "MIXED
ELECTION"), the right to receive 0.37383 shares of AIMCO Common Stock and an
amount in cash equal to $10.00 (together, the "MIXED CONSIDERATION"); or
(ii) for each such share of NHP Common Stock (other than a share with
respect to which a Mixed Election was effectively made and not revoked or lost),
the right to receive 0.74766 (the "EXCHANGE RATIO") shares of AIMCO Common Stock
(the "STOCK CONSIDERATION").
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As a result of the Merger and without any action on the part of the
holders thereof, at the Effective Time, all shares of NHP Common Stock shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of shares of NHP Common Stock shall thereafter
cease to have any rights with respect to such shares of NHP Common Stock, except
the right to receive, without interest, the Merger Consideration and cash for
fractional shares of AIMCO Common Stock in accordance with SECTION 3.5 upon the
surrender of a certificate that, immediately prior to the Effective Time,
represented an outstanding share or shares of NHP Common Stock and a related
Right or Rights (a "CERTIFICATE").
(b) At the Effective Time, each issued and outstanding Right
shall, in accordance with its terms, be converted into the right to receive
one-third of a share of Mortgage Sub Stock (the "RIGHTS CONSIDERATION"). As a
result of the Merger and without any action on the part of the holders thereof,
at the Effective Time, all Rights shall, in accordance with their terms, no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of Rights shall thereafter cease to have any
rights with respect thereto, except the right to receive, without interest, the
Rights Consideration and cash for fractional Rights in accordance with SECTION
3.5 upon the surrender of a Certificate.
(c) Notwithstanding anything contained in this SECTION 3.2 to the
contrary, each share of NHP Common Stock issued and held in NHP's treasury
immediately prior to the Effective Time, and each share of NHP Common Stock
owned by AIMCO or Merger Sub immediately prior to the Effective Time, shall, by
virtue of the Merger, cease to be outstanding and shall be cancelled and retired
and shall cease to exist without payment of any consideration therefor.
(d) Notwithstanding anything in this SECTION 3.2 to the contrary,
shares of NHP Common Stock which are issued and outstanding immediately prior to
the Effective Time and which are held by a Person who has not voted such shares
in favor of the Merger and who has properly exercised his rights of appraisal
for such shares in the manner provided by the DGCL (the "DISSENTING SHARES")
shall not be converted into or be exchangeable for the right to receive the
Merger Consideration, unless and until such holder shall have failed to perfect
or shall have effectively withdrawn or lost his right to appraisal and payment,
as the case may be. If such holder shall have so failed to perfect or shall
have effectively withdrawn or lost such right, his shares shall thereupon be
deemed to have been converted into and to have become exchangeable for, at the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon. NHP shall give
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AIMCO prompt notice of any Dissenting Shares (and shall also give AIMCO prompt
notice of any withdrawals of such demands for appraisal rights) and AIMCO shall
have the right to direct all negotiations and proceedings with respect to any
such demands. NHP shall not, except with the prior written consent of AIMCO,
voluntarily make any payment with respect to, or settle or offer to settle, any
such demand for appraisal rights.
SECTION 3.3 NHP COMMON STOCK ELECTIONS; EXCHANGE OF CERTIFICATES.
(a)Each Person who, at the Effective Time, is a record holder of
shares of NHP Common Stock (other than holders of shares of NHP Common Stock to
be cancelled as set forth in SECTION 3.2(C) or Dissenting Shares) shall have the
right to submit an Election Form specifying the number of shares of NHP Common
Stock that such Person desires to have converted into the right to receive AIMCO
Common Stock and cash pursuant to the Mixed Election, and the number of shares
of NHP Common Stock that such person desires to have converted into the right to
receive solely AIMCO Common Stock (a "STOCK ELECTION").
(b) Promptly after the Effective Time, AIMCO shall deposit (or
cause to be deposited) with a bank or trust company to be designated by AIMCO
and reasonably acceptable to NHP (the "EXCHANGE AGENT"), for the benefit of the
holders of shares of NHP Common Stock and Rights, for exchange in accordance
with this ARTICLE III, (i) cash in an amount sufficient to pay the aggregate
cash portion of the Merger Consideration, (ii) certificates representing the
aggregate number of shares of AIMCO Common Stock that may be issued in respect
of shares of NHP Common Stock in the Merger, and (iii) certificates representing
the aggregate number of shares of Mortgage Sub Stock that may be delivered in
respect of Rights in the Merger. AIMCO Common Stock into which NHP Common Stock
shall be converted pursuant to the Merger shall be deemed to have been issued at
the Effective Time. Promptly after the Effective Time, AIMCO shall cause the
Mortgage Subsidiary to deposit with the Exchange Agent, for the benefit of the
holders of Rights, cash in an amount sufficient to pay the aggregate amount of
cash payable in lieu of fractional shares of Mortgage Sub Stock pursuant to
SECTION 3.5.
(c) As soon as reasonably practicable after the Effective Time,
AIMCO shall cause the Exchange Agent to mail to each holder of record of NHP
Common Stock and Rights immediately prior to the Effective Time (excluding
Dissenting Shares) (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon
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delivery of the Certificates to the Exchange Agent and shall be in such form and
have such other customary provisions as AIMCO may reasonably specify), (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration and Rights Consideration with respect to the shares
of NHP Common Stock and Rights formerly represented thereby, and (iii) a form
(an "ELECTION FORM") pursuant to which a holder of shares of NHP Common Stock
may make a Mixed Election or a Stock Election. As of the Election Deadline, all
holders of NHP Common Stock immediately prior to the Effective Time that have
not submitted to the Exchange Agent, or have properly revoked, a properly
completed Election Form, shall be deemed to have made a Stock Election.
(d)A Mixed Election or a Stock Election (other than a deemed
Stock Election) with respect to any shares of NHP Common Stock shall be
effective only if the Exchange Agent shall have received no later than 5:00
p.m., New York City time (the "ELECTION DEADLINE"), on a date to be mutually
agreed upon by NHP and AIMCO (which date shall not be later than the twentieth
Business Day after the Effective Time), (i) an Election Form properly completed
and executed (with the signature or signatures thereof guaranteed to the extent
required by the Election Form) by the holder thereof, accompanied by (ii) either
(x) the Certificate or Certificates representing such shares of NHP Common
Stock, in such form and with such endorsements, stock powers and signature
guarantees as may be required by such Election Form, or (y) an appropriate
guarantee of delivery of such Certificate from a member of any registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States, as may
be required by such Election Form. Any holder of NHP Common Stock immediately
prior to the Effective Time who has made an election by submitting an Election
Form to the Exchange Agent may, at any time prior to the Election Deadline,
change his election by submitting a revised Election Form, properly completed
and signed that is received by the Exchange Agent prior to the Election
Deadline. Any holder of NHP Common Stock immediately prior to the Effective Time
who has made an election by submitting an Election Form to the Exchange Agent
may revoke his election and withdraw his Certificates deposited with the
Exchange Agent by written notice to the Exchange Agent received before the close
of business on the day prior to the Election Deadline.
(e) Upon surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by AIMCO,
together with the Letter of Transmittal, duly executed, and such other documents
as AIMCO or the Exchange Agent shall reasonably request, the holder of such
Certificate shall be entitled to receive promptly after the Election Deadline in
exchange
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therefor, (i) a certified or bank cashier's check in an amount equal to the
cash, if any, which such holder has the right to receive pursuant to the
provisions of this ARTICLE III (including any cash in lieu of fractional shares
of AIMCO Common Stock pursuant to SECTION 3.5), (ii) a certificate representing
the number of shares of AIMCO Common Stock which such holder has the right to
receive pursuant to the provisions of this ARTICLE III, and (iii) a certificate
representing the number of shares of Mortgage Sub Stock which such holder has
the right to receive pursuant to the provisions of this ARTICLE III (in each
case, less the amount of any required withholding taxes), and the Certificate so
surrendered shall forthwith be cancelled. Until surrendered as contemplated by
this SECTION 3.3(E), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
with respect to the shares of NHP Common Stock formerly represented thereby and
the Rights Consideration with respect to the Rights formerly represented
thereby.
(f) AIMCO shall have the right to make reasonable rules, not
inconsistent with the terms of this Agreement, governing the issuance and
delivery of certificates for shares of AIMCO Common Stock into which shares of
NHP Common Stock are converted in the Merger, the issuance and delivery of
certificates for shares of Mortgage Sub Stock into which Rights are converted in
the Merger, and the payment of cash for shares of NHP Common Stock converted
into the right to receive cash in the Merger.
SECTION 3.4 AIMCO OWNERSHIP LIMIT. Notwithstanding any other
provision of this Agreement to the contrary, AIMCO shall not be obligated to
issue shares of AIMCO Common Stock to any Person if such issuance would result
in a violation of the ownership limit (the "OWNERSHIP LIMIT") set forth in
AIMCO's Organizational Documents. In lieu of issuing any shares (the "EXCESS
SHARES") of AIMCO Common Stock that would result in any Person receiving a
number of shares of AIMCO Common Stock in excess of the Ownership Limit, AIMCO
shall pay to such Person cash in an amount equal to the number of such Excess
Shares multiplied by $26.75.
SECTION 3.5 DIVIDENDS, FRACTIONAL SHARES, ETC.
(a) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on AIMCO
Common Stock or Mortgage Sub Stock shall be paid to the holder of any
unsurrendered Certificates until such Certificates are surrendered for exchange
as provided in this ARTICLE III. Subject to the effect of applicable laws,
following the
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surrender of any such Certificate, there shall be paid, without interest, to the
Person in whose name the certificates representing the shares of AIMCO Common
Stock into which the shares of NHP Common Stock formerly represented by such
Certificate were converted are registered, (i) at the time of such surrender,
the amount of all dividends and other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of AIMCO
Common Stock and not paid, less the amount of any withholding taxes which may be
required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to surrender and a payment date subsequent to surrender payable with
respect to such whole shares of AIMCO Common Stock, less the amount of any
withholding taxes which may be required thereon. Subject to the effect of
applicable laws, following the surrender of any such Certificate, there shall be
paid, without interest, to the Person in whose name the certificates
representing the shares of Mortgage Sub Stock into which the Rights formerly
represented by such Certificate were converted are registered, (i) at the time
of such surrender, the amount of all dividends and other distributions with a
record date after the Effective Time theretofore payable with respect to such
whole shares of Mortgage Sub Stock and not paid, less the amount of any
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Mortgage Sub Stock, less
the amount of any withholding taxes which may be required thereon.
(b) No fractional shares of AIMCO Common Stock or Mortgage Sub
Stock shall be issued in the Merger. All fractional shares of AIMCO Common
Stock or Mortgage Sub Stock that a holder of shares of NHP Common Stock or
Rights would otherwise be entitled to receive as a result of the Merger (or in
accordance with the terms of the Rights) shall be aggregated and, if a
fractional share results from such aggregation, such holder shall be entitled to
receive, in lieu thereof, an amount in cash determined by multiplying (i) the
fraction of a share of AIMCO Common Stock or Mortgage Sub Stock to which such
holder would otherwise have been entitled by (ii) in the case of AIMCO Common
Stock, $26.75 and, in the case of Mortgage Sub Stock, $9.15. No interest will
be paid or will accrue on any cash paid or payable in lieu of any fractional
shares of AIMCO Common Stock or Mortgage Sub Stock.
(c) At and after the Effective Time, there shall be no further
registration of transfers of shares of NHP Common Stock or Rights. If, after
the Effective Time, Certificates are presented to the Surviving Corporation,
they shall
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be cancelled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this ARTICLE III. Certificates surrendered
for exchange by any Person constituting an "affiliate" of NHP for purposes of
Rule 145(c) under the Securities Act shall not be exchanged until AIMCO has
received a written Rule 145 Affiliate Agreement from such Person as provided in
SECTION 6.14.
(d) If any portion of the Merger Consideration or Rights
Consideration is to be paid to a Person other than the registered holder of the
shares of NHP Common Stock and Rights represented by the Certificate or
Certificates surrendered in exchange therefor, it shall be a condition to such
payment that the Certificate or Certificates so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and that the Person
requesting such payment shall pay to the Exchange Agent any transfer or other
taxes required as a result of such payment to a Person other than the registered
holder of such Certificates or establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not payable and, with respect to the
Rights, such other conditions as may be set forth in the Rights Agreement.
(e) Any portion of the Merger Consideration, Rights Consideration
or cash payable in lieu of fractional shares made available to the Exchange
Agent pursuant to this ARTICLE III that remains unclaimed by the former holders
of shares of NHP Common Stock or Rights one year after the Effective Time shall
be delivered (i) in the case of the Merger Consideration, to AIMCO, and (ii) in
the case of the Rights Consideration and cash payable in lieu of fractional
shares of Mortgage Sub Stock, to the Mortgage Subsidiary. Any such holder who
has not theretofore exchanged his Certificates for the Merger Consideration and
Rights Consideration in accordance with this ARTICLE III shall thereafter look
only (i) to AIMCO for payment of the applicable Merger Consideration, cash in
lieu of fractional shares and unpaid dividends and distributions on the AIMCO
Common Stock deliverable in respect thereof, determined pursuant to this
Agreement, in each case, without interest, and (ii) to the Mortgage Subsidiary
for payment of the applicable Rights Consideration, cash in lieu of fractional
shares and unpaid dividends and distributions on the Mortgage Sub Stock
deliverable in respect thereof, determined pursuant to this Agreement and the
Rights Agreement, in each case, without interest. None of AIMCO, NHP or the
Surviving Corporation shall be liable to any former holder of shares of NHP
Common Stock for any amount paid to a public official pursuant to any applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by
holders of shares of NHP Common Stock three years after the Effective Time (or
such earlier date immediately prior to
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such time as such amounts would otherwise escheat to or become property of any
governmental entity) shall, to the extent permitted by applicable law, become
the property of AIMCO free and clear of any claims or interest of any person
previously entitled thereto.
(f) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
AIMCO, the posting by such Person of a bond in such reasonable amount as AIMCO
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the applicable Merger Consideration and
Rights Consideration, cash in lieu of fractional shares, and unpaid dividends
and distributions on shares of AIMCO Common Stock or Mortgage Sub Stock
deliverable in respect thereof pursuant to this Agreement.
(g) If at any time during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of AIMCO or the Mortgage Subsidiary shall occur, including by
reason of any reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, or any stock dividend thereon with a record
date during such period, the number of shares of AIMCO Common Stock constituting
all or part of the Merger Consideration or the number of shares of Mortgage Sub
Stock constituting all or part of the Rights Consideration, as the case may be,
shall be appropriately adjusted, and, in the case of the Rights Consideration,
in accordance with the terms of the Rights.
SECTION 3.6 NHP STOCK OPTIONS.
(a) Prior to the Effective Time, subject to the prior written
approval of AIMCO, in connection with the Spin-Off, NHP may issue to the holders
of NHP Stock Options then outstanding Options to purchase shares of Mortgage Sub
Stock and, in connection therewith, may reduce the exercise price with respect
to the NHP Stock Options. At the Effective Time, each outstanding NHP Stock
Option granted prior to the date of this Agreement shall immediately become
fully vested and exercisable, if not fully vested and exercisable at such time,
and all NHP Stock Options shall be assumed by AIMCO and adjusted in accordance
with the terms thereof and this Agreement to be exercisable to purchase shares
of AIMCO Common Stock, as provided below. Following the Effective Time, each
NHP Stock Option shall continue to have, and shall be subject to, the same terms
and conditions set
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forth in the NHP Option Plan pursuant to which such NHP Stock Option was issued,
or any agreement pursuant to which such NHP Stock Option was subject immediately
prior to the Effective Time, except as set forth in this SECTION 3.6 and except
that (i) each such NHP Stock Option shall be exercisable for that number of
shares of AIMCO Common Stock equal to the product of (x) the aggregate number of
shares of NHP Common Stock for which such NHP Stock Option was exercisable and
(y) the Exchange Ratio, rounded, in the case of any NHP Stock Options other than
an "incentive stock option" (within the meaning of section 422 of the Code), up,
and, in the case of any incentive stock option, down, to the nearest whole
share, if necessary, and (ii) the exercise price per share of such NHP Stock
Option shall be equal to the aggregate exercise price of such NHP Stock Option
at the Effective Time divided by the number of shares of AIMCO Common Stock for
which such NHP Stock Option shall be exercisable as determined in accordance
with the preceding clause (i), rounded up to the next highest cent, if
necessary.
(b) As of the Effective Time, AIMCO will enter into an assumption
agreement with respect to each NHP Stock Option, which shall provide for AIMCO's
assumption of the obligations of NHP under the NHP Option Plan or other
agreement under which such NHP Stock Option was granted. Prior to the Effective
Time, NHP shall make such amendments, if any, to the NHP Option Plans as shall
be necessary to permit the assumption and adjustment referred to in this SECTION
3.6; provided, however, that such amendments shall be subject to approval by
AIMCO (which approval will not be unreasonably withheld).
(c) It is the intention of the parties that, to the extent that
any NHP Stock Option constituted an incentive stock option immediately prior to
the Effective Time, such option continue to qualify as an incentive stock option
to the maximum extent permitted by Section 422 of the Code, and that the
assumption of the NHP Stock Options provided by this SECTION 3.6 satisfy the
conditions of Section 424(a) of the Code. AIMCO shall comply with the terms of
the NHP Option Plans and ensure, to the extent required by, and subject to the
provisions of, such NHP Option Plans, that the NHP Stock Options that qualified
as incentive stock options prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. As soon as practicable after
the Effective Time, AIMCO shall deliver to the participants in the NHP Option
Plans notices setting forth the number of shares and exercise price for such
participant's options.
(d) At or prior to the Effective Time, AIMCO shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of AIMCO Common Stock for delivery upon exercise of NHP Stock Options under the
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NHP Option Plans assumed in accordance with SECTION 3.6(b). AIMCO shall prepare
and file, at its own expense, a registration statement on Form S-8 to become
effective as of the Effective Time with respect to the shares of AIMCO Common
Stock subject to NHP Stock Options and shall use commercially reasonable efforts
to maintain the effectiveness of such registration statement (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such options remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the Exchange Act, where applicable, AIMCO shall administer the
NHP Option Plans assumed pursuant to SECTION 3.6(B) in a manner that complies
with Rule 16b-3 promulgated under the Exchange Act, to the extent the applicable
NHP Option Plan complied with such rule prior to the Merger.
(e) AIMCO shall provide that, for a period of 90 days after the
Effective Time, each holder of NHP Stock Options that are not "incentive stock
options" (within the meaning of Section 422 of the Code) may, in lieu of
exercising any such NHP Stock Options, elect to receive for each share of AIMCO
Common Stock subject to such option a cash amount equal to the excess of $26.75
over the per share exercise price of such NHP Stock Option (as determined after
giving effect to Section 3.6(a)(ii). For a period of 90 days after the
Effective Time, AIMCO will take all actions necessary to provide that each
holder of NHP Stock Options that are incentive stock options, at his or her
election, may exercise his or her NHP Stock Option and immediately sell the
shares of AIMCO Common Stock received upon such exercise, back to AIMCO for
$26.75 per share in cash, such that the net effect is that the option holder
receives an amount in cash equal to the excess of $26.75 over the per share
exercise price of NHP Stock Options (as determined after giving effect to
Section 3.6(a)(ii).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NHP
NHP hereby represents and warrants to AIMCO and Merger Sub that:
SECTION 4.1 ORGANIZATION AND QUALIFICATIONS; SUBSIDIARIES. NHP and
each Material Subsidiary of NHP is a corporation, partnership or other legal
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization and has the requisite
power and authority and all necessary governmental approvals to own, lease and
operate its
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properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, have a Material Adverse Effect on NHP. Each of NHP and its
Material Subsidiaries is duly qualified or licensed as a foreign corporation or
partnership to transact business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
for such failures to be so qualified or licensed and in good standing that would
not, individually or in the aggregate, have a Material Adverse Effect on NHP.
SECTION 4.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Complete and
correct copies of the certificate of incorporation and bylaws of NHP, as amended
to date, have been delivered to AIMCO under cover of a letter dated April 4,
1997, from NHP's General Counsel. Such Organizational Documents are in full
force and effect and have not been amended or modified in any respect. NHP is
not in violation of any provision of its Organizational Documents. No Material
Subsidiary of NHP is in violation of any provision of its Organizational
Documents, except for such violations that would not, individually or in the
aggregate, have a Material Adverse Effect on NHP.
SECTION 4.3 CAPITALIZATION. The authorized capital stock of NHP
consists of 25,000,000 shares of NHP Common Stock. As of March 7, 1997, (a)
12,652,439 shares of NHP Common Stock were issued and outstanding, all of which
were validly issued, fully paid and nonassessable; and (b)(i) 1,270,750 shares
of NHP Common Stock were reserved for issuance upon the exercise of outstanding
stock options granted pursuant to the 1990 Stock Option Plan of NHP
Incorporated, the 1995 Incentive Stock Option Plan of NHP Incorporated, the
stock option agreement, dated as of May 1, 1996, between NHP and William R.
Sullivan, and the stock option agreement, dated as of August 18, 1995, between
NHP and J. Roderick Heller III (collectively, the "NHP OPTION PLANS"), and (ii)
398,250 shares of NHP Common Stock were reserved for issuance pursuant to
options available for grant under the NHP Option Plans. Except as set forth
above, as of March 7, 1997, no shares of capital stock or other voting
securities of NHP were issued, reserved for issuance or outstanding and, since
such date, no shares of capital stock or other voting securities or options in
respect thereof have been issued except upon the exercise of options (the "NHP
STOCK OPTIONS") issued under the NHP Option Plans outstanding on March 7, 1997.
Except for the NHP Stock Options, there are not now, and at the Closing there
will not be, any NHP Options. All shares of NHP Common Stock subject to
issuance as aforesaid, upon issuance on the terms and
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conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There
are no outstanding contractual obligations of NHP or any of its subsidiaries to
repurchase, redeem or otherwise acquire any shares of NHP Common Stock or any
other shares of capital stock of NHP or any of its subsidiaries, or make any
material investment (in the form of a loan, capital contribution or otherwise)
in any subsidiary of NHP or any other Person, other than a wholly-owned
subsidiary of NHP. Each outstanding share of capital stock of each Material
Subsidiary of NHP is duly authorized, validly issued, fully paid and
nonassessable and each such share owned by NHP or any subsidiary of NHP is owned
free and clear of any Liens.
SECTION 4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. NHP has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and, subject to the adoption of this
Agreement by the stockholders of NHP as contemplated herein, to consummate the
Transactions. The execution and delivery of this Agreement by NHP, the
performance by NHP of its obligations hereunder and the consummation by NHP of
the Transactions have been duly and validly authorized by all necessary
corporate action and approved by the affirmative vote of a majority of the
entire Board of Directors of NHP and no other corporate proceedings on the part
of NHP are necessary to authorize this Agreement or to consummate the
Transactions (other than the NHP Stockholder Approval and the Merger Filing).
This Agreement has been duly and validly executed and delivered by NHP and,
assuming the due authorization, execution and delivery thereof by AIMCO and
Merger Sub, constitutes the legal, valid and binding obligation of NHP,
enforceable against NHP in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
SECTION 4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS; CERTAIN
CONTRACTS.
(a) Except as set forth on SCHEDULE 4.5, the execution and
delivery of this Agreement by NHP does not, and the performance of its
obligations under this Agreement and the consummation of the Transactions by NHP
will not, (i) conflict with, result in a breach of, cause a dissolution or
require the consent or approval of any Person under, or violate any provision
of, the Organizational Documents of NHP, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (A) applicable
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requirements of the Exchange Act, the Securities Act and state securities or
"blue sky" laws ("BLUE SKY LAWS"), and (B) the Merger Filing, (iii) subject to
the making of the filings and obtaining the approvals identified in clause (ii),
conflict with or violate any Law, judgment, order, writ, injunction or decree
applicable to NHP or by which any property or asset of NHP is bound or affected,
or (iv) conflict with or result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
result in the loss by NHP or modification in a manner adverse to NHP of any
right or benefit under, or give to others any right of termination, amendment,
acceleration, repurchase or repayment, increased payments or cancellation of, or
result in the creation of a Lien or other encumbrance on any NHP Common Stock or
any property or asset of NHP or any subsidiary of NHP pursuant to, any Contract
of NHP, except, in each case, such as would not prevent or delay in any material
respect consummation of the Merger, or otherwise, individually or in the
aggregate, prevent NHP from performing its obligations under this Agreement in
any material respect, and would not, individually or in the aggregate, have a
Material Adverse Effect on NHP.
(b) Except as set forth in the Contracts filed (or incorporated
by reference) as exhibits to NHP's Annual Report on Form 10-K for the year ended
December 31, 1996 or the other NHP SEC Reports filed thereafter, there are no
Contracts to which NHP or any subsidiary of NHP is a party or by which NHP or
any subsidiary of NHP or any asset of NHP or any subsidiary of NHP is bound,
which by its terms materially limits the ability of NHP or any subsidiary of NHP
or, after consummation of the Transactions, would by its terms materially limit
the ability of AIMCO or any of its affiliates, to engage in any business in any
area or for any period.
SECTION 4.6 COMPLIANCE. Except as set forth on SCHEDULE 4.6, neither
NHP nor any subsidiary of NHP is in conflict with, or in default or violation
of, (a) any Law applicable to such Person or by which any property or asset of
such Person is bound or affected, or (b) any Contract to which NHP or any
subsidiary of NHP is a party or by which such Person or any property or asset of
such Person is bound or affected, except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect on NHP.
SECTION 4.7 SEC REPORTS AND FINANCIAL STATEMENTS. Each form, report,
schedule, registration statement and definitive proxy statement filed by NHP
with the SEC since August 14, 1995 and prior to the date hereof (as such
documents have been amended prior to the date hereof, the "NHP SEC REPORTS"), as
of their respective dates, complied in all material respects with the applicable
requirements
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of the Securities Act and the Exchange Act and the rules and regulations
thereunder. None of the NHP SEC Reports, as of their respective dates,
contained or contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except for such statements, if any, as have been modified or
superseded by subsequent filings prior to the date hereof. NHP has made
available to AIMCO true, accurate and complete copies of all of the NHP SEC
Reports. The consolidated financial statements of NHP and its subsidiaries
included in such reports comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except as may be indicated in the notes thereto or, in the case of the
unaudited interim financial statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim financial
statements, to normal, year-end audit adjustments) the consolidated financial
position of NHP and its subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. Since December 31, 1996, neither NHP nor any of its subsidiaries has
incurred any liabilities or obligations (whether absolute, accrued, fixed,
contingent, liquidated, unliquidated or otherwise and whether due or to become
due) of any nature, except liabilities, obligations or contingencies (a) which
are reflected on the consolidated balance sheet of NHP and its subsidiaries as
at December 31, 1996 (including the notes thereto) or (b) which (i) were
incurred in the ordinary course of business after December 31, 1996 and
consistent with past practices, (ii) are disclosed in the NHP SEC Reports filed
after December 31, 1996, (iii) would not, individually or in the aggregate, have
a Material Adverse Effect on NHP, or (iv) were incurred by the Mortgage
Subsidiary or one of its wholly owned subsidiaries and with respect to which
neither NHP nor any of its other subsidiaries will have any liability or
obligation as of the Effective Time. Since August 14, 1995, NHP has timely
filed with the SEC all forms, reports and other documents required to be filed
prior to the date hereof, and no subsidiary of NHP has filed, or been required
to file, any form, report or other document with the SEC, in each case, pursuant
to the Securities Act, the Exchange Act or the rules and regulations thereunder.
Since December 31, 1996, there has been no change in any of the significant
accounting (including tax accounting) policies, practices or procedures of NHP
or any subsidiary of NHP.
SECTION 4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
contemplated by this Agreement or as disclosed in any NHP SEC Report or as set
forth on SCHEDULE 4.8, since December 31, 1996, (a) NHP and its subsidiaries
have conducted their respective businesses only in the ordinary course,
consistent with
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past practice, and have not taken any of the actions set forth in paragraphs (a)
through (j) of SECTION 6.3, and (b) there has not occurred or arisen any event
that, individually or in the aggregate, has had or, insofar as reasonably can be
foreseen, is likely in the future to have, a Material Adverse Effect on NHP
other than events or developments generally affecting the industry in which NHP
operates. The Rights Agreement is in full force and effect and has not been
amended, modified or terminated.
SECTION 4.9 LITIGATION. Except as disclosed in the NHP SEC Reports
or as set forth on SCHEDULE 4.9, there are no claims, suits, actions or
proceedings pending or, to NHP's knowledge, threatened or contemplated, nor are
there any investigations or reviews by any Governmental Authority pending or, to
NHP's knowledge, threatened or contemplated, against, relating to or affecting
NHP or any of its subsidiaries, which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on NHP, or to
prohibit or materially restrict the consummation of the Transactions, nor is
there any judgment, decree, order, injunction, writ or rule of any Governmental
Authority or any arbitrator outstanding against NHP or any of its subsidiaries
having, or which, insofar as can be reasonably foreseen, in the future is likely
to have, a Material Adverse Effect on NHP. In addition, there have not been any
developments with respect to any of the claims, suits, actions, proceedings,
investigations or reviews disclosed in the NHP SEC Reports which, insofar as can
be reasonably foreseen, in the future are likely to have a Material Adverse
Effect on NHP.
SECTION 4.10 REGISTRATION STATEMENTS AND PROXY STATEMENT/PROSPECTUS.
The information supplied or to be supplied by NHP, any subsidiary of NHP or
their respective Representatives for inclusion in (a) the AIMCO Registration
Statement will not, either at the time the AIMCO Registration Statement is filed
with the SEC, at the time any amendment thereof or supplement thereto is filed
with the SEC, at the time it becomes effective under the Securities Act or at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, (b) the MS Registration Statement will not,
either at the time the MS Registration Statement is filed with the SEC, at the
time any amendment thereof or supplement thereto is filed with the SEC, at the
time it becomes effective or at the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (c) the
Proxy Statement/Prospectus, including any amendments and supplements thereto,
will not, at the date
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mailed to NHP's stockholders, at the time of the NHP Meeting, at the date mailed
to AIMCO's stockholders or at the time of the AIMCO Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy
Statement/Prospectus, as to information supplied by NHP, any subsidiary of NHP
or their respective Representatives, will comply in all material respects with
all applicable provisions of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder, and the MS Registration Statement
will comply in all material respects with the provisions of applicable Federal
securities laws, rules and regulations.
SECTION 4.11 EMPLOYEE BENEFIT PLANS. Each Benefit Plan of NHP has
been administered in compliance, in all material respects, with its terms, and
is in compliance in all material respects with applicable laws, rules and
regulations, (including, without limitation, provisions relating to funding,
filing, termination, reporting, disclosure and continuation coverage obligations
pursuant to Title V of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA")). No Benefit Plan of NHP has been the subject of a
"reportable event" (as defined in Section 4043 of ERISA) (other than a
reportable event for which the 30 day notice requirement has been waived) and
there have not been any non-exempt "prohibited transactions" (as described in
Section 4975 of the Code or in Part 4 of Subtitle B of Title I of ERISA) with
respect to any Benefit Plan of NHP. There are no proceedings, suits or material
claims (other than routine claims for benefits) pending or, to the knowledge of
NHP, threatened with respect to any Benefit Plan of NHP, the assets of any trust
thereunder, or the Benefit Plan sponsor or the Benefit Plan administrator with
respect to the design or operation of any Benefit Plan of NHP. Each Benefit
Plan of NHP which is intended to be "qualified" within the meaning of Section
401(a) of the Code is so qualified, and any trust created pursuant to any such
Benefit Plan of NHP is exempt from Federal income tax under Section 501(a) of
the Code and the IRS has issued each such Benefit Plan a favorable determination
letter which is currently applicable. NHP is not aware of any circumstance or
event which would jeopardize the tax-qualified status of any Benefit Plan of NHP
or the tax-exempt status of any related trust, or would cause the imposition of
any material liability, penalty or tax under ERISA or the Code with respect to
any Benefit Plan of NHP. No material liabilities to or on behalf of
participants (other than routine claims for benefits), the IRS, the United
States Department of Labor, the Pension Benefit Guaranty Corporation or to any
other Person or entity have been or are reasonably expected to be incurred as a
result of the termination of any Benefit Plan of NHP or otherwise that have not
been satisfied in full or properly accrued on NHP's balance sheet as at December
31, 1996, included in the NHP SEC Reports.
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Except as set forth on SCHEDULE 4.11, neither NHP nor any of its subsidiaries
maintains or is obligated to contribute to, or has ever maintained or been
obligated to contribute to, a "multi-employer plan" (as such term is defined by
Section 4001(a)(3) of ERISA) or a "multiple employer plan" (within the meaning
of Section 413(c) of the Code). Except as set forth in SCHEDULE 4.11 or in the
NHP SEC Reports or as otherwise required by applicable law, neither NHP nor any
of its subsidiaries maintains any retiree life and/or retiree health insurance
plans which provide for continuing benefits or coverage for any employee or any
beneficiary of an employee after such employee's termination of employment.
Except as set forth in SCHEDULE 4.11 or in the NHP SEC Reports, the consummation
of the transactions contemplated by this Agreement will not (a) entitle any
employee of NHP or its subsidiaries to severance pay, unemployment compensation
or any other payment, (b) accelerate the time of payment or vesting, or increase
the amount of compensation due to any such employee or (c) result in any
liability under Title IV of ERISA.
SECTION 4.12 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based on any arrangement or agreement made by or on behalf
of NHP, except Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"). NHP
has heretofore furnished to AIMCO a complete and correct copy of all agreements
between NHP and DLJ pursuant to which such firm would be entitled to any payment
relating to the Transactions.
SECTION 4.13 TAXES.
(a) Each of NHP and its subsidiaries has timely filed (or has had
timely filed on its behalf) or will file or cause to be timely filed, all
material Tax Returns required by applicable law to be filed by it prior to or as
of the Effective Time. All such Tax Returns and amendments thereto are, or will
be before the Effective Time, true, complete and correct in all material
respects.
(b) Each of NHP and its subsidiaries has paid (or has had paid on
its behalf), or where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse), or will
establish or cause to be established on or before the Effective Time, an
adequate accrual for the payment of, all material Taxes due with respect to any
period ending prior to or as of the Effective Time.
(c) No deficiency or adjustment for any material Taxes has been
proposed, asserted or assessed against NHP or any of its subsidiaries that has
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not been resolved or paid or for which an adequate accrual has not been
established in accordance with generally accepted accounting principles. There
are no Liens for material Taxes upon the assets of NHP or any of its
subsidiaries, except Liens for current Taxes not yet due.
(d) Neither NHP nor any of its subsidiaries has entered into any
Contract that would result in the disallowance of any tax deductions pursuant to
section 280G of the Code. No "consent" within the meaning of section 341(f) of
the Code has been filed with respect to NHP or any of its subsidiaries.
(e) All Tax sharing agreements, Tax indemnity agreements and
similar agreements to which NHP or any of its subsidiaries is a party are
disclosed in the NHP SEC Reports, except for a Tax sharing agreement reasonably
acceptable to AIMCO that may be entered into between NHP and the Mortgage
Subsidiary after the date hereof.
SECTION 4.14 OPINION OF FINANCIAL ADVISOR. The Independent Committee
has received the opinion of DLJ, dated April 21, 1997 (the "FAIRNESS OPINION"),
to the effect that, as of such date, the Merger Consideration and the Rights
Consideration are, in the aggregate, fair to the unaffiliated stockholders of
NHP, from a financial point of view, and a copy of the Fairness Opinion has been
delivered to AIMCO.
SECTION 4.15 RELIANCE. In entering into this Agreement, NHP has
relied solely on representations made in this Agreement, including the Schedules
hereto, and any certificates and documents required to be provided by AIMCO and
the Merger Sub pursuant to this Agreement. NHP has been represented by counsel
and has had unrestricted opportunity to examine and understand the business and
assets of AIMCO.
SECTION 4.16 MANAGEMENT ARRANGEMENTS. Except as set forth on
SCHEDULE 4.16, and assuming that AIMCO satisfies the test for a "Qualified
Purchaser" under the Stock and Asset Transfer Restrictions Agreement, and
satisfies the net worth and managed units requirements of Section 4 of the Stock
and Asset Transfer Restrictions Agreement, there is currently no fact or
circumstance known to NHP that is likely to result in the loss by NHP, or
modification in a manner adverse to NHP, of any right or benefit under, or give
any Person any right of termination, cancellation or nonrenewal of, any Contract
pursuant to which NHP provides property management services, except such as
would not, individually or in the aggregate, have a Material Adverse Effect on
NHP.
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SECTION 4.17 DISCLOSURE. No representation or warranty of NHP
contained in this Agreement and no statement contained in any certificate or
schedule furnished or to be furnished by or on behalf of NHP to AIMCO or any of
its Representatives pursuant hereto contains or will contain any untrue
statement of a material fact.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIMCO
AND MERGER SUB
AIMCO and Merger Sub hereby represent and warrant to NHP that:
SECTION 5.1 ORGANIZATION AND QUALIFICATIONS; SUBSIDIARIES. AIMCO,
Merger Sub and each Material Subsidiary of AIMCO is a corporation, partnership
or other legal entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and has
the requisite power and authority and all necessary governmental approvals to
own, lease and operate its properties and to carry on its business as it is now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power, authority and governmental approvals would
not, individually or in the aggregate, have a Material Adverse Effect on AIMCO.
Each of AIMCO, Merger Sub and AIMCO's Material Subsidiaries is duly qualified or
licensed as a foreign corporation, partnership or limited liability company to
transact business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a Material Adverse Effect on AIMCO.
SECTION 5.2 CHARTER AND BYLAWS. Complete and correct copies of the
charter and bylaws of AIMCO, as amended and supplemented to date, have been
filed (or incorporated by reference) as exhibits 3.1 and 3.2, respectively, to
AIMCO's Annual Report on Form 10-K for the year ended December 31, 1996. Such
Organizational Documents are in full force and effect and have not been amended
or modified in any respect. AIMCO is not in violation of any provision of its
Organizational Documents. No Material Subsidiary of AIMCO is in violation of
any provision of its Organizational Documents, except for such violations that
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would not, individually or in the aggregate, have a Material Adverse Effect on
AIMCO.
SECTION 5.3 CAPITALIZATION. The authorized capital stock of AIMCO
consists of (a) 150,000,000 shares of AIMCO Common Stock; (b) 425,000 shares of
Class B Common Stock, par value $.01 per share ("CLASS B COMMON STOCK"), of
AIMCO; (c) 9,034,000 shares of Preferred Stock, par value $.01 per share
("PREFERRED STOCK"), of AIMCO; and (d) 966,000 shares of Cumulative Convertible
Senior Preferred Stock, par value $.01 per share (the "SENIOR PREFERRED STOCK"),
of AIMCO. As of March 11, 1997, (i) 17,569,970 shares of AIMCO Common Stock
were issued and outstanding, all of which were validly issued, fully paid and
nonassessable; (ii) 325,000 shares of Class B Common Stock were issued and
outstanding, all of which were validly issued, fully paid and nonassessable;
(iii) no shares of Preferred Stock or Senior Preferred Stock were issued and
outstanding; and (iv)(A) 560,659 shares of AIMCO Common Stock were reserved for
issuance upon the exercise of outstanding stock options granted pursuant to The
1994 Stock Option Plan of Apartment Investment and Management Company and
Affiliates, the Apartment Investment and Management Company 1996 Stock Award and
Incentive Plan and the Apartment Investment and Management Company Non-Qualified
Employee Stock Option Plan (collectively, the "AIMCO OPTION PLANS"), (B) 174,792
shares of AIMCO Common Stock were reserved for issuance pursuant to options
available for grant under AIMCO Option Plans. Except as set forth above, as of
March 11, 1997, no shares of capital stock or other voting securities of AIMCO
were issued, reserved for issuance or outstanding. All shares of AIMCO Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There
are no outstanding contractual obligations of AIMCO or any of its subsidiaries
to repurchase, redeem or otherwise acquire any shares of AIMCO Common Stock or
any other shares of capital stock of AIMCO or any of its subsidiaries, or make
any material investment (in the form of a loan, capital contribution or
otherwise) in any subsidiary of AIMCO or any other Person, other than a
wholly-owned subsidiary of AIMCO. Each outstanding share of capital stock of
each Material Subsidiary of AIMCO is duly authorized, validly issued, fully paid
and nonassessable and each such share owned by AIMCO or any subsidiary of AIMCO
is owned free and clear of any Liens.
SECTION 5.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of AIMCO and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
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the Transactions, subject to the approval of the issuance of shares of AIMCO
Common Stock pursuant to the Merger (the "AIMCO STOCK ISSUANCE") by a majority
of votes cast by the holders of AIMCO Common Stock (the "AIMCO STOCKHOLDER
APPROVAL"). The execution and delivery of this Agreement by AIMCO and Merger
Sub, the performance by AIMCO and Merger Sub of their respective obligations
hereunder and the consummation by AIMCO and Merger Sub of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of AIMCO or Merger Sub are necessary to
authorize this Agreement or to consummate the Transactions (other than the AIMCO
Stockholder Approval and the Merger Filing). This Agreement has been duly and
validly executed and delivered by AIMCO and Merger Sub and, assuming the due
authorization, execution and delivery thereof by NHP, constitutes the legal,
valid and binding obligation of AIMCO and Merger Sub, enforceable against AIMCO
and Merger Sub in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to creditors' rights generally and by
equitable principles to which the remedies of specific performance and
injunctive and similar forms of relief are subject.
SECTION 5.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
execution and delivery of this Agreement by AIMCO and Merger Sub do not, and the
performance of their respective obligations under this Agreement and the
consummation of the Transactions by AIMCO and Merger Sub will not, (a) conflict
with, result in a breach of, cause a dissolution or require the consent or
approval of any Person under, or violate any provision of, the Organizational
Documents of AIMCO or Merger Sub, (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for (i) applicable requirements, if any, of the Exchange Act,
the Securities Act or the Blue Sky Laws, and (ii) the Merger Filing, (c) subject
to the making of the filings and obtaining the approvals identified in clause
(b), conflict with or violate any Law, judgment, order, writ, injunction or
decree applicable to AIMCO or Merger Sub or by which any property or asset of
AIMCO or Merger Sub is bound or affected, or (d) conflict with or result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, result in the loss by AIMCO or
Merger Sub or modification in a manner adverse to AIMCO or Merger Sub of any
right or benefit under, or give to others any right of termination, amendment,
acceleration, repurchase or repayment, increased payments or cancellation of, or
result in the creation of a Lien or other encumbrance on any Shares or any
property or asset of AIMCO or Merger Sub or any subsidiary of AIMCO or Merger
Sub pursuant to, any Contract of AIMCO or Merger Sub, except, in each
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case, such as would not prevent or delay AIMCO or Merger Sub from performing its
obligations under this Agreement in any material respect, and would not,
individually or in the aggregate, have a Material Adverse Effect on AIMCO or
Merger Sub.
SECTION 5.6 COMPLIANCE. Neither AIMCO, Merger Sub nor any Material
Subsidiary of AIMCO is in conflict with, or in default or violation of, (a) any
Law applicable to such Person or by which any property or asset of such Person
is bound or affected, or (b) any Contract to which AIMCO or Merger Sub or any
subsidiary of AIMCO is a party or by which such Person or any property or asset
of such Person is bound or affected, except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect on AIMCO.
SECTION 5.7 SEC REPORTS AND FINANCIAL STATEMENTS. Each form, report,
schedule, registration statement and definitive proxy statement filed by AIMCO
with the SEC since June 30, 1995, and prior to the date hereof (as such
documents have been amended prior to the date hereof, the "AIMCO SEC REPORTS"),
as of their respective dates, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the rules
and regulations thereunder. None of the AIMCO SEC Reports, as of their
respective dates, contained or contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except for such statements, if any, as have been modified
or superseded by subsequent filings prior to the date hereof. The consolidated
financial statements of AIMCO and its subsidiaries included in such reports
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited interim financial statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited interim financial
statements, to normal, year-end audit adjustments) the consolidated financial
position of AIMCO and its subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. Since December 31, 1996, neither AIMCO nor any of its subsidiaries has
incurred any liabilities or obligations (whether absolute, accrued, fixed,
contingent, liquidated, unliquidated or otherwise and whether due or to become
due) of any nature, except liabilities, obligations or contingencies (a) which
are reflected on the consolidated balance sheet of AIMCO
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and its subsidiaries as at December 31, 1996 (including the notes thereto) or
(b) which (i) were incurred in the ordinary course of business after December
31, 1996 and consistent with past practices, (ii) are disclosed in the AIMCO SEC
Reports filed after December 31, 1996, or (iii) would not, individually or in
the aggregate, have a Material Adverse Effect on AIMCO. Since August 14, 1995,
AIMCO has timely filed with the SEC all forms, reports and other documents
required to be filed prior to the date hereof, and no subsidiary of AIMCO has
filed, or been required to file, any form, report or other document with the
SEC, in each case, pursuant to the Securities Act, the Exchange Act or the rules
and regulations thereunder. Since December 31, 1996, there has been no change
in any of the significant accounting (including tax accounting) policies,
practices or procedures of AIMCO or any subsidiary of AIMCO.
SECTION 5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
contemplated by this Agreement or as disclosed in any AIMCO SEC Report, since
December 31, 1996, (a) AIMCO and its subsidiaries have conducted their
respective businesses only in the ordinary course, consistent with past
practice, and (b) there has not occurred or arisen any event that, individually
or in the aggregate, has had or, insofar as reasonably can be foreseen, is
likely in the future to have, a Material Adverse Effect on AIMCO other than
events or developments generally affecting the industry in which AIMCO operates.
SECTION 5.9 LITIGATION. Except as disclosed in the AIMCO SEC
Reports, there are no claims, suits, actions or proceedings pending or, to
AIMCO's knowledge, threatened or contemplated, nor are there any investigations
or reviews by any Governmental Authority pending or, to AIMCO's knowledge,
threatened or contemplated, against, relating to or affecting AIMCO or any of
its subsidiaries, which could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on AIMCO, or to prohibit or materially
restrict the consummation of the Transactions, nor is there any judgment,
decree, order, injunction, writ or rule of any Governmental Authority or any
arbitrator outstanding against AIMCO or any of its subsidiaries having, or
which, insofar as can be reasonably foreseen, in the future is likely to have, a
Material Adverse Effect on AIMCO. In addition, there have not been any
developments with respect to any of the claims, suits, actions, proceedings,
investigations or reviews disclosed in the AIMCO SEC Reports which, insofar as
can be reasonably foreseen, in the future are likely to have a Material Adverse
Effect on AIMCO.
SECTION 5.10 REGISTRATION STATEMENTS AND PROXY STATEMENT/PROSPECTUS.
The information supplied or to be supplied by AIMCO, any
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subsidiary of AIMCO or their respective Representatives for inclusion in (a) the
AIMCO Registration Statement will not, either at the time the AIMCO Registration
Statement is filed with the SEC, at the time any amendment thereof or supplement
thereto is filed with the SEC, at the time it becomes effective under the
Securities Act or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, (b) the MS
Registration Statement will not, either at the time the MS Registration
Statement is filed with the SEC, at the time any amendment thereof or supplement
thereto is filed with the SEC, at the time it becomes effective or at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (c) the Proxy Statement/Prospectus,
including any amendments and supplements thereto, will not, at the date mailed
to AIMCO's stockholders, at the time of the AIMCO Meeting or at the time of the
NHP Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Proxy Statement/Prospectus, as to information supplied by
AIMCO, any subsidiary of AIMCO or their respective Representatives, will comply
as to form in all material respects with all applicable provisions of the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, and the AIMCO Registration Statement will comply in all material
respects with the provisions of the Securities Act and the rules and regulations
promulgated thereunder.
SECTION 5.11 EMPLOYEE BENEFIT PLANS. Each Benefit Plan of AIMCO has
been administered in compliance, in all material respects, with its terms, and
is in compliance in all material respects with applicable laws, rules and
regulations, (including, without limitation, provisions relating to funding,
filing, termination, reporting, disclosure and continuation coverage obligations
pursuant to Title V of COBRA. No Benefit Plan of AIMCO has been the subject of
a "reportable event" (as defined in Section 4043 of ERISA) (other than a
reportable event for which the 30 day notice requirement has been waived) and
there have not been any non-exempt "prohibited transactions" (as described in
Section 4975 of the Code or in Part 4 of Subtitle B of Title I of ERISA) with
respect to any Benefit Plan of AIMCO. There are no proceedings, suits or
material claims (other than routine claims for benefits) pending or, to the
knowledge of AIMCO, threatened with respect to any Benefit Plan of AIMCO, the
assets of any trust thereunder, or the Benefit Plan sponsor or the Benefit Plan
administrator with respect to the design or operation of any Benefit Plan of
AIMCO. Each Benefit Plan of AIMCO which is
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intended to be "qualified" within the meaning of Section 401(a) of the Code is
so qualified, and any trust created pursuant to any such Benefit Plan of AIMCO
is exempt from Federal income tax under Section 501(a) of the Code and the IRS
has issued each such Benefit Plan a favorable determination letter which is
currently applicable. AIMCO is not aware of any circumstance or event which
would jeopardize the tax-qualified status of any Benefit Plan of AIMCO or the
tax-exempt status of any related trust, or would cause the imposition of any
material liability, penalty or tax under ERISA or the Code with respect to any
Benefit Plan of AIMCO. No material liabilities to or on behalf of participants
(other than routine claims for benefits), the IRS, the United States Department
of Labor, the Pension Benefit Guaranty Corporation or to any other Person or
entity have been or are reasonably expected to be incurred as a result of the
termination of any Benefit Plan of AIMCO or otherwise that have not been
satisfied in full or properly accrued on AIMCO's balance sheet as at December
31, 1996, included in the AIMCO SEC Reports. Neither AIMCO nor any of its
subsidiaries maintains or is obligated to contribute to, or has ever maintained
or been obligated to contribute to, a "multi-employer plan" (as such term is
defined by Section 4001(a)(3) of ERISA) or a "multiple employer plan" (within
the meaning of Section 413(c) of the Code). Except as set forth in the AIMCO
SEC Reports or as otherwise required by applicable law, neither AIMCO nor any of
its subsidiaries maintains any retiree life and/or retiree health insurance
plans which provide for continuing benefits or coverage for any employee or any
beneficiary of an employee after such employee's termination of employment.
Except as disclosed in the AIMCO SEC Reports, the consummation of the
transactions contemplated by this Agreement will not (a) entitle any employee of
AIMCO or its subsidiaries to severance pay, unemployment compensation or any
other payment, (b) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee or (c) result in any liability
under Title IV of ERISA.
SECTION 5.12 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based on any arrangement or agreement made by or on behalf
of AIMCO.
SECTION 5.13 TAXES.
(a) AIMCO and each of its subsidiaries has timely filed (or has
had timely filed on its behalf) or will file or cause to be timely filed, all
material Tax Returns required by applicable law to be filed by it prior to or as
of the
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Effective Time. All such Tax Returns and amendments thereto are, or will be
before the Effective Time, true, complete and correct in all material respects.
(b) Each of AIMCO and its subsidiaries has paid (or has had paid
on its behalf), or where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse), or will
establish or cause to be established on or before the Closing Date, an adequate
accrual for the payment of, all material Taxes due with respect to any period
ending prior to or as of the Closing Date.
(c) No deficiency or adjustment for any material Taxes has been
proposed, asserted or assessed against AIMCO or any of its subsidiaries that has
not been resolved or paid or for which an adequate accrual has not been
established in accordance with generally accepted accounting principles. There
are no Liens for material Taxes upon the assets of AIMCO or any of its
subsidiaries, except Liens for current Taxes not yet due.
(d) Neither AIMCO nor any of its subsidiaries has entered into
any Contract that would result in the disallowance of any tax deductions
pursuant to section 280G of the Code. No "consent" within the meaning of
section 341(f) of the Code has been filed with respect to AIMCO or any of its
subsidiaries.
(e) All Tax sharing agreements, Tax indemnity agreements and
similar agreements to which AIMCO or any of its subsidiaries is a party are
disclosed in the AIMCO SEC Reports.
SECTION 5.14 REIT STATUS. AIMCO has been organized and operated in
conformity with the requirements for qualification as a real estate investment
trust under the Code for its taxable years ended December 31, 1994, 1995 and
1996, AIMCO's present and proposed method of operation will enable it to
continue to meet the requirements for qualification as a real estate investment
trust under the Code, and the consummation of the transactions contemplated by
this Agreement, the Stock Purchase Agreement and the Real Estate Acquisition
Agreement will not adversely affect AIMCO's ability to continue to meet such
requirements.
SECTION 5.15 RELIANCE. In entering into this Agreement, AIMCO has
relied solely on representations made in this Agreement, including the Schedules
hereto, and any certificates and documents required to be provided by NHP
pursuant
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to this Agreement. AIMCO has been represented by counsel and has had
unrestricted opportunity to examine and understand the business and assets of
NHP.
SECTION 5.16 STOCK PURCHASE AGREEMENT. AIMCO has delivered to NHP a
true and correct copy of the Stock Purchase Agreement. The Stock Purchase
Agreement is a valid and binding obligation of AIMCO and, to AIMCO's knowledge,
Demeter, and Capricorn.
SECTION 5.17 FINANCIAL CAPABILITY. AIMCO will have on the Closing
Date and immediately prior to and at the Effective Time, funds and authorized
and unissued shares of AIMCO Common Stock sufficient to consummate the Merger
and the transactions contemplated hereby. To the extent that such funds are to
be provided by third party financing, AIMCO will provide NHP with complete and
correct copies of all documents relating to the provision of such financing.
SECTION 5.18 QUALIFIED PURCHASER. AIMCO is, and, after giving effect
to the Transactions and the transactions contemplated by the Stock Purchase
Agreement, will be, a "Qualified Purchaser," as such term is defined in the
Stock and Asset Transfer Restrictions Agreement.
SECTION 5.19 DISCLOSURE. No representation or warranty of AIMCO
contained in this Agreement and no statement contained in any certificate or
schedule furnished or to be furnished by or on behalf of AIMCO to NHP or any of
its Representatives pursuant hereto contains or will contain any untrue
statement of a material fact.
ARTICLE VI
COVENANTS
SECTION 6.1 NOTIFICATION OF CERTAIN MATTERS. Each of the parties
hereto shall give prompt notice to the other parties hereto of (a) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause (i) any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect, or (ii) any
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied and (b) any failure of such party to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder. The delivery of any
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notice pursuant to this SECTION 6.1 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
SECTION 6.2 FURTHER ACTION, REASONABLE EFFORTS; CONSENTS AND
APPROVALS. Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby, including,
without limitation, using commercially reasonable efforts to obtain all
licenses, permits, consents, approvals, authorizations, certificates,
qualifications and orders of, and make all filings and required submissions
with, all Governmental Authorities, and all shareholders, lenders and partners
of, and parties to Contracts with, AIMCO, NHP or any other Person, in each case,
as are necessary or desirable for the consummation of the transactions
contemplated hereby (collectively "CONSENTS"). NHP shall, as soon as possible
prior to the Closing, deliver to AIMCO copies of all Consents obtained by NHP.
AIMCO shall, as soon as possible prior to the Closing, deliver to NHP copies of
all Consents obtained by AIMCO. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, AIMCO and NHP shall use commercially reasonable efforts to take all
such action. Prior to the Closing, each party shall use its best efforts not to
take any action, or enter into any transaction, that would cause any of its
representations or warranties contained in this Agreement to be untrue.
SECTION 6.3 CONDUCT OF BUSINESS OF NHP PENDING THE CLOSING. From the
date hereof through the Closing, except as expressly permitted or contemplated
by this Agreement or as set forth on SCHEDULE 6.3 hereto, unless AIMCO shall
otherwise agree in writing prior to the taking of any action prohibited by the
terms of this SECTION 6.3, NHP and its subsidiaries shall conduct their
operations and business in the ordinary and usual course of business and
consistent with past practice and use reasonable efforts to keep available the
services of its present officers and key employees and preserve the goodwill and
business relationships with all Persons having business relationships with it.
Without limiting the generality of the foregoing, and except as otherwise
expressly permitted by this Agreement, prior to the Closing, without the prior
written consent of AIMCO, neither NHP nor any of its subsidiaries shall: (a)
amend or modify its Organizational Documents or the Rights Agreement; (b) issue,
sell, pledge or dispose of, grant or otherwise create, or agree to issue, sell,
pledge or dispose of, grant or otherwise create any capital stock or other
equity securities, any debt or other securities convertible into or exchangeable
for any of its capital stock or other equity securities; (c) purchase,
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redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise
acquire or retire, any of its capital stock or other equity securities
(including any options with respect to any of its capital stock or other equity
securities and any securities convertible or exchangeable into any of its
capital stock or other equity securities) or any long-term debt; (d) declare,
set aside, make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise, with respect to any of its capital stock or other
equity securities (except the Spin-Off and dividends declared and paid by a
subsidiary of NHP only to NHP or a wholly-owned subsidiary of NHP), or
subdivide, reclassify, recapitalize, split, combine or exchange any of its
capital stock or other equity securities; (e) incur or become contingently
liable with respect to any indebtedness or guarantee any such indebtedness or
issue any debt securities if, after giving effect thereto, the outstanding
indebtedness of NHP and its subsidiaries exceeds the sum of (i) the amount of
long-term indebtedness and the current portion of long-term indebtedness of NHP
and its subsidiaries at December 31, 1996, plus (ii) $5 million (excluding any
such indebtedness relating to the Mortgage Subsidiary and permitted by the
proviso at the end of this SECTION 6.3); (f) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity interest in
or a substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business entity; (g)
mortgage or otherwise encumber or subject to any Lien, or sell, transfer or
otherwise dispose of, any assets or properties that are material, individually
or in the aggregate, to NHP and its subsidiaries, taken as a whole, other than
Liens incurred in the ordinary course of business consistent with past practice
or to secure indebtedness incurred in compliance with clause (e), and sales and
dispositions in the ordinary course of business consistent with past practice;
(h) except as may be required by applicable Law, or as contemplated by this
Agreement, (i) increase the compensation payable or to become payable to, or
enter into any employment agreement with, its executive officers or employees,
except with respect to non-executive officer employees in the ordinary course of
business consistent with past practice; (ii) grant any severance or termination
pay to any director, executive officer or employee of NHP or any subsidiary of
NHP, except with respect to non-executive officer employees in the ordinary
course of business or pursuant to existing NHP Benefit Plans; or (iii) enter
into any severance agreement with any director, executive officer or employee
except with respect to non-executive officer employees in the ordinary course of
business; or (iv) establish, adopt, enter into, terminate, withdraw from or
amend in any material respect or take action to accelerate any rights or
benefits under any collective bargaining agreement, any stock option plan, or
any employee benefit plan or policy; (i) take any action, other than reasonable
actions in the ordinary course of business and consistent with past practice,
with respect to accounting policies or
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procedures (including Tax accounting policies, procedures and elections relating
to Taxes that would apply to NHP, AIMCO or the Surviving Corporation after the
Merger), except as may be required by generally accepted accounting principles,
or settle any material Audit or, except as required by Law, amend in any
material respect any material Tax Return; or (j) authorize any of, or commit or
agree to take any of, the foregoing actions; provided, however, that the
Mortgage Subsidiary may acquire any assets, businesses or entities, and NHP may
incur indebtedness on behalf of the Mortgage Subsidiary, if, after giving effect
to the Spin-Off, NHP and its other subsidiaries would not have any liabilities
or obligations relating thereto.
SECTION 6.4 CONDUCT OF BUSINESS OF AIMCO PENDING THE CLOSING. From
the date hereof through the Closing, except as expressly permitted or
contemplated by this Agreement, unless NHP shall otherwise agree in writing
prior to the taking of any action prohibited by the terms of this SECTION 6.4,
AIMCO and its subsidiaries shall conduct their operations and business in the
ordinary and usual course of business and consistent with past practice and use
reasonable efforts to keep available the services of its present officers and
key employees and preserve the goodwill and business relationships with all
Persons having business relationships with it.
SECTION 6.5 ACCESS TO INFORMATION.
(a) From the date hereof to the Effective Time, each of AIMCO and
NHP shall (and shall cause their respective subsidiaries and Representatives to)
afford the Representatives of the other party reasonable access at all
reasonable times to its officers, employees, agents, properties, offices, plants
and other facilities, books, records and Tax Returns, and shall furnish such
Representatives with all financial, operating and other data and information as
may be reasonably requested.
(b) All information provided by AIMCO or NHP pursuant to this
Agreement shall be subject to the AIMCO Confidentiality Agreement or the NHP
Confidentiality Agreement, respectively.
SECTION 6.6 NO SOLICITATION.
(a) NHP shall not, nor shall it permit any of its subsidiaries,
or any of their Representatives (including, without limitation, any investment
banker, attorney or accountant retained by NHP or a subsidiary of NHP), directly
or indirectly, to, (i) initiate, solicit or encourage any inquiries or proposals
that
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constitute, or could reasonably be expected to lead to, a proposal or offer for
a merger, consolidation, business combination, sale of assets representing a
substantial portion of the assets of NHP and its subsidiaries, taken as a whole,
sale of shares of capital stock (other than to NHP or a subsidiary of NHP),
including, without limitation, by way of a tender offer or exchange offer by any
person (other than NHP or a subsidiary of NHP) for shares of capital stock of
NHP, other than the Transactions (any of the foregoing inquiries or proposals
being referred to in this Agreement as an "ACQUISITION PROPOSAL"), (ii) engage
in negotiations or discussions concerning, or provide to any person or entity
any non-public information or data relating to NHP or any subsidiary of NHP for
the purposes of, or otherwise cooperate with or assist or participate in,
facilitate or encourage, any inquiries or the making of any Acquisition
Proposal, (iii) agree to, approve or recommend any Acquisition Proposal, or (iv)
take any other action inconsistent with the obligations and commitments assumed
by NHP pursuant to this SECTION 6.6; provided, however, that nothing contained
in this Agreement shall prevent NHP or its Board of Directors from (A)
furnishing nonpublic information to, or entering into discussions or
negotiations with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal to NHP or its stockholders, if and only to the
extent that (1) the Board of Directors of NHP, by action of a majority of the
entire Board of Directors of NHP, or by the Board of Directors with the approval
of its Independent Committee, determines in good faith (after consultation with
outside legal counsel) that such action is necessary for such Board of Directors
to comply with its fiduciary duties to stockholders under applicable law, and
(2) prior to furnishing such non-public information to, or entering into
discussions or negotiations with, such person or entity, the Board of Directors
of NHP receives from such person or entity an executed confidentiality agreement
with terms no less favorable to such party than those contained in the NHP
Confidentiality Agreement; or (B) complying with Rule 14e-2 promulgated under
the Exchange Act with regard to an Acquisition Proposal or making any other
public disclosure that, in the opinion of NHP's counsel, is required by
applicable law, rule or regulation; provided, that prior to making any such
other public disclosure NHP shall to the extent reasonably practicable inform
AIMCO that it intends to make such disclosure and consult with AIMCO regarding
the necessity for such disclosure. NHP will immediately cease and cause to be
terminated any existing activities, discussions or negotiations by NHP or its
Representatives with any parties conducted heretofore with respect to any of the
foregoing.
(b) NHP shall (i) promptly notify AIMCO in writing after receipt
by NHP (or its Representatives) of any Acquisition Proposal or any inquiries
indicating that any person is considering making or wishes to make an
Acquisition
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Proposal, (ii) promptly notify AIMCO in writing after receipt of any request for
nonpublic information relating to it or any of its subsidiaries or for access to
its or any of its subsidiaries' properties, books or records by any person that,
to NHP's knowledge, may be considering making, or has made, an Acquisition
Proposal and (iii) keep AIMCO advised of the status and principal financial
terms of any such Acquisition Proposal, indication or request.
SECTION 6.7 STOCKHOLDER MEETINGS.
(a) NHP shall take all action necessary, in accordance with the
DGCL and NHP's Organizational Documents, to call a meeting of its stockholders
(the "NHP MEETING") to be held as promptly as practicable for the purpose of
considering and voting upon this Agreement and the Merger. The vote required
for such approval shall be the affirmative vote of the holders of 66-2/3% of the
outstanding shares of NHP Common Stock that is not owned (within the meaning of
Section 203 of the DGCL) by AIMCO (the "NHP STOCKHOLDER APPROVAL"). The Board
of Directors of NHP shall recommend that the stockholders of NHP approve this
Agreement and the Merger; provided, that the Board of Directors of NHP, by
action of a majority of the entire Board of Directors of NHP, or by the Board of
Directors with the approval of its Independent Committee, may withdraw such
recommendation if such Board of Directors determines in good faith, after
receipt of an Acquisition Proposal and after consultation with outside legal
counsel, that the withdrawal of such recommendation is necessary for such Board
of Directors to comply with its fiduciary duties under applicable law. AIMCO
shall vote or cause to be voted all of the shares of NHP owned by it and its
Affiliates in favor of adoption of this Agreement.
(b) AIMCO shall take all action necessary, in accordance with the
Maryland General Corporation Law and AIMCO's Organizational Documents, to call a
meeting of its stockholders (the "AIMCO MEETING") to be held as promptly as
practicable for the purpose of seeking the AIMCO Stockholder Approval. The
Board of Directors of AIMCO shall recommend that the stockholders of AIMCO vote
in favor of the matters that are the subject of the AIMCO Stockholder Approval.
SECTION 6.8 REGISTRATION STATEMENTS AND JOINT PROXY
STATEMENT/PROSPECTUS.
(a) As promptly as practicable after the execution of this
Agreement, (i) AIMCO and NHP shall prepare and file with the SEC a joint proxy
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statement relating to the NHP Meeting and the AIMCO Meeting to be held in
connection with the Transactions (together with any amendments thereof or
supplements thereto, the "PROXY STATEMENT/PROSPECTUS"), (ii) AIMCO shall prepare
and file with the SEC a registration statement on Form S-4 (together with all
amendments thereto, the "AIMCO REGISTRATION STATEMENT"), in which the Proxy
Statement/Prospectus shall be included as a prospectus, in connection with the
registration under the Securities Act of the shares of AIMCO Common Stock to be
issued pursuant to the Merger, and (iii) NHP shall cause the Mortgage Subsidiary
to prepare and file with the SEC a registration statement on an appropriate form
(together with any amendments thereof or supplements thereto, the "MS
REGISTRATION STATEMENT"), in which the Proxy Statement/Prospectus shall be
included, in connection with the registration under applicable Federal
securities laws, rules and regulations of the shares of Mortgage Sub Stock to be
distributed pursuant to the Rights and the Rights Agreement. Each of AIMCO and
NHP (i) shall cause the Proxy Statement/Prospectus, the AIMCO Registration
Statement and the MS Registration Statement to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder, (ii) shall use commercially reasonable
efforts to have or cause the AIMCO Registration Statement and the MS
Registration Statement to become effective as promptly as practicable, and (iii)
shall take any and all action required under any applicable Federal or state
securities laws in connection with the issuance of shares of AIMCO Common Stock
and Mortgage Sub Stock pursuant to the Merger. AIMCO and NHP shall furnish to
the other all information concerning AIMCO and NHP as the other may reasonably
request in connection with the preparation of the documents referred to herein.
As promptly as practicable after the AIMCO Registration Statement and the MS
Registration Statement shall have become effective, each of AIMCO and NHP shall
mail the Proxy Statement/Prospectus to its respective stockholders.
(b) The information supplied by each of AIMCO and NHP for
inclusion in the AIMCO Registration Statement and the MS Registration Statement
and the Proxy Statement/Prospectus shall not (i) at the time the AIMCO
Registration Statement is declared effective, (ii) at the time the MS
Registration Statement is declared effective, (iii) at the time the Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is first
mailed to the stockholders of AIMCO or NHP, (iv) at the time of the NHP Meeting,
(v) at the time of the AIMCO Meeting, or (vi) at the Effective Time, 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. If, at any time prior to the Effective Time, any event or
circumstance relating to NHP, any subsidiary of NHP, AIMCO, any subsidiary of
AIMCO, or their respective officers or direc-
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tors, should be discovered by such party which should be set forth in an
amendment or a supplement to the AIMCO Registration Statement, the MS
Registration Statement or the Proxy Statement/Prospectus, such party shall
promptly inform the other thereof and take appropriate action in respect
thereof.
SECTION 6.9 LETTERS OF ACCOUNTANTS. AIMCO and NHP shall use
commercially reasonable efforts to cause to be delivered to the other "comfort"
letters of Ernst & Young LLP, AIMCO's independent public accountants, and of
Arthur Andersen LLP, NHP's independent public accountants, respectively, in each
case, dated and delivered on the date on which the AIMCO Registration Statement
shall become effective, on the date on which the MS Registration Statement shall
become effective and as of the Effective Time, and addressed to the boards of
directors of AIMCO and NHP, in form and substance reasonably satisfactory to the
other and reasonably customary in scope and substance for letters delivered by
independent public accountants in connection with transactions such as those
contemplated by this Agreement.
SECTION 6.10 ACCELERATIONS. Except as contemplated by this
Agreement, NHP shall take or forbear from taking such action as may be
reasonably necessary and within its control to insure that the Transactions
shall not constitute a change in ownership or control (or other similar event
accelerating or triggering changes to benefits or the terms of any contract,
agreement or arrangement (other than any NHP Benefit Plan) material to NHP and
its subsidiaries, taken as a whole (a "TRIGGERING EVENT")), for purposes of any
such contract, agreement or arrangement under which any such change in ownership
or control (or other Triggering Event) may be avoided by action or inaction, as
the case may be, by NHP or any of its officers or directors.
SECTION 6.11 PUBLIC ANNOUNCEMENTS. At all times at or before the
Closing, neither NHP nor AIMCO shall issue or make, directly or indirectly, any
reports, statements or releases to the public with respect to this Agreement or
the transactions contemplated hereby without the prior written consent of the
other; provided, however, that NHP and AIMCO may, without the prior written
consent of the other, issue or make, directly or indirectly, any report,
statement or release required by Law, its fiduciary obligations or any listing
agreement or arrangement to which such Person is a party with a national
securities exchange if the other parties to this Agreement are so notified as
soon as possible in advance of such report, statement or release.
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SECTION 6.12 BLUE SKY. AIMCO shall use its best efforts to obtain
prior to the Effective Time all approvals or permits required to carry out the
transactions contemplated hereby under applicable Blue Sky Laws in connection
with the issuance of shares of AIMCO Common Stock in the Merger and as
contemplated by this Agreement; provided, however, that with respect to such
qualifications neither AIMCO nor NHP shall be required to register or qualify as
a foreign corporation or to take any action which would subject it to general
service of process or taxation in any jurisdiction where any such entity is not
now so subject.
SECTION 6.13 NYSE LISTING. AIMCO shall promptly prepare and submit
to the NYSE listing applications covering the shares of AIMCO Common Stock to be
issued in the Merger, and shall use its best efforts to cause such shares to be
approved for listing and trading on the NYSE prior to the Effective Time,
subject to official notice of issuance.
SECTION 6.14 AFFILIATES. Within 30 days after the date of this
Agreement, (a) NHP shall deliver to AIMCO a letter identifying all persons who
may be deemed to be affiliates of NHP under Rule 145 of the Securities Act as of
the record date for the NHP Meeting (the "RULE 145 AFFILIATES") and (b) NHP
shall advise the persons identified in such letter of the resale restrictions
imposed by applicable securities laws and shall use commercially reasonable
efforts to obtain from each person identified in such letter a written
agreement, substantially in the form of EXHIBIT A hereto (a "RULE 145 AFFILIATE
AGREEMENT"). Prior to the Effective Time, AIMCO shall execute and deliver a
Registration Rights Agreement in the form of EXHIBIT B hereto (the "REGISTRATION
RIGHTS AGREEMENT").
SECTION 6.15 INDEMNIFICATION WITH RESPECT TO THE REGISTRATION
STATEMENT.
(a) Each party hereto shall (i) indemnify (in such role, an
"INDEMNIFYING PARTY") and hold harmless each other party and their respective
directors, officers and controlling persons (an "INDEMNIFIED PARTY") against any
and all loss, liability, claim, damage and expense whatsoever to which an
Indemnified Party may become subject, under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the AIMCO Registration Statement, the
MS Registration Statement or the Proxy Statement/Prospectus, or any amendment or
supplement thereto, or any preliminary Proxy Statement/Prospectus, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the
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statements therein not misleading; and (ii) will reimburse the Indemnified Party
for any legal or other expenses reasonably incurred by the Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that (i)
NHP shall be liable under this SECTION 6.15 only for information relating to NHP
included or incorporated by reference in the AIMCO Registration Statement, the
MS Registration Statement or Proxy Statement/Prospectus, (ii) AIMCO and Merger
Sub shall be liable under this SECTION 6.15 only for information relating to
AIMCO and Merger Sub included or incorporated by reference in the AIMCO
Registration Statement, the MS Registration Statement or Proxy
Statement/Prospectus, and (iii) no Indemnifying Party will be liable in any such
case under this SECTION 6.15 to the extent that any such loss, claim, damage,
liability or action arises out of any untrue statement or alleged untrue
statement or omission or alleged omission made in any of such documents in
reliance upon and in conformity with written information furnished to the
Indemnifying Party by or on behalf of such Indemnified Party specifically for
use therein.
(b) Promptly after receipt by an Indemnified Party under this
SECTION 6.15 of notice of any claim or the commencement of any action, the
Indemnified Party shall, if a claim in respect thereof is to be made against the
Indemnifying Party under this SECTION 6.15, promptly notify the Indemnifying
Party in writing of the claim or the commencement of that action; PROVIDED,
HOWEVER, that the failure to notify or a delay in notifying the Indemnifying
Party shall not relieve it from any liability which it may have to an
Indemnified Party otherwise than under this SECTION 6.15 except to the extent
that such Indemnifying Party is prejudiced thereby. If any such claim or action
shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense of such claim or action, the Indemnifying Party shall not be liable to
the Indemnified Party under this SECTION 6.15 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the employment thereof has been specifically
authorized by the Indemnifying Party in writing, (ii) such Indemnified Party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party and in the reasonable judgment of such
counsel it is advisable for such Indemnified Party to employ
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separate counsel or (iii) the Indemnifying Party has failed to assume the
defense to such claim or action and employ counsel reasonably satisfactory to
the Indemnified Party, in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such claim or action on behalf of such
Indemnified Party; it being understood, however, that the Indemnifying Party
shall not, in connection with any one such claim or action or separate but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such Indemnified Parties, which firm shall be designated in writing
by such Indemnified Parties. Each Indemnified Party, as a condition of the
indemnity agreements contained herein shall use its best efforts to cooperate
with the Indemnifying Party in the defense of any such claim or action. The
Indemnifying Party shall not be liable for any settlement of any such claim or
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment in favor of the plaintiff in any such claim or action, the
Indemnifying Party agrees to indemnify and hold harmless any Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
SECTION 6.16 SPIN-OFF. Prior to the Closing Date, NHP shall
distribute to all NHP stockholders of record as of a date prior to the Closing
Date one Right for each share of NHP Stock held by each NHP stockholder as of
such date. Prior to the Effective Time, NHP shall contribute cash to the
Mortgage Subsidiary, forgive indebtedness of the Mortgage Subsidiary, or any
combination of the foregoing, in an aggregate amount equal to NHP's best
estimate (which shall be subject to the prior approval of AIMCO, which approval
shall not be unreasonably withheld) of the amount, if any, by which (x) NHP's
Free Cash Flow for the period from February 1, 1997 until the earlier of the
Effective Time or the Maturity Time, exceeds (y) NHP's Transaction Costs for
such period. NHP and AIMCO shall use commercially reasonable efforts to obtain
the consent of The First National Bank of Boston to the Spin-Off.
SECTION 6.17 CONSENT TO CERTAIN TRANSACTIONS. NHP hereby consents to
a Change of Control Transaction (as defined in Section 1.3 of the Right of First
Refusal Agreement) involving AIMCO or any of its subsidiaries or affiliates
pursuant to the Real Estate Acquisition Agreement, provided that (a) the Real
Estate Acquisition Agreement is entered into on or prior to May 31, 1997, (b)
such
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agreement is delivered to NHP, and (c) such consent shall not become effective
until 5:00 p.m., Eastern Time, on May 3, 1997.
SECTION 6.18 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) From and after the Effective Time, the Surviving Corporation
shall, and AIMCO shall cause the Surviving Corporation to, indemnify, defend and
hold harmless the present and former officers and directors of NHP (the
"INDEMNIFIED OFFICERS/DIRECTORS") against all losses, expenses (including
attorneys fees), claims, damages, liabilities or amounts ("LOSSES") that are
paid in settlement (provided that such settlement has been approved by AIMCO,
such approval not to be unreasonably withheld) of, or otherwise in connection
with, any claim, action, suit, proceeding or investigation (a "CLAIM"), based in
whole or in part on the fact that such person is or was a director or officer of
NHP and arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the Transactions), in each case,
to the full extent permitted under the DGCL and NHP's certificate of
incorporation and bylaws (to the extent permitted by applicable law) as in
effect on the date of this Agreement. The Surviving Corporation shall pay any
expenses in advance of the final disposition of any such Claim to each of the
Indemnified Officers/Directors to the fullest extent permitted under the DGCL
upon receipt from any of the Indemnified Officers/Directors to whom expenses are
advanced of any undertaking to repay such advances required under the DGCL. The
Surviving Corporation shall cooperate in the defense of any such matter.
(b) The Surviving Corporation shall, and AIMCO shall cause the
Surviving Corporation to, keep in effect provisions in its certificate of
incorporation and bylaws providing for exculpation of director liability and its
indemnification of the Indemnified Officers/Directors to the fullest extent
permitted under the DGCL, which provisions shall not be amended except as
required by applicable law or except to make changes permitted by law that would
enlarge the right of indemnification of the Indemnified Officers/Directors.
(c) For a period of three years after the Effective Time, the
Surviving Corporation shall, and AIMCO shall cause the Surviving Corporation to,
maintain in effect the current policies of directors' and officers' liability
insurance maintained by NHP covering persons who are currently covered by NHP's
officers' and directors' liability insurance policies with respect to actions or
omissions occurring at or prior to the Effective Time, a true and correct
summary of which is set forth on SCHEDULE 6.18, to the extent that such policies
are available; provided,
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that policies of at least the same coverage containing terms and conditions
which are no less advantageous to the insureds may be substituted therefor.
(d) From and after the Effective Time, AIMCO agrees to indemnify,
defend and hold harmless the Indemnified Officers/Directors against all Losses
that are paid in settlement (provided that such settlement has been approved by
AIMCO, such approval not to be unreasonably withheld) of, or otherwise in
connection with, a Claim based in whole or in part on the fact that such Person
is or was a director or officer of NHP and arising out of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
Transactions), in each case to the fullest extent permitted by applicable Law
and whether or not the Surviving Corporation is permitted by applicable Law to
provide any indemnity with respect to such Losses. AIMCO shall pay any expenses
in advance of the final disposition of any such Claim to each of the Indemnified
Officers/Directors to the fullest extent permitted by applicable Law. AIMCO
shall cooperate in the defense of any such matter.
(e) The provisions of this SECTION 6.18 shall survive the
consummation of the Merger and expressly are intended to benefit each of the
Indemnified Officers/Directors.
SECTION 6.19 NHP EMPLOYEES.
(a) In the event that any employee of the Surviving Corporation
or one of its subsidiaries is at any time after the Effective Time transferred
to AIMCO or any affiliate of AIMCO or becomes a participant in an employee
benefit plan, program or arrangement maintained by or contributed by AIMCO or
any affiliate of AIMCO, AIMCO shall cause such plan, program or arrangement to
treat the prior service of such employee with NHP and its subsidiaries, to the
extent prior service is generally recognized under the comparable plan, program
or arrangement of NHP, as service rendered to AIMCO or such affiliates for
purposes of eligibility, vesting or entitlement to early retirement benefits,
vacation time or severance benefits under such plans.
(b) At the request and direction of AIMCO, NHP shall give any
notices required by the U.S. Worker Adjustment and Retraining Notification Act
of 1988, as amended ("WARN ACT"), or any similar state law or regulation.
SECTION 6.20 DIRECTORS. In the event of any vacancy in the Board of
Directors of NHP arising after the date of this Agreement and after the Initial
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Closing (as defined in the Stock Purchase Agreement), NHP shall cause an
individual designated by AIMCO to fill such vacancy, and if such vacancy
resulted from the death, removal or resignation of any director who served as a
member of any committee of NHP's Board of Directors (other than the Independent
Committee) or any board of directors of a subsidiary of NHP, then NHP shall
cause AIMCO's designee to be appointed to such committee or board of directors,
as the case may be. AIMCO shall not, until the earlier of the Effective Time or
the termination of this Agreement, take any action to remove from office as a
director of NHP any member of the Independent Committee, or increase the number
of NHP directors from that in effect as of the date hereof.
SECTION 6.21 FINANCING. AIMCO agrees that it will obtain all
financing necessary to consummate the Merger and the transactions contemplated
hereby in accordance with the terms and conditions specified in this Agreement.
SECTION 6.22 SEPARATION AGREEMENT. Prior to the Effective Time, NHP
shall, and shall cause the Mortgage Subsidiary to, enter into a separation
agreement providing for the Mortgage Subsidiary to assume all liabilities of NHP
relating to the business and operations of the Mortgage Subsidiary and to
indemnify NHP for, and hold NHP harmless from, such liabilities and all
expenses, costs and losses related thereto, all on terms reasonably acceptable
to AIMCO.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to this Agreement to effect
the Merger shall be subject to the following conditions:
(a) All consents, approvals and action of any Governmental
Authority (including, without limitation, the U.S. Department of Housing and
Urban Development) required to permit the consummation of the Transactions shall
have been obtained or made, free of any condition that would have a Material
Adverse Effect on either AIMCO or NHP.
(b) No action shall have been taken, and no statute, rule,
regulation, executive order, judgment, decree, or injunction (other than a
temporary restraining order) shall have been enacted, entered, promulgated or
enforced (and
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not repealed, superseded, lifted or otherwise made inapplicable), by any court
of competent jurisdiction or Governmental Authority which restrains, enjoins or
otherwise prohibits the consummation of the transactions contemplated by this
Agreement (each party agreeing to use its commercially reasonable efforts to
avoid the effect of any such statute, rule, regulation or order or to have any
such order, judgment, decree or injunction lifted).
(c) Each of the AIMCO Registration Statement and the MS
Registration Statement shall have become effective in accordance with the
provisions of all applicable Federal Securities laws, rules and regulations, and
no stop order suspending such effectiveness shall have been issued and remain in
effect. AIMCO, NHP and/or the Mortgage Subsidiary shall have received all state
securities or "blue sky" permits and other authorizations necessary to issue and
distribute the AIMCO Common Stock, and distribute Mortgage Sub Stock, pursuant
to this Agreement.
(d) The shares of AIMCO Common Stock shall have been approved for
listing on the NYSE, subject only to official notice of issuance.
(e) Any applicable waiting period under the HSR Act shall have
expired or been terminated.
(f) The Effective Time shall have occurred on or prior to
December 1, 1997 (the "OUTSIDE DATE").
(g) AIMCO shall have received the AIMCO Stockholder Approval.
(h) NHP shall have received the NHP Stockholder Approval.
(i) The record date for the distribution of the Rights to NHP
stockholders shall have occurred.
(j) The Real Estate Acquisition Agreement shall have been entered
into and neither the Stock Purchase Agreement nor the Real Estate Acquisition
Agreement shall have been terminated.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF NHP TO EFFECT THE MERGER.
The obligations of NHP to effect the Merger are subject to the satisfaction of
the following conditions, unless waived by NHP:
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(a) The representations and warranties of AIMCO and Merger Sub
contained herein that are qualified as to materiality shall be true and
accurate, and those not so qualified shall be true and accurate in all material
respects, in each case, at and as of the Effective Time with the same force and
effect as though made at and as of the Effective Time (except to the extent a
representation or warranty speaks specifically as of an earlier date or except
as contemplated by this Agreement); provided, that any representation and
warranty that is true and accurate as of the date hereof (or such earlier date
as set forth above) shall be deemed to be true and accurate at and as of the
Effective Time except to the extent that AIMCO or any of its subsidiaries shall
have taken any voluntary action completely within the control of such person
that has been the principal cause of such representation or warranty not being
true and accurate; and provided, further, that the representations and
warranties set forth in SECTION 5.9 and clause (ii) of SECTION 5.8 shall be true
and accurate only as of the date hereof.
(b) AIMCO and Merger Sub shall have performed, in all material
respects, all obligations and complied, in all material respects, with all
covenants required by this Agreement to be performed or complied with by them
prior to the Effective Time.
(c) AIMCO shall have delivered to NHP a certificate, dated the
Effective Time and signed by its Chairman of the Board and Chief Executive
Officer or President, evidencing compliance with SECTIONS 7.2(a) and (b).
(d) NHP shall have received an opinion of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to AIMCO and Merger Sub, and an opinion of Piper &
Marbury L.L.P., Maryland counsel to AIMCO, in each case, in form and substance
reasonably satisfactory to NHP, addressing the matters set forth in EXHIBIT C-1
and EXHIBIT C-2, respectively.
(e) DLJ shall not have withdrawn the Fairness Opinion.
(f) The Stock Purchase Agreement shall not have been amended so
as to increase the consideration payable to Demeter and Capricorn thereunder.
SECTION 7.3 CONDITIONS TO OBLIGATIONS OF AIMCO AND MERGER SUB TO
EFFECT THE MERGER. The obligations of AIMCO and Merger Sub to effect the Merger
are subject to the satisfaction of the following conditions, unless waived by
AIMCO and Merger Sub:
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(a) The representations and warranties of NHP contained herein
that are qualified as to materiality shall be true and accurate, and those not
so qualified shall be true and accurate in all material respects, in each case
at and as of the Effective Time with the same force and effect as though made at
and as of the Effective Time (except to the extent a representation or warranty
speaks specifically as of an earlier date or except as contemplated by this
Agreement); provided, that any representation and warranty that is true and
accurate as of the date hereof (or such earlier date as set forth above) shall
be deemed to be true and accurate at and as of the Effective Time except to the
extent that NHP and its subsidiaries shall have taken any voluntary action
completely within the control of such person, that has been the principal cause
of such representation or warranty not being true and accurate; and provided,
further, that the representations and warranties set forth in SECTION 4.9 and
clause (ii) of SECTION 4.8 shall be true and accurate only as of the date
hereof.
(b) NHP shall have performed, in all material respects, all
obligations and complied, in all material respects, with all covenants required
by this Agreement to be performed or complied with by it prior to the Effective
Time.
(c) NHP shall have delivered to AIMCO a certificate, dated the
Effective Time and signed by its Chairman of the Board and Chief Executive
Officer or President, evidencing compliance with SECTIONS 7.3(a) and (b).
(d) AIMCO shall have received from each Rule 145 Affiliate of NHP
an executed copy of a Rule 145 Affiliate Agreement from each Rule 145 Affiliate
as contemplated by SECTION 6.14.
(e) AIMCO and Merger Sub shall have received an opinion of
Wilmer, Cutler & Pickering, counsel to NHP, and an opinion of Arent Fox Kintner
Plotkin & Kahn, in each case, in form and substance reasonably satisfactory to
AIMCO and Merger Sub, addressing the matters set forth in EXHIBIT D-1 and
EXHIBIT D-2, respectively.
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT AND CLOSING
SECTION 8.1 TERMINATION. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after
approval
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of this Agreement, the Merger and the other Transactions by the respective
stockholders of NHP and AIMCO:
(a) by the mutual written consent of NHP and AIMCO;
(b) by NHP or AIMCO, if (i) the Effective Time shall not have
occurred on or before the Outside Date, (ii) any Governmental Authority, the
consent of which is a condition to the obligations of NHP and AIMCO to
consummate the Transactions, shall have determined not to grant its consent and
all appeals of such determination shall have been taken and have been
unsuccessful or (iii) any court of competent jurisdiction shall have issued an
order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment or decree shall have become final and nonappealable; provided, however,
that the right to terminate this Agreement pursuant to clause (i) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date;
(c) by NHP, if there has been a material breach by AIMCO of any
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten Business Days following receipt by
AIMCO of notice of such breach from NHP; provided, however, that the right to
terminate this Agreement pursuant to this SECTION 8.1(c) shall not be available
to NHP if NHP, at such time, is in material breach of any representation,
warranty, covenant or agreement set forth in this Agreement;
(d) by AIMCO, if there has been a material breach by NHP of any
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten Business Days following receipt by
NHP of notice of such breach from AIMCO; provided, however, that the right to
terminate this Agreement pursuant to this SECTION 8.1(d) shall not be available
to AIMCO if AIMCO, at such time, is in material breach of any representation,
warranty, covenant or agreement set forth in this Agreement;
(e) by AIMCO or NHP if, at the NHP Meeting (including any
adjournment or postponement thereof) called pursuant to SECTION 6.7 hereof, the
NHP Stockholder Approval shall not have been obtained;
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(f) by AIMCO or NHP if, at the AIMCO Meeting (including any
adjournment or postponement thereof) called pursuant to SECTION 6.7 hereof, the
AIMCO Stockholder Approval shall not have been obtained;
(g) by NHP if (i) NHP receives an alternative Acquisition
Proposal, (ii) NHP is not then in breach of SECTION 6.6 or in breach of any
other representation, warranty, covenant or agreement that would give rise to a
failure of a condition set forth in SECTION 7.3(a) or 7.3(b), (iii) NHP shall
have made the payment required by SECTION 8.5, (iv) at least three Business Days
prior to such termination, NHP shall have provided to AIMCO written notice (A)
as to the material terms of any such Acquisition Proposal and (B) that the Board
of Directors of NHP, in the exercise of its good faith judgment as to fiduciary
duties to stockholders under applicable law, after consultation with outside
legal counsel, has determined, by action of a majority of the entire Board of
Directors of NHP, or by the Board of Directors with the approval of its
Independent Committee, that such termination is necessary in order for such
Board of Directors to comply with such duties, and (iv) on the date of such
termination, the Board of Directors of NHP determines, by action of a majority
of the entire Board of Directors of NHP, or by the Board of Directors with the
approval of its Independent Committee, that such termination continues to be
necessary in order for such Board of Directors to comply with its fiduciary
duties to stockholders under applicable law (which determination shall be made
in light of any revised proposal made by AIMCO) and NHP concurrently enters into
a definitive agreement providing for the implementation of such Acquisition
Proposal; and
(h) by AIMCO or NHP if (i) the Real Estate Acquisition Agreement
has not been entered into by May 31, 1997, or (ii) either the Stock Purchase
Agreement or the Real Estate Acquisition Agreement is terminated in accordance
with its terms.
SECTION 8.2 EFFECT OF TERMINATION. In the event of termination of
this Agreement by NHP or AIMCO as provided in SECTION 8.1 hereof, this Agreement
shall forthwith become void (except SECTIONS 6.5(b), 6.15, 8.2, 8.5, 9.1, 9.2,
9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.14 or 9.15) and there shall be no liability on
the part of NHP, AIMCO, Merger Sub or their respective officers or directors,
except for any breach of a party's obligations under SECTIONS 6.5(b), 6.15, 8.2,
8.5, 9.1, 9.2, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 9.14 and 9.15. Notwithstanding
the foregoing,no party hereto shall be relieved from liability for any willful,
material breach of this Agreement.
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SECTION 8.3 AMENDMENT OR SUPPLEMENT. At any time before or after
approval of this Agreement by the stockholders of NHP or AIMCO and prior to the
Effective Time, this Agreement may be amended or supplemented in writing by NHP,
Merger Sub and AIMCO with respect to any of the terms contained in this
Agreement, except that following approval by the stockholders of NHP or AIMCO
there shall be no amendment or supplement which by law requires further approval
by such stockholders without such further approval by the stockholders of NHP or
AIMCO, as the case may be.
SECTION 8.4 EXTENSION OF TIME, WAIVER, ETC. At any time prior to the
Effective Time:
(a) AIMCO may extend the time for the performance of any of the
obligations or acts of NHP, and NHP may extend the time for the performance of
any of the obligations or acts of AIMCO or Merger Sub;
(b) AIMCO may waive any inaccuracies in the representations and
warranties of NHP contained herein or in any document delivered pursuant hereto,
and NHP may waive any inaccuracies in the representations and warranties of
AIMCO contained herein or in any document delivered pursuant hereto; or
(c) AIMCO may waive compliance with any of the agreements of NHP
contained herein, and NHP may waive compliance with any of the agreements of
AIMCO or Merger Sub contained herein; provided, however, that no failure or
delay by NHP or AIMCO in exercising any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right hereunder.
SECTION 8.5 TERMINATION FEE. If this Agreement is to be terminated
pursuant to SECTION 8.1(e) or 8.1(g), and if NHP is not entitled to terminate
this Agreement by reason of SECTION 8.1(b), 8.1(c) or 8.1(f), then, in addition
to any other rights or remedies that may be available to AIMCO, NHP shall
promptly (and in any event within two days of receipt by NHP of written notice
from AIMCO) pay to AIMCO (by wire transfer of immediately available funds to an
account designated by AIMCO) a termination fee of $4.0 million; provided,
however, that NHP shall not be obligated to pay such fee to AIMCO if this
Agreement is terminated pursuant to SECTION 8.1(e) unless (i) (A) at the time of
the NHP Meeting, NHP has received an alternative Acquisition Proposal, and (B)
prior to the termination of this Agreement, the Board of Directors of NHP shall
have withdrawn, or modified in a manner adverse to AIMCO, its approval or
recommen-
57
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dation of the Merger, and (ii) within two years after the termination of this
Agreement, NHP enters into a definitive agreement providing for an alternative
Acquisition Proposal or an alternative Acquisition Proposal is consummated with
any Person; and, provided, further, that if such termination fee becomes payable
as a result of a termination pursuant to SECTION 8.1(e), then such termination
fee shall be paid promptly following the earlier of the execution of such
definitive agreement providing for an alternative Acquisition Proposal and the
consummation of an alternative Acquisition Proposal, as the case may be. If
this Agreement is terminated pursuant to SECTION 8.1(e) and (i) prior to the
termination of this Agreement, the Board of Directors of NHP shall have
withdrawn, or modified in a manner adverse to AIMCO, its approval or
recommendation of the Merger, and (ii) NHP is not at that time obligated to pay
the termination fee pursuant to the first proviso of the preceding sentence,
then NHP shall pay to AIMCO, on demand, an amount equal to the documented
out-of-pocket expenses incurred by AIMCO in connection with this Agreement and
the Merger, provided, that the maximum amount of such expenses that NHP is
required to reimburse shall not exceed $4.0 million (which expense reimbursement
shall be credited against any termination fee that subsequently becomes payable
pursuant to clause (ii) of the preceding sentence).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 GOVERNING LAW. This Agreement and the legal relations
among the parties hereto shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to its
principles of conflicts of law.
SECTION 9.2 ENTIRE AGREEMENT. This Agreement, including the exhibits
and schedules attached hereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, letters of intent, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements, express or implied, made to any party by
any other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith.
SECTION 9.3 MODIFICATION; WAIVER. No supplement, modification,
extension, waiver or termination of this Agreement shall be binding unless
executed
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in writing by the party to be bound thereby. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
SECTION 8.4 NOTICES. All notices, consents, requests, reports,
demands or other communications hereunder (collectively, "NOTICES") shall be in
writing and may be given personally, by registered mail, fax or by Federal
Express (or other reputable overnight delivery service):
if to AIMCO or Merger Sub, to it at:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
Fax: (303) 753-9538
and
28200 Highway 189, Building F-240
P.O. Box 1060
Lake Arrowhead, California 92352
Attention: Mr. Peter K. Kompaniez
Telephone: (909) 336-4821
Fax: (909) 336-4826
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra, Esq.
Telephone: (213) 687-5000
Fax: (213) 687-5600
59
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if to NHP, to it at:
8065 Leesburg Pike, Suite 400
Vienna, Virginia 22182
Attention: Mr. J. Roderick Heller III and
Joel Bonder, Esq.
Telephone: (703) 394-2470
Fax: (703) 394-2970
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attention: Richard W. Cass, Esq.
Telephone: (202) 663-6503
Fax: (202) 663-6363
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given (i) when delivered personally, (ii) three days after being sent
by registered mail, (iii) upon transmission by fax and receipt of confirmation
of such transmission by the sender's fax machine, or (iv) one day after being
sent by Federal Express (or other reputable overnight delivery service).
SECTION 9.5 EXPENSES. Whether or not the transactions contemplated
by this Agreement shall be consummated, all fees and expenses incurred by any
party hereto in connection with this Agreement shall be borne by such party,
except that the expenses incurred in connection with printing the Proxy
Statement/Prospectus shall be paid in equal shares by NHP and AIMCO.
SECTION 9.6 ASSIGNMENT. No party hereto shall have the right, power
or authority to assign or pledge this Agreement or any portion of this
Agreement, or to delegate any duties or obligations arising under this
Agreement, voluntarily, involuntarily, or by operation of law, without the prior
written consent of the other parties hereto.
SECTION 9.7 SURVIVAL. None of the representations and warranties in
this Agreement or in any document or instrument delivered pursuant to this
60
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Agreement shall survive the Merger or the termination of this Agreement pursuant
to ARTICLE VIII.
SECTION 9.8 SEVERABILITY. Any provision or part of this Agreement
which is invalid or unenforceable in any situation in any jurisdiction shall, as
to such situation and such jurisdiction, be ineffective only to the extent of
such invalidity and shall not affect the enforceability of the remaining
provisions hereof or the validity or enforceability of any such provision in any
other situation or in any other jurisdiction.
SECTION 9.9 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and
without waiver of the provisions of SECTION 9.6, all of the rights, duties,
benefits, liabilities and obligations of the parties shall inure to the benefit
of, and be binding upon, their respective successors, assigns, heirs and legal
representatives. Except as specifically set forth in SECTION 3.2, 3.3, 3.6,
6.15, 6.18 and 6.19, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or entity, other than the parties
hereto and their successors or permitted assigns, any rights or remedies under
or by reason of this Agreement.
SECTION 9.10 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
SECTION 9.11 INTERPRETATION; REFERENCES. Any use of masculine,
feminine or neuter pronouns herein shall not be limiting, but shall be construed
as referring to persons of any gender, as the context may require. Any use of
the singular or plural form herein shall not be limiting, but shall be construed
as referring to either the plural or singular, as the context may require.
References to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement, and references to an
"Article" or a "Section" are, unless otherwise specified, to an Article or a
Section of this Agreement. The Article and Section headings of this Agreement
are for convenience of reference only and shall not be deemed to modify,
explain, restrict, alter or affect the meaning or interpretation of any
provision hereof.
SECTION 9.12 JURISDICTION. The parties hereto hereby agree that any
disputes arising out of, in connection with or with respect to this Agreement,
the subject matter hereof, the performance or non-performance of any obligation
61
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hereunder, or any of the transactions contemplated hereby shall be adjudicated
in a state or federal court of competent civil jurisdiction sitting in the State
of Delaware and nowhere else. Each of the parties hereto hereby irrevocably
submits to the jurisdiction of any such court of the purposes of any suit, civil
action or other proceeding arising out of, in connection with or with respect to
this Agreement, the subject matter hereof, the performance of non-performance of
any obligation hereunder, or any of the transactions contemplated hereby (each,
a "SUIT"). To the extent permitted by Law, each of the parties hereto hereby
waives and agrees not to assert by way of motion, as a defense or otherwise in
any such Suit, any claim that it is not subject to the jurisdiction of the above
courts, that such Suit is brought in an inconvenient forum, that the venue of
such Suit is improper or that it is entitled to a trial by jury.
SECTION 9.13 EXHIBITS AND SCHEDULES. All exhibits and schedules
attached hereto are hereby incorporated by reference as though set out in full
herein.
SECTION 9.14 ATTORNEYS' FEES. In the event that any party hereto
brings an action or proceeding against the other party to enforce or interpret
any of the covenants, conditions, agreements or provisions of this Agreement,
the prevailing party in such action or proceeding shall be entitled to recover
all costs and expenses of such action or proceeding, including, without
limitation, reasonable attorneys' fees, charges, disbursements and the fees and
costs of expert witnesses.
SECTION 9.15 WAIVER OF JURY TRIAL. Each party to this Agreement
further waives its respective right to a jury trial of any claim or cause of
action arising out of this Agreement or any dealings between any of the parties
hereto relating to the subject matter of this Agreement. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this Agreement,
including, without limitation, contract claims, tort claims and all other common
law and statutory claims. This waiver is irrevocable, meaning that it may not
be modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications to this Agreement or
to any other document or agreement relating to the Transactions.
SECTION 9.16 FURTHER ASSURANCES. Each of the parties shall, without
further consideration, use reasonable efforts to execute and deliver such
additional documents and take such other action as the other parties, or any of
them, may reasonably request to carry out the intent of this Agreement and the
Transactions.
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SECTION 9.17 NEGOTIATION OF AGREEMENT. Each of the parties
acknowledges that it has been represented by independent counsel of its choice
throughout all negotiations that have preceded the execution of this Agreement
and that it has executed the same with consent and upon the advice of said
independent counsel. Each party and its counsel cooperated in the drafting and
preparation of this Agreement and the documents referred to herein, and any and
all drafts relating thereto shall be deemed the work product of the parties and
may not be construed against any party by reason of its preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intentions of the parties and this Agreement.
[SIGNATURE PAGE FOLLOWS]
63
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
NHP INCORPORATED
By /s/ J. Roderick Heller, III
---------------------------------------
Name: J. Roderick Heller, III
Title: Chairman, President and
Chief Executive Officer
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By /s/ Peter Kompaniez
---------------------------------------
Name: Peter Kompaniez
Title: Vice Chairman
AIMCO/NHP ACQUISITION CORP.
By /s/ Peter Kompaniez
---------------------------------------
Name: Peter Kompaniez
Title: Vice President
<PAGE>
EXHIBITS TO
AGREEMENT AND PLAN OF MERGER
dated as of
April 21, 1997
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
AIMCO/NHP ACQUISITION CORP.
and
NHP INCORPORATED
<PAGE>
INDEX
EXHIBIT A Form of Affiliate Letter..................................... A-1
EXHIBIT B Registration Rights Agreement ............................... B-1
EXHIBIT C-1 Form of Legal Opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, Counsel to
AIMCO and Merger Sub.........................................C1-1
EXHIBIT C-2 Form of Legal Opinion of Piper & Marbury
L.L.P., Maryland Counsel to AIMCO............................C2-1
EXHIBIT D-1 Form of Legal Opinion of Wilmer, Cutler
& Pickering, Counsel to NHP..................................D1-1
EXHIBIT D-2 Form of Legal Opinion of Arent Fox Kintner
Plotkin & Kahn, Special Counsel to NHP.......................D2-1
<PAGE>
EXHIBIT A
FORM OF AFFILIATE LETTER
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Ladies and Gentlemen:
I have been advised that, as of the date of this letter agreement, I
may be deemed to be an "affiliate" of NHP Incorporated, a Delaware corporation
("NHP"), as such term is defined for purposes of paragraphs (c) and (d) of Rule
145 of the rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act").
Pursuant to the terms of the Agreement and Plan of Merger, dated as of
April 21, 1997 (the "Merger Agreement"), by and among Apartment Investment and
Management Company, a Maryland corporation ("AIMCO"), NHP and AIMCO/NHP
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of AIMCO
("Merger Sub"), Merger Sub will be merged with and into NHP (the "Merger").
Pursuant to the Merger, all of the shares of Common Stock, par value $0.01 per
share, of NHP owned by the undersigned will be converted into the right to
receive shares of Class A Common Stock, par value $0.01 per share, of AIMCO (the
"AIMCO Common Stock"), or a combination of cash and shares of AIMCO Common
Stock.
I represent, warrant and covenant to AIMCO that, with respect to all
shares of AIMCO Common Stock received as a result of the Merger:
1. I shall not make any sale, transfer or other disposition of the
shares of AIMCO Common Stock in violation of the Act or the Rules and
Regulations.
2. I have carefully read this letter and the Merger Agreement and
have had an opportunity to discuss the requirements of such documents and any
other applicable limitations upon my ability to sell, transfer or otherwise
dispose of shares of AIMCO Common Stock with my counsel or counsel for NHP.
3. I have been advised that the issuance of shares of AIMCO Common
Stock to me pursuant to the Merger has been registered with the Commission under
the Act. However, I have also been advised that, since at the time the Merger
was submitted for a vote of the stockholders of NHP, I may be deemed to have
been an affiliate of NHP and the distribution by me of the AIMCO Common Stock
has not been registered under the Act, I may not sell, transfer or otherwise
dispose of shares of AIMCO
A-1
<PAGE>
Common Stock issued to me in the Merger unless (i) such sale, transfer or other
disposition has been registered under the Act or is made in conformity with Rule
145 under the Act, or (ii) in the opinion of counsel reasonably acceptable to
AIMCO, or pursuant to a "no action" letter obtained by the undersigned from the
staff of the Commission, such sale, transfer or other disposition is otherwise
exempt from registration under the Act.
4. I understand that, except as provided in the Registration Rights
Agreement to be entered into by AIMCO and the undersigned as contemplated by the
Merger Agreement, AIMCO is under no obligation to register under the Act the
sale, transfer or other disposition of shares of AIMCO Common Stock by me or on
my behalf or to take any other action necessary in order to make compliance with
an exemption from such registration available.
5. I understand that AIMCO will give stop transfer instructions to
AIMCO's transfer agents with respect to the AIMCO Common Stock and that the
certificates for the shares of AIMCO Common Stock issued to me, or any
substitutions therefor, will bear a legend substantially to the following
effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT, DATED
____________, BETWEEN THE REGISTERED HOLDER HEREOF AND _____________, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF _______."
6. I also understand that unless the transfer by me of my shares of
AIMCO Common Stock has been registered under the Act or is a sale made in
conformity with the provisions of Rule 145, AIMCO reserves the right to place a
legend substantially to the following effect on the certificates issued to any
transferee:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A
PERSON WHO RECEIVED SUCH SECURITIES IN A TRANSACTION TO WHICH RULE 145
UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SECURITIES HAVE NOT
BEEN ACQUIRED BY THE HOLDER WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN EXEMPTION
A-2
<PAGE>
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legends set forth in paragraphs 5
and 6 above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Act. It is understood
and agreed that such legends and the stop orders referred to above will be
removed if (i) one year shall have elapsed from the date the undersigned
acquired the Securities received in the Merger and the provisions of Rule
145(d)(2) are then available to the undersigned, (ii) two years shall have
elapsed from the date the undersigned acquired the shares of AIMCO Common Stock
received in the Merger and the provisions of Rule 145(d)(3) are then available
to the undersigned, or (iii) AIMCO has received either an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to AIMCO, or a "no
action" letter obtained by the undersigned from the staff of the Commission, to
the effect that the restrictions imposed by Rule 145 under the Act no longer
apply to the undersigned.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of NHP as described in the first paragraph of this
letter.
AIMCO agrees that, for a period of at least two years after the
effective date of Merger, it will make publicly available the information
required by, and in the manner specified by, Rule 144(c) under the Act.
Sincerely,
______________________
Name:
Accepted this ____ day of ____________________, 1997:
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By:________________________________________
Name:
Title:
A-3
<PAGE>
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of ______________, 1997, by and among Apartment Investment
and Management Company, a Maryland corporation ("AIMCO"), and the persons
named on the signature pages hereto (each, an "INVESTOR" and, collectively,
the "INVESTORS").
WHEREAS, the Investors own shares of common stock, par value $.01 per
share (the "NHP SHARES"), of NHP Incorporated, a Delaware corporation ("NHP");
WHEREAS, in connection with the Agreement and Plan of Merger, dated as
of April 21, 1997 (the "MERGER AGREEMENT"), by and among AIMCO, NHP, and
AIMCO/NHP Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of AIMCO ("MERGER SUB"), Merger Sub will be merged with and into NHP
and the NHP Shares will be converted into shares of AIMCO Common Stock (as
defined below) and/or cash; and
WHEREAS, in order to induce the Investors to execute and deliver to
AIMCO the letters contemplated by Section 6.14 of the Merger Agreement, AIMCO
has agreed to provide the registration rights set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
SECTION 7. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
"ADVICE" shall have the meaning set forth in SECTION 4.
"AFFILIATE" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
B-1
<PAGE>
definition, "control" when used with respect to any specified person means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
"AIMCO" shall have the meaning set forth in the introductory clauses
hereof.
"AIMCO COMMON STOCK" means the Class A Common Stock, par value $0.01
per share, of AIMCO issued pursuant to the Merger Agreement, or any other
shares of Capital Stock or other securities into which such shares of AIMCO
Common Stock shall be reclassified or changed, including, without limitation, by
reason of a merger, consolidation, exchange, reorganization or recapitalization.
If the AIMCO Common Stock has been so reclassified or changed, or if AIMCO pays
a dividend or makes a distribution on the AIMCO Common Stock in shares of
Capital Stock or other securities, or subdivides (or combines) its outstanding
shares of AIMCO Common Stock into a greater (or smaller) number of shares of
AIMCO Common Stock, a share of AIMCO Common Stock shall be deemed to be such
number of shares of Capital Stock and amount of other securities to which a
holder of a share of AIMCO Common Stock outstanding immediately prior to such
change, reclassification, exchange, dividend, distribution, subdivision or
combination would be entitled.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a
legal holiday on which banking institutions in the State of New York are not
required to be open.
"CAPITAL STOCK" means, with respect to any person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock issued by such person, including each class of common stock and preferred
stock of such person.
"DELAY PERIOD" shall have the meaning set forth in SECTION 2(D).
"DEMAND NOTICE" shall have the meaning set forth in SECTION 2(B).
"DEMAND REGISTRATION" shall have the meaning set forth in SECTION
2(c).
"EFFECTIVENESS PERIOD" shall have the meaning set forth in SECTION
2(d).
B-2
<PAGE>
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"HOLD-BACK PERIOD" shall have the meaning set forth in SECTION 3.
"HOLDER" means a person who owns Registrable Securities and is either
(i) an Investor, (ii) a person that has agreed to be bound by the terms of this
Agreement as if such person were an Investor and is (A) a person to whom an
Investor has transferred Registrable Securities in a transaction not involving a
public offering (e.g. pursuant to Rule "4(1-1/2)" or any similar private
transfer exemption), (B) upon the death of any Investor, the executor of the
estate of such Investor or such Investor's heirs, devisees, legatees or assigns
or (iii) upon the disability of any Investor, any guardian or conservator of
such Investor.
"INITIAL SHELF REGISTRATION" shall have the meaning set forth in
SECTION 2(a).
"INTERRUPTION PERIOD" shall have the meaning set forth in SECTION 4.
"INVESTOR(S)" shall have the meaning set forth in the introductory
clauses hereof.
"MERGER AGREEMENT" shall have the meaning set forth in the
introductory clauses hereof.
"MERGER SUB" shall have the meaning set forth in the introductory
clauses hereof.
"NHP" shall have the meaning set forth in the introductory clauses
hereof.
"NHP SHARES" shall have the meaning set forth in the introductory
clauses hereof.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or supplemented
by any
B-3
<PAGE>
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means shares of AIMCO Common Stock of an
Investor unless (i) such securities have previously been disposed of by a Holder
pursuant to an effective Registration Statement under Section 5 of the
Securities Act, or (ii) at any time hereafter, such securities have become
freely transferable without restriction under the Securities Act.
"REGISTRATION" means registration under the Securities Act of the
offering of Registrable Securities pursuant to the Initial Shelf Registration or
a Demand Registration.
"REGISTRATION PERIOD" shall have the meaning set forth in SECTION
2(b).
"REGISTRATION STATEMENT" means any registration statement of AIMCO
under the Securities Act that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the Prospectus included therein,
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SHELF REGISTRATION" means the registration under the Securities Act
of the offering of Registrable Securities on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the SEC).
"SHELF REGISTRATION STATEMENT" means a Registration Statement intended
to effect a Shelf Registration.
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means a
registration under the Securities Act in which securities of AIMCO are sold to
an underwriter for reoffering to the public.
B-4
<PAGE>
SECTION 8. INITIAL SHELF REGISTRATION; DEMAND REGISTRATION.
(a) As soon as practicable, but in any event within 90 days after
the date hereof, AIMCO shall prepare and file with the SEC a Shelf Registration
Statement on an appropriate form (the "INITIAL SHELF REGISTRATION"). AIMCO
shall include in the Initial Shelf Registration all Registrable Securities with
respect to which a Holder has, not later than the second day prior to the
effectiveness of such Shelf Registration Statement, given AIMCO written notice
of such Holder's intention to sell thereunder. AIMCO shall use its best efforts
to cause such Shelf Registration Statement to be declared effective by the SEC
as soon as possible. If AIMCO receives written notice from a Holder after the
date on which such Shelf Registration Statement has become effective that such
Holder desires to include additional Registrable Securities in such Shelf
Registration Statement, AIMCO shall use its best efforts to so include such
additional Registrable Securities as promptly as possible, including, if
required, filing an additional registration statement, either pursuant to Rule
462(b) under the Securities Act or otherwise, which registration statement shall
not be counted towards determining the number of Demand Registrations to which
the Holders are entitled pursuant to SECTION 2(b).
(b) The Holders shall have the right, during the period (the
"REGISTRATION PERIOD") commencing on the date hereof and ending on the third
anniversary hereof, by written notice (the "DEMAND NOTICE") given to AIMCO, to
request AIMCO to register under and in accordance with the provisions of the
Securities Act all or part of the Registrable Securities designated by such
Holders; PROVIDED, that the aggregate number of Registrable Securities requested
to be registered pursuant to any such Demand Notice and pursuant to all Demand
Notices received pursuant to the following sentence shall be at least 300,000
shares of AIMCO Common Stock. Upon receipt of any such Demand Notice, AIMCO
will promptly notify all other Holders of the receipt of such Demand Notice and
allow them the opportunity to include Registrable Securities held by them in the
proposed registration by submitting their own Demand Notice. The Holders as a
group shall be entitled to two Demand Registrations pursuant to this SECTION
2(b) unless any such Demand Registration did not become effective or was not
maintained effective for a period (whether or not continuous) of at least 90
days or such shorter period which shall terminate when all the Registrable
Securities covered by such Demand Registration have been disposed of pursuant
thereto, in which case the Holders, as a group, will be entitled, in each case
to one additional Demand Registration pursuant hereto.
(c) Within 20 days of the date on which AIMCO first receives a
Demand Notice pursuant to SECTION 2(B) hereof, AIMCO shall file with the SEC a
Registration Statement on the appropriate form for the registration and sale of
the total number of Registrable Securities specified in such Demand Notices in
accordance with the intended method or methods of distribution specified by the
Holders in such Demand Notices (a "DEMAND REGISTRATION"). AIMCO shall use its
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best efforts to cause such Registration Statement to be declared effective by
the SEC within 90 days of the date of AIMCO's earliest receipt of a Demand
Notice.
(d) AIMCO agrees to use commercially reasonable efforts to keep
any Registration Statement filed pursuant to this SECTION 2 continuously
effective and usable for the sale of Registrable Securities (i)(A) in the case
of a Shelf Registration, until one year from the date hereof or, if later, 90
days from the date on which the SEC declares such Registration Statement
effective, and (B) in the case of a Registration that is not a Shelf
Registration, until 90 days from the date on which the SEC declares such
Registration Statement effective, or (ii) until all the Registrable Securities
covered by such Registration Statement have been sold pursuant to such
Registration Statement, if earlier, in either case as such period may be
extended pursuant to this SECTION 2. Notwithstanding the foregoing, AIMCO shall
have the right to delay the filing of any Registration Statement otherwise
required to be prepared and filed by AIMCO pursuant to this SECTION 2, or to
suspend the use of any Registration Statement, for a period not in excess of 60
days (a "DELAY PERIOD") if any executive officer of AIMCO determines that in
such executive officer's reasonable judgment and good faith the registration and
distribution of the Registrable Securities covered or to be covered by such
Registration Statement would materially interfere with any pending financing,
acquisition or corporate reorganization or other material transaction involving
AIMCO or any of its subsidiaries or would require disclosure of any other
material corporate development that AIMCO is not otherwise required to disclose.
AIMCO will promptly give the Holders written notice of such determination and an
approximation of the period of the anticipated delay; PROVIDED, HOWEVER, that
the aggregate number of days included in all Delay Periods during any
consecutive 12 months shall not exceed the aggregate of (x) 150 days minus (y)
the number of days occurring during the Hold-Back Periods and Interruption
Periods during such consecutive 12 months. Each Holder agrees to cease all
disposition efforts under such Registration Statement with respect to
Registrable Securities held by such Holder immediately upon receipt of notice of
the beginning of any Delay Period. AIMCO shall provide written notice to the
Holders of the end of each Delay Period. AIMCO shall not be entitled to
initiate a Delay Period unless it shall (i) to the extent permitted by
agreements with other security holders of AIMCO, concurrently prohibit sales by
such other security holders under registration statements covering securities
held by such other security holders and (ii) have in place a policy that
prohibits sales of securities of AIMCO by senior executive officers during such
period. The time period for which AIMCO is required to maintain the
effectiveness of a Registration Statement referred to above shall be extended by
the aggregate number of days of all Delay Periods, Hold-Back Periods and
Interruption Periods affecting such Registration, and such period and any
extension thereof is hereinafter referred to as the "EFFECTIVENESS PERIOD."
(e) AIMCO shall not include any securities that are not
Registrable Securities in any Registration Statement filed pursuant to this
SECTION 2
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without the prior written consent of the Holders of a majority in number of the
Registrable Securities covered by such Registration Statement. AIMCO shall not
enter into any agreement granting any person (an "OTHER SECURITY HOLDER")
piggyback registration rights that would permit AIMCO securities of such Other
Security Holder (or such Other Security Holder's successors or assigns) to be
included on a Registration Statement filed pursuant to this SECTION 2 or
granting any Other Security Holder piggyback rights to include such Other
Security Holder's securities in any registration in which the Holders have the
right to include Registrable Securities on a priority basis more favorable to
such Other Security Holder than is provided to the Holders pursuant to SECTION
3(b). To AIMCO's knowledge, there are no agreements granting any person the
right to include securities in any registration pursuant to SECTION 2.
(f) Holders of a majority in number of the Registrable Securities
to be included in a Demand Registration pursuant to this SECTION 2 may, at any
time prior to the effective date of the Registration Statement in respect
thereof, revoke such request by providing a written notice to AIMCO to such
effect. The Holders of Registrable Securities who revoke such request shall
reimburse AIMCO for all of its out-of-pocket expenses incurred in the
preparation, filing and processing of the Registration Statement; PROVIDED,
HOWEVER, that, if such revocation was based on AIMCO's failure to comply in any
material respect with its obligations hereunder, such reimbursement shall not be
required.
SECTION 9. HOLD-BACK AGREEMENTS.
During any Effectiveness Period, each Holder having Registrable
Securities covered by the Registration Statement to which such Effectiveness
Period relates shall, if requested by the managing underwriter or underwriters
in an underwritten offering by AIMCO for the account of AIMCO, agree not to
effect any public sale or distribution of any securities of the same type
(including any underlying securities) as the securities being offered by AIMCO
(except as part of such underwritten offering or pursuant to Rule 144 or 145
under the Securities Act), during a period of up to 90 days, beginning on the
effective date of each such underwritten offering (each such period, a
"HOLD-BACK PERIOD").
SECTION 10. REGISTRATION PROCEDURES.
In connection with the registration obligations of AIMCO pursuant to
and in accordance with SECTION 2 hereof (and subject to AIMCO's rights under
SECTION 2), AIMCO will use commercially reasonable efforts to effect such
registration to permit the sale of such Registrable Securities in accordance
with the Holders' intended method or methods of disposition thereof, and
pursuant thereto AIMCO shall as expeditiously as possible:
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(a) prepare and file with the SEC a Registration Statement for
the sale of the Registrable Securities on any form for which AIMCO then
qualifies or which counsel for AIMCO shall deem appropriate in accordance
with such Holders' intended method or methods of distribution thereof and,
subject to SECTION 2(d), use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective as provided
herein;
(b) prepare and file with the SEC such amendments (including
post-effective amendments) to the Registration Statement, and such
supplements to the Prospectus, as may be required by the rules, regulations
or instructions applicable to the Securities Act during the applicable period
in accordance with the intended methods of disposition specified by the
Holders owning any Registrable Securities covered by such Registration
Statement, make generally available earnings statements satisfying the
provisions of Section 11(a) of the Securities Act (provided that AIMCO shall
be deemed to have complied with this clause if it has complied with Rule 158
under the Securities Act), and cause the Prospectus as so supplemented to be
filed pursuant to Rule 424 under the Securities Act;
(c) notify the Holders owning any Registrable Securities covered
by such Registration Statement promptly and (if requested) confirm such notice
in writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to a Registration Statement or
related Prospectus or for additional information regarding such Holders, (iii)
of the issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by AIMCO of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (v) of the happening of any event that requires
the making of any changes in such Registration Statement, Prospectus or
documents incorporated or deemed to be incorporated therein by reference so that
they will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(d) use commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of a Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction in the United
States;
(e) furnish to the Holders disposing of Registrable Securities
covered by such Registration Statement, counsel for such Holders and each
managing underwriter, if any, without charge, one conformed copy of the
Registration Statement, as declared effective by the SEC, and of each
post-effective amend-
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ment thereto, in each case, including financial statements and schedules and all
exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
covered by the Registration Statement in conformity with the requirements of the
Securities Act;
(f) prior to any public offering of Registrable Securities, use
commercially reasonable efforts to register or qualify such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions in the United States as the Holders disposing of Registrable
Securities covered by the Registration Statement shall reasonably request in
writing; PROVIDED, HOWEVER, that AIMCO shall in no event be required to qualify
generally to do business as a foreign corporation or as a dealer in any
jurisdiction where it is not at the time so qualified or to execute or file a
general consent to service of process in any such jurisdiction where it has not
theretofore done so or to take any action that would subject it to general
service of process or taxation in any such jurisdiction where it is not then
subject;
(g) except during any Delay Period, upon the occurrence of any
event contemplated by SECTION 4(c)(v) above, promptly file a supplement or
post-effective amendment to the Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference or
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(h) use commercially reasonable efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on each securities
exchange or automated interdealer quotation system, if any, on which similar
securities issued by AIMCO are then listed or quoted;
(i) on or before the effective date of the Registration
Statement, provide the transfer agent of AIMCO for the Registrable Securities
with printed certificates for the Registrable Securities in a form eligible for
deposit with The Depositary Trust Company;
(j) if such offering is an underwritten offering, make available
for inspection by any Holder disposing of Registrable Securities included in
such Registration Statement, any underwriter of such offering, and any attorney,
accountant or other agent retained by any such Holder or underwriter
(collectively, the "INSPECTORS"), all financial and other records and other
information, pertinent
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corporate documents and properties of any of AIMCO and its subsidiaries
(collectively, the "RECORDS"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility; PROVIDED, HOWEVER, that the
Records that AIMCO determines, in good faith, to be confidential shall not be
disclosed to any Inspector unless (i) such Inspector signs a confidentiality
agreement reasonably satisfactory to AIMCO (which shall permit the disclosure of
such Records in such Registration Statement or the related Prospectus if
necessary to avoid or correct a material misstatement in or material omission
from such Registration Statement or Prospectus), (ii) after consultation with
counsel for the applicable Inspectors, the Holders and AIMCO, the disclosure of
such Records is necessary to avoid or correct a misstatement or omission in such
Registration Statement or (iii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction, PROVIDED
that each Holder shall, promptly after learning that disclosure of such Records
is sought in a court having jurisdiction, give notice to AIMCO and allow AIMCO,
at AIMCO's expense, to undertake appropriate action to prevent disclosure of
such Records; and
(k) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders owning a majority of the Registrable
Securities being sold in connection therewith (including those reasonably
requested by the managing underwriters) in order to expedite or facilitate the
disposition of such Registrable Securities and, in such connection, (i) use its
commercially reasonable efforts to obtain opinions of counsel to AIMCO and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the managing underwriters and counsel to the
Holders disposing of Registrable Securities), addressed to each Holder selling
Registrable Securities covered by such Registration Statement and each of the
underwriters as to the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (ii) use commercially reasonable efforts to
obtain "cold comfort" letters and updates thereof from the independent certified
public accountants of AIMCO (and, if necessary, any other independent certified
public accountants of any subsidiary of AIMCO or of any business acquired by
AIMCO for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each Holder selling
Registrable Securities covered by the Registration Statement (unless such
accountants shall be prohibited from so addressing such letters by applicable
standards of the accounting profession) and each of the underwriters, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings, and
(iii) if requested and if an underwriting agreement is entered into, provide
indemnification provisions and procedures substantially to the effect set forth
in SECTION 7 hereof with respect to all parties to be indemnified pursuant to
said Section. The above shall be done at each
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closing under such underwriting or similar agreement, or as and to the extent
required thereunder.
With respect to any Registration under SECTION 2 hereof, AIMCO
may require each Holder disposing of Registrable Securities covered by such
Registration to furnish such information regarding the Holder and such Holder's
intended disposition of Registrable Securities as AIMCO may from time to time
reasonably request in writing. If any such information with respect to the
Holder is not furnished within a reasonable period of time after receipt of such
request, AIMCO may exclude such Holder's Registrable Securities from such
Registration.
Upon receipt of any notice from AIMCO of the happening of any
event of the kind described in SECTION 4(c)(ii), 4(c)(iii), 4(c)(iv) or 4(c)(v)
hereof, each Holder shall (i) forthwith discontinue disposition of any
Registrable Securities covered by such Registration Statement or Prospectus
until receipt of the copies of the supplemented or amended Prospectus
contemplated by SECTION 4(g) hereof, or until such Holder is advised in writing
(the "ADVICE") by AIMCO that the use of the applicable Prospectus may be
resumed, and has received copies of any amended or supplemented Prospectus or
any additional or supplemental filings which are incorporated, or deemed to be
incorporated, by reference in such Prospectus (such period during which
disposition is discontinued being an "INTERRUPTION PERIOD") and (ii) if
requested by AIMCO, deliver to AIMCO (at the expense of AIMCO) all copies then
in its possession, other than permanent file copies then in its possession, of
the Prospectus covering such Registrable Securities at the time of receipt of
such request. No Holder shall utilize any material other than the applicable
current preliminary prospectus or Prospectus in connection with the offering of
Registrable Securities pursuant to SECTION 2 hereunder.
SECTION 11. REGISTRATION EXPENSES.
Whether or not any Registration Statement is filed or becomes
effective, AIMCO shall pay all costs, fees and expenses incident to AIMCO's
performance of or compliance with this Agreement including, without limitation,
(i) all registration and filing fees, including NASD filing fees, (ii) fees and
expenses of compliance with securities or Blue Sky laws, including reasonable
fees and disbursements of counsel in connection therewith, (iii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses (including preliminary
prospectuses) if the printing of prospectuses is requested by the Holders or the
managing underwriter, if any), (iv) messenger, telephone and delivery expenses,
(v) fees and disbursements of counsel for AIMCO, (vi) fees and disbursements of
all independent certified public accountants of AIMCO (including, without
limitation, expenses of any "cold comfort" letters required in connection with
this Agreement) and all other persons retained by AIMCO in connection with the
Registration Statement, (vii) fees and disbursements (not in excess of $25,000
per Registration) of one counsel, other than AIMCO's
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counsel, selected to represent all such Holders by Holders owning a majority in
number of the Registrable Securities being registered, (viii) fees and expenses
customarily reimbursed or paid by issuers or selling securityholders on behalf
of underwriters in underwritten offerings (other than any marketing or
distribution expenses) and (ix) all other costs, fees and expenses incident to
AIMCO's performance or compliance with this Agreement. Notwithstanding the
foregoing, the fees and expenses of any persons (other than fees and
disbursements not in excess of $25,000 per Registration of the counsel selected
by Holders owning a majority in number of the Registrable Securities being
registered) retained by a Holder, and any discounts, commissions or brokers'
fees or fees of similar securities industry professionals and any transfer taxes
relating to the disposition of the Registrable Securities by a Holder, will be
payable by such Holder, and AIMCO will have no obligation to pay any such
amounts.
SECTION 12. UNDERWRITING REQUIREMENTS.
(a) Subject to SECTION 6(b) hereof, any Holder shall have the
right, by written notice, to specify that it intends to dispose of Registrable
Securities covered by a Registration Statement pursuant to an underwritten
offering.
(b) In the case of any underwritten offering pursuant to a Shelf
Registration Statement, the Holders selling securities in such underwritten
offering shall select the institution or institutions that shall manage or lead
the offering or placement, subject to the reasonable satisfaction of AIMCO. In
the case of a Demand Registration in which an underwritten offering is
specified, the Holders selling securities in such offering shall select the lead
manager of such offering or placement, subject to the reasonable satisfaction of
AIMCO, and AIMCO shall select the second manager of such offering or placement,
subject to the reasonable satisfaction of such Holders. Any selection or other
decision by Holders pursuant to this paragraph (b) shall be made by the Holders
of a majority in number of the Registrable Securities to be sold pursuant to the
applicable underwritten offering. No Holder shall be entitled to participate in
an underwritten offering unless and until such Holder has entered into an
underwriting or other agreement with such institution or institutions for such
offering in such form as AIMCO and such institution or institutions shall
determine.
SECTION 13. INDEMNIFICATION.
(a) INDEMNIFICATION BY AIMCO. AIMCO shall, without limitation as
to time, indemnify and hold harmless, to the full extent permitted by law, each
Holder whose Registrable Securities are covered by a Registration Statement or
Prospectus, the officers, directors and agents and employees of each of them,
each Person who controls each such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling person, to the fullest
extent
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lawful, from and against any and all losses, claims, damages, liabilities,
judgment, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "LOSSES"), as incurred,
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon information furnished in writing to
AIMCO by or on behalf of such Holder expressly for use therein; PROVIDED,
HOWEVER, that AIMCO shall not be liable to any Holder to the extent that any
such Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus if
(i) having previously been furnished by or on behalf of AIMCO with copies of the
Prospectus, such Holder failed to send or deliver a copy of the Prospectus with
or prior to the delivery of written confirmation of the sale of Registrable
Securities by such Holder to the person asserting the claim from which such
Losses arise and (ii) the Prospectus would have corrected in all material
respects such untrue statement or alleged untrue statement or such omission or
alleged omission; and PROVIDED, FURTHER, that AIMCO shall not be liable in any
such case to the extent that any such Losses arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
the Prospectus, if (x) such untrue statement or alleged untrue statement,
omission or alleged omission is corrected in all material respects in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of AIMCO with copies of the Prospectus as so amended
or supplemented, such Holder failed to deliver such Prospectus as so amended or
supplemented, prior to or concurrently with the delivery of written confirmation
of the sale of Registrable Securities to the person asserting the claim from
which such Losses arise.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. In
connection with any Registration Statement in which a Holder is participating,
and as a condition to such participation, such Holder shall (i) furnish to AIMCO
in writing such information as AIMCO reasonably requests for use in connection
with any Registration Statement or Prospectus and (ii) be deemed to have agreed
to indemnify, to the full extent permitted by law, AIMCO, its directors,
officers, agents and employees, each Person who controls AIMCO (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons,
from and against all Losses arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, to the extent, but only to the extent, that
such untrue or alleged untrue statement or omission or alleged omission is based
upon any information so furnished in writing
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by or on behalf of such Holder to AIMCO expressly for use in such Registration
Statement or Prospectus.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Person shall
be entitled to indemnity hereunder (an "indemnified party"), such indemnified
party shall give prompt notice to the party from which such indemnity is sought
(the "indemnifying party") of any claim or of the commencement of any proceeding
with respect to which such indemnified party seeks indemnification or
contribution pursuant hereto; PROVIDED, HOWEVER, that the delay or failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
obligation or liability except to the extent that the indemnifying party has
been materially prejudiced by such delay or failure. The indemnifying party
shall have the right, exercisable by giving written notice to an indemnified
party promptly after the receipt of written notice from such indemnified party
of such claim or proceeding, to assume, at the indemnifying party's expense, the
defense of any such claim or proceeding, with counsel reasonably satisfactory to
such indemnified party; PROVIDED, HOWEVER, that an indemnified party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless: (l) the indemnifying
party agrees to pay such fees and expenses; (2) the indemnifying party fails
promptly to assume the defense of such claim or proceeding or fails to employ
counsel reasonably satisfactory to such indemnified party; or (3) the named
parties to any proceeding (including impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party);
in which case the indemnified party shall have the right to employ counsel and
to assume the defense of such claim or proceeding; PROVIDED, HOWEVER, that
subject to clause (3) above, the indemnifying party shall not, in connection
with any one such claim or proceeding or separate but substantially similar or
related claims or proceedings in the same jurisdiction, arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one firm of attorneys (together with appropriate local counsel) at any
time for all of the indemnified parties, or for fees and expenses that are not
reasonable. Whether or not such defense is assumed by the indemnifying party,
such indemnified party will not be subject to any liability for any settlement
made without its consent. The indemnifying party shall not consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification hereunder.
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(d) CONTRIBUTION. If the indemnification provided for in this
SECTION 7 is unavailable to an indemnified party in respect of any Losses (other
than in accordance with its terms), then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and such indemnified party, on the other hand, in
connection with the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this SECTION 7(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this SECTION 7(d), an indemnifying party that
is a Holder shall not be required to contribute any amount which is in excess of
the amount by which the total proceeds received by such Holder from the sale of
Registrable Securities (net of all underwriting discounts and commissions)
exceeds the amount of any damages that such indemnifying party has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
SECTION 14. MISCELLANEOUS.
(a) NOTICES. All notices or communications hereunder shall be in
writing (including facsimile or similar writing), addressed as follows:
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To AIMCO:
Apartment Investment and Management Company
1873 South Bellaire Street, 17th Floor
Denver, CO 80222
Attention: Terry Considine
With a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom, LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra
To the Holders at their respective addresses set forth on the
signature pages hereto.
Any such notice or communication shall be deemed given (i) when
made, if made by hand delivery, (ii) one business day after being deposited with
a next-day courier, postage prepaid, or (iii) three business days after being
sent certified or registered mail, return receipt requested, postage prepaid, in
each case addressed as above (or to such other address as such party may
designate in writing from time to time).
(b) SEPARABILITY. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
(c) ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, devisees,
legatees, legal representatives, successors and assigns. Except as set forth
herein, neither AIMCO nor any Holder shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of AIMCO and the
other Holders, with respect to an assignment by any Holder, or the Holders, with
respect to an assignment by AIMCO; PROVIDED, that no consent of AIMCO or the
other Holders shall be required for the assignment by any Holder of this
Agreement or any of the rights and obligations of such Holder hereunder to any
person described in clause (ii) of the definition of "Holder" to whom
Registrable Securities are transferred by such Holder.
(d) ENTIRE AGREEMENT. This Agreement represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the parties hereto with respect to the
subject matter hereof.
B-16
<PAGE>
(e) AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless AIMCO has obtained the written consent of Holders of at least a
majority in number of the Registrable Securities then outstanding.
(f) PUBLICITY. The Holders and AIMCO agree that no public
release or announcement concerning the transactions contemplated hereby shall be
issued by either party without the prior consent of the other party, except to
the extent that the Holders or AIMCO is advised by counsel that such release or
announcement is necessary or advisable under applicable law or the rules or
regulations of any securities exchange, in which case the party required to make
the release or announcement shall to the extent practicable provide the other
party with an opportunity to review and comment on such release or announcement
in advance of its issuance.
(g) EXPENSES. Whether or not the transactions contemplated
hereby are consummated, except as otherwise provided herein, all costs and
expenses incurred in connection with the execution of this Agreement shall be
paid by the party incurring such costs or expenses, except as otherwise set
forth herein.
(h) INTERPRETATION. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when two or more such counterparts have been signed by
each of the parties and delivered to the other party.
(j) GOVERNING LAW. This Agreement shall be construed,
interpreted, and governed in accordance with the laws of the State of Maryland,
without reference to rules relating to conflicts of law.
(k) CALCULATION OF TIME PERIODS. Except as otherwise indicated,
all periods of time referred to herein shall include all Saturdays, Sundays and
holidays; PROVIDED, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the next
succeeding Business Day.
B-17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
AIMCO:
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
-------------------------------------
Name:
Title:
INVESTOR:
-------------------------------------
Name:
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
B-18
<PAGE>
EXHIBIT C-1
FORM OF LEGAL OPINION OF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP,
COUNSEL TO AIMCO AND MERGER SUB
1. Merger Sub has been duly incorporated and each of Merger Sub and
AIMCO Properties, L.P. is validly existing and in good standing under the laws
of the State of Delaware.
2. Merger Sub has the corporate power and corporate authority to
enter into the Agreement and to consummate the transactions contemplated
thereby. The execution and delivery of the Agreement by Merger Sub and the
consummation of the transactions contemplated thereby have been duly authorized
by all requisite corporate action on the part of Merger Sub.
3. The Agreement has been executed and delivered by Merger Sub and
(assuming it has been duly authorized, executed and delivered by AIMCO and NHP)
is a valid and binding obligation of AIMCO and Merger Sub, enforceable against
AIMCO and Merger Sub in accordance with its terms, except (a) to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity) and (b) that rights to indemnification thereunder may be limited by
Federal or state securities laws or the policies underlying such laws.
4. Neither the execution and delivery of the Agreement by AIMCO, nor
the consummation by AIMCO of the transactions contemplated thereby, will (a)
violate the Certificate of Incorporation or By-laws of Merger Sub, or (b) to the
best of our knowledge, without having made any independent investigation,
constitute a violation of or a default under any material contract, agreement or
instrument to which AIMCO, Merger Sub or any of their Material Subsidiaries is
subject and which has been specifically identified to us as material by AIMCO
and Merger Sub in connection with rendering such opinion. We express no
opinion, however, as to whether the execution, delivery or performance by AIMCO
or Merger Sub of the Agreement will constitute a violation of or a default under
any covenant, restriction or provision with respect to financial ratios or tests
or any aspect of the financial condition or results of operations of AIMCO or
Merger Sub.
5. Neither the execution or delivery by AIMCO or Merger Sub of the
Agreement nor the consummation by AIMCO or Merger Sub of the Merger in
accordance with the terms and provisions thereof will violate any Applicable Law
(as hereinafter defined). "Applicable Laws" shall mean those laws, rules and
regu-
C1-1
<PAGE>
lations of the State of California, the general corporate law of the State of
Delaware and of the United States of America which, in our experience, are
normally applicable to transactions of the type contemplated by the Agreement.
6. No Governmental Approval (as hereinafter defined), which has not
been obtained or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution, delivery or
performance of the Agreement by AIMCO or Merger Sub, except that we express no
opinion with regard to the securities or Blue Sky laws of the various states.
"Governmental Approval" means any consent, approval, license, authorization or
validation of, or filing, recording or registration with, any Governmental
Authority pursuant to Applicable Laws.
7. The AIMCO Registration Statement has been declared effective
under the Securities Act and, to the best of our knowledge, no stop order
suspending the effectiveness of the AIMCO Registration Statement or preventing
the use of the Proxy Statement/Prospectus has been issued.
8. [Unless a similar opinion is included as an exhibit in the AIMCO
Registration Statement:] [Commencing with AIMCO's 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
AIMCO's proposed method of operation, and its actual method of operation since
its formation, will enable it to meet the requirements for qualification and
taxation as a REIT. The qualification and taxation as a REIT depends upon
AIMCO's ability to meet, through actual annual operating results, certain
requirements, including requirements relating to distribution levels and
diversity of stock ownership, and the various qualification tests imposed under
the Code, the results of which will not be reviewed by us. Accordingly, no
assurance can be given that the actual results of AIMCO's operation for any one
taxable year will satisfy such requirements.]
9. The Proxy Statement/Prospectus, as of the date it was mailed to
stockholders of AIMCO and as of the date hereof, and the AIMCO Registration
Statement, as of the date of its effectiveness and as of the date hereof,
appeared on its face to be appropriately responsive in all material respects to
the applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations thereunder, except that, in each case, we express no
opinion or belief as to the financial statements, schedules and other financial
data included or incorporated, or deemed to be incorporated, by reference
therein or excluded therefrom or any information to the extent it was furnished
by or relates to NHP, and we do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Proxy
Statement/Prospectus or the AIMCO Registration Statement.
C1-2
<PAGE>
In addition, we have participated in conferences with officers and
other representatives of AIMCO, representatives of the independent public
accountants of AIMCO, officers and other representatives of NHP, counsel for NHP
and representatives of the independent public accountants of NHP, at which the
contents of the Proxy Statement/Prospectus, the AIMCO Registration Statement and
related matters were discussed and, although we are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Proxy Statement/Prospectus or the AIMCO Registration
Statement and have made no independent check or verification thereof, on the
basis of the foregoing, no facts have come to our attention that have led us to
believe that, insofar as it relates to AIMCO, the Proxy Statement/Prospectus,
the AIMCO Registration Statement, in each case, as of its date and the date of
the NHP Meeting, contained or contains an untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that we express no opinion or
belief with respect to the financial statements, schedules and other financial
data included or incorporated, or deemed to be incorporated, by reference in the
Proxy Statement/Prospectus or the AIMCO Registration Statement or the
information included or incorporated, or deemed to be incorporated, by reference
in the Proxy Statement/Prospectus or the AIMCO Registration Statement to the
extent such information was furnished by or relates to NHP.
C1-3
<PAGE>
EXHIBIT C-2
FORM OF LEGAL OPINION OF
PIPER & MARBURY L.L.P.,
MARYLAND COUNSEL TO AIMCO
1. AIMCO has been duly incorporated and is validly existing and in
good standing under the laws of its jurisdiction of incorporation.
2. AIMCO has the corporate power and corporate authority to enter
into the Agreement and to consummate the transactions contemplated thereby. The
execution and delivery of the Agreement by AIMCO and the consummation of the
transactions contemplated thereby have been duly authorized by all requisite
corporate action on the part of AIMCO.
3. Assuming the Agreement has been executed and delivered by an
authorized officer of AIMCO, the Agreement has been executed and delivered by
AIMCO.
4. Neither the execution and delivery of the Agreement by AIMCO, nor
the consummation by AIMCO of the transactions contemplated thereby, will violate
the Charter or By-laws of AIMCO.
5. Neither the execution or delivery by AIMCO of the Agreement nor
the consummation by AIMCO of the Merger in accordance with the terms and
provisions thereof will violate any Applicable Law (as hereinafter defined).
"Applicable Laws" shall mean those laws, rules and regulations of the State of
Maryland which, in our experience, are normally applicable to transactions of
the type contemplated by the Agreement.
6. No Governmental Approval (as hereinafter defined), which has not
been obtained or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution, delivery or
performance of the Agreement by AIMCO, except that we express no opinion with
regard to the securities or Blue Sky laws of the various states. "Governmental
Approval" means any consent, approval, license, authorization or validation of,
or filing, recording or registration with, any Maryland Governmental Authority
pursuant to Applicable Laws.
7. The AIMCO Common Stock to be issued in the Merger has been duly
authorized and, upon issuance in accordance with the Agreement, will be validly
issued, fully paid and nonassessable.
C2-1
<PAGE>
EXHIBIT D-1
FORM OF LEGAL OPINION OF
WILMER, CUTLER & PICKERING,
COUNSEL TO NHP
1. NHP and each subsidiary of NHP listed on Schedule A attached
hereto has been duly incorporated and is validly existing and in good standing
under the laws of its respective jurisdiction of incorporation.
2. NHP has the corporate power and corporate authority to enter into
the Agreement and to consummate the transactions contemplated thereby. The
execution and delivery of the Agreement by NHP and the consummation of the
transactions contemplated thereby have been duly authorized by all requisite
corporate action on the part of NHP.
3. The Agreement has been executed and delivered by NHP and
(assuming it has been duly authorized, executed and delivered by AIMCO and
Merger Sub) is a valid and binding obligation of NHP, enforceable against NHP in
accordance with its terms, except (a) to the extent that enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and (b) that rights to
indemnification thereunder may be limited by Federal or state securities laws or
the policies underlying such laws.
4. Neither the execution and delivery of the Agreement by NHP, nor
the consummation by NHP of the transactions contemplated thereby, will (a)
violate the Certificate of Incorporation or By-laws of NHP, or (b) to the best
of our knowledge, without having made any independent investigation, constitute
a violation of or a default under any material contract, agreement or instrument
to which NHP or any of its Material Subsidiaries is subject and which has been
specifically identified to us as material by NHP in connection with rendering
such opinion. We express no opinion, however, as to whether the execution,
delivery or performance by NHP of the Agreement will constitute a violation of
or a default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or results of
operations of NHP.
5. Neither the execution or delivery by NHP of the Agreement nor the
consummation by NHP of the Merger in accordance with the terms and provisions
thereof will violate any Applicable Law (as hereinafter defined). "Applicable
Laws" shall mean those laws, rules and regulations of the District of Columbia,
the general corporate law of the State of Delaware and of the United States of
America
D1-1
<PAGE>
which, in our experience, are normally applicable to transactions of the type
contemplated by the Agreement.
6. No Governmental Approval (as hereinafter defined), which has not
been obtained or taken and is not in full force and effect, is required to
authorize or is required in connection with the execution, delivery or
performance of the Agreement by NHP, except that we express no opinion with
regard to the securities or Blue Sky laws of the various states. "Governmental
Approval" means any consent, approval, license, authorization or validation of,
or filing, recording or registration with, any Governmental Authority pursuant
to Applicable Laws.
7. The MS Registration Statement has been declared effective under the
Exchange Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the MS Registration Statement or preventing the use of the
Proxy Statement/Prospectus has been issued.
8. Each of the Proxy Statement/Prospectus, as of the date it was
mailed to stockholders of NHP and as of the date hereof, and the MS Registration
Statement, as of the date of its effectiveness and as of the date hereof,
appeared on its face to be appropriately responsive in all material respects to
the applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations thereunder, except that, in each case, we express no
opinion or belief as to the financial statements, schedules and other financial
data included or incorporated, or deemed to be incorporated, by reference
therein or excluded therefrom or any information to the extent it was furnished
by or relates to AIMCO or Merger Sub, and we do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Proxy Statement/Prospectus or the MS Registration Statement.
In addition, we have participated in conferences with officers and
other representatives of NHP, representatives of the independent public
accountants of NHP, officers and other representatives of AIMCO, counsel for
AIMCO and representatives of the independent public accountants of AIMCO, at
which the contents of the Proxy Statement/Prospectus, the MS Registration
Statement and related matters were discussed and, although we are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Proxy Statement/Prospectus or the MS
Registration Statement and have made no independent check or verification
thereof, on the basis of the foregoing, no facts have come to our attention that
have led us to believe that, insofar as it relates to NHP, the Proxy
Statement/Prospectus or the MS Registration Statement, in each case, as of its
date and the date of the NHP Meeting, contained or contains an untrue statement
of a material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that we express
no opinion or belief with respect to the financial statements, sched-
D1-2
<PAGE>
ules and other financial data included or incorporated, or deemed to be
incorporated, by reference in the Proxy Statement/Prospectus or the MS
Registration Statement or the information included or incorporated, or deemed to
be incorporated, by reference in the Proxy Statement/Prospectus or the MS
Registration Statement to the extent such information was furnished by or
relates to AIMCO or Merger Sub.
D1-3
<PAGE>
SCHEDULE A
NHP Management Company
NHP-HG II, Inc.
D1-4
<PAGE>
EXHIBIT D-2
FORM OF LEGAL OPINION OF
ARENT FOX KINTNER PLOTKIN & KAHN,
SPECIAL COUNSEL TO NHP
1. Neither the execution and delivery of the Agreement by NHP, nor
the consummation by NHP of the Merger, will give to any member of the Oxford
Group (as defined in the Stock Purchase Agreement) any right to terminate, not
renew or amend any of the Oxford Management Contracts (as defined in the Stock
Purchase Agreement) without the consent of NHP or one of its wholly owned
subsidiaries.
2. Neither the execution and delivery of the Agreement by NHP, nor
the consummation by NHP of the Merger, will constitute a violation of or a
default under, any of the Oxford Management Contracts or any other Contract,
agreement or instrument to which (a) NHP or any of its subsidiaries is a party,
and (b) any member of the Oxford Group is party, including, without limitation,
the Stock and Asset Transfer Restrictions Agreement.
D2-1
<PAGE>
[The Schedules listed in the table of contents preceding
the Agreement and Plan of Merger, dated as of April 21, 1997, by and among
Apartment Investment and Management Company, AIMCO/NHP Acquisition Corp. and NHP
Incorporated, have been omitted. A copy of such Schedules will be
furnished supplementally to the Securities and Exchange Commission upon
request.]
<PAGE>
Exhibit 2.2
STOCK PURCHASE AGREEMENT
dated as of
April 16, 1997
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
DEMETER HOLDINGS CORPORATION
and
CAPRICORN INVESTORS, L.P.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1 Definitions........................................................... 1
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale of Stock............................................ 9
2.2 Consideration........................................................ 10
2.3 Closings.............................................................. 10
2.4 Deliveries by the Sellers at the Initial Closing
and each Subsequent Closing........................................... 11
2.5 Deliveries by AIMCO at the Initial Closing
and each Subsequent Closing........................................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
3.1 Organization and Qualifications; Subsidiaries......................... 13
3.2 Certificate of Incorporation and Bylaws............................... 13
3.3 Capitalization........................................................ 13
3.4 Ownership of Shares................................................... 13
3.5 Authority Relative to This Agreement.................................. 14
3.6 No Conflict; Required Filings and Consents............................ 14
3.7 Compliance............................................................ 14
3.8 SEC Reports and Financial Statements.................................. 15
3.9 Absence of Certain Changes or Events.................................. 15
3.10 Litigation............................................................ 16
3.11 Investment Representations............................................ 16
3.12 Brokers............................................................... 17
3.13 Management Arrangements............................................... 17
3.14 Disclosure............................................................ 17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AIMCO
4.1 Organization and Qualifications; Subsidiaries......................... 18
4.2 Charter and Bylaws.................................................... 18
4.3 Capitalization........................................................ 18
4.4 Authority Relative to This Agreement.................................. 18
i
<PAGE>
Page
----
4.5 No Conflict; Required Filings and Consents............................ 19
4.6 Compliance............................................................ 19
4.7 SEC Reports and Financial Statements.................................. 19
4.8 Absence of Certain Changes or Events.................................. 20
4.9 Litigation............................................................ 20
4.10 Investment Representations............................................ 21
4.11 Brokers............................................................... 22
4.12 Disclosure............................................................ 22
ARTICLE V
COVENANTS
5.1 Notification of Certain Matters....................................... 22
5.2 Further Action, Reasonable Efforts; Consents and Approvals............ 22
5.3 Conduct of Business of NHP Pending the Closing........................ 23
5.4 Conduct of Business of AIMCO Pending the Closing...................... 23
5.5 No Solicitation....................................................... 23
5.6 Transfer Taxes........................................................ 24
5.7 Public Announcements.................................................. 24
5.8 Voting Arrangements................................................... 24
5.9 Assignment of Shareholder Rights...................................... 25
5.10 Merger Proposal....................................................... 26
5.11 Exchange Offer........................................................ 26
5.12 Spin-Off.............................................................. 28
5.13 Sellers' Put Right.................................................... 28
5.14 Resignations of Directors............................................. 29
5.15 Determination of Initial Shares....................................... 29
5.16 Trust Agreement....................................................... 29
ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to Each Party's Obligation to Effect Each Closing.......... 30
6.2 Conditions to Obligations of AIMCO to Effect the
Initial Closing and the Subsequent Closing............................ 30
6.3 Conditions to Obligations of the Sellers to Effect the Initial
Closing and the Subsequent Closing.................................... 31
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 Termination........................................................... 32
ii
<PAGE>
7.2 Effect of Termination................................................. 33
7.3 Amendment or Supplement............................................... 33
7.4 Extension of Time, Waiver, Etc........................................ 33
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by the Sellers........................................ 34
8.2 Indemnification by AIMCO.............................................. 35
8.3 Procedures Relating to Indemnification................................ 35
8.4 Limitations on Indemnification........................................ 38
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Governing Law......................................................... 39
9.2 Entire Agreement...................................................... 39
9.3 Modification; Waiver.................................................. 39
9.4 Notices............................................................... 40
9.5 Expenses.............................................................. 41
9.6 Assignment............................................................ 41
9.7 Survival.............................................................. 42
9.8 Severability.......................................................... 42
9.9 Successors and Assigns; Third Parties................................. 42
9.10 Counterparts.......................................................... 42
9.11 Interpretation; References............................................ 42
9.12 Time of Essence....................................................... 42
9.13 Remedies.............................................................. 43
9.14 Exhibits.............................................................. 43
9.15 Attorneys' Fees....................................................... 43
9.16 Waiver of Jury Trial.................................................. 43
9.17 Further Assurances.................................................... 44
9.18 Negotiation of Agreement.............................................. 44
9.19 Several Liability..................................................... 44
iii
<PAGE>
DISCLOSURE SCHEDULE
EXHIBITS
EXHIBIT A -- Escrow Agreement
EXHIBIT B -- Guaranty
EXHIBIT C -- Registration Rights Agreement
EXHIBIT D -- Rights Agreement
EXHIBIT E -- Trust Agreement
iv
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of April 16, 1997 (the
"AGREEMENT"), by and among Apartment Investment and Management Company, a
Maryland corporation ("AIMCO" or the "BUYER"), Demeter Holdings Corporation, a
Massachusetts corporation ("DEMETER"), and Capricorn Investors, L.P., a Delaware
limited partnership ("CAPRICORN," and together with Demeter, the "SELLERS").
WHEREAS, Demeter owns 5,619,695 shares (the "DEMETER SHARES") of
common stock, par value $.01 per share ("NHP STOCK"), of NHP Incorporated, a
Delaware corporation (together with any successors, "NHP"); and
WHEREAS, Capricorn owns 1,310,427 shares (the "CAPRICORN SHARES" and,
together with the Demeter Shares, the "SHARES") of NHP Stock;
WHEREAS, the Sellers desire to sell their respective Shares to AIMCO
in exchange for shares of Class A Common Stock, par value $.01 per share ("AIMCO
Stock"), of AIMCO and/or cash, and AIMCO desires to purchase such shares of NHP
Stock in exchange for such consideration; and
WHEREAS, AIMCO and the Sellers have previously entered into a letter
agreement, dated February 13, 1997 (the "LETTER AGREEMENT"), which provides for
AIMCO to purchase the Shares from the Sellers, and for AIMCO and the Sellers to
negotiate a further agreement for such purchase.
NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the terms
and conditions set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. The capitalized terms used in this Agreement and not
otherwise defined herein shall have the following meanings (unless the context
otherwise requires, such capitalized terms shall include the singular and plural
and the conjunctive and disjunctive forms of the terms defined):
"ACCREDITED INVESTOR" shall have the meaning ascribed thereto in
Regulation D of the Rules and Regulations promulgated under the Securities Act.
"ACQUISITION PROPOSAL" shall have the meaning ascribed thereto in
SECTION 5.8.
1
<PAGE>
"AFFILIATE" shall mean, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Person.
"AIMCO GROSS ASSET VALUE" shall mean, as of any date, the total asset
value of AIMCO, as determined in good faith by the Board of Directors of AIMCO
in accordance with Treasury Regulation Section 1.856-2(d)(3) and Code Section
856.
"AIMCO SEC REPORTS" shall have the meaning ascribed thereto in SECTION
4.7.
"AIMCO STOCK" shall mean shares of Class A Common Stock, par value
$.01 per share, of AIMCO.
"BUSINESS DAY" shall mean a day other than Saturday, Sunday, or any
day on which the principal commercial banks located in California are authorized
or obligated to close under the laws of California.
"CAPRICORN SHARE PERCENTAGE" shall mean a fraction, the numerator of
which is the total number of Capricorn Shares and the denominator of which is
the total number of Shares.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMMENCEMENT DATE" shall have the meaning ascribed thereto in SECTION
5.11.
"COMMERCIALLY REASONABLE EFFORTS" or "COMMERCIALLY REASONABLE STEPS,"
when used with respect to any party, shall mean the reasonable efforts of a
party without the requirement that such party incur any unanticipated (as of the
date hereof) material and extraordinary out-of-pocket expenses, including the
making of any capital contribution, or incur any other unanticipated (as of the
date hereof) material and extraordinary burden or commence or pursue litigation
in any action, suit or proceeding, whether administrative, civil or criminal.
"CONSENTS" shall have the meaning ascribed thereto in SECTION 5.2.
"CONTRACT" shall mean, with respect to any Person, any note, bond,
indenture, lease, license, permit, franchise, deed of trust, mortgage, loan
agreement or other document, instrument, obligation or agreement, oral or
written, to which such Person or any of its subsidiaries is a party or by which
any of them or their assets or properties is bound or affected.
2
<PAGE>
"CONTROL" (and its derivative terms "CONTROLLED," "CONTROLS," etc.)
shall mean the power and right to direct the management and policies of another
Person, whether by ownership of voting securities, the ability to elect a
majority of the board of directors or other managing board or committee,
management contract, or otherwise.
"DAMAGES" shall mean any and all costs, damages, liabilities, fines,
fees, penalties, interest obligations, assessments, deficiencies, losses
(including any unrealized loss in value of any securities), and expenses
(including, without limitation, punitive, treble, or other exemplary damages,
amounts paid in settlement, interest, court costs, costs of investigation,
reasonable fees and expenses of attorneys, accountants, actuaries, and other
experts, and other reasonable expenses of litigation or of any claim, default or
assessment).
"DEMETER SHARE PERCENTAGE" shall mean a fraction, the numerator of
which is the total number of Demeter Shares and the denominator of which is the
total number of Shares.
"DIRECT CLAIM" shall have the meaning ascribed thereto in SECTION 8.3.
"DISCLOSURE SCHEDULE" shall mean the Disclosure Schedule attached
hereto.
"ESCROW AGENT" shall mean the Person named as Escrow Agent in the
Escrow Agreement.
"ESCROW AGREEMENT" shall mean an Escrow Agreement, substantially in
the form of EXHIBIT A hereto, to be entered into by Capricorn (or any transferee
of Capricorn Shares pursuant to SECTION 5.8(c)), AIMCO and an Escrow Agent to be
named therein and reasonably acceptable to AIMCO and Capricorn.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" shall have the meaning ascribed thereto in SECTION
5.11.
"EXCHANGE OFFER CLOSING" shall mean AIMCO's acceptance for exchange of
shares of NHP Stock tendered pursuant to the Exchange Offer.
"GAAP" shall mean generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"GOVERNMENTAL AUTHORITY" shall mean any government or any agency,
bureau, board, commission, court, department, authority, official, political
subdivision, tribunal or other instrumentality of any government, whether
Federal, state or local, domestic or foreign.
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"GUARANTY" shall mean the Guaranty, substantially in the form of
EXHIBIT B hereto, to be made by Phemus for the benefit of AIMCO and its
Representatives.
"HSR ACT" shall mean Section 7A of the Clayton Act (Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976), as amended (including
without limitation any successor act), and the rules and regulations promulgated
thereunder.
"HUD" means the U.S. Department of Housing and Urban Development.
"HUD CLEARANCE" shall mean approval by HUD of the participation of a
"Principal" in a "Project," each as defined in 24 C.F.R. Section 200.215,
pursuant to HUD's Previous Participation Review and Clearance procedure set
forth in 24 C.F.R. subpart H.
"INDEMNIFIED PARTY" shall have the meaning ascribed thereto in SECTION
8.3.
"INITIAL CLOSING" shall mean the closing of the transactions
contemplated by this Agreement in SECTION 2.1(a).
"INITIAL CLOSING DATE" shall mean the date on which the Initial
Closing occurs.
"INITIAL SHARES" shall have the meaning set forth in SECTION 5.15.
"IRS" shall mean the United States Internal Revenue Service or any
successor agency.
"KNOWLEDGE" shall mean, when used with respect to any Person, such
Person's actual knowledge without any duty to make any inquiry or investigation.
"LAW" shall mean any law, statute, rule, regulation, ordinance, decree
or order of any Governmental Authority.
"LIEN" shall mean any mortgage, pledge, assessment, security interest,
lease, sublease, lien, adverse claim, levy, charge, option, rights of others or
restrictions (whether on voting, sale, transfer, disposition or otherwise) or
other encumbrance of any kind, whether imposed by agreement, understanding, law
or equity, or any conditional sale contract, title retention contract, or other
contract to give or to refrain from giving any of the foregoing.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
material adverse effect on the validity or enforceability of this Agreement, on
the ability of such Person to perform its obligations under this Agreement, if
any, or on the business, assets, condition or results of operation of such
Person.
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"MATERIAL SUBSIDIARY" shall mean, with respect to any Person, a
subsidiary of such Person that (i) constitutes a "significant subsidiary" of
such Person, within the meaning of Rule 1-02 of Regulation S-X of the SEC, (ii)
has a direct or indirect ownership interest in any other subsidiary of such
Person that is a Material Subsidiary of such Person, or (iii) is otherwise
material to the business or operations of such Person and its subsidiaries,
taken as a whole.
"MATURITY TIME" shall have the meaning set forth in the Rights
Agreement.
"MERGER" shall mean the merger of NHP and AIMCO or a subsidiary of
AIMCO pursuant to the Merger Proposal.
"MERGER PROPOSAL" shall mean the transactions proposed by AIMCO
pursuant to that certain letter, dated February 19, 1997, from AIMCO to NHP.
"MORTGAGE SUB STOCK" shall mean common stock, par value $.01 per
share, of the Mortgage Subsidiary.
"MORTGAGE SUBSIDIARY" shall mean NHP Financial Services, Ltd., a
Delaware corporation.
"NHP SEC REPORTS" shall have the meaning ascribed thereto in Section
3.8.
"NHP'S FREE CASH FLOW" shall mean, for any period, the amount of NHP's
earnings before interest, taxes, depreciation and amortization for such period,
less (i) the amount of cash payments made or obligated to be made in respect of
taxes and interest during such period, and (ii) $500,000 for each month (or
ratable portion thereof) included in such period.
"NHP'S TRANSACTION COSTS" shall mean, for any period, all of NHP's
termination, severance and transaction costs arising during such period in
respect of the Spin-Off and the Merger.
"NOTICE OF DIRECT CLAIM" shall have the meaning ascribed thereto in
SECTION 8.3.
"NOTICE OF THIRD PARTY CLAIM" shall have the meaning ascribed thereto
in SECTION 8.3.
"NOTICES" shall have the meaning ascribed thereto in SECTION 9.4.
"OFFER DOCUMENTS" shall have the meaning ascribed thereto in SECTION
5.11.
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"OPTION" shall mean, with respect to any Person, any option, warrant,
call, right, subscription, convertible or exchangeable security or other right,
agreement, arrangement or commitment of any kind or character to which such
Person or any of its subsidiaries is a party relating to the issued or unissued
capital stock of such Person or any of its subsidiaries, or obligating such
Person or any of its subsidiaries to issue, transfer, grant or sell any shares
of capital stock of, or other equity interest in, or securities convertible into
or exchangeable for any capital stock or other equity interest in, such Person
or any of its subsidiaries.
"ORDER" shall mean any order, decree, injunction, judgment, edict,
ruling, assessment, pronouncement, determination, decision, opinion, sentence,
subpoena, writ or award issued, made, entered or rendered by any court,
administrative agency or other Governmental Authority or by any arbitrator.
"ORGANIZATIONAL DOCUMENTS" shall mean (i) with respect to a
corporation, its certificate or articles of incorporation and bylaws, (ii) with
respect to any limited liability company, its certificate of formation, articles
of organization, regulations, operating agreement and limited liability company
agreement, as applicable, (iii) with respect to any limited partnership, its
certificate of limited partnership and limited partnership agreement, (iv) with
respect to any general partnership, its partnership agreement, and (v) all other
similar organizational documents.
"OXFORD GROUP" shall mean Mr. Leo E. Zickler, Oxford Realty Financial
Group, Inc., Oxford Corporation, Oxford Construction Services, Inc., Oxford
Development Corporation, Oxford Development Enterprises, Inc., Oxford Equities
Corporation II, Oxford Equities Corporation III, Oxford Equities Corporation,
Oxford Engineering Services, Inc., Oxford Holding Corporation, Oxford Investment
Corporation, Oxford Investment II Corporation, Oxford Management Company, Inc.,
Oxford Mortgage & Investment Corporation, Oxford Properties Corporation, Oxford
Real Estate Holdings Corporation, Oxford Residential Properties I Limited
Partnership, Oxford Realty Services Corp., Oxford Retirement Services, Inc. and
Oxford Securities Corporation, and all Affiliates, associates and subsidiaries
of any of them.
"OXFORD MANAGEMENT CONTRACTS" shall mean any Contract in effect as of
the date hereof pursuant to which NHP or any of its subsidiaries provides
management services to or for any of the Oxford Properties.
"OXFORD PROPERTIES" shall mean any property directly or indirectly
owned, controlled or sponsored by any member of the Oxford Group.
"PERSON" shall mean any natural person, corporation, general
partnership, limited partnership, limited liability company, limited liability
partnership, proprietorship, trust, union, association, court, tribunal, agency,
government, department, commission, self-regulatory organization, arbitrator,
board, bureau, instrumentality or other entity, enterprise, authority or
business organization.
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"PHEMUS" shall mean Phemus Corporation, a Massachusetts corporation.
"PROXY" shall have the meaning ascribed thereto in SECTION 5.8.
"PUT SHARES" shall have the meaning ascribed thereto in SECTION 5.13.
"REAL ESTATE AGREEMENT" shall mean the Real Estate Acquisition
Agreement to be entered into by and among AIMCO, AIMCO Properties, L.P.,
Demeter, Phemus Corporation, Capricorn and/or certain related entities on terms
substantially in accordance with the Letter Agreement.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement, substantially in the form of EXHIBIT C hereto, to be entered into by
AIMCO and the Sellers at the Closing.
"REIT STATUS" shall mean, with respect to any Person, (a) the
qualification of such Person as a real estate investment trust under Sections
856 through 860 of the Code, (b) the applicability to such Person and its
shareholders of the method of taxation provided for in Sections 857 ET SEQ. of
the Code, and (c) the qualification and taxation of such Person as a real estate
investment trust under analogous provisions of state and local law in each state
and jurisdiction in which such Person owns property, operates or conducts
business.
"REPRESENTATIVE" shall mean, with respect to any Person, any director,
officer, employee, agent, advisor, counsel, accountant, lender or other
representative of such Person or of any Affiliate of such Person or any
Representative of any of the foregoing.
"RIGHT" shall have the meaning set forth in the Rights Agreement.
"RIGHTS AGREEMENT" shall mean a Rights Agreement, substantially in the
form of EXHIBIT D hereto, to be entered into by NHP, the Mortgage Subsidiary and
the Rights Agent to be named therein.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLERS' PUT CLOSING" shall have the meaning ascribed thereto in
SECTION 5.13.
"SELLERS' PUT RIGHT" shall have the meaning ascribed thereto in
SECTION 5.13.
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"SENIOR PREFERRED STOCK" shall have the meaning ascribed thereto in
SECTION 4.3.
"SHAREHOLDERS AGREEMENT" shall have the meaning ascribed thereto in
SECTION 5.9.
"SPIN-OFF" shall mean the distribution of Rights and Mortgage Sub
Stock pursuant to the Rights Agreement.
"STOCK AND ASSET TRANSFER RESTRICTIONS AGREEMENT" shall mean the Stock
and Asset Transfer Restrictions Agreement, dated as of December 10, 1993, by and
among Oxford Holding Corporation, Oxford Management Company, Inc., Oxford
Retirement Services, Inc., Oxford Realty Services Corp., Oxford Development
Corporation, NHP-HG, Inc., NHP, Inc., NHP Property Management, Inc., Oxford
Asset Management Corporation and Leo E. Zickler.
"SUBSEQUENT CLOSING" shall mean each closing of the transactions
contemplated by this Agreement in SECTION 2.1(b).
"SUBSEQUENT CLOSING DATE" shall mean the date on which a Subsequent
Closing occurs.
"SUBSIDIARY" shall mean, with respect to any Person, (i) any
corporation with respect to which such Person, directly or indirectly through
one or more subsidiaries, (a) owns more than 50% of the outstanding shares of
capital stock having generally the right to vote in the election of directors or
(b) has the power, under ordinary circumstances, to elect, or to direct the
election of, a majority of the board of directors of such corporation, (ii) any
partnership with respect to which (a) such Person or a subsidiary of such Person
is a general partner, (b) such Person and its subsidiaries together own more
than 50% of the interests therein, or (c) such Person and its subsidiaries have
the right to appoint or elect or direct the appointment or election of a
majority of the directors or other Person or body responsible for the governance
or management thereof, (iii) any limited liability company with respect to which
(a) such Person or a subsidiary of such Person is the manager or managing
member, or (b) such Person and its subsidiaries together own more than 50% of
the interests therein, or (c) such Person and its subsidiaries have the right to
appoint or elect or direct the appointment or election of a majority of the
directors or other Person or body responsible for the governance or management
thereof, or (iv) any other entity in which such Person has, and/or one or more
of its subsidiaries have, directly or indirectly, (a) at least a 50% ownership
interest or (b) the power to appoint or elect or direct the appointment or
election of a majority of the directors or other Person or body responsible for
the governance or management thereof.
"TAX" or "TAXES" shall mean all Federal, state, local and foreign
taxes and other assessments and governmental charges of a similar nature
(whether imposed
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directly or through withholdings), including any interest, penalties and
additions to Tax applicable thereto.
"THIRD PARTY CLAIM" shall have the meaning ascribed thereto in SECTION
8.3.
"TRANSACTIONS" means the transactions contemplated by this Agreement
in SECTION 2.1 and SECTION 2.2 hereof.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE OF STOCK.
(a) Upon the terms and subject to the conditions set forth
herein, at the Initial Closing: (i) Demeter shall sell, convey, assign,
transfer and deliver to AIMCO, and AIMCO shall accept, purchase and acquire
from Demeter, a number of Demeter Shares equal to the product of (x) the number
of Initial Shares, and (y) the Demeter Share Percentage; and (ii) Capricorn
shall sell, convey, assign, transfer and deliver to AIMCO, and AIMCO shall
accept, purchase and acquire from Capricorn, a number of Capricorn Shares equal
to the product of (x) the number of Initial Shares, and (y) the Capricorn Share
Percentage. Each of Demeter and Capricorn shall retain beneficial ownership of
all Rights relating to the Initial Shares that it sells at the Initial Closing,
and AIMCO shall hold such Rights in trust for the benefit of Demeter and
Capricorn.
(b) Upon the terms and subject to the conditions set forth
herein, at each Subsequent Closing: (i) Demeter shall sell, convey, assign,
transfer and deliver to AIMCO, and AIMCO shall accept, purchase and acquire from
Demeter, a number of Demeter Shares equal to product of (x) the total number of
Shares requested by AIMCO to be purchased at such Subsequent Closing pursuant to
a notice given pursuant to SECTION 2.3(b), and (y) the Demeter Share Percentage;
and (ii) Capricorn shall sell, convey, assign, transfer and deliver to AIMCO,
and AIMCO shall accept, purchase and acquire from Capricorn, a number of
Capricorn Shares equal to the product of (x) the total number of Shares
requested by AIMCO to be purchased at such Subsequent Closing pursuant to a
notice given pursuant to SECTION 2.3(b), and (y) the Capricorn Share Percentage;
provided, however, that if any Shares have not been purchased by AIMCO hereunder
prior to October 1, 1997, all such remaining Shares shall be purchased by AIMCO
at a Subsequent Closing held on such date. Each of Demeter and Capricorn shall
retain beneficial ownership of all Rights relating to Shares sold prior to the
Maturity Time. Without limiting AIMCO's ability to sell, assign, transfer or
dispose of Shares acquired by it hereunder, with respect to Rights relating to
Shares sold prior to the Maturity Time, AIMCO shall hold such Rights in trust
for the
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benefit of Demeter and Capricorn in accordance with the trust agreement referred
to in SECTION 5.16.
2.2 CONSIDERATION.
(a) In exchange for the sale, conveyance, assignment and
transfer of Demeter Shares: (i) at the Initial Closing and each Subsequent
Closing, AIMCO shall pay to Demeter cash in an amount equal to the product of
(x) the number of Demeter Shares being sold at such closing, and (y) $20;
provided, however, that if and to the extent that, after giving effect to such
closing, the aggregate amount of cash consideration that would have been paid to
Demeter hereunder at the Initial Closing and any Subsequent Closings exceeds
$59,473,017, in lieu of paying such excess cash amount, AIMCO may elect to
deliver to Demeter a number of shares of AIMCO Stock equal to (A) all or any
portion of such excess amount, divided by (B) $26.75; and (ii) as soon as
practicable after the Maturity Time has occurred, AIMCO shall exercise all
Rights with respect to the Demeter Shares theretofore acquired by it, and shall
deliver to Demeter all shares of Mortgage Sub Stock acquired by AIMCO upon the
exercise, conversion or maturity of such Rights or, if the Maturity Time has not
occurred prior to September 1, 1997, at the request of Demeter, AIMCO shall pay
to Demeter an additional cash amount equal to the product of (x) the number of
Demeter Shares theretofore acquired by it, and (y) $3.05.
(b) In exchange for the sale, conveyance, assignment and
transfer of Capricorn Shares: (i) at the Initial Closing and each Subsequent
Closing, AIMCO shall deliver (I) to Capricorn a number of shares of AIMCO Stock
equal to the product of (A) 80% of the number of Capricorn Shares being sold at
such closing, and (B) a fraction, the numerator of which is $20 and the
denominator of which is $26.75 and (II) to the Escrow Agent a number of shares
of AIMCO Stock equal to the product of (A) 20% of the number of Capricorn Shares
being sold at such closing, and (B) a fraction, the numerator of which is $20
and the denominator of which is $26.75; and (ii) as soon as practicable after
the Maturity Time has occurred, AIMCO shall exercise all Rights with respect to
the Capricorn Shares theretofore acquired by it, and shall deliver to Capricorn
all shares of Mortgage Sub Stock acquired by AIMCO upon the exercise, conversion
or maturity of such Rights or, if the Maturity Time has not occurred prior to
September 1, 1997, at the request of Capricorn, AIMCO shall pay to Capricorn an
additional cash amount equal to the product of (x) the number of Capricorn
Shares theretofore acquired by it, and (y) $3.05.
2.3 CLOSINGS.
(a) Upon the terms and subject to the satisfaction or waiver of
all the conditions to such closing set forth in this Agreement, the Initial
Closing and each Subsequent Closing shall take place at 10:00 a.m., Boston time,
on dates to be specified by the parties, which shall be (i) in the case of the
Initial Closing, no later than the fifth Business Day after the satisfaction or
waiver of the conditions to such closing set forth
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in this Agreement, and no earlier than five Business Days after the date of this
Agreement, and (ii) in the case of any Subsequent Closing, on the date specified
by AIMCO in the notice given pursuant to SECTION 2.3(b) or, if any of the Shares
have not yet been purchased by AIMCO hereunder, on October 1, 1997, in each
case, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon
Street, Boston, Massachusetts 02108-3194, unless another date or place is agreed
to in writing by the parties hereto.
(b) AIMCO shall give the Sellers notice of its intention to
effect a Subsequent Closing within 10 days of the AIMCO Gross Asset Value
increasing by more than $100 million from the AIMCO Gross Asset Value as of the
Initial Closing Date or as of the most recent Subsequent Closing Date, whichever
is later. Such notice shall specify (i) the date of the proposed Subsequent
Closing, which shall not be more than ten Business Days after the date of such
notice, and (ii) the number of Shares to be purchased at such Subsequent
Closing, which shall not be less than the quotient obtained by dividing (x) the
sum of (I) 5% of such increase in AIMCO Gross Asset Value, and (II) any
additional financing that AIMCO is able to obtain in connection with such
Subsequent Closing, by (y) $20. Such notice shall be accompanied by a
certificate signed by the secretary or an assistant secretary of AIMCO,
certifying as to the AIMCO Board of Directors' determination of such AIMCO Gross
Asset Value.
2.4 DELIVERIES BY THE SELLERS AT THE INITIAL CLOSING AND EACH
SUBSEQUENT CLOSING. At the Initial Closing and at the Subsequent Closing, the
Sellers shall deliver, or cause to be delivered, to AIMCO the following:
(a) STOCK CERTIFICATES. Demeter shall deliver or cause to be
delivered a certificate or certificates representing all of the Demeter Shares
to be purchased at such closing, in accordance with SECTION 2.1, accompanied by
duly executed blank stock powers or endorsed in blank for transfer, as AIMCO
requests. Capricorn shall deliver or cause to be delivered a certificate or
certificates representing all of the Capricorn Shares to be purchased at such
closing, in accordance with SECTION 2.1, accompanied by duly executed blank
stock powers or endorsed in blank for transfer, as AIMCO requests.
(b) PROOF OF AUTHORITY. Each of the Sellers shall deliver to
AIMCO a certificate, dated the Closing Date and executed by its clerk or
assistant clerk, in the case of Demeter, or the secretary or any assistant
secretary of the general partner of its general partner, in the case of
Capricorn, certifying that (i) such Seller has duly and validly taken all
corporate or partnership action, as the case may be, necessary to authorize its
execution and delivery of this Agreement and its performance of its obligations
under this Agreement, (ii) the individual(s) executing or delivering any
instruments, documents or certificates on behalf of such Seller has the power or
authority to act for or bind such Seller, and (iii) the resolutions (true and
complete copies of which shall be attached to the certificate) of the Board of
Directors of such Seller, in the case of Demeter, or of the general partner of
the general partner of such Seller, in the case
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of Capricorn, with respect to this Agreement and the Transactions have been duly
and validly adopted and are in full force and effect.
(c) STOCK POWERS. Capricorn shall deliver or cause to be
delivered duly executed blank stock powers with respect to all shares of AIMCO
Stock delivered to the Escrow Agent pursuant to SECTION 2.2(b).
(d) OTHER. The Sellers shall deliver to AIMCO all other
documents, instruments and writings reasonably requested by AIMCO to be
delivered by the Sellers at or prior to the Closing Date pursuant to this
Agreement.
2.5 DELIVERIES BY AIMCO AT THE INITIAL CLOSING AND EACH SUBSEQUENT
CLOSING. At the Initial Closing and the Subsequent Closing, AIMCO shall
deliver, or cause to be delivered, to the Sellers the following:
(a) STOCK CERTIFICATES. AIMCO shall deliver (i) to Demeter a
certificate or certificates representing the number of shares of AIMCO Stock
specified in SECTION 2.2(a), if any, (ii) to Capricorn a certificate or
certificates representing the number of shares of AIMCO Stock specified in
SECTION 2.2(b)(i)(I), and (iii) to the Escrow Agent a certificate or
certificates representing the number of shares of AIMCO Stock specified in
Section 2.2(b)(i)(II), in each case, in such denominations and registered in
such names as Demeter, in the case of the foregoing clause (i), or Capricorn, in
the case of the foregoing clause (ii), shall specify in writing at least three
Business Days prior to the Closing.
(b) CASH CONSIDERATION. AIMCO shall (i) deliver to Demeter a
check or checks, payable in next-day funds to the order of such Persons as
Demeter shall specify in writing at least three Business Days prior to such
closing, or (ii) wire transfer funds to such account or accounts as Demeter
shall specify at least three Business Days prior to such closing, or (iii)
perform any combination of the foregoing, as Demeter may request at least three
Business Days prior to such closing, in an aggregate amount equal to the cash to
be paid by AIMCO to Demeter pursuant to SECTION 2.2(a).
(c) PROOF OF AUTHORITY. AIMCO shall deliver to the Sellers a
certificate, dated the Closing Date and executed by the secretary or any
assistant secretary of AIMCO certifying that (i) AIMCO has duly and validly
taken all corporate action necessary to authorize its execution and delivery of
this Agreement and its performance of its obligations under this Agreement, (ii)
the individual(s) executing or delivering any instruments, documents or
certificates on behalf of such Seller has the power or authority to act for or
bind AIMCO, and (iii) the resolutions (true and complete copies of which shall
be attached to the certificate) of the Board of Directors of AIMCO with respect
to this Agreement and the Transactions have been duly and validly adopted and
are in full force and effect.
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(d) OTHER. AIMCO shall deliver to the Sellers all other
documents, instruments and writings reasonably requested by the Sellers to be
delivered by AIMCO at or prior to the Closing Date pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Subject to the Disclosure Schedule, each of the Sellers hereby
represents and warrants, severally and not jointly, to AIMCO as follows:
3.1 ORGANIZATION AND QUALIFICATIONS; SUBSIDIARIES. Such Seller and,
to such Seller's knowledge, NHP and each Material Subsidiary of NHP is a
corporation, partnership or other legal entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect on such Person.
3.2 CERTIFICATE OF INCORPORATION AND BYLAWS. To such Seller's
knowledge, complete and correct copies of the certificate of incorporation and
bylaws of NHP, as amended to date, have been delivered to AIMCO under cover of a
letter dated April 4, 1997, from NHP's General Counsel. To such Seller's
knowledge, such Organizational Documents are in full force and effect and have
not been amended or modified in any respect. To such Seller's knowledge, NHP is
not in violation of any provision of its Organizational Documents. To such
Seller's knowledge, no Material Subsidiary of NHP is in violation of any
provision of its Organizational Documents, except for such violations that would
not, individually or in the aggregate, have a Material Adverse Effect on NHP.
3.3 CAPITALIZATION. To such Seller's knowledge, the authorized
capital stock of NHP as of December 31, 1996, and the number of shares of NHP
Stock issued and outstanding or subject to issuance pursuant to NHP Options as
of December 31, 1996, is as set forth in the NHP SEC Reports.
3.4 OWNERSHIP OF SHARES.
(a) Such Seller is the record and beneficial owner of the
Demeter Shares (in the case of Demeter) or the Capricorn Shares (in the case of
Capricorn), free and clear of any and all Liens.
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(b) Except as set forth in the Shareholders Agreement, such
Seller has no right to require NHP to register such Seller's Shares under the
Securities Act, and no right to require any Person to purchase such Seller's
Shares, in each case, pursuant to any Contract.
3.5 AUTHORITY RELATIVE TO THIS AGREEMENT. Such Seller has all
necessary power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by such Seller, the performance by such Seller of its
obligations hereunder and the consummation by such Seller of the Transactions
have been duly and validly authorized by all necessary corporate or partnership
action and no other corporate or partnership proceedings on the part of such
Seller are necessary to authorize this Agreement or to consummate the
Transactions. This Agreement has been duly and validly executed and delivered
by such Seller and, assuming the due authorization, execution and delivery
thereof by AIMCO, constitutes the legal, valid and binding obligation of such
Seller, enforceable against such Seller in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally and by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are subject.
3.6 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by such Seller do not, and the performance of its
obligations under this Agreement and the consummation of the Transactions by
such Seller will not, (a) conflict with, result in a breach of, cause a
dissolution or require the consent or approval of any Person under, or violate
any provision of the Organizational Documents of such Seller or, to such
Seller's knowledge, NHP, (b) require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Authority, except
for the notification requirements of the HSR Act and the HUD Clearance, (c)
subject to the making of the filings and obtaining the approvals identified in
clause (b), conflict with or violate any Law, judgment, order, writ, injunction
or decree applicable to such Seller or, to such Seller's knowledge, NHP or by
which any property or asset of such Seller or, to such Seller's knowledge, NHP
is bound or affected, or (d) to such Seller's knowledge, conflict with or result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, result in the loss by NHP or
modification in a manner materially adverse to NHP of any material right or
benefit under, or give to others any right of termination, amendment,
acceleration, repurchase or repayment, increased payments or cancellation of, or
result in the creation of a Lien or other encumbrance on any Shares or any
property or asset of NHP or any subsidiary of NHP pursuant to, any Contract of
NHP, except, in the case of clauses (a), (b) and (c), such as would not prevent
or delay such Seller from performing its obligations under this Agreement in any
material respect, and would not, individually or in the aggregate, have a
Material Adverse Effect on such Seller or, to such Seller's knowledge, NHP.
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3.7 COMPLIANCE. Neither such Seller nor, to such Seller's knowledge,
NHP or any subsidiary of NHP is in conflict with, or in default or violation of,
(a) any Law applicable to such Person or by which any property or asset of such
Person is bound or affected, or (b) any Contract to which such Seller, NHP or
any subsidiary of NHP is a party or by which such Person or any property or
asset of such Person is bound or affected, except for any such conflicts,
defaults or violations that would not, individually or in the aggregate, have a
Material Adverse Effect on such Seller or NHP.
3.8 SEC REPORTS AND FINANCIAL STATEMENTS. To such Seller's knowledge,
each form, report, schedule, registration statement and definitive proxy
statement filed by NHP with the SEC since August 14, 1995 and prior to the date
hereof (as such documents have been amended prior to the date hereof, the "NHP
SEC REPORTS"), as of their respective dates, complied in all material respects
with the applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations thereunder. To such Seller's knowledge, none of the
NHP SEC Reports, as of their respective dates, contained or contains any untrue
statement of a material fact or omits 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, except for such
statements, if any, as have been modified or superseded by subsequent filings
prior to the date hereof. To such Seller's knowledge, the Sellers have made
available to AIMCO true, accurate and complete copies of all of the NHP SEC
Reports. The consolidated financial statements of NHP and its subsidiaries
included in such reports comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited interim financial statements, as permitted by Form 10-Q of
the SEC) and fairly present (subject, in the case of the unaudited interim
financial statements, to normal, year-end audit adjustments) the consolidated
financial position of NHP and its subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. To such Seller's knowledge, since December 31, 1996, neither NHP nor any
of its subsidiaries has incurred any liabilities or obligations (whether
absolute, accrued, fixed, contingent, liquidated, unliquidated or otherwise and
whether due or to become due) of any nature, except liabilities, obligations or
contingencies (a) which are reflected on the consolidated balance sheet of NHP
and its subsidiaries as at December 31, 1996 (including the notes thereto) or
(b) which (i) were incurred in the ordinary course of business after December
31, 1996 and consistent with past practices, (ii) are disclosed in the NHP SEC
Reports filed after December 31, 1996, or (iii) would not, individually or in
the aggregate, have a Material Adverse Effect on NHP. To such Seller's
knowledge, since August 14, 1995, NHP has timely filed with the SEC all forms,
reports and other documents required to be filed prior to the date hereof, and
no subsidiary of NHP has filed, or been required to file, any form, report or
other document with the SEC, in each case, pursuant to the Securities Act, the
Exchange Act or the rules and regulations thereunder. To such Seller's
knowledge, since December 31, 1996, there has been no change in any of the
significant accounting
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(including tax accounting) policies, practices or procedures of NHP or any
subsidiary of NHP.
3.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by
this Agreement or as disclosed in any NHP SEC Report, to such Seller's
knowledge, since December 31, 1996, (a) NHP and its subsidiaries have conducted
their respective businesses only in the ordinary course, consistent with past
practice, and (b) there has not occurred or arisen any event that, individually
or in the aggregate, has had or, insofar as reasonably can be foreseen, is
likely in the future to have, a Material Adverse Effect on NHP other than events
or developments generally affecting the industry in which NHP operates.
3.10 LITIGATION. Except as disclosed in the NHP SEC Reports, to such
Seller's knowledge, there are no claims, suits, actions or proceedings pending,
threatened or contemplated, nor are there any investigations or reviews by any
Governmental Authority pending, threatened or contemplated, against, relating to
or affecting NHP or any of its subsidiaries, which could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on NHP, or
to prohibit or materially restrict the consummation of the Transactions, nor is
there any judgment, decree, order, injunction, writ or rule of any court,
judicial or quasi-judicial body, governmental department, commission, agency,
instrumentality or authority or any arbitrator outstanding against NHP or any of
its subsidiaries having, or which, insofar as can be reasonably foreseen, in the
future is likely to have, a Material Adverse Effect on NHP. In addition, to
such Seller's knowledge, there have not been any developments with respect to
any of the claims, suits, actions, proceedings, investigations or reviews
disclosed in the NHP SEC Reports which, insofar as can be reasonably foreseen,
in the future are likely to have a Material Adverse Effect on NHP.
3.11 INVESTMENT REPRESENTATIONS. Such Seller is an Accredited
Investor. Such Seller has reviewed the AIMCO SEC Reports. Such Seller has had
access to such additional financial and other information, and has been afforded
the opportunity to ask questions of representatives of AIMCO, and to receive
answers to those questions, as it has deemed necessary in connection with its
acquisition of shares of AIMCO Stock. Such Seller acknowledges that the shares
of AIMCO Stock that will be acquired by it pursuant to this Agreement are being
acquired in a transaction not involving any public offering within the meaning
of the Securities Act, and such shares of AIMCO Stock have not been, and may
never be, registered under the Securities Act. Such Seller agrees not to offer,
sell, transfer or otherwise dispose of any shares of AIMCO Stock received by it
pursuant to this Agreement in the absence of registration under the Securities
Act unless it delivers to AIMCO evidence reasonably satisfactory to AIMCO that
the proposed sale, transfer or other disposition may be effected without
registration under the Securities Act or an opinion of counsel, in form and
substance reasonably satisfactory to AIMCO, to such effect. Such Seller agrees
not to offer, sell, transfer or otherwise dispose of any shares of AIMCO Stock
received by it pursuant to this Agreement in violation of applicable state
securities and blue sky laws. Such Seller has such
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knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an acquisition of shares of AIMCO Stock and
is able to bear the economic risk of a loss of an investment in shares of AIMCO
Stock and is not acquiring any shares of AIMCO Stock with a view to the
distribution thereof or any present intention of offering or selling any thereof
in a transaction that would violate the Securities Act or the securities laws of
any state or any other applicable jurisdiction. Such Seller acknowledges that
the shares of AIMCO Stock received by it pursuant to this Agreement will be in
the form of physical certificates and that, unless and until such shares of
AIMCO Stock shall have been registered under the Securities Act, the
certificates will bear a legend to the following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE COMPANY AN OPINION
OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY, IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE,
TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT. THESE SECURITIES MAY NOT BE TRANSFERRED IN VIOLATION OF ANY
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
3.12 BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based on any arrangement or agreement made by or on behalf of such
Seller, and such Seller agrees to indemnify and hold AIMCO and the other Seller
harmless against any damages incurred as a result of any such claims.
3.13 MANAGEMENT ARRANGEMENTS. Assuming that AIMCO meets the
definition of a "Qualified Purchaser" under the Stock and Asset Transfer
Restrictions Agreement, to the best of such Seller's knowledge, there is
currently no fact or circumstance that could reasonably be expected to result in
the loss by NHP, or modification in a manner adverse to NHP, of any right or
benefit under, or give any Person any right to cause any termination,
cancellation or non-renewal of any Oxford Management Contract, except such as
would not, individually or in the aggregate, have a Material Adverse Effect on
NHP.
3.14 DISCLOSURE. No representation or warranty of such Seller
contained in this Agreement and no statement contained in any certificate or
schedule furnished or to be furnished by or on behalf of such Seller to AIMCO or
any of its Representatives pursuant hereto contains or will contain any untrue
statement of a material fact.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AIMCO
AIMCO hereby represents and warrants each of to the Sellers, as
follows:
4.1 ORGANIZATION AND QUALIFICATIONS; SUBSIDIARIES. AIMCO and each
Material Subsidiary of AIMCO is a corporation, partnership or other legal entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has the requisite power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing or to have
such power, authority and governmental approvals would not, individually or in
the aggregate, have a Material Adverse Effect on such Person.
4.2 CHARTER AND BYLAWS. Complete and correct copies of the Charter
and bylaws of AIMCO, as amended and supplemented to date, have been filed (or
incorporated by reference) as exhibits 3.1 and 3.2, respectively, to AIMCO's
Annual Report on Form 10-K for the year ended December 31, 1996. Such
Organizational Documents are in full force and effect and have not been amended
or modified in any respect. AIMCO is not in violation of any provision of its
Organizational Documents. No Material Subsidiary of AIMCO is in violation of
any provision of its Organizational Documents, except for such violations that
would not, individually or in the aggregate, have a Material Adverse Effect on
AIMCO.
4.3 CAPITALIZATION.
(a) The authorized capital stock of AIMCO consists of (i)
150,000,000 shares of AIMCO Stock; (ii) 425,000 shares of Class B Common Stock,
par value $.01 per share ("AIMCO CLASS B COMMON STOCK"), of AIMCO; (iii)
9,034,000 shares of Preferred Stock, par value $.01 per share ("AIMCO PREFERRED
STOCK"), of AIMCO; and (iv) 966,000 shares of Cumulative Convertible Senior
Preferred Stock, par value $.01 per share (the "SENIOR PREFERRED STOCK"), of
AIMCO. As of March 11, 1997, (i) 17,569,970 shares of AIMCO Stock were issued
and outstanding, all of which were validly issued, fully paid and nonassessable;
(ii) 325,000 shares of AIMCO Class B Stock were issued and outstanding, all of
which were validly issued, fully paid and nonassessable; and (iii) no shares of
AIMCO Preferred Stock or Senior Preferred Stock were issued and outstanding.
(b) Prior to the Initial Closing, AIMCO will have reserved
1,800,000 shares of AIMCO Stock for issuance pursuant to SECTION 2.2 and SECTION
2.5 of this Agreement. When issued in accordance with the terms of this
Agreement, such shares will be duly authorized, validly issued, fully paid and
nonassessable. Assuming that the Seller's representations in SECTION 3.11 are
true and correct, when issued in
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accordance with this Agreement, such shares will have been issued in compliance
with the Securities Act and all state securities and blue sky laws.
4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. AIMCO has all necessary
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by AIMCO, the performance by AIMCO of its obligations
hereunder and the consummation by AIMCO of the Transactions have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of AIMCO are necessary to authorize this Agreement or to
consummate the Transactions. This Agreement has been duly and validly executed
and delivered by AIMCO and, assuming the due authorization, execution and
delivery thereof by the Sellers, constitutes the legal, valid and binding
obligation of AIMCO, enforceable against AIMCO in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally and by equitable principles to which the remedies of specific
performance and injunctive and similar forms of relief are subject.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution and
delivery of this Agreement by AIMCO do not, and the performance of its
obligations under this Agreement and the consummation of the Transactions by
AIMCO will not, (a) conflict with, result in a breach of, cause a dissolution or
require the consent or approval of any Person under, or violate any provision of
the Organizational Documents of AIMCO, (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except for the notification requirements of the HSR Act and the HUD
Clearance, (c) subject to the making of the filings and obtaining the approvals
identified in clause (b), conflict with or violate any Law, judgment, order,
writ, injunction or decree applicable to AIMCO or by which any property or asset
of AIMCO is bound or affected, or (d) conflict with or result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss by AIMCO or modification in a
manner materially adverse to AIMCO of any material right or benefit under, or
give to others any right of termination, amendment, acceleration, repurchase or
repayment, increased payments or cancellation of, or result in the creation of a
Lien or other encumbrance on any property or asset of AIMCO or any subsidiary of
AIMCO pursuant to, any Contract of AIMCO, except, in the case of clauses (a),
(b) and (c), such as would not prevent or delay such Seller from performing its
obligations under this Agreement in any material respect, and would not,
individually or in the aggregate, have a Material Adverse Effect on AIMCO.
4.6 COMPLIANCE. Neither AIMCO nor any subsidiary of AIMCO is in
conflict with, or in default or violation of, (a) any Law applicable to such
Person or by which any property or asset of such Person is bound or affected, or
(b) any Contract to which AIMCO or any subsidiary of AIMCO is a party or by
which such Person or any property or asset of such Person is bound or affected,
except for any such conflicts, de-
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faults or violations that would not, individually or in the aggregate, have a
Material Adverse Effect on AIMCO.
4.7 SEC REPORTS AND FINANCIAL STATEMENTS. Each form, report,
schedule, registration statement and definitive proxy statement filed by AIMCO
with the SEC since August 14, 1995 and prior to the date hereof (as such
documents have been amended prior to the date hereof, the "AIMCO SEC REPORTS"),
as of their respective dates, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the rules
and regulations thereunder. None of the AIMCO SEC Reports, as of their
respective dates, contained or contains any untrue statement of a material fact
or omits 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, except for such statements, if any, as have been
modified or superseded by subsequent filings prior to the date hereof. AIMCO
has made available to the Sellers true, accurate and complete copies of all of
the AIMCO SEC Reports. The consolidated financial statements of AIMCO and its
subsidiaries included in such reports comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited interim financial statements, as permitted by
Form 10-Q of the SEC) and fairly present (subject, in the case of the unaudited
interim financial statements, to normal, year-end audit adjustments) the
consolidated financial position of AIMCO and its subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended. Since December 31, 1996, neither AIMCO nor any of its
subsidiaries has incurred any liabilities or obligations (whether absolute,
accrued, fixed, contingent, liquidated, unliquidated or otherwise and whether
due or to become due) of any nature, except liabilities, obligations or
contingencies (a) which are reflected on the consolidated balance sheet of AIMCO
and its subsidiaries as at December 31, 1996 (including the notes thereto) or
(b) which (i) were incurred in the ordinary course of business after December
31, 1996 and consistent with past practices, (ii) are disclosed in the AIMCO SEC
Reports filed after December 31, 1996, or (iii) would not, individually or in
the aggregate, have a Material Adverse Effect on AIMCO. Since August 14, 1995,
AIMCO has timely filed with the SEC all forms, reports and other documents
required to be filed prior to the date hereof, and no subsidiary of AIMCO has
filed, or been required to file, any form, report or other document with the
SEC, in each case, pursuant to the Securities Act, the Exchange Act or the rules
and regulations thereunder. Since December 31, 1996, there has been no change
in any of the significant accounting (including tax accounting) policies,
practices or procedures of AIMCO or any subsidiary of AIMCO.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by
this Agreement or as disclosed in any AIMCO SEC Report, since December 31, 1996,
(a) AIMCO and its subsidiaries have conducted their respective businesses only
in the ordinary course, consistent with past practice, and (b) there has not
occurred or arisen
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any event that, individually or in the aggregate, has had or, insofar as
reasonably can be foreseen, is likely in the future to have, a Material Adverse
Effect on AIMCO other than events or developments generally affecting the
industry in which AIMCO operates.
4.9 LITIGATION. Except as disclosed in the AIMCO SEC Reports, to
AIMCO's knowledge, there are no claims, suits, actions or proceedings pending,
threatened or contemplated, nor are there any investigations or reviews by any
Governmental Authority pending, threatened or contemplated, against, relating to
or affecting AIMCO or any of its subsidiaries, which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
AIMCO, or to prohibit or materially restrict the consummation of the
Transactions, nor is there any judgment, decree, order, injunction, writ or rule
of any court, judicial or quasi-judicial body, governmental department,
commission, agency, instrumentality or authority or any arbitrator outstanding
against AIMCO or any of its subsidiaries having, or which, insofar as can be
reasonably foreseen, in the future is likely to have, a Material Adverse Effect
on AIMCO. In addition, to AIMCO's knowledge, there have not been any
developments with respect to any of the claims, suits, actions, proceedings,
investigations or reviews disclosed in the AIMCO SEC Reports which, insofar as
can be reasonably foreseen, in the future are likely to have a Material Adverse
Effect on AIMCO.
4.10 INVESTMENT REPRESENTATIONS. AIMCO is an Accredited Investor.
AIMCO has reviewed the NHP SEC Reports. AIMCO has had access to such additional
financial and other information, and has been afforded the opportunity to ask
questions of representatives of NHP, and to receive answers to those questions,
as it has deemed necessary in connection with its acquisition of the Shares.
AIMCO acknowledges that the Shares are being acquired in a transaction not
involving any public offering within the meaning of the Securities Act, and the
Shares have not been, and may never be, registered under the Securities Act.
AIMCO agrees not to offer, sell, transfer or otherwise dispose of any of the
Shares in violation of the Securities Act or any applicable state securities or
blue sky laws. AIMCO has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
acquisition of the Shares and is able to bear the economic risk of a loss of an
investment in the Shares and is not acquiring the Shares with a view to the
distribution thereof or any present intention of offering or selling any thereof
in a transaction that would violate the Securities Act or the securities laws of
any state or any other applicable jurisdiction. AIMCO acknowledges that the
Shares will be in the form of physical certificates and that, unless and until
the Shares shall have been registered under the Securities Act, the certificates
may bear a legend to the following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE COMPANY AN OPINION
OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTO-
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RY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT. THESE SECURITIES MAY NOT BE
TRANSFERRED IN VIOLATION OF ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
4.11 BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based on any arrangement or agreement made by or on behalf of
AIMCO, and AIMCO agrees to indemnify and hold the Sellers harmless against any
damages incurred as a result of any such claims.
4.12 DISCLOSURE. No representation or warranty of AIMCO contained in
this Agreement and no statement contained in any certificate or schedule
furnished or to be furnished by or on behalf of AIMCO to any Seller or any of
its Representatives pursuant hereto contains or will contain any untrue
statement of a material fact.
ARTICLE V
COVENANTS
5.1 NOTIFICATION OF CERTAIN MATTERS. Each of the parties hereto shall
give prompt notice to the other parties hereto of (a) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause (i) any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect, or (ii) any covenant,
condition or agreement contained in this Agreement not to be complied with or
satisfied and (b) any failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. Subject to SECTION 8.1, the delivery of any notice pursuant to this
Section shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
5.2 FURTHER ACTION, REASONABLE EFFORTS; CONSENTS AND APPROVALS. Upon
the terms and subject to the conditions hereof, each of the parties hereto shall
use commercially reasonable efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated hereby, including, without limitation,
using commercially reasonable efforts to obtain all licenses, permits, consents,
approvals, authorizations, certificates, qualifications and orders of, and make
all filings and required submissions with, all Governmental Authorities, and all
shareholders, lenders and partners of, and parties to contracts with, any of the
Sellers, AIMCO, NHP or any other Persons, in each case, as are necessary or
desirable for the consummation of the transactions contemplated hereby
(collectively "CONSENTS"). The Sellers shall, as soon as possible prior to the
Initial Closing, deliver
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to AIMCO copies of all Consents obtained by the Sellers. AIMCO shall, as soon
as possible prior to the Initial Closing, deliver to the Sellers copies of all
Consents obtained by AIMCO. In case at any time after the Initial Closing Date
any further action is necessary or desirable to carry out the purposes of this
Agreement, AIMCO and the Sellers shall use commercially reasonable efforts to
take all such action. Prior to the Initial Closing, each party shall use its
best efforts not to take any action, or enter into any transaction, that would
cause any of its representations or warranties contained in this Agreement to be
untrue. Until all of the Shares have been sold to AIMCO, each party shall use
its best efforts not to take any action, or enter into any transaction, that
would cause (a) in the case of each of the Sellers, any of its representations
or warranties in SECTION 3.4(a), 3.11 or 3.12 to be untrue, and (b) in the case
of AIMCO, any of its representations or warranties in SECTION 4.3(b), 4.10 or
4.11 to be untrue. Notwithstanding the foregoing, the Sellers shall not be
obligated to vote, grant or withhold their consent or take any other action in
their capacities as stockholders of NHP, except to the extent specifically
provided in SECTION 5.8(a).
5.3 CONDUCT OF BUSINESS OF NHP PENDING THE CLOSING. From the date
hereof through the Initial Closing, except for the Spin-Off or as expressly
permitted or contemplated by this Agreement, unless AIMCO shall otherwise agree
in writing prior to the taking of any action prohibited by the terms of this
Section, the Sellers shall use their best efforts to cause NHP and its
subsidiaries to conduct their operations and business in the ordinary and usual
course of business and consistent with past practice and use reasonable efforts
to keep available the services of its present officers and key employees and
preserve the goodwill and business relationships with all Persons having
business relationships with it. Notwithstanding the foregoing, the Sellers shall
not be obligated to vote, grant or withhold their consent or take any other
action in their capacities as stockholders of NHP, except to the extent
specifically provided in SECTION 5.8(a).
5.4 CONDUCT OF BUSINESS OF AIMCO PENDING THE CLOSING. From the date
hereof through the Initial Closing, except as expressly permitted or
contemplated by this Agreement, unless the Sellers shall otherwise agree in
writing prior to the taking of any action prohibited by the terms of this
Section, AIMCO shall and shall cause its subsidiaries to conduct their
operations and business in the ordinary and usual course of business and
consistent with past practice and use reasonable efforts to keep available the
services of its present officers and key employees and preserve the goodwill and
business relationships with all Persons having business relationships with it.
5.5 NO SOLICITATION. Except for the Spin-Off, the Sellers shall not,
and shall not permit any of their Representatives or any other Person acting for
or on behalf of any of them to, directly or indirectly, initiate, solicit,
encourage, entertain offers with respect to, negotiate with respect to, or in
any manner encourage, recommend or agree to, any inquiry, offer or proposal
relating to (a) the sale of NHP or any of its assets or equity securities, (b)
the merger, consolidation or other combination of NHP with any Person, or (c)
the liquidation, dissolution or reorganization of NHP, except as specif-
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ically contemplated by this Agreement. Without limiting the generality of the
foregoing, the Sellers shall not, and shall not permit any of their
Representatives or any other Person acting for or on behalf of any of them to,
furnish or cause to be furnished any information with respect to NHP or the
Shares to any Person other than AIMCO and its Representatives. If any of the
Sellers or any of their Representatives receives from any Person any offer,
proposal or informational request that may be subject to this SECTION 5.5, the
Sellers shall, as soon as possible, but in any event within three Business Days,
(w) advise AIMCO of such offer, proposal or informational request, (x) provide
AIMCO with a copy of any document or writing received by any of the Sellers or
their Representatives relating to such offer, proposal or informational request,
(y) advise such Person, by written notice, of the terms of this SECTION 5.5, and
(z) deliver a copy of such notice to AIMCO. Notwithstanding anything in this
Agreement to the contrary, nothing in this ARTICLE V shall be construed to
obligate any of the Seller's Representatives who serve as a director of NHP to
take any action or refrain from taking any action in his or her capacity as a
director of NHP.
5.6 TRANSFER TAXES. The Sellers shall be liable for, and shall
indemnify and hold AIMCO harmless against, any liability for any sales, gains,
transfer or similar Taxes resulting from the transfer to AIMCO of any Shares
pursuant to this Agreement.
5.7 PUBLIC ANNOUNCEMENTS. Until all of the Shares have been sold to
AIMCO, none of the Sellers or AIMCO shall issue or make, directly or indirectly,
any reports, statements or releases to the public with respect to this Agreement
or the transactions contemplated hereby without the prior written consent of
each of the others; provided, however, that each of the Sellers and AIMCO may,
without the prior written consent of the others, issue or make, directly or
indirectly, any report, statement or release required by Law, its fiduciary
obligations or any listing agreement or arrangement to which such Person is a
party with a national securities exchange if the other parties to this Agreement
are so notified as soon as possible in advance of such report, statement or
release.
5.8 VOTING ARRANGEMENTS.
(a) At every meeting of the stockholders of NHP, and at every
adjournment or postponement thereof, and on any matter to which the stockholders
of NHP are entitled to express consent or dissent in writing without a meeting,
with respect to all of the Shares, the Sellers shall: (i) vote in favor of (or
consent to) the Merger Proposal and any actions required in furtherance thereof;
(ii) vote against (or dissent from) any proposal or offer to acquire all or any
portion of NHP, its equity securities, its assets or its subsidiaries' assets,
whether by tender or exchange offer, merger, consolidation, business
combination, sale of assets, sale of additional interests or similar transaction
(each, an "ACQUISITION PROPOSAL"), which is not made by AIMCO or one of its
Affiliates; and (iii) vote against (or dissent from) any action or agreement
that is reasonably likely to impede, interfere with, delay or postpone the
Transactions, the
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Merger Proposal or the Exchange Offer, or to impair the value of such
transactions to AIMCO.
(b) Except as contemplated in this Agreement (including SECTION
5.8(c)), (i) each Seller will not, and will cause its Affiliates not to,
directly or indirectly, sell, transfer, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, the Shares to be sold hereunder by such
Seller, and (ii) each Seller will not, and will cause its Affiliates not to,
directly or indirectly, grant or agree to grant any proxies or authorities with
respect to, deposit or agree to deposit into a voting trust, or enter into or
agree to enter into a voting agreement with respect to, any of the Shares;
provided, however, that any transferee of Capricorn Shares pursuant to Section
5.8(c) may grant a proxy to Winokur Holdings, Inc. to vote such Capricorn Shares
in accordance with SECTION 5.8(a).
(c) Notwithstanding anything in this Agreement to the contrary,
upon at least five Business Days prior notice to AIMCO, (i) Capricorn may
transfer any or all of the Capricorn Shares (and may assign its rights and
benefits under this Agreement with respect to such Capricorn Shares) to any of
its constituent partners that agree, severally and not jointly, and pursuant to
a written agreement reasonably acceptable to AIMCO, to be bound by the
provisions of this Agreement applicable to Capricorn with respect to the
Capricorn Shares received by such transferee, and (ii) any such transferee may
further transfer any or all of the Capricorn Shares so transferred to it (and
assign its rights and benefits under this Agreement with respect to such
Capricorn Shares) to any charitable institution that agrees, severally and not
jointly and pursuant to a written agreement reasonably acceptable to AIMCO, to
be bound by the provisions of this Agreement applicable to Capricorn with
respect to the Capricorn Shares received by such transferee. Upon the
effectiveness of each such transfer of Capricorn Shares, (i) the obligations and
agreements of the transferor thereof under this Agreement with respect to the
Capricorn Shares so transferred shall terminate with respect to such Capricorn
Shares (and no other Shares), (ii) the transferee thereof shall be entitled to
the rights of Capricorn set forth in ARTICLE II and SECTION 5.13 of this
Agreement, and shall be obligated to perform the covenants and other obligations
and agreements of the transferor thereof under this Agreement, in each case,
with respect to such Capricorn Shares transferred to such transferee (and no
other Shares); PROVIDED that (x) notwithstanding any transfer of Capricorn
Shares, the representations and warranties of Capricorn set forth in ARTICLE III
shall remain in full force and effect (except that the representations and
warranties set forth in SECTION 3.4 shall be true and correct in all material
respects only as of the date of this Agreement) and the obligations and
agreements of Capricorn set forth in ARTICLE V, VIII and IX shall remain in full
force and effect (except that Capricorn shall at any time have obligations under
SECTION 5.3 only with respect to the Capricorn Shares then owned by it and shall
have obligations under SECTIONS 5.6 AND 5.9 only with respect to the Capricorn
Shares sold by it pursuant to this Agreement), (y) each such transferee of
Capricorn Shares shall be deemed to have made the representations and warranties
of Capricorn set forth in SECTION 3.4 only with respect
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to the Capricorn Shares transferred to such transferee and shall not be deemed
to have made any other representations or warranties, and (z) no such transferee
shall have, or be deemed to have, any obligation under SECTION 5.3.
5.9 ASSIGNMENT OF SHAREHOLDER RIGHTS. At or prior to the Initial
Closing, each Seller shall assign to AIMCO all of its rights under the Amended
and Restated Shareholders Agreement, dated as of August 15, 1995 (the
"SHAREHOLDERS AGREEMENT"), by and among NHP, the John B. Frick Revocable Trust
and the Sellers.
5.10 MERGER PROPOSAL. If the Board of Directors of NHP approves the
Merger Proposal, then AIMCO shall use commercially reasonable efforts to
promptly and diligently negotiate in good faith a definitive agreement with NHP
on the terms set forth in the Merger Proposal.
5.11 EXCHANGE OFFER.
(a) If the Board of Directors of NHP has not approved the Merger
Proposal prior to the first anniversary of the date of this Agreement (such
first anniversary being the "COMMENCEMENT DATE"), then AIMCO shall commence, not
later than the Commencement Date, an offer (the "EXCHANGE OFFER") to exchange
shares of AIMCO Stock for any and all of the then outstanding shares of NHP
Stock, with the number of shares of AIMCO Stock offered in exchange for each
share of NHP Stock equal to $20 divided by $26.75; provided, however, that AIMCO
shall not be obligated to issue any fractional shares of AIMCO Stock pursuant to
the Exchange Offer and, in lieu thereof, may make cash payments; provided,
further, that AIMCO shall not be obligated to commence the Exchange Offer if any
event or circumstance shall have occurred or arisen and be continuing that would
result in the failure to satisfy any of the conditions set forth in SECTION
5.11(c). AIMCO's obligation under this SECTION 5.11(a) shall include preparing
and filing with the SEC a registration statement for the purpose of registering
under the Securities Act the shares of AIMCO Stock to be issued in the Exchange
Offer and using its best efforts to seek the effectiveness of such registration
statement and maintain the effectiveness of such registration statement until
the consummation of the Exchange Offer.
(b) AIMCO shall conduct the Exchange Offer in accordance with
all applicable laws, including without limitation, Section 14 under the Exchange
Act, and the rules and regulations thereunder. AIMCO shall cause the
information included, or incorporated by reference, in the documents (the "OFFER
DOCUMENTS") pursuant to which the Exchange Offer is made (other than information
with respect to NHP) not to 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 at the time the Offer
Documents (or any amendment or supplement thereto) are first mailed to the
stockholders of NHP.
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(c) Notwithstanding any other provisions of the Exchange Offer,
AIMCO shall not be required to accept for exchange any shares of NHP Stock
tendered pursuant to the Exchange Offer, may postpone the exchange of shares
tendered, and may terminate or amend the Exchange Offer if at any time on or
after the date hereof and at or before the time of acceptance for exchange of
any such shares (whether or not any shares have theretofore been accepted for
exchange) pursuant to the Exchange Offer, any of the following shall occur:
(i) any change, event, occurrence or circumstance shall
have occurred, arisen or been threatened in the business, properties,
assets, liabilities, capitalization, financial condition, operations,
licenses or franchises, or results of operations of NHP, which change is
or is reasonably likely to have a Material Adverse Effect on NHP, or a
material change shall have occurred in the equity capitalization of NHP
that would be adverse to AIMCO, or AIMCO shall have become aware of any
facts relating to NHP or its operations which has or may have material
significance with respect to the value of NHP;
(ii) there shall be instituted or pending any action,
proceeding, application or counterclaim by any Governmental Authority, or
by any Person before any Governmental Authority (other than pursuant to
Section 203 of the DGCL), which (A) restrains, prohibits, materially
delays or makes illegal the making or consummation of the Exchange Offer,
(B) seeks to restrain, prohibit, materially delay or make illegal the
Exchange Offer, (C) imposes or seeks to impose any material limitation
on the ability of AIMCO or any Affiliate of AIMCO to conduct NHP's business
or own any assets of NHP, (D) imposes or seeks to impose material
limitations on the ability of AIMCO to acquire or hold or to exercise
full rights of ownership of the shares of NHP Stock including, but not
limited to, the right to vote the shares of NHP Stock purchased by it on
all matters properly presented to the stockholders of NHP, or (E) might
result in a limitation of the benefits expected to be derived by AIMCO as
a result of the transactions contemplated by the Exchange Offer or the
value of the shares of NHP Stock to AIMCO; provided, however, that AIMCO
shall use its best efforts to contest any such action, proceeding,
application or counterclaim, or to seek to have any such action,
proceeding, application or counterclaim vacated or lifted;
(iii) there shall be any action taken, or any Law or Order
shall be sought, proposed, enacted, promulgated, entered, enforced or
deemed applicable to the Exchange Offer, AIMCO or any Affiliate of AIMCO,
or any other action shall have been taken, proposed or threatened, by any
Governmental Authority that might reasonably be expected to, directly or
indirectly, result in any of the consequences
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referred to in clauses (A) through (E) of paragraph (ii) above (other than
pursuant to Section 203 of the DGCL);
(iv) a registration statement relating to the shares of
AIMCO Stock issuable pursuant to the Exchange Offer shall not be effective
under the Securities Act or there shall be pending or threatened a
proceeding for the issuance of an order suspending the effectiveness of
any such registration statement; or
(v) any of the conditions set forth in SECTION 6.1 shall
not have been satisfied.
5.12 SPIN-OFF. Prior to the Initial Closing Date, the Sellers shall
use commercially reasonable efforts to (a) cause NHP to enter into the Rights
Agreement and issue the Rights pursuant thereto, (b) prohibit NHP from amending
or terminating the Rights Agreement without the prior written approval of AIMCO,
and (c) cause NHP to obtain the consent of The First National Bank of Boston to
the Spin-Off. After the Initial Closing, (A) AIMCO and the Sellers shall use
commercially reasonable efforts to (i) cause NHP to cause the Maturity Time to
occur as soon as possible, and (ii) cause NHP to obtain the consent of The First
National Bank of Boston to the Spin-Off, and (B) AIMCO shall (i) not permit NHP
to redeem the Rights without the prior written consent of Demeter, and (ii) to
the extent within its control and subject to any fiduciary obligations it may
have, cause NHP to appoint persons designated by Demeter as directors of the
Mortgage Subsidiary. With respect to all Rights relating to Shares sold prior
to the Maturity Time, AIMCO shall not approve or consent to any amendment of the
Rights Agreement without the prior written consent of Demeter. Prior to the
Merger, the Sellers and AIMCO shall use commercially reasonable efforts to
contribute to the Mortgage Subsidiary the amount, if any, by which (x) NHP's
Free Cash Flow for the period from February 1, 1997 until the Maturity Time,
exceeds (y) NHP's Transaction Costs for such period and, if the Maturity Time
occurs after the Merger, AIMCO shall cause NHP to contribute such amount to the
Mortgage Subsidiary prior to the Maturity Time.
5.13 SELLERS' PUT RIGHT.
(a) The Sellers shall have the right (the "SELLERS' PUT RIGHT")
to require AIMCO to acquire a number of the Shares (with respect to each Seller,
such Seller's "PUT SHARES") in exchange for (i) in the case of Demeter, cash in
an amount equal to a number of shares of AIMCO Stock equal to the number of
Demeter's Put Shares, multiplied by $20, or (ii) in the case of Capricorn, a
number of shares of AIMCO Stock equal to the number of Capricorn's Put Shares,
multiplied by $20, and divided by $26.75. The aggregate number of Put Shares
may not exceed 10% of the total number of shares of NHP Stock outstanding at the
time the Sellers' Put Right is exercised.
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(b) The Seller's Put Right may be exercised only once (unless
the Sellers' Put Closing in respect of such exercise fails to occur as a result
of the failure to satisfy any of the conditions set forth in SECTION 6.1), and
shall be exercised by Demeter's delivery of a written notice to AIMCO specifying
(i) the number of Demeter Shares and the number of Capricorn Shares that are
requested to be acquired by AIMCO pursuant to the Sellers' Put Right, (ii) the
date and time (which shall be at least ten Business Days after such notice is
given) at which the closing (the "SELLERS' PUT CLOSING") of the purchase of the
Put Shares is to occur, and (iii) the names and denominations in which the
certificates representing shares of AIMCO Stock to be delivered at the Sellers'
Put Closing are to be issued.
(c) The Sellers' Put Closing shall take place at the principal
offices of AIMCO's counsel, Skadden, Arps, Slate, Meagher & Flom LLP, in Boston,
Massachusetts (or such other location as Demeter and AIMCO may agree on). At
the Sellers' Put Closing (i) AIMCO shall (x) deliver to the Sellers a
certificate or certificates representing the aggregate number of shares of AIMCO
Stock specified in SECTION 5.13(a), in such denominations and registered in such
names as Demeter shall have requested in its exercise notice to AIMCO, and (y)
wire transfer to an account specified by the Sellers at least five Business Days
prior to the Sellers' Put Closing, funds in an amount equal to the cash amount
specified in SECTION 5.13(a), and (ii) the Sellers shall deliver or cause to be
delivered a certificate or certificates representing the Put Shares, accompanied
by duly executed blank stock powers or endorsed in blank for transfer, as AIMCO
may request.
(d) AIMCO's obligation to consummate the Sellers' Put Closing
shall be subject to the conditions set forth in SECTION 6.1.
(e) In the event of any exercise of the Sellers' Put Right, the
number of Demeter Shares and Capricorn Shares to be purchased at the Initial
Closing shall be reduced by the number of each that have been sold pursuant to
the exercise of the Sellers' Put Right.
5.14 RESIGNATIONS OF DIRECTORS. Promptly after a majority of the
Shares has been sold hereunder, the Sellers shall cause all of their
Representatives who serve as a member of the board of directors of NHP or any of
its subsidiaries to resign from such boards of directors; provided, that AIMCO
has notified the Sellers that Representatives of AIMCO will be appointed to fill
any vacancies created thereby.
5.15 DETERMINATION OF INITIAL SHARES. Prior to the Initial Closing,
AIMCO shall use commercially reasonable efforts to obtain one or more
commitments from lenders to provide financing for the Transactions in an
aggregate amount equal to the cash necessary for AIMCO to complete the
Transactions. At least 5 Business Days prior to the Initial Closing, AIMCO
shall give written notice to the Sellers as to the number of Shares (the
"INITIAL SHARES") that it intends to purchase at the Initial Closing, which
shall be equal to the greater of (a) 2,500,000, and (b) the quotient obtained by
dividing
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(i) the sum of (x) 5% of the AIMCO Gross Asset Value as of a date not more than
five Business Days prior to the Initial Closing, giving pro forma effect to
AIMCO's acquisition of the Initial Shares, and (y) the maximum amount of
financing that AIMCO was able to obtain in connection therewith, by (ii) $20.
5.16 TRUST AGREEMENT. Prior to the Initial Closing, AIMCO and the
Sellers shall enter into a trust agreement, substantially in the form of EXHIBIT
E hereto.
ARTCILE VI
CONDITIONS TO CLOSING
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT EACH CLOSING. The
respective obligations of each party to this Agreement to effect the Initial
Closing, the Subsequent Closing, the Exchange Offer Closing and the Sellers' Put
Closing (to the extent each is a party to such transactions) shall be subject to
the following conditions:
(a) GOVERNMENTAL APPROVALS. All consents, approvals and action
of Governmental Authorities required to permit the consummation of the
transactions contemplated to occur at such closing shall have been obtained or
made, free of any condition that would have a Material Adverse Effect on AIMCO
or NHP, and all required authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Authority shall have been obtained or filed or shall have occurred.
(b) NO INJUNCTIONS. No action shall have been taken, and no
statute, rule, regulation, executive order, decree or injunction shall have been
enacted, entered, promulgated or enforced (and not repealed, superseded or
otherwise made inapplicable), by any court or Governmental Authority which
prohibits the consummation of the transactions contemplated to occur at such
closing.
(c) NO RESTRAINING ORDERS. No court of competent jurisdiction
shall have issued an order, judgment or decree (other than a temporary
restraining order) restraining, enjoining or otherwise prohibiting the
transactions contemplated to occur at such closing which has not been lifted
(each party agreeing to use its reasonable efforts to have any such injunction,
order or decree lifted).
6.2 CONDITIONS TO OBLIGATIONS OF AIMCO TO EFFECT THE INITIAL CLOSING
AND THE SUBSEQUENT CLOSING. The obligations of AIMCO to effect the Initial
Closing and the Subsequent Closing are subject to the satisfaction of the
following conditions, unless waived by AIMCO.
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Sellers contained herein that are qualified as to materiality
shall be true and correct, and those not so qualified shall be true and correct
in all material respects,
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at and as of the Initial Closing Date and, in the case of a Subsequent Closing,
the representations and warranties of the Sellers contained in SECTIONS 3.4(a),
3.11 and 3.12 shall be true and correct at and as of the Subsequent Closing
Date, with the same force and effect as though made on and as of such date,
except for any representation or warranty that specifically relates to an
earlier date, which shall be true and correct as of such earlier date.
(b) PERFORMANCE. The Sellers shall have performed, in all
material respects, all obligations and complied, in all material respects, with
all covenants required by this Agreement to be performed or complied with by
them prior to such closing.
(c) CERTIFICATES. Each of the Sellers shall have delivered to
AIMCO a certificate, dated the Initial Closing Date or the Subsequent Closing
Date, as the case may be, and signed by the president or chief executive officer
of such Seller, in the case of Demeter, or of the general partner of the general
partner of such Seller, in the case of Capricorn, certifying as to such Seller's
compliance with SECTION 6.2(a) and SECTION 6.2(b).
(d) REAL ESTATE AGREEMENT. The Real Estate Agreement shall have
been entered into and shall not have been terminated.
(e) GUARANTY. Phemus shall have duly executed and delivered to
AIMCO the Guaranty, and shall have delivered to AIMCO a certificate, executed by
its clerk or assistant clerk, certifying that (i) Phemus has duly and validly
taken all corporate action necessary to authorize its execution and delivery of
the Guaranty and its performance of its obligations under the Guaranty, (ii) the
individual(s) executing and delivering the Guaranty on behalf of Phemus has the
power or authority to act for or bind Phemus, and (iii) the resolutions (true
and complete copies of which shall be attached to the certificate) of the Board
of Directors of Phemus, with respect to the Guaranty, have been duly and validly
adopted and are in full force and effect.
(f) ESCROW AGREEMENT. Capricorn and all transferees of
Capricorn Shares pursuant to SECTION 5.8(c) shall have duly executed and
delivered to AIMCO an Escrow Agreement.
(g) OTHER. The Sellers shall have delivered to the Buyers such
other documents and instruments, signed and properly acknowledged by the
Sellers, if appropriate, as may be reasonably required by AIMCO or otherwise in
order to effectuate the provisions of this Agreement and such closing.
6.3 CONDITIONS TO OBLIGATIONS OF THE SELLERS TO EFFECT THE INITIAL
CLOSING AND THE SUBSEQUENT CLOSING. The obligations of the Sellers to effect
the Initial Closing and the Subsequent Closing are subject to the satisfaction
of the following conditions, unless waived by the Sellers:
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(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of AIMCO contained herein that are qualified as to materiality shall
be true and correct, and those not so qualified shall be true and correct in all
material respects, at and as of the Initial Closing Date, and, in the case of a
Subsequent Closing, the representations and warranties of AIMCO contained in
SECTIONS 4.3(b), 4.10 and 4.11 shall be true and correct at and as of the
Subsequent Closing Date, with the same force and effect as though made on and as
of such date, except for any representation or warranty that specifically
relates to an earlier date, which shall be true and correct as of such earlier
date.
(b) PERFORMANCE. AIMCO shall have performed, in all material
respects, all obligations and complied, in all material respects, with all
covenants required by this Agreement to be performed or complied with by it
prior to such closing.
(c) CERTIFICATES. AIMCO shall have delivered to each of the
Sellers a certificate dated the Initial Closing Date or the Subsequent Closing
Date, as the case may be, and signed by its president or vice chairman,
certifying as to AIMCO's compliance with SECTION 6.3(a) and SECTION 6.3(b).
(d) REGISTRATION RIGHTS AGREEMENT. AIMCO shall have executed
and delivered to each of the Sellers that is to receive shares of AIMCO Stock at
such closing, a Registration Rights Agreement relating to such shares of AIMCO
Stock.
(e) OTHER. AIMCO shall have delivered such other documents and
instruments, properly signed and acknowledged if appropriate, as reasonably may
be required in order to effectuate the provisions of this Agreement and such
closing.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated and abandoned at
any time prior to the Initial Closing:
(a) by the mutual written consent of AIMCO and Demeter;
(b) by AIMCO or Demeter if (i) any Governmental Authority, the
consent of which is a condition to the obligations of AIMCO and any of the
Sellers to consummate the Initial Closing, shall have determined not to grant
its consent and all appeals of such determination shall have been taken and have
been unsuccessful, or (ii) any court of competent jurisdiction shall have issued
an order, judgment or decree (other than a temporary restraining order)
restraining, enjoining or otherwise prohibiting the
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Initial Closing, and such order, judgment or decree shall have become final and
nonappealable;
(c) by AIMCO if there has been a material breach by any of the
Sellers of any representation, warranty, covenant or agreement set forth in this
Agreement, which breach has not been cured within ten business days following
receipt by the breaching party of notice of such breach;
(d) by Demeter if there has been a material breach by AIMCO of
any representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten business days following receipt by
the breaching party of notice of such breach; and
(e) by AIMCO or Demeter if the Initial Closing has not occurred
by May 31, 1997; provided, however, that (i) AIMCO shall not be entitled to
terminate this Agreement pursuant to this SECTION 7.1(e) if a knowing or willful
breach of this Agreement by AIMCO has prevented the Initial Closing from
occurring by such date, and (ii) Demeter shall not be entitled to terminate
this Agreement pursuant to this SECTION 7.1(e) if a knowing or willful breach of
this Agreement by any Seller has prevented the Initial Closing from occurring by
such date.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by AIMCO or either Seller as provided in SECTION 7.1, this Agreement
shall forthwith become void and there shall be no liability on the part of
AIMCO, the Sellers or their respective officers or directors; provided, however,
that if AIMCO terminates this Agreement with respect to only one of the Sellers,
or if only one of the Sellers terminates this Agreement, AIMCO and the other
Seller shall remain obligated under this Agreement; provided, further, that if
this Agreement is so terminated by a party because one or more of the conditions
to such party's obligations hereunder is not satisfied as a result of the other
party's willful failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies for breach of contract or
otherwise, including, without limitation, Damages relating thereto, shall
survive such termination unimpaired.
7.3 AMENDMENT OR SUPPLEMENT. This Agreement may be amended or
supplemented in writing by AIMCO and Demeter and, solely with respect to any
change to SECTION 2.1(a)(ii), 2.1(b)(ii) or 5.8(c), Capricorn.
7.4 EXTENSION OF TIME, WAIVER, ETC. At any time prior to the
Subsequent Closing:
(a) AIMCO may extend the time for the performance of any of the
obligations or acts of either of the Sellers and Demeter may extend the time for
the performance of any of the obligations or acts of AIMCO;
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(b) AIMCO may waive any inaccuracies in the representations and
warranties of either Seller contained herein or in any document delivered
pursuant hereto, and either Seller may do the same with respect to AIMCO for
such Seller; or
(c) AIMCO may waive compliance with any of the agreements or
conditions of either Seller contained herein, and either Seller may do the same
with respect to AIMCO for such Seller; provided, that no failure or delay by any
party in exercising any right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
ARTICLE VII
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE SELLERS. Subject to SECTION 9.7, from and
after the Initial Closing, each of the Sellers shall, severally and not jointly,
indemnify, reimburse, defend and hold harmless AIMCO and its Representatives
for, from and against all demands, claims, actions, causes of action and
Damages, asserted against, resulting to, imposed on or suffered or incurred by
AIMCO or its Representatives, directly or indirectly, in connection with any of
the following:
(a) any breach of, or inaccuracy in, any representation or
warranty of such Seller in this Agreement or any certificate, instrument or
other document delivered pursuant hereto or in connection herewith;
(b) any breach of any covenant of such Seller contained in this
Agreement;
(c) claims made by any member of the Oxford Group arising in
connection with the sale of the Shares hereunder other than claims arising (i)
as a result of AIMCO not meeting the definition of a "Qualified Purchaser" under
the Stock and Asset Transfer Restrictions Agreement, or (ii) as a result of
AIMCO failing to satisfy the net worth or managed units requirements of Section
4 of the Stock and Asset Transfer Restrictions Agreement (iii) as a result of a
"Termination for Financial Performance," as defined in any Oxford Management
Contract, based on the relevant property's financial performance after the
Initial Closing Date, (iv) as a result of a "For Cause Termination," as defined
in any Oxford Management Contract, based on an event or circumstance arising
after the Initial Closing Date, unless, and to the extent that, any such event
or circumstance arises as a result of any action or inaction by NHP, the Sellers
or any of their affiliates prior to the Initial Closing Date, (v) as a result of
any failure by AIMCO to satisfy any fiduciary obligations (whether express or
implied) under any Oxford Management Contract after the Initial Closing Date; or
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(d) the loss by NHP or any of its subsidiaries, or modification
in a manner adverse to NHP or any of its subsidiaries, of any right or benefit
under, or any termination, cancellation or non-renewal of, any Oxford Management
Contract, and such loss, modification, termination, cancellation or non-renewal
occurs on or before the first anniversary of the Initial Closing Date, unless
such loss, modification, termination, cancellation or non-renewal occurs (i) as
a result of AIMCO not meeting the definition of a "Qualified Purchaser" under
the Stock and Asset Transfer Restrictions Agreement, (ii) as a result of AIMCO
failing to satisfy the net worth or managed units requirements of Section 4 of
the Stock and Asset Transfer Restrictions Agreement, (iii) as a result of a
"Termination for Financial Performance," as defined in such Oxford Management
Contract, based on the relevant property's financial performance after the
Initial Closing Date, (iv) as a result of a "For Cause Termination," as defined
in such Oxford Management Contract, based on an event or circumstance arising
after the Initial Closing Date, unless, and to the extent that, any such event
or circumstance arises as a result of any action or inaction by NHP, the Sellers
or any of their affiliates prior to the Initial Closing Date, (v) as a result of
any failure by AIMCO to satisfy any fiduciary obligations (whether express or
implied) under any such Oxford Management Contract after the Initial Closing
Date, or (vi) at the request or with the consent of AIMCO.
8.2 INDEMNIFICATION BY AIMCO. Subject to SECTION 9.7, from and after
the Initial Closing, AIMCO shall indemnify, reimburse, defend, and hold harmless
the Sellers and their Representatives for, from, and against all demands,
claims, actions or causes of action, and Damages, asserted against, resulting
to, imposed on, or suffered or incurred by any of the Sellers or their
Representatives, directly or indirectly, in connection with any of the
following:
(a) any breach of, or inaccuracy in, any representation or
warranty of AIMCO contained in this Agreement or any certificate, instrument or
other document delivered pursuant hereto or in connection herewith; or
(b) any breach of covenant of AIMCO contained in this Agreement.
8.3 PROCEDURES RELATING TO INDEMNIFICATION.
(a) Each person to be indemnified pursuant to SECTION 8.1 or
SECTION 8.2 (an "INDEMNIFIED PARTY") agrees to give prompt notice (a "NOTICE OF
THIRD PARTY CLAIM") to the indemnifying party of the assertion of any claim, or
the commencement of any suit, action or proceeding, brought against or sought to
be collected from such indemnified party (each, a "THIRD PARTY CLAIM"), in
respect of which indemnity may be sought by such indemnified party under SECTION
8.1 or SECTION 8.2; provided that the omission so to promptly notify the
indemnifying party with respect to a Third Party Claim brought against or sought
to be collected from such indemnified party will not relieve the indemnifying
party from any liability which it may have to such indemnified party under
SECTION 8.1 or SECTION 8.2 except as otherwise provided in SECTION 8.4 or to
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the extent that such failure has materially prejudiced such indemnifying party
with respect to the defense of such Third Party Claim. If any indemnified party
shall seek indemnity under SECTION 8.1 or SECTION 8.2 with respect to a Third
Party Claim brought against or sought to be collected from such indemnified
party, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, to assume and direct the defense and settlement
thereof with counsel satisfactory to such indemnified party; provided that if
any Third Party Claim brought against or sought to be collected from any
indemnified party includes a request for injunctive or other equitable relief
that, if granted, is reasonably likely to have a Material Adverse Effect or a
similar effect on such indemnified party, such indemnified party shall be
entitled to control and direct the defense and settlement thereof and in such
event the legal and other expenses subsequently incurred by such indemnified
party in connection with the defense thereof shall be paid by the indemnifying
party. After notice from the indemnifying party to an indemnified party of its
election to assume and direct the defense and settlement of a Third Party Claim
brought against or sought to be collected from such indemnified party which such
indemnifying party is entitled to assume and direct under the terms hereof, the
indemnifying party shall not be liable to such indemnified party under SECTION
8.1 or SECTION 8.2, as the case may be, for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided that such
indemnified party shall have the right to employ counsel to represent such party
if in the reasonable judgment of such party, it is advisable for such party to
be represented by separate counsel because the representation of both the
indemnified party and the indemnifying party in such matter could present such
counsel with a potential conflict of interest and in such event the fees and
expenses of such separate counsel shall be paid by the indemnifying party.
Notwithstanding the foregoing provisions of this SECTION 8.3(a), the
indemnifying party shall not (A) without the prior written consent of an
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which such indemnified party is, or with reasonable
foreseeability, could have been a party and indemnity could have been sought
hereunder by such indemnified party for a Third Party Claim brought against or
sought to be collected from such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
arising out of such proceeding (provided that, whether or not such a release is
required to be obtained, the indemnifying party shall remain liable to such
indemnified party in accordance with SECTION 8.1 or SECTION 8.2 in the event
that a Third Party Claim is subsequently brought against or sought to be
collected from such indemnified party) or (B) be liable for any settlement of
any Third Party Claim brought against or sought to be collected from an
indemnified party effected without such indemnifying party's written consent
(which shall not be unreasonably withheld), but if settled with such
indemnifying party's written consent, or if there is a final judgment for the
plaintiff in any such Third Party Claim, such indemnifying party agrees (to the
extent stated above) to indemnify the indemnified party from and against any
loss, liability, claim, damage or expense by reason or such settlement or
judgment. The indemnification required by SECTION 8.1 or SECTION 8.2, as the
case may be, shall be made by periodic payments of the amount thereof during the
course of
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the investigation or defense, as and when bills are received or loss, liability,
claim, damage or expense is incurred.
(b) In the event any indemnified party should have a claim
(each, a "DIRECT CLAIM") against any indemnifying party under SECTION 8.1 or
SECTION 8.2 that does not involve a Third Party Claim being asserted against or
sought to be collected from such indemnified party, the indemnified party shall
deliver notice (a "NOTICE OF DIRECT CLAIM") of such claim with reasonable
promptness to the indemnifying party. The failure by any indemnified party so
to notify the indemnifying party shall not relieve the indemnifying party from
any liability which it may have to such indemnified party under SECTION 8.1 or
SECTION 8.2 except as otherwise provided in SECTION 8.4 or to the extent that
the indemnifying party demonstrates that it has been materially prejudiced by
such failure. If the indemnifying party does not notify the indemnified party,
within 30 calendar days following its receipt of a Notice of Direct Claim, that
the indemnifying party disputes its liability to the indemnified party under
SECTION 8.1 or SECTION 8.2, as the case may be, such claim specified by the
indemnified party in such Notice of Direct Claim will be conclusively deemed a
liability of the indemnifying party under SECTION 8.1 or SECTION 8.2, as the
case may be, and the indemnifying party shall pay the amount of such liability
to the indemnified party on demand, or, in the case of any notice in which the
amount of the claim (or any portion thereof) is estimated, on such later date
when the amount of such claim (or such portion thereof) becomes finally
determined.
(c) If the indemnifying party has timely disputed its liability
with respect to a Third Party Claim or a Direct Claim, the indemnifying party
and the indemnified party agree to proceed in good faith to negotiate a
resolution of such dispute and, if not resolved through negotiations, such
dispute will be resolved by arbitration held in Denver, Colorado in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the "AAA") then in effect unless the parties mutually agree otherwise. Notice
of the demand for arbitration shall be filed in writing by the indemnified party
with the indemnifying party and with the AAA and shall be made within a
reasonable time after the dispute has arisen. Within 30 days after the date the
arbitration notice is filed with the AAA, the indemnified party and the
indemnifying party shall select one person to act as arbitrator. If the parties
are unable to agree upon an arbitrator within 10 days, the arbitrator shall be
selected by the AAA within 30 days thereafter. The arbitrator shall be
independent and impartial. The arbitrator shall promptly schedule all discovery
and the other steps to be taken in resolution of any controversy, dispute or
claim and otherwise assume sufficient initiative and control to effect the
sufficient and expeditious resolution of the dispute. The award rendered by the
arbitrator shall be final and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof. Any liability that the
indemnifying party agrees to assume, or that is determined by the arbitrator to
be a liability of the indemnifying party under SECTION 8.1 or SECTION 8.2 will
be conclusively deemed a liability of the indemnifying party. Except by written
consent of the Person sought to be joined, no arbitration arising out of or
relating to this Agreement shall include, by consolidation, joinder or in any
other manner, any Person not a party to, or otherwise
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bound by, this Agreement. The provisions of this Agreement to arbitrate and any
other written agreement to arbitrate referred to herein shall be specifically
enforceable under the prevailing arbitration law. Each party hereto expressly
consents to, and waives any future objection to, such forum and arbitration
rules.
(d) If Demeter or Phemus is obligated to indemnify AIMCO or any
of its Representatives under this ARTICLE VIII, Demeter or Phemus, as the case
may be, will succeed to, and stand in place of NHP or AIMCO in respect of any,
similar claims or causes of action of NHP or AIMCO may have against third
parties in connection with any matter for which Demeter or Phemus is obligated
to indemnify AIMCO or any of its Representatives, but only to the extent that
Demeter or Phemus, as the case may be, has indemnified AIMCO or any of its
Representatives for such matter. In such event, AIMCO shall cooperate with
Demeter and Phemus in a reasonable manner, at the cost and expense of Demeter or
Phemus, as the case may be, in prosecuting any such subrogated right or claim,
including without limitation, signing claims or bringing actions in the name of
NHP or AIMCO.
(e) Each of AIMCO and its Representatives may give notice of a
claim under the Escrow Agreement in an amount equal to any amount for which it
may be entitled to indemnification under this ARTICLE VIII upon notice to
Capricorn specifying in reasonable detail the basis for such claim. Neither the
giving of any such notice, nor the failure to give any such notice, of a claim
under the Escrow Agreement will constitute an election of remedies or limit
AIMCO or any of its Representatives in any manner in the enforcement of any
other remedies that may be available to it.
8.4 LIMITATIONS ON INDEMNIFICATION.
(a) The obligations to indemnify and hold harmless a party
hereto, (i) pursuant to SECTION 8.1(a) and SECTION 8.2(a), shall terminate when
the applicable representation or warranty terminates pursuant to SECTION 9.7,
(ii) pursuant to SECTION 8.1(b) and SECTION 8.2(b), shall not terminate, and
(iii) pursuant to SECTION 8.1(c) and SECTION 8.1(d), shall terminate after the
first anniversary of the Initial Closing Date; provided, however, that, as to
clauses (i) and (iii) above, such obligation to indemnify and hold harmless
shall not terminate with respect to any item as to which the person to be
indemnified or the related party thereto shall have, before the expiration of
the applicable period, previously made a claim by delivering a notice (stating
in reasonable detail the basis of such claim) to the indemnifying party.
(b) The Sellers shall have no liability under SECTION 8.1, and
AIMCO shall have no liability under SECTION 8.2, unless and until the aggregate
Damages for which indemnification is sought under such Section exceed
$1,000,000, and then only for the amount by which such Damages exceed
$1,000,000; provided, however, that such limitation shall not apply to any
intentional breach or any of the matters referred to in SECTION 8.4(c).
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(c) In the event that the Sellers are obligated to indemnify
AIMCO or any of its Representatives pursuant to SECTION 8.1(a), (c) or (d) as a
result of a loss by NHP or any of its subsidiaries, or modification in a manner
adverse to NHP or any of its subsidiaries, of any right or benefit under, or any
termination, cancellation or non-renewal of, any Contract, in effect as of the
Initial Closing Date, pursuant to which NHP or any of its subsidiaries provides
property management services (including, without limitation, services provided
to or for the Oxford Properties), Damages shall be calculated by multiplying (i)
that portion of the aggregate annualized revenues lost by NHP and its
subsidiaries as a result of all such losses, modifications, terminations,
cancellations and non-renewals (reduced by the amount of any compensatory
payments received in respect thereof, other than payments by the Sellers and
Phemus under this Agreement or the Guaranty) that exceeds $3.0 million, by (ii)
3.6.
(d) In the event that AIMCO or its Representatives are entitled
to indemnification by any of the Sellers for any Damages under SECTION 8.1(c) or
(d) or for a breach of the representations set forth in ARTICLE III (other than
SECTIONS 3.4, 3.5, 3.11 and 3.12), if, and only to the extent that such breach
of representation relates to NHP and not to such Seller, the aggregate liability
of such Seller shall be limited to an amount equal to the product of (i) the
aggregate amount of such Damages, multiplied by (ii) 42.9% in the case of
Demeter, and 10.1% in the case of Capricorn.
(e) Each Seller's liability to AIMCO and its Representatives
under this ARTICLE VIII shall not exceed the aggregate consideration paid to
such Seller hereunder. AIMCO's liability to each Seller and its Representatives
under this ARTICLE VIII shall not exceed the aggregate consideration paid to
such Seller hereunder.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without regard to its principles of
conflicts of law.
9.2 ENTIRE AGREEMENT. This Agreement, including the exhibits and
schedules attached hereto, constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, letters of intent, negotiations and discussions, whether oral or
written, of the parties, including that certain letter agreement, dated February
13, 1997, among AIMCO and the Sellers, and there are no warranties,
representations or other agreements, express or implied, made to any party by
any other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith.
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9.3 MODIFICATION; WAIVER. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
9.4 NOTICES. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "NOTICES") shall be in writing and
may be given personally, by registered mail, or by Federal Express (or other
reputable overnight delivery service):
if to AIMCO, to it at:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
and
28200 Highway 189, Building F-240
P.O. Box 1060
Lake Arrowhead, California 92352
Attention: Mr. Peter K. Kompaniez
Telephone: (909) 336-4821
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra, Esq.
Telephone: (213) 687-5000
if to Demeter, to it at:
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, Massachusetts 02210
Attention: Mr. Tim Palmer
Tami E. Nason, Esq.
Telephone: (617) 523-4400
40
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with a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts 02210
Attention: Larry Jordan Rowe, Esq.
Telephone: (617) 951-7407
if to Capricorn, to it at:
30 East Elm Street
Greenwich, Connecticut 06830
Attention: Mr. Herbert S. Winokur, Jr.
Telephone: (203) 861-6600
with a copy to:
O'Melveny & Myers LLP
153 East 53rd Street
New York, New York 10022
Attention: Drake Tempest, Esq.
Telephone: (212) 326-2000
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given (i) when delivered personally, (ii) three days after being sent
by registered mail, or (iii) one day after being sent by Federal Express (or
other reputable overnight delivery service).
9.5 EXPENSES. Whether or not the transactions contemplated by this
Agreement shall be consummated, all fees and expenses incurred by any party
hereto in connection with this Agreement shall be borne by such party.
Notwithstanding the preceding sentence, AIMCO shall pay one-half and the
Sellers, collectively, shall pay one-half of all HSR Act fees for filings made
in connection with the Transactions.
9.6 ASSIGNMENT.
(a) Except as specifically provided to the contrary in SECTION
5.8(c) and SECTION 9.6(b), no party hereto shall have the right, power, or
authority to assign or pledge this Agreement or any portion of this Agreement,
or to delegate any duties or obligations arising under this Agreement,
voluntarily, involuntarily, or by operation of law, without the prior written
consent of the other parties hereto.
(b) AIMCO may assign any or all of its rights and interest in
this Agreement to any corporation (i) with respect to which AIMCO owns, directly
or
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indirectly, a majority of the outstanding capital stock and (ii) that is
designated by AIMCO to purchase any or all of the Shares pursuant to this
Agreement. Notwithstanding any such assignment, AIMCO shall remain liable to
perform all obligations required to be performed by it hereunder. In the event
of any such assignment, all of the Sellers' representations and warranties shall
be deemed to be made to AIMCO and such designee, and all covenants and
agreements of the Sellers herein shall be deemed to be made for the benefit of
AIMCO and such designee.
9.7 SURVIVAL. All representations and warranties in this Agreement
(other than SECTIONS 3.4(a), 3.5, 4.3(b) and 4.4) shall survive only until the
first anniversary of the Initial Closing. The representations and warranties in
SECTIONS 3.4(a), 3.5, 4.3(b) and 4.4 shall survive the Initial Closing and any
Subsequent Closing indefinitely. All representations and warranties shall
survive notwithstanding any investigation conducted with respect thereto or any
knowledge acquired as to the accuracy or inaccuracy of any such representation
or warranty.
9.8 SEVERABILITY. Any provision or part of this Agreement which is
invalid or unenforceable in any situation in any jurisdiction shall, as to such
situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining provisions
hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction.
9.9 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and without
waiver of the provisions of SECTION 9.6, all of the rights, duties, benefits,
liabilities and obligations of the parties shall inure to the benefit of, and be
binding upon, their respective successors, assigns, heirs and legal
representatives. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or entity, other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
9.10 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
9.11 INTERPRETATION; REFERENCES. Any use of masculine, feminine or
neuter pronouns herein shall not be limiting, but shall be construed as
referring to persons of any gender, as the context may require. Any use of the
singular or plural form herein shall not be limiting, but shall be construed as
referring to either the plural or singular, as the context may require.
References to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement, and references to an
"Article," a "Section" or a "Subsection" are, unless otherwise specified, to an
Article, a Section or a Subsection of this Agreement. The Article and Section
headings of this Agreement are for convenience of reference only and shall not
be
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deemed to modify, explain, restrict, alter or affect the meaning or
interpretation of any provision hereof.
9.12 TIME OF ESSENCE. Time shall be of the essence with respect to
all matters contemplated by this Agreement.
9.1 REMEDIES.
(a) In the event of a breach by AIMCO or any of the Sellers of
its obligations under ARTICLE II or SECTION 5.5, 5.8 or 5.13 of this Agreement,
the non-breaching party, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. AIMCO and the Sellers agree
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by any of them of any of the provisions of ARTICLE II or
SECTION 5.5, 5.8 or 5.13 of this Agreement and hereby further agree that, in the
event of any action for specific performance in respect of such breach, they
shall waive the defense that a remedy at law would be adequate.
(b) The sole and exclusive liability of the Sellers to AIMCO,
and of AIMCO to the Sellers, for money Damages under or in connection with this
Agreement or the transactions contemplated hereby (including without limitation,
for any breach or inaccuracy of any representation or warranty or for any breach
of any covenant required to be performed hereunder) and the sole and exclusive
remedy of AIMCO and the Sellers with respect to any of the foregoing, shall be
as expressly set forth in ARTICLE VIII and the Sellers and AIMCO hereby waive,
release and agree not to assert any other remedy for money Damages; provided,
however, that the foregoing shall not limit AIMCO or the Sellers in any way from
exercising any rights or securing any remedies in connection with this Agreement
or the transactions contemplated hereby as a result of a fraudulent breach of
any representation, warranty or covenant hereunder.
9.14 EXHIBITS. All exhibits attached hereto are hereby incorporated
by reference as though set out in full herein.
9.15 ATTORNEYS' FEES. In the event that any party hereto brings an
action or proceeding against the other party to enforce or interpret any of the
covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
attorneys' fees, charges, disbursements and the fees and costs of expert
witnesses.
9.16 WAIVER OF JURY TRIAL. Consistent with SECTION 8.2, each party to
this Agreement further waives its respective right to a jury trial of any claim
or cause of action arising out of this Agreement or any dealings between any of
the parties hereto relating to the subject matter of this Agreement. The scope
of this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that
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relate to the subject matter of this Agreement, including, without limitation,
contract claims, tort claims and all other common law and statutory claims.
This waiver is irrevocable, meaning that it may not be modified either orally or
in writing, and this waiver shall apply to any subsequent amendments,
supplements or other modifications to this Agreement or to any other document or
agreement relating to the Transactions.
9.17 FURTHER ASSURANCES. Each of the parties shall, without further
consideration, use reasonable efforts to execute and deliver such additional
documents and take such other action as the other parties, or any of them, may
reasonably request to carry out the intent of this Agreement and the
Transactions.
9.18 NEGOTIATION OF AGREEMENT. Each of the parties acknowledges that
it has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said independent counsel.
Each party and its counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law or
any legal decision that would require interpretation of any ambiguities in this
Agreement against the party that drafted it is of no application and is hereby
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intentions of the parties and this Agreement.
9.19 SEVERAL LIABILITY. The liability of Demeter and Capricorn under
this Agreement is several and not joint.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/ Peter Kompaniez
-----------------------------
Name: Peter Kompaniez
Title: Vice Chairman
DEMETER HOLDINGS CORPORATION
By: /s/ Michael R. Eisenson
-----------------------------
Name: Michael R. Eisenson
Title: Authorized Signatory
By: /s/ Tim R. Palmer
-----------------------------
Name: Tim R. Palmer
Title: Authorized Signatory
CAPRICORN INVESTORS, L.P.
By: Capricorn Holdings, G.P.,
its General Partner
By: Winokur Holdings Inc.,
its General Partner
By: /s/ Herbert S. Winokur, Jr.
-----------------------------
Name: Herbert S. Winokur, Jr.
Title: President
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EXHIBITS TO
STOCK PURCHASE AGREEMENT
dated as of
April 16, 1997
by and among
APARTMENT INVESTMENT AND MANAGEMENT COMPANY,
DEMETER HOLDINGS CORPORATION
and
CAPRICORN INVESTORS, L.P.
<PAGE>
INDEX
EXHIBIT A Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Registration Rights Agreement . . . . . . . . . . . . . . . . C-1
EXHIBIT D Rights Agreement . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . E-1
<PAGE>
EXHIBIT A
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of ______ __, 1997 (the "AGREEMENT"), by
and among Apartment Investment and Management Company, a Maryland corporation
("AIMCO"), [Capricorn Investors, L.P., a Delaware limited partnership]
("CAPRICORN"), and ___________, a [national banking association] [bank
organized under the laws of ___________], as escrow agent (the "ESCROW AGENT").
WHEREAS, AIMCO has entered into a Stock Purchase Agreement, dated as
of April 16, 1997 (the "STOCK PURCHASE AGREEMENT"), with Demeter Holdings
Corporation, a Massachusetts corporation ("DEMETER"), and Capricorn Investors,
L.P., a Delaware limited partnership, which provides for AIMCO and Capricorn to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the terms
and conditions set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined in
this Agreement shall have the respective meanings ascribed thereto in the Stock
Purchase Agreement.
1.2 "CLOSING PRICE" shall mean, with respect to any security on any
day, the closing sale price, regular way, on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the principal national securities exchange
or quotation system on which such security is quoted or listed or admitted to
trading, as the case may be, or, if not quoted or listed or admitted to trading
on any national securities exchange or quotation system, the average of the
closing bid and asked prices of such security on the over-the-counter market on
the day in question as reported by the National Quotation Bureau Incorporated,
or a similar generally accepted reporting service or, if not so reported, the
market value per unit of such security on the day in question, as determined,
using valuation techniques generally accepted in the securities industry, by any
New York Stock Exchange ("NYSE") member firm selected by Escrow Agent for that
purpose.
1.3 "DETERMINATION DATE" shall mean (i) when used with respect to any
dividend or other distribution, the date fixed for the determination of the
holders of the
A-1
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securities entitled to receive such dividend or distribution, or, if a
dividend or distribution is paid or made without fixing such a date, the date
of such dividend or distribution and (ii) when used with respect to any
subdivision, combination or reclassification of securities, the date upon
which such subdivision, combination or reclassification becomes effective.
1.4 "EX-DATE" shall mean (i) when used with respect to any dividend
or distribution, the first date on which the securities on which the dividend or
distribution is payable trade regular way on the relevant exchange or in the
relevant market without the right to receive such dividend or distribution, and
(ii) when used with respect to any subdivision, combination or reclassification
of securities, the first date on which the securities trade regular way on such
exchange or in such market to reflect such subdivision, combination or
reclassification becoming effective.
1.5 "MARKET PRICE" shall mean, with respect to any security on any
date (the "SPECIFIED DATE"), the average of the daily Closing Prices with
respect to such security for the ten consecutive Trading Days for such security
ending on the third Trading Day that immediately precedes the Specified Date,
appropriately adjusted to take into account any dividends or distributions
payable on such security, or any reclassification, subdivisions or combinations
of, or similar transactions involving, such security with respect to which (i)
the Ex-Date occurs after the first of such ten consecutive Trading Days and (ii)
the Determination Date occurs prior to the Specified Date.
1.6 "TRADING DAY" shall mean, with respect to any security, (i) if
the principal trading market for the applicable security is the NYSE or another
national securities exchange, a day on which the NYSE or such other national
securities exchange is open for business, (ii) if the principal trading market
for the applicable security is the Nasdaq Stock Market, a day on which a trade
may be made on the Nasdaq Stock Market, or (iii) if the applicable security is
not listed, admitted for trading or quoted as provided in clause (i) or (ii),
any day other than a Saturday or Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or executive order
to close.
ARTICLE II
ESCROW
2.1 ESTABLISHMENT OF ESCROW.
(a) AIMCO may, from time to time, in accordance with the Stock
Purchase Agreement, deposit with Escrow Agent certificates representing shares
of AIMCO Stock issued in the name of Capricorn (the "ESCROW SHARES"). Capricorn
shall deliver to the Escrow Agent duly executed blank stock powers for each of
the Escrow Shares. Upon receipt of such shares, Escrow Agent shall give AIMCO
written acknowledgement thereof. The Escrow Shares, any shares of AIMCO Stock,
marketable
A-2
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securities or other assets deposited by Capricorn with Escrow Agent pursuant
to SECTION 2.4, the proceeds of any sales of such securities or other assets
and any dividends or earnings thereon, as reduced by any disbursements
pursuant to SECTION 2.3, or SECTION 2.4, amounts withdrawn under SECTION
3.1(J), or losses on investments, are collectively referred to herein as the
"ESCROW FUND."
(b) Escrow Agent hereby agrees to act as escrow agent and to
hold, safeguard and disburse the Escrow Fund pursuant to the terms and
conditions hereof.
2.2 INVESTMENT OF FUNDS. Assets in the Escrow Fund, other than
shares of AIMCO Stock and marketable securities, shall be invested from time to
time as directed by Capricorn, until disbursement of the entire Escrow Fund.
2.3 CLAIMS.
(a) From time to time on or before the earlier to occur of the
Merger or the first anniversary of the Initial Closing Date, AIMCO may give
written notice (a "NOTICE") to Capricorn and Escrow Agent specifying in
reasonable detail the nature and dollar amount of any claim (a "CLAIM") it may
have against Capricorn under ARTICLE VIII of the Stock Purchase Agreement; AIMCO
may make more than one claim with respect to any underlying state of facts. If
Capricorn gives notice to AIMCO and Escrow Agent disputing any Claim (a "COUNTER
NOTICE") within 30 days following receipt by Escrow Agent of the Notice
regarding such Claim, such Claim shall be resolved as provided in SECTION
2.3(B). If no Counter Notice is received by Escrow Agent within such 30-day
period, then the dollar amount of damages claimed by AIMCO as set forth in its
Notice shall be deemed established for purposes of this Agreement and the Stock
Purchase Agreement and, at the end of such 30-day period, Escrow Agent shall (i)
deliver to AIMCO one or more certificates representing, in the aggregate, a
number of Escrow Shares equal to (x) the dollar amount claimed in the Notice,
divided by (y) the Market Price of AIMCO Stock on the date of delivery of such
Escrow Shares to AIMCO, or (ii) pay to AIMCO the dollar amount claimed in the
Notice, in each case, from (and only to the extent of) the Escrow Fund. Escrow
Agent shall not inquire into or consider whether a Claim complies with the
requirements of the Stock Purchase Agreement.
(b) If a Counter Notice is given with respect to a Claim, Escrow
Agent shall make payment with respect thereto only in accordance with (i) joint
written instructions of AIMCO and Capricorn, or (ii) a final non-appealable
order of a court of competent jurisdiction. Any court order shall be
accompanied by a legal opinion by counsel for the presenting party satisfactory
to Escrow Agent to the effect that the order is final and non-appealable.
Escrow Agent shall act on such court order and legal opinion without further
question.
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2.4 SUBSTITUTION OF ESCROW FUNDS. Capricorn may, at any time and
from time to time, deposit with Escrow Agent shares of AIMCO Stock or other
marketable securities duly indorsed in blank, or cash or cash equivalents, in
substitution of all or any portion of the Escrow Fund, and Escrow Agent shall
promptly thereafter pay and distribute to Capricorn an amount of Escrow Shares
and/or other assets then included in the Escrow Fund, as requested by Capricorn,
equal in value to the shares of AIMCO Stock, marketable securities, cash or cash
equivalents deposited by Capricorn with Escrow Agent, with shares of AIMCO Stock
and marketable securities valued for such purpose at the Market Price of such
security on the date of delivery of such Escrow Shares.
2.5 TERMINATION OF ESCROW. On the earlier to occur of the Merger or
the first anniversary of the Initial Closing Date, Escrow Agent shall pay and
distribute to Capricorn the amount of securities and other assets then included
in the Escrow Fund, unless any Claims are then pending, in which case an amount
equal to the aggregate dollar amount of such Claims (as shown in the Notices of
such Claims) shall be retained by Escrow Agent in the Escrow Fund (and the
balance paid to Capricorn), until it receives joint written instructions of
AIMCO and Capricorn or a final non-appealable order of a court of competent
jurisdiction as contemplated by SECTION 2.3(b).
2.6 OWNERSHIP OF ESCROW FUND. AIMCO and Capricorn agree that,
subject to the other terms and provisions of this Agreement, including, without
limitation, SECTION 2.3, for all purposes, including Federal and other taxes
based on income, Capricorn will be treated as the owner of all of the Escrow
Fund, and that Capricorn will report all income, if any, that is earned on, or
derived from, the Escrow Fund as its income in the taxable year or years in
which such income is properly includible and pay any taxes attributable thereto.
ARTICLE III
ESCROW AGENT
3.1 DUTIES OF ESCROW AGENT.
(a) Escrow Agent shall not be under any duty to give the Escrow
Fund held by it hereunder any greater degree of care than it gives its own
similar property and shall not be required to invest any funds held hereunder
except as directed in this Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.
(b) Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor Escrow Agent) from
and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees
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and disbursements, arising out of and in connection with this Agreement.
Without limiting the foregoing, Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash held by it
hereunder in good faith, in accordance with the terms hereof, including,
without limitation, any liability for any delays (not resulting from its
gross negligence or willful misconduct) in the investment or reinvestment of
the Escrow Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for any
action taken or omitted by it in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from this Escrow Fund shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide Escrow Agent with appropriate Internal
Revenue Service Forms W-9 for tax identification number certification, or non-
resident alien certifications. This SECTION 3.1(e) and SECTION 3.1(b) shall
survive notwithstanding any termination of this Agreement or the resignation of
Escrow Agent.
(f) Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party as
to the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor Escrow Agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Agreement. The
resignation of Escrow
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Agent will take effect on the earlier of (i) the appointment of a successor
(including a court of competent jurisdiction) or (ii) the day which is 30
days after the date of delivery of its written notice of resignation to the
other parties hereto. If, at that time, Escrow Agent has not received a
designation of a successor Escrow Agent, Escrow Agent's sole responsibility
after that time shall be to retain and safeguard the Escrow Fund until
receipt of a designation of successor Escrow Agent or a joint written
disposition instruction by the other parties hereto or a final non-appealable
order of a court of competent jurisdiction.
(i) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection with the
Escrow Fund or in the event that Escrow Agent is in doubt as to what action it
should take hereunder, Escrow Agent shall be entitled to retain the Escrow Fund
until Escrow Agent shall have received (i) a final non-appealable order of a
court of competent jurisdiction directing delivery of the Escrow Fund or (ii) a
written agreement executed by the other parties hereto directing delivery of the
Escrow Fund, in which event Escrow Agent shall disburse the Escrow Fund in
accordance with such order or agreement. Any court order shall be accompanied
by a legal opinion by counsel for the presenting party satisfactory to Escrow
Agent to the effect that the order is final and non-appealable. Escrow Agent
shall act on such court order and legal opinion without further question.
(j) AIMCO and Capricorn shall pay Escrow Agent compensation (as
payment in full) for the services to be rendered by Escrow Agent hereunder in
the amount of $_________ at the time of execution of this Agreement and
$_____________ annually thereafter and agree to reimburse Escrow Agent for all
reasonable expenses, disbursements and advances incurred or made by Escrow Agent
in performance of its duties hereunder (including reasonable fees, expenses and
disbursements of its counsel). Any such compensation and reimbursement to which
Escrow Agent is entitled shall be borne 50% by AIMCO, and 50% by Capricorn.
(k) No printed or other matter in any language (including,
without limitation, prospectuses, notices, reports and promotional material)
that mentions Escrow Agent's name or the rights, powers, or duties of Escrow
Agent shall be issued by the other parties hereto or on such parties' behalf
unless Escrow Agent shall first have given its specific written consent thereto.
(l) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate, including, without
limitation, the Depositary Trust Company and the Federal Reserve Book Entry
System.
3.2 LIMITED RESPONSIBILITY. This Agreement expressly sets forth
all the duties of Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into this Agreement
against Escrow Agent. Escrow
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Agent shall not be bound by the provisions of any agreement among the other
parties hereto except this Agreement.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 GOVERNING LAW. This Agreement and the legal relations among the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware, without regard to its principles of
conflicts of law.
4.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, letters of intent, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to any
party by any other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith.
4.3 MODIFICATION; WAIVER. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
4.4 NOTICES. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "NOTICES") shall be in writing and
may be given personally, by registered mail, or by Federal Express (or other
reputable overnight delivery service):
if to AIMCO, to it at:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
and
28200 Highway 189, Building F-240
P.O. Box 1060
Lake Arrowhead, California 92352
Attention: Mr. Peter K. Kompaniez
Telephone: (909) 336-4821
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with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra, Esq.
Telephone: (213) 687-5000
if to Capricorn, to it at:
c/o Capricorn Investors, L.P.
30 East Elm Street
Greenwich, Connecticut 06830
Attention: Mr. Herbert S. Winokur, Jr.
Telephone: (203) 861-6600
with a copy to:
O'Melveny & Myers, LLP
153 East 53rd Street
New York, New York 10022
Attention: Drake Tempest, Esq.
Telephone: (212) 326-2000
if to Escrow Agent, to it at:
___________________
___________________
Attention: ___________________
Telephone: ___________________
with a copy to:
___________________
___________________
Attention: __________________
Telephone: ___________________
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given (i) when delivered personally, (ii) three days after being sent
by registered mail, or (iii) one day after being sent by Federal Express (or
other reputable overnight delivery service).
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4.5 EXPENSES. Except as set forth in SECTION 4.12, all fees and
expenses incurred by AIMCO, Capricorn or Phemus in connection with this
Agreement shall be borne by such party.
4.6 ASSIGNMENT.
(a) Except as specifically provided to the contrary in SECTION
3.1(h) or SECTION 4.6(b), no party hereto shall have the right, power, or
authority to assign or pledge this Agreement or any portion of this Agreement,
or to delegate any duties or obligations arising under this Agreement,
voluntarily, involuntarily, or by operation of law, without the prior written
consent of the other parties hereto.
(b) AIMCO may assign any or all of its rights and interest in
this Agreement to any corporation (i) with respect to which AIMCO owns, directly
or indirectly, a majority of the outstanding capital stock, and (ii) that is
designated by AIMCO to purchase any or all of the Shares pursuant to the Stock
Purchase Agreement. Notwithstanding any such assignment, AIMCO shall remain
liable to perform all obligations required to be performed by it hereunder.
4.7 SEVERABILITY. Any provision or part of this Agreement which is
invalid or unenforceable in any situation in any jurisdiction shall, as to such
situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining provisions
hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction.
4.8 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and without
waiver of the provisions of SECTION 4.6, all of the rights, duties, benefits,
liabilities and obligations of the parties shall inure to the benefit of, and be
binding upon, their respective successors, assigns, heirs and legal
representatives. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or entity, other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
4.9 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
4.10 INTERPRETATION; REFERENCES. Any use of masculine, feminine or
neuter pronouns herein shall not be limiting, but shall be construed as
referring to persons of any gender, as the context may require. Any use of the
singular or plural form herein shall not be limiting, but shall be construed as
referring to either the plural or singular, as the context may require.
References to an "Article" or a "Section" are, unless otherwise specified, to an
Article or a Section of this Agreement. The Article and
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Section headings of this Agreement are for convenience of reference only and
shall not be deemed to modify, explain, restrict, alter or affect the meaning
or interpretation of any provision hereof.
4.11 TIME OF ESSENCE. Time shall be of the essence with respect to
all matters contemplated by this Agreement.
4.12 ATTORNEYS' FEES. In the event that AIMCO or Capricorn brings an
action or proceeding against the other to enforce or interpret any of the
covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
attorneys' fees, charges, disbursements and the fees and costs of expert
witnesses.
4.13 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of California, County of Los Angeles, the State of New York, County of New York,
or, if it has or can acquire jurisdiction, in the United States District Court
for the Central District of California or the United States District Court for
the Southern District of New York, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
4.14 WAIVER OF JURY TRIAL. Each party to this Agreement further
waives its respective right to a jury trial of any claim or cause of action
arising out of this Agreement or any dealings between any of the parties hereto
relating to the subject matter of this Agreement. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement, including,
without limitation, contract claims, tort claims and all other common law and
statutory claims. This waiver is irrevocable, meaning that it may not be
modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications to this Agreement or
to any other document or agreement relating hereto.
4.15 NEGOTIATION OF AGREEMENT. Each of the parties acknowledges that
it has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said independent counsel.
Each party and its counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law or
any legal decision that would require interpretation of any ambiguities in this
Agreement against the party that drafted it is of
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no application and is hereby expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the
intentions of the parties and this Agreement.
4.16 REMEDIES. In the event of a breach by any party of this
Agreement, a non-breaching party, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The parties hereby
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by any of them of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By:______________________________
Name:
Its:
[CAPRICORN INVESTORS, L.P.]
By:______________________________
Name:
Its:
[ESCROW AGENT]
By:______________________________
Name:
Its:
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EXHIBIT B
GUARANTY
GUARANTY, dated as of ______ __, 1997 (the "GUARANTY"), by Phemus
Corporation, a Massachusetts corporation ("PHEMUS"), for the benefit of
Apartment Investment and Management Company, a Maryland corporation ("AIV"),
and its Representatives (collectively, "AIMCO").
WHEREAS, AIV has entered into a Stock Purchase Agreement, dated as
of April 16, 1997 (the "STOCK PURCHASE AGREEMENT"), with Demeter Holdings
Corporation, a Massachusetts corporation, and Capricorn Investors, L.P., a
Delaware limited partnership, which provides for Phemus to execute and
deliver this Guaranty.
NOW, THEREFORE, in consideration of the foregoing and the covenants
of the parties set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
subject to the terms and conditions set forth herein, the parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms used but not otherwise defined
in this Agreement shall have the respective meanings ascribed thereto in the
Stock Purchase Agreement.
ARTICLE II
PAYMENT GUARANTY
2.1 GUARANTY OF PAYMENT. In consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Phemus hereby guaranties, as primary obligor and not as surety, the due and
punctual payment in full of all obligations of Demeter under the Stock
Purchase Agreement. This is a guaranty of payment and not of collection.
2.2 GUARANTY ABSOLUTE. Subject to SECTION 2.6, the obligations of
Phemus under the Guaranty shall be absolute, irrevocable and unconditional
under any and all circumstances, in accordance with its terms, and shall
remain in full force and effect without regard to, and shall not be released,
suspended, terminated, discharged or otherwise affected by, any act, event or
circumstance that might discharge, reduce, limit or modify Phemus's
obligations under the Guaranty or constitute a legal or equitable discharge
or defense of a guarantor.
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2.3 WAIVERS. Phemus hereby expressly waives: (a) any right it
may have to require AIMCO to proceed against Demeter, proceed against or
exhaust any security held from Demeter or pursue any other remedy in AIMCO's
power to pursue; (b) promptness, diligence, notice of acceptance and any
other notice with respect to its obligations hereunder; and (c) all
presentments, demands for payment or performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of acceptance of
this Guaranty, and demands and notices of every kind other than as required
by the Stock Purchase Agreement. Phemus acknowledges that it will receive
direct and indirect benefits from this Guaranty and that the waivers set
forth herein are knowingly made in contemplation of such benefits.
2.4 REINSTATEMENT OF OBLIGATIONS. If AIMCO is required by court
or otherwise to pay, return or restore to Demeter or Phemus or any other
person any amounts previously paid pursuant to the Stock Purchase Agreement,
the obligations of Phemus under this Guaranty, to the extent theretofore
discharged, shall be reinstated and revived and the rights of AIMCO shall
continue with regard to such amounts as though they had never been paid.
2.5 DISPUTED AMOUNTS. If Phemus contests any claim by AIMCO
hereunder, Phemus shall nonetheless pay to AIMCO the non-disputed portion of
such Claim not paid by the Sellers to the extent required by this Guaranty.
AIMCO may not enforce this Guaranty against Phemus with respect to the
disputed amount of such claim unless and until a final, non-appealable order,
award or judgment of a court of competent jurisdiction has been made with
respect to such contested claim which requires Demeter or Phemus to pay any
of such contested claim to or for the benefit of AIMCO, in which event Phemus
shall, unless the same is paid by Demeter when due, pay upon demand all
amounts owed thereunder (including without limitation, all damages, awarded
interest, legal costs, and attorneys' fees) to the extent required by this
Guaranty.
2.6 LIMITATION ON OBLIGATIONS. Nothing contained herein, express or
implied, is intended to, or shall be deemed to, obligate Phemus to pay any
amount if and to the extent that Demeter would not have been obligated to pay
such amount under the Stock Purchase Agreement or otherwise, by reason of any
defense, claim, cause of action, counterclaim, right or set-off or similar
right.
2.7 LIMITATION ON SUBROGATION. Notwithstanding any payment or
payments made by Phemus by reason of this Guaranty, Phemus shall not be
subrogated to any rights of AIMCO against Demeter until all obligations of
Demeter to AIMCO under the Stock Purchase Agreement shall have been paid in
full.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Phemus hereby represents and warrants to AIMCO as follows:
3.1 ORGANIZATION AND QUALIFICATIONS. Phemus is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Phemus was incorporated in 1987.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Phemus has all
necessary power and authority to execute and deliver this Guaranty and to
perform its obligations hereunder. The execution and delivery of this
Guaranty by Phemus and the performance by Phemus of its obligations hereunder
have been duly and validly authorized by all necessary corporate action and
no other corporate proceedings on the part of such Seller are necessary to
authorize this Guaranty. This Guaranty has been duly and validly executed and
delivered by Phemus and constitutes the legal, valid and binding obligation
of Phemus, enforceable against Phemus in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally and by equitable principles to which the remedies of
specific performance and injunctive and similar forms of relief are subject.
3.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution and
delivery of Guaranty by Phemus do not, and the performance of its obligations
under this Guaranty will not, (a) conflict with, result in a breach of, cause
a dissolution or require the consent or approval of any Person under, or
violate any provision of the Organizational Documents of Phemus, (b) require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, (c) conflict with or violate any
Law, judgment, order, writ, injunction or decree applicable to Phemus or by
which any property or asset of Phemus is bound or affected, or (d) conflict
with or result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, result in
the loss by Phemus or modification in a manner materially adverse to Phemus
of any material right or benefit under, or give to others any right of
termination, amendment, acceleration, repurchase or repayment, increased
payments or cancellation of, or result in the creation of a Lien or other
encumbrance on any property or asset of Phemus pursuant to, any Contract of
Phemus except, in the case of clauses (a), (b) and (c), such as would not
prevent or delay Phemus from performing its obligations under this Guaranty
in any material respect, and would not, individually or in the aggregate,
have a Material Adverse Effect on Phemus.
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3.4 HARVARD AFFILIATION. Each of Phemus and Demeter is solely
controlled by the President and the Fellows of Harvard College.
3.5 NET WORTH. Phemus has a net worth in excess of $500,000,000.
ARTICLE IV
COVENANTS OF PHEMUS
4.1 CORPORATE EXISTENCE. Except for a transaction that satisfies
the requirements of SECTION 4.2, Phemus shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence in accordance with its organizational documents.
4.2 LIMITATION ON SALE OF ASSETS, LIQUIDATION, ETC. Phemus shall
not, in a single transaction or through a series of related transactions, (a)
consolidate with or merge with or into any other Person, or transfer (by
lease, assignment, sale or otherwise) all or substantially all of its
properties and assets as an entirety or substantially as an entirety to
another Person or group of affiliated Persons or (b) adopt a plan (a "PLAN OF
LIQUIDATION") that provides for, contemplates or the effectuation of which is
preceded or accompanied by (regardless of whether substantially
contemporaneously, in phases or otherwise) (i) the sale, lease, conveyance or
other disposition of all or substantially all of the assets of Phemus
otherwise than as an entirety or substantially as an entirety and (ii) the
distribution of all or substantially all of the proceeds of such sale, lease,
conveyance or other disposition and all or substantially all of the remaining
assets of such Person to holders of capital stock of Phemus unless, in the
case of clause (a) or (b):
(x) either Phemus shall be the continuing Person, or the Person (if
other than Phemus) formed by such consolidation or into which Phemus is
merged or to which all or substantially all of the properties and assets of
Phemus are transferred as an entirety or substantially as an entirety (or, in
the case of a Plan of Liquidation, any Person to which assets are
transferred) (Phemus or such other Person being hereinafter referred to as
the "SURVIVING PERSON") shall be a corporation organized and validly existing
under the laws of the United States, any State thereof or the District of
Columbia, and shall expressly assume all of the obligations of Phemus under
this Guaranty; and
(y) immediately after and giving effect to such transaction and
the assumption contemplated by clause (x) above, the Surviving Person shall
have a net worth equal to or greater than the net worth of Phemus immediately
preceding the transaction.
4.3 LIQUIDITY. Phemus covenants and agrees that it will, at such
time, if any, as its obligations under the Guaranty become due, have liquid
assets at least equal to its obligations hereunder.
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ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 GOVERNING LAW. This Guaranty and the legal relations among
the parties hereto shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to its
principles of conflicts of law.
5.2 MODIFICATION; WAIVER. No supplement, modification, waiver or
termination of this Guaranty shall be binding unless executed in writing by
Phemus. No waiver of any provision of this Guaranty shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar),
nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
5.3 NOTICES. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "NOTICES") shall be in writing
and may be given personally, by registered mail, or by Federal Express (or
other reputable overnight delivery service):
if to AIMCO, to it at:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
and
28200 Highway 189, Building F-240
P.O. Box 1060
Lake Arrowhead, California 92352
Attention: Mr. Peter K. Kompaniez
Telephone: (909) 336-4821
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra, Esq.
Telephone: (213) 687-5000
if to Phemus, to it at:
c/o Harvard Management Company, Inc.
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600 Atlantic Avenue
Boston, Massachusetts 02210
Attention: Mr. Tim Palmer
Tami E. Nason, Esq.
Telephone: (617) 523-4400
with a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts 02210
Attention: Larry Jordan Rowe, Esq.
Telephone: (617) 951-7407
or to such other address or such other person as the addressee party shall
have last designated by notice to the other party. All Notices shall be
deemed to have been given (i) when delivered personally, (ii) three days
after being sent by registered mail, or (iii) one day after being sent by
Federal Express (or other reputable overnight delivery service).
5.4 EXPENSES. Except as set forth in SECTION 5.10, all fees and
expenses incurred by Phemus in connection with this Guaranty shall be borne by
Phemus.
5.5 ASSIGNMENT.
(a) Phemus shall not delegate any duties or obligations
arising under this Guaranty, voluntarily, involuntarily, or by operation of
law, without the prior written consent of AIMCO.
(b) AIMCO may assign any or all of its rights and interest in
this Guaranty to any corporation (i) with respect to which AIMCO owns,
directly or indirectly, a majority of the outstanding capital stock, and (ii)
that is designated by AIMCO to purchase any or all of the Shares pursuant to
the Stock Purchase Agreement. Notwithstanding any such assignment, AIMCO
shall remain liable to perform all obligations required to be performed by it
hereunder.
5.6 SEVERABILITY. Any provision or part of this Guaranty which is
invalid or unenforceable in any situation in any jurisdiction shall, as to
such situation and such jurisdiction, be ineffective only to the extent of
such invalidity and shall not affect the enforceability of the remaining
provisions hereof or the validity or enforceability of any such provision in
any other situation or in any other jurisdiction.
5.7 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and without
waiver of the provisions of SECTION 5.5, all of the rights and benefits of
AIMCO shall inure to the benefit of AIMCO's successors and assigns. Except
as specifically set forth or
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referred to herein, nothing herein expressed or implied is intended or shall
be construed to confer upon or give to any person or entity, other than AIMCO
and its successors and permitted assigns, any rights or remedies under or by
reason of this Guaranty.
5.8 INTERPRETATION; REFERENCES. Any use of masculine, feminine or
neuter pronouns herein shall not be limiting, but shall be construed as
referring to persons of any gender, as the context may require. Any use of
the singular or plural form herein shall not be limiting, but shall be
construed as referring to either the plural or singular, as the context may
require. References to an "Article" or a "Section" are, unless otherwise
specified, to an Article or a Section of this Guaranty. The Article and
Section headings of this Guaranty are for convenience of reference only and
shall not be deemed to modify, explain, restrict, alter or affect the meaning
or interpretation of any provision hereof.
5.9 TIME OF ESSENCE. Time shall be of the essence with respect to
all matters contemplated by this Guaranty.
5.10 ATTORNEYS' FEES. In the event that AIMCO brings an action or
proceeding against Phemus to enforce or interpret any of the covenants,
conditions, agreements or provisions of this Guaranty, the prevailing party
in such action or proceeding shall be entitled to recover all costs and
expenses of such action or proceeding, including, without limitation,
attorneys' fees, charges, disbursements and the fees and costs of expert
witnesses.
5.11 JURISDICTION; SERVICE OF PROCESS. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this Guaranty may be brought against any of the parties in the courts of the
State of California, County of Los Angeles, the Commonwealth of
Massachusetts, County of Suffolk, or, if it has or can acquire jurisdiction,
in the United States District Court for the Central District of California or
the United States District Court for the Commonwealth of Massachusetts, and
each of the parties consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in
the world.
5.12 WAIVER OF JURY TRIAL. Phemus waives its respective right to
a jury trial of any claim or cause of action arising out of this Guaranty or
any dealings between any of the parties hereto relating to the subject matter
of this Guaranty. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this Guaranty, including, without
limitation, contract claims, tort claims and all other common law and
statutory claims. This waiver is irrevocable, meaning that it may not be
modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications to this Guaranty or
to any other document or agreement relating hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Phemus has executed this Guaranty as of the
date first above written.
PHEMUS CORPORATION
By:____________________________________
Name:
Its:
By:____________________________________
Name:
Its:
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EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ________, 1997 (this
"AGREEMENT"), by and among Apartment Investment and Management Company, a
Maryland corporation (the "COMPANY"), and the persons listed on SCHEDULE A
hereto (each, an "INVESTOR").
WHEREAS, pursuant to that certain Stock Purchase Agreement, dated
as of April 16, 1997 (the "ACQUISITION AGREEMENT"), by and among the Company,
Demeter Holdings Corporation, a Massachusetts corporation ("DEMETER"), and
Capricorn Investors, L.P., a Delaware limited partnership ("CAPRICORN"), the
Investors will receive up to _____ shares of the Company's Class A Common
Stock, par value $.01 per share (the "COMMON STOCK");
WHEREAS, in connection with the Acquisition Agreement, the Company
has agreed to register for sale by the Investors and certain transferees, the
shares of Common Stock received by the Investors pursuant to the Acquisition
Agreement (collectively, the "REGISTRABLE SHARES"); and
WHEREAS, the parties hereto desire to enter into this agreement to
evidence the foregoing agreement of the Company and the mutual covenants of
the parties relating thereto.
NOW, THEREFORE, in consideration of the foregoing and the covenants
of the parties set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
subject to the terms and conditions set forth herein, the parties hereby
agree as follows:
Section 1. CERTAIN DEFINITIONS. In this Agreement the following
terms shall have the following respective meanings:
"ACCREDITED INVESTOR" shall have the meaning set forth in Rule 501
of the General Rules and Regulations promulgated under the Securities Act.
"AFFILIATE" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
the Person specified.
"COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the relevant time.
"HOLDERS" shall mean (i) each of the Investors, and (ii) each
Person holding Registrable Shares as a result of a transfer or assignment to
that Person of Registrable Shares made by an Investor in accordance with this
Agreement other than pursuant to an effective registration statement or Rule
144.
"INDEMNIFIED PARTY" shall have the meaning ascribed to it in Section
4(c) of this Agreement.
"INDEMNIFYING PARTY" shall have the meaning ascribed to it in Section
4(c) of this Agreement.
"PERSON" shall mean an individual, corporation, partnership, estate,
trust, association, private foundation, joint stock company or other entity.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act providing for the sale by the Holders of
Registrable Shares in accordance with the method or methods of distribution
designated by the Holders, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
"REGISTRABLE SHARES" shall have the meaning ascribed to it in the
recitals to this Agreement.
"REGISTRATION EXPENSES" shall mean all expenses (excluding Selling
Expenses) incurred by the Company in complying with Section 2 hereof,
including, without limitation, the following: (a) all registration, filing
and listing fees; (b) fees and expenses of compliance with federal and state
securities or real estate syndication laws (including, without limitation,
reasonable fees and disbursements of counsel in connection with state
securities and real estate syndication qualifications of the Registrable
Shares under the laws of such jurisdictions as the Holders may reasonably
designate); (c) printing (including, without limitation, expenses of printing
or engraving certificates for the Registrable Shares in a form eligible for
deposit with The Depository Trust Company and otherwise meeting the
requirements of any securities exchange on which they are listed and of
printing registration statements and prospectuses), messenger, telephone,
shipping and delivery expenses; (d) fees and disbursements of counsel for the
Company; (e) fees and disbursements of all independent public accountants of
the Company (including without limitation the expenses of any annual or
special audit and "cold comfort" letters required by the managing
underwriter); (f) securities act liability insurance if the Company so
desires; (g) fees and expenses of other Persons reasonably necessary in
connection with the registration, including any experts, retained by the
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Company; (h) fees and expenses incurred in connection with the listing of the
Registrable Shares on each securities exchange on which securities of the
same class are then listed; and (i) fees and expenses associated with any
NASD filing required to be made in connection with the registration statement.
"RIGHTS" shall have the meaning ascribed to it in Section 6 of this
Agreement.
"RULE 144" shall mean Rule 144 promulgated by the Commission under
the Securities Act, as amended from time to time, or any similar rule or
regulation of the Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the relevant time.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to any sale of Registrable
Shares.
Section 2. REGISTRATION.
(a) The Company shall prepare and file with the Commission a
registration statement for the purpose of effecting a Registration of the
sale of Registrable Shares by the Holders thereof; shall use its best efforts
to effect such Registration within 10 days after the effectiveness of a
registration statement filed by the Company to effect the registration of
shares of Common Stock to be issued in connection with the proposed merger of
NHP Incorporated and a subsidiary of the Company, but not later than 6 months
after the date hereof (including, without limitation, the execution of an
undertaking to file post-effective amendments and appropriate qualification
under applicable state securities and real estate syndication laws); and
shall keep such Registration continuously effective until the earlier of (i)
the third anniversary of the date hereof or, if the Company has exercised its
Suspension Right hereunder, an additional number of days after such third
anniversary equal to the aggregate number of days that the Company has
deferred a filing or suspended sales under any filed registration statement,
and (ii) the date on which all Registrable Shares have been sold pursuant to
such registration statement or Rule 144; PROVIDED, HOWEVER, that the Company
shall not be obligated to take any action to effect any such Registration,
qualification or compliance pursuant to this Section 2 in any particular
jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such Registration, qualification
or compliance unless the Company is already subject to service in such
jurisdiction.
Notwithstanding the foregoing, the Company shall have the right
(the "SUSPENSION RIGHT") to defer such filing (or suspend sales under any
filed registration statement or defer the updating of any filed registration
statement and suspend sales
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thereunder) for a period of not more than 120 days during any one-year period
ending on December 31, if the Company shall furnish to the Holders a
certificate signed by the President or any other executive officer or any
director of the Company stating that (x) in the good faith judgment of the
Company, it would be detrimental to the Company and its shareholders to file
such registration statement or amendment thereto at such time (or continue
sales under a filed registration statement), or (y) the managing underwriter
or underwriters in an underwritten offering by the Company for the account of
the Company have requested in writing that the Holders refrain from any sale
or distribution of Common Stock, and, in either case, the Company has elected
to defer the filing of such registration statement (or suspend sales under a
filed registration statement) for the period of time specified in such
certificate (which shall not exceed 120 days during any one-year period).
Upon the Company's exercise of the Suspension Right, the Holders hereby agree
not to effect any sale or distribution of shares of Common Stock during the
period specified by the Company in such certificate.
(b) The Company shall promptly notify the Holders of the
occurrence of the following events:
(i) when any registration statement relating to the
Registrable Shares or post-effective amendment thereto filed with the
Commission has become effective;
(ii) the issuance by the Commission of any stop order
suspending the effectiveness of any registration statement relating to
the Registrable Shares;
(iii) the suspension of an effective registration
statement by the Company in accordance with the last paragraph of
Section 2(a) above;
(iv) the Company's receipt of any notification of the
suspension of the qualification of any Registrable Shares covered by a
registration statement for sale in any jurisdiction; and
(v) the existence of any event, fact or circumstance
that results in a registration statement or prospectus relating to
Registrable Shares or any document incorporated therein by reference
containing an untrue statement of material fact or omitting to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading during the distribution of
securities.
The Company agrees to use its best effort to obtain the withdrawal of any order
suspending the effectiveness of any such registration statement or any state
qualification at the earliest possible moment.
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(c) The Company shall provide to the Holders, at no cost to
the Holders, a copy of the registration statement and any amendment thereto
used to effect the Registration of the Registrable Shares, each prospectus
contained in such registration statement or post-effective amendment and any
amendment or supplement thereto and such other documents as the requesting
Holders may reasonably request in order to facilitate the disposition of the
Registrable Shares covered by such registration statement. The Company
consents to the use of each such prospectus and any supplement thereto by the
Holders in connection with the offering and sale of the Registrable Shares
covered by such registration statement or any amendment thereto. The Company
shall also file a sufficient number of copies of the prospectus and any
post-effective amendment or supplement thereto with the New York Stock
Exchange (or, if the Common Stock is no longer listed thereon, with such
other securities exchange or market on which the Common Stock is then listed)
so as to enable the Holders to the benefits of the prospectus delivery
provisions of Rule 153 under the Securities Act.
(d) The Company agrees to use its best efforts to cause the
Registrable Shares covered by a registration statement to be registered with or
approved by such state securities authorities as may be necessary to enable the
Holders to consummate the disposition of such shares pursuant to the plan of
distribution set forth in the registration statement.
(e) Subject to the Company's Suspension Right, if any event,
fact or circumstance requiring an amendment to a registration statement relating
to the Registrable Shares or supplement to a prospectus relating to the
Registrable Shares shall exist, immediately upon becoming aware thereof the
Company agrees to notify the Holders and prepare and furnish to the Holders a
post-effective amendment to the registration statement or supplement to the
prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Shares, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(f) The Company agrees to use commercially reasonable efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the registration statement on each securities
exchange on which securities of the same class are then listed.
(g) The Company agrees to use its best efforts to comply with
the Securities Act and the Exchange Act, and, as soon as reasonably practicable
following the end of any fiscal year during which a registration statement
effecting a Registration of the Registrable Shares shall have been effective, to
make available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.
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(h) The Company agrees to cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Shares to be sold pursuant to a Registration and not bearing any
Securities Act legend; and enable certificates for such Registrable Shares to be
issued for such numbers of shares and registered in such names as the Holders
may reasonably request at least two business days prior to any sale of
Registrable Shares.
(i) If Holders notify the Company that they intend to effect an
underwritten offering of at least 300,000 Registrable Shares, the Company will
make available for inspection by any Holder disposing of such Registrable
Shares, any underwriter of such offering, and any attorney, accountant or other
agent retained by any such Holder or underwriter (collectively, the
"INSPECTORS"), all financial and other records and other information, pertinent
corporate documents and properties of any of the Company and its subsidiaries
(collectively, the "RECORDS"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility; PROVIDED, HOWEVER, that the
Records that the company determines, in good faith, to be confidential shall not
be disclosed to any Inspector unless (i) such Inspector signs a confidentiality
agreement reasonably satisfactory to the Company (which shall permit the
disclosure of such Records in such Registration Statement or the related
Prospectus if necessary to avoid or correct a material misstatement in or
material omission from such Registration Statement or Prospectus), (ii) after
consultation with counsel for the applicable Inspectors, the Holders and the
Company, the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in such Registration Statement or (iii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, PROVIDED that each Holder shall, promptly after learning
that disclosure of such Records is sought in a court having jurisdiction, give
notice to the Company and allow the Company, at the Company's expense, to
undertake appropriate action to prevent disclosure of such Records.
(j) If Holders notify the Company that they intend to effect an
underwritten offering of at least 300,000 Registrable Shares, the Company will
enter into such agreements (including an underwriting agreement in form, scope
and substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders owning a majority of
the Registrable Shares being sold in connection therewith (including those
reasonably requested by the managing underwriters) in order to expedite or
facilitate the disposition of such Registrable Shares and, in such connection,
(i) use its commercially reasonable efforts to obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters and
counsel to the Holders disposing of Registrable Shares), addressed to each
Holder selling Registrable Shares thereby and each of the underwriters as to the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such counsel and
underwriters, (ii) use commercially reasonable efforts to obtain "cold comfort"
or "agreed-upon-procedures" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any
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other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each Holder selling Registrable Shares
covered thereby (unless such accountants shall be prohibited from so
addressing such letters by applicable standards of the accounting profession)
and each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" or
"agreed-upon-procedures" letters in connection with underwritten offerings,
and (iii) if requested and if an underwriting agreement is entered into, make
customary representations and warranties, and provide indemnification
provisions and procedures substantially to the effect set forth in Section 4
hereof with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting or
similar agreement, or as and to the extent required thereunder.
Section 3. EXPENSES OF REGISTRATION. The Company shall pay all
Registration Expenses incurred in connection with the registration,
qualification or compliance pursuant to Section 2 hereof. The Company shall
pay the fees and disbursements (not in excess of $25,000 in the aggregate) of
one counsel, other than the Company's counsel, selected to represent the Holders
by Holders owning a majority in number of the Registrable Shares. Except as set
forth in the immediately preceding sentence, each Holder shall pay the expenses
of its own counsel. All Selling Expenses incurred in connection with the sale
of Registrable Shares by any of the Holders shall be borne by the Holder selling
such Registrable Shares.
Section 4. INDEMNIFICATION.
(a) The Company will indemnify each Holder, each Holder's
officers and directors, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities (including reasonable legal expenses), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus relating to
the Registrable Shares, or any amendment or supplement thereto, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with information furnished in
writing to the Company by such Holder or underwriter for inclusion therein.
(b) Each Holder will indemnify the Company, each of its
directors and each of its officers who signs the registration statement, each
underwriter, if any, of the Company's securities covered by such registration
statement, and each person who controls the Company or such underwriter within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (including reasonable
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legal fees and expenses) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement or prospectus, or any amendment or supplement thereto,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement or prospectus, in
reliance upon and in conformity with information furnished in writing to the
Company by such Holder for inclusion therein.
(c) Each party entitled to indemnification under this Section 4
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
omission to so notify the Indemnifying Party shall not relieve it from any
liability which it may have to the Indemnified Party otherwise than pursuant to
the provisions of this Section 4 and then, only to the extent of the actual
damages suffered by such delay in notification. The Indemnifying Party shall
assume the defense of such action, including the employment of counsel to be
chosen by the Indemnifying Party to be reasonably satisfactory to the
Indemnified Party, and payment of expenses. The Indemnified Party shall have
the right to employ its own counsel in any such case, but the legal fees and
expenses of such counsel shall be at the expense of the Indemnified Party,
unless the employment of such counsel shall have been authorized in writing by
the Indemnifying Party in connection with the defense of such action, or the
Indemnifying Party shall not have employed counsel to take charge of the defense
of such action or the Indemnified Party shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Indemnifying Party (in which case the
Indemnifying Party shall not have the right to direct the defense of such action
on behalf of the Indemnified Party), in any of which events such fees and
expenses shall be borne by the Indemnifying Party. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 4 is
unavailable to a party that would have been an Indemnified Party under this
Section in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that would have been an Indemnifying Party
hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to
the amount paid or payable by such Indemnified Party as a result of such
expenses, claims, losses, damages and liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and such Indemnified Party on the other in connection with the statement or
omission which resulted in such expenses, claims, losses, damages and
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined
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by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Indemnifying Party or
such Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and each holder of Registrable Shares agrees that it would not
be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this Section 4(d).
(e) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 5. INFORMATION TO BE FURNISHED BY HOLDERS. Each Holder shall
furnish to the Company such information as the Company may reasonably request
and as shall be required in connection with the Registration and related
proceedings referred to in Section 2 hereof. The Company's obligation to
include any Holder's Registrable Shares in a Registration hereunder shall be
subject to such Holder providing the Company with such information. The Company
shall not have any obligation to make more than three post-effective amendments
to any Registration hereunder to include any Registrable Shares of a Holder
providing such information after the effective date of such Registration, unless
such Holder agrees to pay all costs and expenses associated with any additional
post-effective amendment.
Section 6. TRANSFER OF REGISTRATION RIGHTS. The rights of each
Holder under Section 2 hereof and the related rights of each Holder hereunder
(the "RIGHTS") may be assigned by each Holder (i) if the Holder is a
corporation, to a shareholder or shareholders of such Holder, (ii) if the Holder
is a partnership, to a partner or partners of that partnership, (iii) if the
Holder is an individual, to an immediate family member, (iv) upon the death of
the Holder, to the heirs of the Holder by virtue of the Holder's will or the
laws of descent and distribution, (v) if the Holder is a corporation or a
partnership, to any Person into or with which the Holder is merged or
consolidated or to which the Holder sells all or substantially all of its
assets, (vi) in connection with a bona fide pledge of Registrable Shares, to the
pledgee, (vii) to an entity controlled by or under common control with the
Holder, or (viii) to any entity or person that acquires at least 300,000
Registrable Shares, in each case, only in connection with the transfer of
Registrable Shares issued to the Investors pursuant to the Acquisition
Agreement; PROVIDED that (w) in each case, the transferee is an Accredited
Investor, (x) such transfer is otherwise effected in accordance with applicable
securities laws and the Company shall have been provided by the transferor and
the transferee with such evidence thereof as the Company may request, including
representations by the transferee in form and content reasonably acceptable to
the Company, (y) the Company is given written notice of such transfer prior to
such transfer (or, in the case of the death of the Investor, as soon as
practicable following the death of the Investor), and (z) the transferee by
written agreement delivered to the Company acknowledges that such transferee is
bound by the
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<PAGE>
terms of this Agreement. In the event of any such permitted transfer, the
defined term "HOLDERS" shall from and after such transfer include such
transferee.
Section 7. INTENTIONALLY OMITTED.
Section 8. RULE 144 SALES.
(a) The Company covenants that, until the third anniversary of
the date hereof, it will file the reports required to be filed by the Company
under the Exchange Act, so as to enable any Holder to sell Registrable Shares
pursuant to Rule 144 under the Securities Act.
(b) In connection with any sale, transfer or other disposition
by any Holder of any Registrable Shares pursuant to Rule 144 under the
Securities Act, the Company shall cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Registrable Shares
to be sold and not bearing any Securities Act legend, and enable certificates
for such Registrable Shares to be for such number of shares and registered in
such names as the selling Holder may reasonably request at least two business
days prior to any sale of Registrable Shares.
Section 9. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and the legal relations among
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, letters of intent, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to any
party by any other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith.
(c) MODIFICATION; WAIVER. No supplement, modification,
waiver or termination of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
(d) NOTICES. All notices, consents, requests, reports,
demands or other communications hereunder (collectively, "NOTICES") shall be
in writing and may be given personally, by registered mail, or by Federal
Express (or other reputable overnight delivery service). Notices shall be
addressed as follows: (i) if to an Investor, at such Investor's address set
forth below its signature hereon, or at such other address as the
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Investor shall have furnished to the Company in writing, (ii) if to any
assignee or transferee of an Investor, at such address as such assignee or
transferee shall have furnished the Company in writing, or (iii) if to the
Company, at the following address:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
or to such other address or such other person as the addressee party shall
have last designated by notice to the other party. Any notice or other
communication required to be given hereunder to a Holder in connection with a
registration may instead be given to the designated representative of such
Holder. All Notices shall be deemed to have been given (i) when delivered
personally, (ii) three days after being sent by registered mail, or (iii) one
day after being sent by Federal Express (or other reputable overnight
delivery service).
(e) ASSIGNMENT. Except as specifically provided to the
contrary in SECTION 6, no party hereto shall have the right, power, or
authority to assign or pledge this Agreement or any portion of this
Agreement, or to delegate any duties or obligations arising under this
Agreement, voluntarily, involuntarily, or by operation of law, without the
prior written consent of the other parties hereto.
(f) SEVERABILITY. Any provision or part of this Agreement
which is invalid or unenforceable in any situation in any jurisdiction shall,
as to such situation and such jurisdiction, be ineffective only to the extent
of such invalidity and shall not affect the enforceability of the remaining
provisions hereof or the validity or enforceability of any such provision in
any other situation or in any other jurisdiction.
(g) SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and
without waiver of the provisions of SECTION 9(e), all of the rights, duties,
benefits, liabilities and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors, assigns, heirs
and legal representatives. Except as specifically set forth or referred to
herein, nothing herein expressed or implied is intended or shall be construed
to confer upon or give to any person or entity, other than the parties hereto
and their successors or permitted assigns, any rights or remedies under or by
reason of this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute one
and the same instrument.
(i) INTERPRETATION; REFERENCES. Any use of masculine,
feminine or neuter pronouns herein shall not be limiting, but shall be
construed as referring to
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persons of any gender, as the context may require. Any use of the singular
or plural form herein shall not be limiting, but shall be construed as
referring to either the plural or singular, as the context may require.
References to a "Section" are, unless otherwise specified, to a Section of
this Agreement. The Section headings of this Agreement are for convenience
of reference only and shall not be deemed to modify, explain, restrict, alter
or affect the meaning or interpretation of any provision hereof.
(j) TIME OF ESSENCE. Time shall be of the essence with respect
to all matters contemplated by this Agreement.
(k) ATTORNEYS' FEES. In the event that any party hereto brings
an action or proceeding against the other party to enforce or interpret any of
the covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
attorneys' fees, charges, disbursements and the fees and costs of expert
witnesses.
(l) WAIVER OF JURY TRIAL. Each party to this Agreement further
waives its respective right to a jury trial of any claim or cause of action
arising out of this Agreement or any dealings between any of the parties hereto
relating to the subject matter of this Agreement. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement, including,
without limitation, contract claims, tort claims and all other common law and
statutory claims. This waiver is irrevocable, meaning that it may not be
modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications to this Agreement.
(m) NEGOTIATION OF AGREEMENT. Each of the parties acknowledges
that it has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said independent counsel.
Each party and its counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law or
any legal decision that would require interpretation of any ambiguities in this
Agreement against the party that drafted it is of no application and is hereby
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intentions of the parties and this Agreement.
[SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:_________________________________________
Name:_______________________________________
Title:______________________________________
INVESTOR:
Name:
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Name:
By:_________________________________________
Name:_______________________________________
Title:______________________________________
Investor's Address:
____________________________________________
____________________________________________
____________________________________________
Phone:______________________________________
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<PAGE>
SCHEDULE A TO
REGISTRATION RIGHTS AGREEMENT
INVESTORS
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<PAGE>
EXHIBIT D
- --------------------------------------------------------------------------------
NHP INCORPORATED,
NHP FINANCIAL SERVICES, LTD.
AND
THE FIRST NATIONAL BANK OF BOSTON,
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF ________ __, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . 4
Section 3. Evidence of Rights . . . . . . . . . . . . . . . . . . . . 4
Section 4. Effect of Maturity Time. . . . . . . . . . . . . . . . . . 5
Section 5. Covenants of the Company and the Spin-Off Entity . . . . . 6
Section 6. Record Date. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7. Recapitalization of the Spin-Off Entity. . . . . . . . . . 9
Section 8. Rights of Action . . . . . . . . . . . . . . . . . . . . . 9
Section 9. Agreement of Rights Holders. . . . . . . . . . . . . . . .10
Section 10. Right Holder Not Deemed a Spin-Off Entity Shareholder. . .10
Section 11. Concerning the Rights Agent. . . . . . . . . . . . . . . .11
Section 12. Merger or Consolidation or Change of Name of Rights Agent.11
Section 13. Duties of Rights Agent . . . . . . . . . . . . . . . . . .11
Section 14. Change of Rights Agent . . . . . . . . . . . . . . . . . .13
Section 15. Termination. . . . . . . . . . . . . . . . . . . . . . .14
Section 16. Notice of Certain Events.. . . . . . . . . . . . . . . . .14
Section 17. Notices. . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 18. Supplements and Amendments . . . . . . . . . . . . . . . .16
Section 19. Successors; Certain Covenants. . . . . . . . . . . . . . .16
Section 20. Benefits of this Agreement . . . . . . . . . . . . . . . .16
Section 21. Determinations and Actions by the Board of Directors, etc.17
Section 22. Severability.. . . . . . . . . . . . . . . . . . . . . . .17
Section 23. Governing Law. . . . . . . . . . . . . . . . . . . . . . .17
Section 24. Counterparts.. . . . . . . . . . . . . . . . . . . . . . .17
Section 25. Descriptive Headings.. . . . . . . . . . . . . . . . . . .17
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of April __, 1997 (this "Agreement"),
is made and entered into by and between NHP Incorporated, a Delaware corporation
(the "Company"), NHP Financial Services, Ltd., a Delaware corporation (the
"Spin-Off Entity"), and The First National Bank of Boston, a ___________
corporation (the "Rights Agent").
RECITALS
WHEREAS, on April __, 1997, the Board of Directors of the Company
authorized and declared a dividend distribution of one right ("Right") for each
share of Common Stock, par value $.01 per share, of the Company (a "Common
Share") outstanding as of the Close of Business (as hereinafter defined) on
__________ __, 1997, (the "Record Date"), each Right representing the right to
receive, upon the Company's distribution of shares of common stock of NHP
Financial Services, Ltd., a Delaware corporation (the "Spin-Off Entity"), upon
the terms and subject to the conditions herein set forth, one-third of a Share
of the Spin-Off Entity, and further authorized and directed the issuance of one
Right with respect to each Common Share issued or delivered by the Company
(whether originally issued or delivered from the Company's treasury) after the
Record Date but prior to the Maturity Time (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms, in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined), as in effect on the
date of this Agreement.
(b) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Massachusetts (or
such other state in which the principal office of the Rights Agent is located)
are authorized or obligated by law or executive order to close.
(c) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(d) "Common Shares" shall mean the Common Stock, par value $.01
per share, of the Company.
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(e) "Company" shall mean NHP Incorporated, a Delaware
corporation.
(f) "Effective Time" shall have the meaning set forth in the
Merger Agreement.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Exchange Agent" shall mean the Exchange Agent appointed
pursuant to the Merger Agreement.
(i) "Maturity Time" shall mean the earlier of the Effective Time
of the Merger and the Close of Business on December 1, 1997; provided, however,
that if the distribution of Shares pursuant to Section 4 of this Agreement is
prohibited by the terms of any agreement to which the Company or the Spin-Off
Entity is a party as in effect on the date of this Agreement and consent to such
distribution has not been obtained, or if the distribution of Shares requires
any governmental filing or approval or the effectiveness of any filing in order
to comply with applicable law, then the Maturity Time shall be deferred until
such time as any such consent is obtained, any such prohibition is no longer in
effect and all such filings or approvals have been made or obtained or such
filings have become effective.
(j) "Merger" shall mean the merger of AIMCO/NHP Acquisition
Corp., a Maryland corporation, with and into the Company pursuant to the Merger
Agreement.
(k) "Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of April __, 1997 by and among Apartment Investment and
Management Company, a Maryland corporation, AIMCO/NHP Acquisition Corp., a
Delaware corporation, and the Company.
(l) "Nasdaq Stock Market" shall have the meaning set forth in
Rule 4200(v) of the Rules of the National Association of Securities Dealers,
Inc.
(m) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other legal entity, and shall include
any successor (by merger or otherwise) of such entity.
(n) "Recapitalization" shall mean the action required pursuant
to Section 7 of this Agreement.
(o) "Registration Statement" shall mean an appropriate
registration statement (together with all amendments thereto) under the
Securities Act or the Exchange Act (as the Company determines to be appropriate)
relating to the distribution
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of the Shares on the terms set forth herein and relating to the reoffering or
resale within 30 days after the distribution of securities acquired pursuant
to the distribution to the extent requested by any Person who reasonably
expects to be an Affiliate of the Spin-Off Entity upon completion of the
distribution and who requests inclusion of Shares it expects to hold no later
than five Business Days prior to the effectiveness of the Registration
Statement, which statement shall be filed with the SEC.
(p) "Right" shall have the meaning set forth in the Recitals to
this Agreement.
(q) "Rights Agent" shall mean The First National Bank of Boston
unless and until a successor Rights Agent shall have become such pursuant to the
terms of this Agreement, and thereafter, "Rights Agent" shall mean such
successor Rights Agent.
(r) "SEC" shall mean the Securities and Exchange Commission.
(s) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(t) "Share" shall mean a share of Common Stock, par value $.01
per share, of the Spin-Off Entity.
(u) "Share Registration Date" shall mean the date upon which the
Registration Statement shall have become effective.
(v) "Special Meeting" shall mean the meeting of the shareholders
of the Company to consider and vote on the approval of the Merger Agreement.
(w) "Spin-Off Entity" shall mean NHP Financial Services, Ltd.,
a Delaware corporation.
(x) "Subsidiary" when used with reference to any Person shall
mean any corporation or other entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(y) "Summary of Rights to Purchase Shares" shall mean the
Summary of Rights to Purchase Shares, in substantially the form of Exhibit A
attached hereto.
(z) "Transfer Agent" shall mean the transfer agent for Shares as
appointed by the Spin-Off Entity from time to time.
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<PAGE>
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company and the Spin-Off
Entity hereby appoint the Rights Agent to act as agent for the Company and the
Spin-Off Entity, and the holders of the Rights in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the New York Stock
Exchange governing transfer agents and registrars. The Company may from time to
time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem
necessary or desirable. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent. To the extent that any Co-Rights Agent takes any action pursuant to this
Agreement, such Co-Rights Agent shall be entitled to all of the rights and
protections of, and subject to all of the applicable duties and obligations
imposed upon, the Rights Agent pursuant to the terms of this Agreement.
Section 3. EVIDENCE OF RIGHTS.
(a) (i) The Rights shall be evidenced by the certificates
representing Common Shares registered in the names of the record holders
thereof, (ii) the Rights shall be transferable only in connection with the
transfer of the underlying Common Shares, and (iii) the surrender for transfer
of any certificates evidencing Common Shares in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with the
Common Shares evidenced by such certificates.
(b) On the Record Date or as promptly as practicable thereafter,
the Company shall send a copy of the Summary of Rights by first-class, postage
prepaid mail, to each record holder of Common Shares as of the Close of Business
on the Record Date, at the address of such holder shown on the records of the
Company as of such date. With respect to certificates of Common Shares
outstanding as of the Record Date and until the Maturity Time, the Rights will
be evidenced by such certificates registered in the names of the holders. Until
the Maturity Time, the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby.
(c) Rights shall be issued by the Company in respect of all
Common Shares issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
Maturity Time. Certificates evidencing such Common Shares shall have stamped
on, impressed on, printed on, written on or otherwise affixed to them the
following legend or such similar legend as the Company may deem appropriate and
as is not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the Common Shares may from time to time be
listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between NHP
Incorporated, NHP Financial
D-4
<PAGE>
Services, Ltd. and The First National Bank of Boston dated as of
April __, 1997 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of NHP Incorporated. NHP
Incorporated will mail to the holder of this Certificate a copy of
the Rights Agreement without charge promptly after receipt of a
written request therefor.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. EFFECT OF MATURITY TIME.
(a) Without any action on the part of a holder of Rights, at the
Maturity Time, all Rights shall no longer be outstanding and shall automatically
cease to exist, and each record holder of Rights shall thereafter cease to have
any rights with respect to such Rights except the right to receive, without
interest, one-third of a Share of the Spin-Off Entity for each Right and cash
for fractional shares of the Spin-Off Entity in accordance with Section 4(b).
(b) No fractional Shares shall be issued with respect to
Rights. All fractional Shares that a holder of Rights would otherwise be
entitled to receive with respect to the Rights shall be aggregated and, if a
fractional share results from such aggregation, such holder shall be entitled
to receive, in lieu thereof, an amount in cash determined by multiplying (i)
the fraction of a Share to which such holder would otherwise have been
entitled by (ii) $9.15. No interest will be paid or will accrue on any cash
paid or payable in lieu of any fractional Shares.
(c) Subject to Section 4(d), as soon as reasonably practicable
after the Maturity Time, (i) the Company shall surrender to the Transfer Agent
all certificates it holds for Shares of the Spin-Off Entity along with executed
stock transfer powers and instructions to issue certificates in the names of
holders of record of Rights immediately prior to the Maturity Time (or such
other Person as may be properly designated pursuant to Section 4(e)) in
accordance with Section 4(a) and to deliver such certificates to the Rights
Agent for the benefit of the holders of Rights, (ii) the Spin-Off Entity shall
deposit (or cause to be deposited) with the Rights Agent, for the benefit of
holders of Rights, cash in an amount sufficient to pay the aggregate cash
required to be paid for fractional shares of the Spin-Off Entity pursuant to
Section 4(b), and (iii) the Rights Agent shall mail to each holder of record of
Rights immediately prior to the Maturity Time (or such other Person as may be
properly designated pursuant to Section 4(e)) the certificates for
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<PAGE>
Shares and cash to which such holder is entitled pursuant to Sections 4(a)
and 4(b), respectively.
(d) If the Maturity Time shall be the Effective Time, then (i)
the Company may, in lieu of instructing the Transfer Agent to deliver
certificates for Shares to the Rights Agent pursuant to Section 4(c)(i),
instruct the Transfer Agent to deliver certificates for all or some of the
Shares to the Exchange Agent, and instruct the Exchange Agent to deliver
certificates for such Shares upon surrender of certificates for Common Shares in
connection with the Merger, and (ii) the Spin-Off Entity may, in lieu of
depositing cash with the Rights Agent as required pursuant to Section 4(c)(ii),
deposit all or some of the cash with the Exchange Agent to deliver upon
surrender of certificates for Common Shares in connection with the Merger.
(e) The Company may instruct the Transfer Agent to issue
certificates for Shares in the name of a person other than the record holder of
Rights, and the Rights Agent or the Exchange Agent may deliver certificates for
Shares and cash to a person other than the record holder of Rights if, prior to
the Maturity Time, the Company receives (and transmits to the Rights Agent)
instructions to issue Shares in the name of and deliver Shares and cash to
another Person and such instructions are duly signed by the record holder and,
unless such record holder is a financial institution that is a member of the
Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges'
Medallion Program (SEMP) or the New York Stock Exchange, Inc. Medallion Program
(MSP) (each such entity, an "Eligible Institution"), the signature of the record
holder is guaranteed by an Eligible Institution.
Section 5. COVENANTS OF THE COMPANY AND THE SPIN-OFF ENTITY. The
Company and the Spin-Off Entity (as appropriate) covenant and agree that from
and after the Record Date until the Maturity Time.
(a) The Company and the Spin-Off Entity shall take all such
action as may be necessary to ensure that all Shares and/or other securities
delivered upon exercise of Rights, at the time of delivery of the certificates
for such securities, shall be duly and validly authorized and issued, fully paid
and nonassessable securities.
(b) The Company shall pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Shares; PROVIDED, HOWEVER, that the Company
shall not be required to pay any transfer tax or charge which may be payable in
respect of any transfer or delivery of Shares to a Person other than, or the
issuance or delivery of certificates representing Shares in a name other than
that of, the registered holder of the Rights immediately prior to the Maturity
Time, or to issue or deliver any certificates representing Shares until any such
tax or charge shall have been paid (any such tax or charge being payable by the
holder of such Rights at the time of surrender) or until it has been established
to the Company's reasonable satisfaction that no such tax is due.
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<PAGE>
(c) The Spin-Off Entity shall, and the Company shall cause the
Spin-Off Entity to, use its best efforts (i) to file on an appropriate form, in
connection with the filing of the proxy statement with respect to the Special
Meeting or otherwise as promptly as practicable, the Registration Statement with
respect to the Shares to be delivered upon maturity of the Rights, (ii) to cause
such Registration Statement to become effective as soon as practicable after
such filing, and (iii) to cause such Registration Statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until such time as is necessary to complete the distribution of Shares in
accordance with Section 4 and any reoffering or resale included in the
Registration Statement. The Spin-Off Entity shall also, and the Company shall
also cause the Spin-Off Entity to, take such action as may be appropriate under,
or to ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the distribution of the Shares pursuant to this
Agreement. If the Spin-Off Entity shall determine that a registration statement
should be filed under any state securities laws, the Spin-Off Entity may
temporarily suspend the distribution of the Shares pursuant to this Agreement in
each relevant jurisdiction until such time as a registration statement has been
declared effective and, upon any such suspension, the Spin-Off Entity shall
issue a public announcement stating that the distribution of the Shares pursuant
to this Agreement has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding anything in this Agreement to the contrary, the Shares shall not
be distributed pursuant to this Agreement in any jurisdiction if the requisite
registration or qualification in such jurisdiction shall not have been effected
or such distribution shall not be permitted under applicable law.
(d) Notwithstanding anything in this Agreement to the contrary,
after the Record Date, the Company and the Spin-Off Entity shall not, except as
permitted by Section 18 hereof, take (or permit any of their Subsidiaries to
take) any action the purpose of which is to, or if at the time such action is
taken it is reasonably foreseeable that the effect of such action will,
eliminate or otherwise materially diminish the benefits intended to be afforded
by the Rights.
(e) Notwithstanding anything in this Agreement to the contrary,
in the event that the Company shall consolidate with or merge with or into, any
other Person other than in connection with the Merger, regardless of whether the
Company shall or shall not be the continuing or surviving corporation of such
consolidation or merger, the Maturity Time shall become the date immediately
preceding the date of the effective time or consummation of any such merger or
consolidation. Prior to the effective time or consummation of any such merger
or consolidation, the Spin-Off Entity shall, and the Company shall cause the
Spin-Off Entity to, cause a registration statement to become and remain
effective with respect to the distribution of Shares pursuant to this Agreement.
(f) The Spin-Off Entity shall, and the Company shall cause the
Spin-Off Entity to, conduct the operations of the Spin-Off Entity in the
ordinary and usual
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course of business and consistent with past practice and use reasonable
efforts to keep available the services of its present officers and key
employees and preserve the goodwill and business relationships with all
Persons having business relations with it. Without limiting the generality
of the foregoing, and except as otherwise expressly permitted by this
Agreement, prior to the Maturity Time, the Spin-Off Entity shall not, and the
Company shall not permit the Spin-Off Entity to:
(i) transfer the assets of the Spin-Off Entity other
than in the ordinary course of business;
(ii) issue, sell, pledge or dispose of, grant or
otherwise create, or agree to issue, sell, pledge or dispose of, grant
or otherwise create any capital stock or other equity securities, any
debt or other securities convertible into or exchangeable for any of
its capital stock or other equity securities other than in connection
with a stock dividend, subdivision, combination or reclassification or
the exercise of options, warrants and other rights to acquire
securities issued and outstanding as of the Record Date except that
the Spin-Off Entity may (W) issue options (and securities issuable
upon exercise of such options) in connection with an amendment of
outstanding options to acquire Common Shares of the Company so that
each such option includes the right to receive the number of Shares
that would be distributed in connection with Rights that would be
associated with Common Shares obtainable upon exercise of such
options, (X) issue options (and Shares obtainable upon exercise of
such options) to acquire up to an additional 338,000 Shares (assuming
completion of the Recapitalization), provided that such options are
issued in connection with an employee stock option plan duly adopted
by the Spin-Off Entity, (Y) issue an additional 6,000 Shares (assuming
completion of the Recapitalization), provided that such Shares are
issued only to employees of the Spin-Off Entity and (Z) issue or agree
to issue Shares for an aggregate consideration of $5,000,000 at a
price per Share such that, if such Shares were issued immediately
after the Recapitalization, the price paid per Share would be $9.15;
or
(iii) declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock (other than Shares),
property or otherwise, with respect to any of its capital stock or
other equity securities.
(g) The Company shall not:
(i) sell, pledge, distribute, dispose of or otherwise
transfer and shall not agree to sell, pledge, distribute, dispose of
or otherwise transfer any Shares except pursuant to the Rights; and
(ii) issue, sell, pledge or dispose of, grant or
otherwise create any Common Shares or other equity security to which
Rights attach, any debt or other securities convertible into or
exchangeable for Common Shares or
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<PAGE>
any other equity security to which Rights attach other than in
connection with a stock dividend, subdivision, combination or
reclassification or the exercise of options, warrants and other
rights to acquire securities issued and outstanding as of the
Record Date.
(h) The Company and the Spin-Off Entity shall use their best
efforts to obtain any consent and to make any filings or obtain any approvals
necessary to distribute the Shares pursuant to Section 4 of this Agreement at or
prior to the Maturity Time.
Section 6. RECORD DATE. Each Person in whose name any certificate
representing Shares is issued pursuant to Section 4 shall for all purposes be
deemed to have become the holder of record of the Shares represented thereby on,
and such certificate shall be dated, the Maturity Time; PROVIDED, HOWEVER, that
if the Maturity Time is a date upon which the share transfer books of the Spin-
Off Entity are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Share transfer books of the Spin-Off Entity
are open.
Section 7. RECAPITALIZATION OF THE SPIN-OFF ENTITY. As soon as
practicable on or after the Maturity Time, the Spin-Off Entity shall, and the
Company shall cause the Spin-Off Entity to, (i) declare a dividend on the Shares
payable in Shares, (ii) subdivide the outstanding Shares or (iii) combine the
outstanding Shares into a smaller number of Shares, to the extent necessary so
that the number of Shares issued and outstanding immediately thereafter is equal
to the number of Rights outstanding; immediately prior to the Maturity Time
divided by three.
Section 8. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 11 and Section 13 hereof, are vested in the respective
registered holders of the Common Shares; and any registered holder of any
Common Shares, without the consent of the Rights Agent or of the holder of
any other Common Shares, may in his, her or its own behalf and for his, her
or its own benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his, her or its right to exercise the Rights evidenced by such Common Shares
in the manner provided in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and shall be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to this Agreement. Holders of Rights shall be entitled to recover
the reasonable costs and expenses, including reasonable attorneys fees,
incurred by them in any action to enforce the provisions of this Agreement.
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<PAGE>
Section 9. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same shall be deemed to have consented and agreed with the Company
and the Rights Agent and with every other holder of a Right that:
(a) Until the Maturity Time, the Rights shall be transferable
only in connection with the transfer of the Common Shares;
(b) Except as provided in Section 4(e), the Company and the
Rights Agent may deem and treat the person in whose name the associated Common
Share certificate is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
associated Common Share certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(c) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon maturity of a Right, except
as otherwise provided in Section 4(b) hereof; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, that the Company shall use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 10. RIGHT HOLDER NOT DEEMED A SPIN-OFF ENTITY SHAREHOLDER.
No holder, as such, of any Right shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Shares or any other securities of
the Spin-Off Entity which may at any time be issuable in respect of the Rights,
nor shall anything contained herein be construed to confer upon the holder of
any Right, as such, any of the rights of a shareholder of the Spin-Off Entity or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 16 hereof), or to receive dividends
or subscription rights, or otherwise, until the Shares shall have been
distributed in accordance with the provisions of this Agreement.
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<PAGE>
Section 11. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, suit, action, proceeding or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided herein shall survive the distribution of
Shares in respect of the Rights.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
certificate evidencing Common Shares or other securities of the Company or
certificate evidencing Shares or other securities of the Spin-Off Entity,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 13 hereof.
Section 12. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 14
hereof.
Section 13. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company, the Spin-Off Entity and the holders of
Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
D-11
<PAGE>
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company or the Spin-Off Entity prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the President or any Senior Vice President of the Company
or the Spin-Off Entity, as appropriate, and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Rights Agent); nor shall it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement, nor shall it be responsible for any adjustment
required under the provisions of Section 7 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
maturity of Rights after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock or other securities to be
issued pursuant to this Agreement or as to whether any shares of stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company and the Spin-Off Entity agree that they will
perform, execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President or any Vice President of the
Company or the Spin-Off Entity, as appropriate, and to apply to such persons for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
D-12
<PAGE>
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or the Spin-Off Entity or become pecuniarily
interested in any transaction in which the Company or the Spin-Off Entity may be
interested, or contract with or lend money to the Company or the Spin-Off Entity
or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company, the Spin-Off Entity or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company or the Spin-Off Entity resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof. The Rights Agent
shall not be under any duty or responsibility to insure compliance with any
applicable federal or state securities laws in connection with the issuance,
transfer or exchange of Rights.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
Section 14. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 calendar days' notice in writing mailed to the Company, the
Spin-Off Entity and to each transfer agent of the Common Shares and Shares by
registered or certified mail, and to the holders of the Rights by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 calendar days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Shares by registered or certified mail, and to the holders of
the Rights by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor Rights Agent. If the Company shall fail to make such appointment
within a period of 30 calendar days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent, then the registered holder of any
Rights may apply to any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be a corporation organized and doing business under
the laws of the United States or of any other state of the United States so long
as such corporation is in good standing and is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as
D-13
<PAGE>
successor Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares and the Shares, and mail a notice thereof
in writing to the registered holders of the Rights. Failure to give any
notice provided for in this Section 14, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 15. [Intentionally omitted.]
Section 16. NOTICE OF CERTAIN EVENTS.
(a) In case, after the Record Date, the Company or the Spin-Off
Entity shall propose (i) to pay any dividend payable in stock of any class to
the holders of Shares or to make any other distribution to the holders of Shares
(other than a regular periodic cash dividend), (ii) to offer to the holders of
Shares rights, options or warrants to subscribe for or to purchase any
additional Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Shares (other
than a reclassification involving only the subdivision of outstanding Shares),
(iv) to effect any consolidation or merger (other than the Merger) into or with,
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of assets or earning power (including, without limitation, securities creating
any obligation on the part of the Company and/or any of its Subsidiaries)
representing more than 50% of the assets and earning power of the Company and
its Subsidiaries, taken as a whole, to any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right, in accordance with
Section 17 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution or offering of
rights, options or warrants, or the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, liquidation, dissolution,
or winding up is to take place and the date of participation therein by the
holders of the Shares, if any such date is to be fixed, and such notice shall be
so given, in the case of any action covered by clause (i) or (ii) above, at
least 10 calendar days prior to the record date for determining holders of the
Common Shares for purposes of such action, and, in the case of any such other
action, at least 10 calendar days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares, whichever shall be the earlier.
D-14
<PAGE>
(b) Upon the occurrence of the Special Meeting or the
termination of the Merger Agreement, the Company shall as soon as practicable
thereafter, make a public announcement and give to the Rights Agent and each
holder of a Right, in accordance with Section 17 hereof, a notice of the
occurrence of such event, which announcement and notice shall specify the
results of the vote on the approval of the Merger Agreement or the fact of the
termination of the Merger Agreement, and the consequences of the event to
holders of Rights; provided that no notice need be given if the Maturity Time is
expected to occur within 10 Business Days of the occurrence of the Special
Meeting.
Section 17. NOTICES.
(a) Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
NHP Incorporated
8065 Leesburg Pike
Suite 400
Vienna, Virginia 22182-2738
Attention: President and Chief Executive Officer
(b) Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right to or on the Spin-Off
Entity shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
NHP Financial Services, Ltd.
1593 Spring Hill Road, Suite 400
Vienna, Virginia 22182
Attention: President and Chief Executive Officer
(c) Subject to the provisions of Section 14 hereof, any notice
or demand authorized by this Agreement to be given or made by the Company or the
Spin-Off Entity, or by the holder of any Right to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
________________________
________________________
________________________
Attention:
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<PAGE>
(d) Notices or demands authorized by this Agreement to be given
or made by the Company, the Spin-Off Entity or the Rights Agent to the holder of
any Right certificate evidencing Common Shares shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Company.
Section 18. SUPPLEMENTS AND AMENDMENTS. Subject to the last sentence
of this Section 18, if the Company so directs, the Company and the Rights Agent
shall supplement or amend this Agreement without the approval of any holders of
Rights (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable, which supplement or amendment shall not, in the good
faith determination of the Board of Directors of the Company, adversely affect
the interests of the holders of Rights (so long as the duties, liabilities and
indemnifications of the Rights Agent are not affected). Upon the delivery of a
certificate from an officer of the Company which states that the proposed
supplement or Amendment is in compliance with the terms of this Section 18, the
Rights Agent shall execute such supplement or amendment; provided, however, that
the failure or refusal of the Rights Agent to execute such supplement or
amendment shall not affect the validity of any supplement or amendment adopted
by the Company, any of which shall be effective in accordance with the terms
thereof. Notwithstanding anything in this Agreement to the contrary, no
supplement or Amendment shall be made which increases the period of time
remaining until the Maturity Time or terminates the Rights or makes the Rights
subject to redemption without the consent of the holders of a majority of the
issued and outstanding Rights, and this Agreement may be amended in any respect
upon the agreement of the Company, the Spin-Off Entity and the Rights Agent if
the consent of the holders of a majority of the issued and outstanding Rights
has been obtained with respect to such amendment.
Section 19. SUCCESSORS; CERTAIN COVENANTS. All the covenants and
provisions of this Agreement by or for the benefit of the Company, the Spin-Off
Entity or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 20. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Spin-Off
Entity, the Rights Agent and the holders of the Rights any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Spin-Off Entity, the Rights Agent
and the holders of the Rights.
Section 21. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration
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<PAGE>
of this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, to amend the Agreement and whether any
proposed amendment adversely affects the interests of the holders of Rights).
For all purposes of this Agreement, any calculation of the number of Shares
or Common Shares or other securities outstanding at any particular time shall
be made in accordance with the last sentence of Rule l3d-3(d)(l)(i) under the
Exchange Act as in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board of Directors of the Company in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights.
Section 22. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 23. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the internal
substantive laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within such State.
Section 24. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 25. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Remainder of page left intentionally blank.]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
Attest:
NHP INCORPORATED
- ----------------------- -----------------------
Name: Name:
Title: Title:
[SEAL]
Attest:
NHP FINANCIAL SERVICES, INC.
- ----------------------- -----------------------
Name: Name:
Title: Title:
[SEAL]
Attest:
THE FIRST NATIONAL
BANK OF BOSTON
- ----------------------- -----------------------
Name: Name:
Title: Title:
D-18
<PAGE>
EXHIBIT A
SUMMARY OF RIGHTS TO
SHARES OF NHP FINANCIAL SERVICES, LTD.
The Board of Directors of NHP Incorporated (the "Company") has
declared a dividend distribution of one right (a "Right") for each outstanding
share of common stock, par value $.01 per share (the "Common Shares"), of the
Company. The distribution is payable on April __, 1997 (the "Record Date") to
the shareholders of record as of the close of business on the Record Date. Each
Right entitles the registered holder to receive from the Company upon maturity
of the Rights one-third of a share (the "Shares") of common stock, par value
$.01 per share, of NHP Financial Services, Ltd., a Delaware corporation (the
"Spin-Off Entity"), or any successor thereof, subject to the terms and
conditions set forth in a Rights Agreement, dated as of April__, 1997 (the
"Rights Agreement "), between the Company, the Spin-Off Entity and The First
National Bank of Boston as Rights Agent (the "Rights Agent "). No fractional
Shares will be issued and cash will be paid in lieu of fractional Shares at the
rate of $9.15 per Share. The distribution of Shares pursuant to the Rights will
result in 100% of the equity of the Spin-Off Entity being distributed to the
holders of Rights. Rights will also be issued with respect to any Common Share
issued prior to the time Shares become distributable in respect of Rights.
The Rights Agreement provides that the right to receive the Shares
shall not mature until the earlier of the Effective Time of the merger (the
"Merger") of a subsidiary of Apartment Investment and Management Company
("AIMCO") with and into the Company pursuant to an Agreement and Plan of Merger
dated as of April __, 1997 by and among AIMCO, such subsidiary and the Company
(the "Merger Agreement") December 1, 1997 (the time at which the Rights mature
being referred to as the "Maturity Time").
The Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificates. Until the Maturity Time new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Maturity Time, the surrender for transfer of any certificates for Common Shares
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificates.
The Rights Agreement also contains certain covenants of the Company
and the Spin-Off Entity proscribing the following while the Rights are
outstanding: (i) a transfer of the assets of the Spin-Off Entity other than in
the ordinary course of business; (ii) issuance of securities by the Company
other than in connection with a stock dividend, subdivision, combination or
reclassification or the exercise of options, warrants and other rights to
acquire securities issued and outstanding as of the Record Date; (iii) issuance
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<PAGE>
of securities by the Spin-Off Entity other than in connection with a stock
dividend, subdivision, combination or reclassification or the exercise of
options, warrants and other rights to acquire securities issued and outstanding
as of the Record Date plus (W) the Spin-Off Entity may issue options (and
securities issuable upon exercise of such options) in connection with an
amendment of outstanding options to acquire Common Shares of the Company so that
each such option includes the right to receive the number of Shares that would
be distributed in connection with Rights that would be associated with Common
Shares obtainable upon exercise of such options, (X) the Spin-Off Entity may
issue options (and Shares obtainable upon exercise of such options) to acquire
up to an additional 338,000 Shares (assuming completion of the Recapitalization
contemplated by the Rights Agreement), provided that such options are issued in
connection with an employee stock option plan duly adopted by the Spin-Off
Entity, (Y) the Spin-Off Entity may issue an additional 6,000 Shares (assuming
completion of the Recapitalization contemplated by the Rights Agreement),
provided that such Shares are issued only to employees of the Spin-Off Entity
and (Z) issue or agree to issue Shares for an aggregate consideration of
$5,000,000 at a price expected to be $9.15 per Share (assuming completion of the
Recapitalization contemplated by the Rights Agreement); and (iv) the operation
of the Spin-Off Entity otherwise than in the ordinary course of business.
The Rights Agreement may be amended by the Company without the
approval of any holders of Right Certificates in certain events, including
amendments which add other events requiring adjustment to the number of Shares
or other securities issuable upon the exercise of the Rights provided that no
amendment may be made which (i) changes the number of Shares that may be
distributed in any way that results in less than all Shares held by the Company
at the Maturity Time being distributed in respect of the Rights, or
(ii) increases the period of time remaining until the Maturity Time, without the
consent of the holders of a majority of the issued and outstanding Rights, and
the Rights Agreement may be amended in any respect upon the agreement of the
Company, the Spin-Off Entity and the Rights Agent if the consent of the holders
of a majority of the issued and outstanding Rights has been obtained with
respect to such amendment.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights is as of April __, 1997, does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by this reference.
DA-2
<PAGE>
EXHIBIT E
FORM OF TRUST AGREEMENT
This Trust Agreement (the "Agreement") is made and entered this
________day of April, 1997 by and between _____________________, a ________
corporation ("AIMCO"), and [Demeter Holdings Corporation, a Massachusetts
corporation ("Demeter")], [Capricorn Investors, L.P., a Delaware Limited
Partnership ("Capricorn")] [other Capricorn Investors] (the "Seller").
WHEREAS, AIMCO has acquired ____ shares (the "Shares") of Common
Stock, par value $.01 per share ("NHP Stock") of NHP Incorporated, a Delaware
corporation ("NHP") from the Seller pursuant to that certain Stock Purchase
Agreement dated as of April , 1997 (the "Stock Purchase Agreement"), and
WHEREAS, in order to implement certain provisions of the Stock
Purchase Agreement, AIMCO and the Seller desires to enter into this Agreement on
the terms and conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the parties agree as follows:
Section 1. DEFINITIONS. Initially capitalized terms used in this
Agreement shall have the meanings ascribed thereto in the Stock Purchase
Agreement unless otherwise defined herein.
Section 2. TRUST ARRANGEMENTS. In furtherance of Section 2.1 and
5.8(c) of the Stock Purchase Agreement, AIMCO has agreed that the Seller shall
retain beneficial ownership of all Rights relating to the Shares, and that AIMCO
shall hold such Rights in trust for the benefit of the Seller. In furtherance
of the foregoing, upon and after receipt of the consideration referred to in
Section 2.2(b) of the Stock Purchase Agreement, AIMCO shall become record holder
of and obtain legal title to the Shares, and without any additional action by
the Seller or AIMCO, the Seller shall remain the beneficial owner of the Rights
with all of the rights (including without limitation the right to exercise the
Rights) and any obligations of any holders of the Rights. AIMCO agrees to not
sell, transfer or otherwise convey in any respect the rights or interests of the
Seller relating to the Rights retained by the Seller hereunder (it being
understood that a sale of the Shares transfers record ownership of the Rights
and shall not be deemed to sell, transfer or otherwise convey in any respect the
rights or interests of the Seller relating to the Rights retained by the Seller
hereunder and shall not be deemed to violate this Section 2 ).
Section 3. IRREVOCABLE PROXY. AIMCO hereby constitutes and appoints
the Seller as proxy for AIMCO, with full power of substitution and hereby
authorizes and empowers the Seller to represent and vote and take all action
with respect to, in its
E-1
<PAGE>
sole discretion (including without limitation the right to exercise the
Rights or amend the Rights Agreement), Rights attached to all of the Shares.
This proxy is coupled with an interest and shall be effective for so long as
AIMCO shall hold the Rights in trust and for the benefit of the Seller
hereunder and shall not be earlier revoked, withdrawn, amended or modified
in any respect. Notwithstanding any other provision of this Agreement,
subject to Section 4(e) hereof, AIMCO shall retain all rights with respect to
the Shares (other than the Rights) and shall retain all rights to vote such
Shares, receive dividends in respect of the Shares and sell, assign, transfer
and dispose of the Shares.
Section 4. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement and the legal relations among
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of The Commonwealth of Massachusetts, without regard to its
principles of conflicts of law.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, letters of intent, negotiations
and discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements, express or implied, made to any
party by any other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith.
(c) MODIFICATION; WAIVER. No supplement, modification, waiver
or termination of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any provision of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
(d) NOTICES. All notices, consents, requests, reports, demands
or other communications hereunder (collectively, "NOTICES") shall be in writing
and may be given personally, by registered mail, or by Federal Express (or other
reputable overnight delivery service):
if to AIMCO, to it at:
1873 South Bellaire Street, 17th Floor
Denver, Colorado 80222-4348
Attention: Mr. Terry Considine
Telephone: (303) 757-8600
and
E-2
<PAGE>
28200 Highway 189, Building F-240
P.O. Box 1060
Lake Arrowhead, California 92352
Attention: Mr. Peter K. Kompaniez
Telephone: (909) 336-4821
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rod A. Guerra, Esq.
Telephone: (213) 687-5000
if to the Seller, to it at:
_____________________________
_____________________________
_____________________________
_____________________________
with a copy to:
_____________________________
_____________________________
_____________________________
_____________________________
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. All Notices shall be deemed to
have been given (i) when delivered personally, (ii) three days after being sent
by registered mail, or (iii) one day after being sent by Federal Express (or
other reputable overnight delivery service).
(e) ASSIGNMENT. No party hereto shall have the right, power, or
authority to assign or pledge this Agreement or any portion of this Agreement,
or to delegate any duties or obligations arising under this Agreement,
voluntarily, involuntarily, or by operation of law, without the prior written
consent of the other parties hereto PROVIDED; HOWEVER, that AIMCO may transfer
the Shares to any person or entity. Notwithstanding any such assignment, AIMCO
shall remain liable for any failure to perform all obligations required to be
performed by it hereunder.
(f) SEVERABILITY. Any provision or part of this Agreement which
is invalid or unenforceable in any situation in any jurisdiction shall, as to
such situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not
E-3
<PAGE>
affect the enforceability of the remaining provision hereof or the validity
or enforceability of any such provision in any other situation or in any
other jurisdiction.
(g) SUCCESSORS AND ASSIGNS; THIRD PARTIES. All of the rights,
duties, benefits, liabilities and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors, assigns, heirs and
legal representatives. Except as specifically set forth or referred to herein,
nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any person or entity, other than the parties hereto and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
(h) COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
(i) INTERPRETATION; REFERENCES. Any use of masculine, feminine
or neuter pronouns herein shall not be limiting, but shall be construed as
referring to persons of any gender, as the context may require. Any use of the
singular or plural form herein shall not be limiting, but shall be construed as
referring to either the plural or singular, as the context may require.
References to a "Section" are, unless otherwise specified, to a Section of this
Agreement. The Section headings of this Agreement are for convenience of
reference only and shall not be deemed to modify, explain, restrict, alter or
affect the meaning or interpretation of any provision hereof.
(j) TIME OF ESSENCE. Time shall be of the essence with respect
to all matters contemplated by this Agreement.
(k) ATTORNEYS' FEES. In the event that any party hereto brings
an action or proceeding against the other party to enforce or interpret any of
the covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
attorneys' fees, charges, disbursements and the fees and costs of expert
witnesses.
(l) WAIVER OF JURY TRIAL. Each party to this Agreement further
waives its respective right to a jury trial of any claim or cause of action
arising out of this Agreement or any dealings between any of the parties hereto
relating to the subject matter of this Agreement. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this Agreement, including,
without limitation, contract claims, tort claims and all other common law and
statutory claims. This waiver is irrevocable, meaning that it may not be
modified either orally or in writing, and this waiver shall apply to any
subsequent amendments, supplements or other modifications, supplements or other
modifications to this Agreement.
E-4
<PAGE>
(m) NEGOTIATION OF AGREEMENT. Each of the parties acknowledges
that it has been represented by independent counsel of its choice throughout all
negotiations that have preceded the execution of this Agreement and that it has
executed the same with consent and upon the advice of said independent counsel.
Each party and its counsel cooperated in the drafting and preparation of this
Agreement and the documents referred to herein, and any and all drafts relating
thereto shall be deemed the work product of the parties and may not be construed
against any party by reason of its preparation. Accordingly, any rule of law or
any legal decision that would require interpretation of any ambiguities in this
Agreement against the party that drafted it is of no application and is hereby
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intentions of the parties and this Agreement.
(n) REMEDIES. In the event of a breach by any party of this
Agreement, a non-breaching party, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The parties hereby
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by any of them of any of the provisions of this
Agreement and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate.
AIMCO:
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SELLER:
-----------------------------------
By:
--------------------------------
Authorized Signatory
By:
--------------------------------
Authorized Signatory
E-5
<PAGE>
[The Disclosure Schedule listed in the table of contents
preceding the Stock Purchase Agreement, dated as of April 16, 1997, by and among
Apartment Investment and Management Company, Demeter Holdings Corporation and
Capricorn Investors, L.P., have been omitted. A copy of such
Schedules will be furnished supplementally to the Securities and Exchange
Commission upon request.]
<PAGE>
EXHIBIT 99.1
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
ANNOUNCES FIRST QUARTER RESULTS
DENVER, COLORADO, April 23, 1997 (NYSE:AIV)
Apartment Investment and Management Company (the "AIMCO") announced that
Cash Earned For Shareholders ("CEFS") was $10,979,000 or $0.56 per common
share for the quarter ended March 31, 1997 compared to $6,768,000 or $0.49
per common share for the quarter ended March 31, 1996, a 14.3% increase on a
per share basis. AIMCO measures its economic profitability based on Funds
From Operations less a minimum annual provision for capital replacements of
$300 per apartment unit, which the Company defines as CEFS.
Funds From Operations ("FFO") for the first quarter of 1997 equaled
$12,512,000 or $0.64 per common share, exceeding industry analysts' consensus
estimates of $0.63, compared to $7,888,000 or $0.57 per common share for the
quarter ended March 31, 1996, a 12.3% increase on a per share basis.
For the first quarter of 1997 "same store" sales for 51 properties
consisting of 12,863 apartment units owned during the first quarters of both
1997 and 1996 showed an increase in revenues of 4.2%, operating expenses
remained stable, resulting in an increase in net operating income of 6.8%
over the comparable quarter of 1996. Weighted average physical occupancy for
the 51 properties increased approximately 1% from 93.8% at March 31, 1996 to
94.5% at March 31, 1997. Average monthly rent per occupied unit increased
from $541 at March 31, 1996 to $563 at March 31, 1997, a 4.1% increase.
The first quarter 1997 earnings conference call will be conducted on
Monday, April 28, 1997 at 3:00 p.m. Eastern time. You can participate in the
conference call by dialing (800) 374-0616 approximately five minutes before
the conference call is scheduled to begin and indicating that you wish to
join the Apartment Investment and Management Company first quarter results
conference call.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Earnings Release - April 23, 1997
Page Two
AIMCO is a real estate investment trust with headquarters in Denver,
Colorado and 8 regional and local offices, which holds a geographically
diversified portfolio of apartment communities, primarily serving the middle
market. As of March 31, 1997, AIMCO owned or controlled 94 apartment
communities containing 23,764 apartment units and managed 131 apartment
communities containing 17,731 apartment units for third parties and
affiliates, bringing the total managed portfolio to 225 apartment communities
containing 41,495 apartment units located primarily in the sunbelt regions of
the United States.
Summary:
Quarter Ended Quarter Ended
March 31, 1997 March 31, 1996
-------------- --------------
Funds From Operations $12,512,000 $7,888,000
Cash Earned For Shareholders 10,979,000 6,768,000
PER COMMON SHARE
Funds From Operations $0.64 $0.57
Cash Earned For Shareholders 0.56 0.49
Summary financial statements and fact sheet are attached.
Contact: Leeann Morein, Chief Financial Officer (303) 757-8101
Peter Kompaniez, Vice Chairman (909) 336-4821
E-Mail: investor @po-admin.ccmail.compuserve.com
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Highlights of First Quarter 1997
- - AIMCO entered into the Stock Purchase Agreement with Demeter Holdings
Corporation ("Demeter"), an affiliate of Harvard Private Capital Group,
Inc. and Capricorn Investors, L.P. ("Capricorn"), majority shareholders
owning 53% of NHP Incorporated ("NHP"), the nation's second largest manager
of apartment communities, with over 700 apartment communities containing
135,000 apartment units under management at March 31, 1997. For each share
of NHP owned by Demeter and Capricorn, AIMCO will either pay $20 per share
or will issue 0.74766 shares of AIMCO common stock for the 6.93 million
shares of NHP held by Demeter and Capricorn. AIMCO is obligated to pay at
least $59.5 million in cash.
- - AIMCO completed the Merger Agreement for the remaining shareholders'
interest in NHP. For each share of NHP, the shareholder can elect to
receive either $10 in cash and 0.37383 shares of AIMCO common stock or
0.74766 shares of AIMCO common stock. In addition, all shareholders will
receive rights to shares of NHP Financial Services, Ltd., NHP's commercial
mortgage banking subsidiary. AIMCO will deliver its rights in NHP Financial
Services, Ltd. to Demeter and Capricorn;
- - AIMCO is continuing to negotiate, amplify and expand the terms of a
definitive agreement with Demeter, Capricorn and another affiliate of
Demeter for the acquisition of certain entities that own interests in
conventional and affordable multifamily apartment properties managed by NHP;
- - AIMCO completed a public offering of 2,015,000 shares of its Class A
Common Stock at a price of $26.75 per common share. The net proceeds of $51
million were used to repay a portion of the Company's acquisition related
indebtedness;
- - AIMCO has announced the planned acquisitions in separate transactions of
1,238 apartment units in four properties located in Aventura, Florida (702
units), Tustin, California (292 units) and Orlando, Florida (244 units). The
aggregate purchase price for the properties is $96.3 million, which includes
$2.2 million which AIMCO has budgeted for initial capital expenditures. The
consideration includes the assumption of existing loans totaling $55.5
million, $28.3 million in cash and the issuance of 450,000 shares of Class A
Common Stock and Operating Partnership Units ("OP Units") as $27.875 per
share/OP unit for an aggregate value of $12.5 million;
- - AIMCO entered into a new $100 million anticipatory hedge transaction which
will mature in the third quarter of 1997 in order to fix the rate on debt,
expected to be incurred in conjunction with future transactions. AIMCO
locked in the twelve year treasury rate at 6.94%;
- - AIMCO appointed Dave Williams as Executive Vice President - Property
Operations and established the START team, organized by Executive Vice
President Steve Ira, to perform acquisition due diligence, supervise
construction and redevelopment projects and the initial takeover of
acquisition properties; and
- - During the first quarter, 543,800 OP units were redeemed for common stock.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the Quarter For the Quarter
Ended Ended
March 31, 1997 March 31, 1996(1)
--------------- -----------------
<S> <C> <C>
RENTAL PROPERTY OPERATIONS
Rental and other property revenues $ 38,040 $22,451
Property operating expenses (14,456) (8,704)
Owned property management expense (1,321) (660)
-------- -------
Income from property operations before
depreciation 22,263 13,087
Depreciation (7,455) (4,470)
-------- -------
Income from property operations 14,808 8,617
-------- -------
SERVICE COMPANY BUSINESS(1)
Management fees and other income 2,444 1,848
Management and other expenses (1,420) (1,260)
Corporate overhead allocation (147) (149)
Amortization of management company goodwill (237) (114)
Other assets depreciation and amortization (88) (48)
-------- -------
Income from service company business 552 277
Minority interests in service company business (1) 14
-------- -------
Company's share of income from service
company bus 551 291
-------- -------
-------- -------
GENERAL AND ADMINISTRATIVE EXPENSES (351) (323)
Interest expense (9,452) (5,395)
Interest income 507 114
Non-controlled interest in partnerships (369) --
-------- -------
Income before extraordinary item and
minority interest in Operating Partnership 5,694 3,304
Extraordinary item - early extinguishment of
debt (269) --
-------- -------
Income before minority interest in Operating
Partnership 5,425 3,304
Minority interest in Operating Partnership (841) (494)
-------- -------
Net income $ 4,584 $ 2,810
-------- -------
-------- -------
Weighted average common shares and common
share equivalents outstanding 16,586 11,860
-------- -------
-------- -------
Net income per common share and common share
equivalent $0.28 $0.24
-------- -------
-------- -------
</TABLE>
(1) Amounts have been restated to reflect the service business subsidiaries
on a consolidated basis in adoption of the Emerging Issues Task Force
("EITF") Issue Number 95-6 "Accounting by a Real Estate Investment Trust for
an Investment in a Service Corporation."
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
FUNDS FROM OPERATIONS AND
CASH EARNED FOR SHAREHOLDERS
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
For the Quarter For the Quarter
Ended Ended
March 31, 1997 March 31, 1996
--------------- ---------------
<S> <C> <C>
Income before a extraordinary item and
minority interest in Operating
Partnership $ 5,694 $ 3,304
Owned properties depreciation 6,581 4,470
Amortization of management company goodwill 237 114
------- -------
Funds From Operations(1) 12,512 7,888
Capital Replacements(2) (1,533) (1,120)
------- -------
Cash Earned For Shareholders $10,979 $ 6,768
------- -------
------- -------
Weighted average common shares and Operating
Partnership units outstanding:
Common shares and common share equivalents 16,586 11,860
Operating Partnership units 3,040 2,080
------- -------
19,626 13,940
------- -------
------- -------
PER COMMON SHARE:
Funds From Operation $0.64 $0.57
Cash Earned For Shareholders 0.56 0.49
</TABLE>
(1) Funds From Operations computations conform to NAREIT's definition and are
adjusted to add back amortization of management company goodwill and deduct
payment of preferred stock dividend.
(2) Capital replacements of $547 were unspent and reserved for the quarter
ended March 31, 1997. In addition, prior period reserves of $586 remain
from the year ended December 31, 1996.
<PAGE>
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
OTHER HIGHLIGHTS
(in thousands, except unit data)
(unaudited)
<TABLE>
<CAPTION>
Percentage
March 31 March 31 (Increase)
1997 1996 (Decrease)
---------- ---------- ----------
<S> <C> <C> <C>
OTHER DATA:
Number of apartment units owned 23,764 15,028 58.1%
Total Portfolio:
Weighted average physical occupancy
at end of period (1) 94.2% 93.7% 0.5%
Average monthly rent per occupied unit
at end of period (1) $566 $530 6.8%
Same Store (51 properties, 12,863
apartment units):
Weighted average physical occupancy at
end of period 94.5% 93.8% 0.7%
Average monthly rent per occupied unit
at end of period $563 $541 4.1%
Annualized year to date resident turnover 54% 65% (16.9%)
Annualized year to date resident turnover
(excluding transfers within same property) 48% 59% (18.6%)
Apartment units managed by Property Asset
Management:
AIMCO owned (94 properties at March 31, 1997) 23,764 15,028 58.1%
Third parties (113 properties, 91 owners at
March 31, 1997) 14,120 16,423 (14.0%)
Affiliates (18 properties, 13 owners at
March 31, 1997) 3,611 3,561 1.4%
---------- ---------- ---------
Total managed 41,495 35,012 18.5%
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
(1) Excludes properties undergoing renovation.
<TABLE>
<CAPTION>
Percentage
March 31 March 31 (Increase)
1997 1996 (Decrease)
---------- ---------- ----------
<S> <C> <C> <C>
BALANCE SHEET DATA
Real estate, net $742,399 $745,145 (0.4%)
Cash and cash equivalents 11,531 13,170 (12.4%)
Restricted cash 10,423 15,831 (34.2%)
Accounts receivable 5,313 4,344 22.3%
Deferred financing costs 10,576 11,053 (4.3%)
Other assets 35,987 45,270 (20.5%)
---------- ---------- ----------
Total assets $816,229 $834,813 (2.2%)
---------- ---------- ----------
---------- ---------- ----------
Secured tax-exempt bond financing $73,151 $75,497 (0.5%)
Secured notes payable 240,935 242,110 (0.5%)
Secured short-term financing 140,487 192,039 (26.8%)
Unsecured short-term financing - 12,500 (100.0%)
---------- ---------- ----------
Total indebtedness 456,573 522,146 (12.6%)
---------- ---------- ----------
Accounts payable, accrued and other
liabilities 14,248 16,299 (12.6%)
Resident security deposits and prepaid rents 4,623 4,316 7.1%
---------- ---------- ----------
Total liabilities 475,444 542,761 (12.4%)
---------- ---------- ----------
Minority interest in Other Partnerships 9,893 10,386 (4.7%)
Minority interest in Operating Partnership 50,045 58,777 (14.9%)
Stockholders' equity 280,847 222,889 26.0%
---------- ---------- ----------
Total liabilities and stockholders' equity $816,229 $834,813 (2.2%)
---------- ---------- ----------
---------- ---------- ----------
Market Capitalization
Period end price per share $29,125 $28.25 3.1%
Common shares outstanding 17,587 14,980 17.4%
Operating Partnership units outstanding 2,858 3,401 (16.0%)
---------- ---------- ----------
Total common shares and Operating
Partnership units 20,445 18,381 11.2%
---------- ---------- ----------
Equity $595,461 $519,263 14.7%
Debt 456,573 522,146 (12.6%)
---------- ---------- ----------
Total Market Capitalization $1,052,034 $1,041,409 1.0%
---------- ---------- ----------
Debt to Market Capitalization 43.4% 50.1% (13.4%)
Actual free cash flow coverage of
interest expense 2.3 2.3 0.0%
</TABLE>
<PAGE>
EXHIBIT 99.2
Apartment Investment and Management Company
Declares First Quarter Dividend
DENVER, April 24 /PRNewswire/ -- Apartment Investment and Management
Company ("AIMCO") (NYSE: AIV) announced that Cash Earned For Shareholders
("CEFS") totaled $10,979,000 or $0.56 per common share for the quarter ended
March 31, 1997 compared to $6,768,000 or $0.49 per common share for the quarter
ended March 31, 1996, a 14.3% increase on a per share basis. Funds From
Operations ("FFD") for the first quarter of 1997 equaled $12,512,000 or $0.64
per common share, exceeding industry analysts' consensus estimates of $0.63,
compared to $7,888,000 or $0.57 per common share for the quarter ended March 31,
1996, a 12.3% increase on a per share basis.
For the first quarter of 1997 "same store" sales for 51 properties
consisting of 12,863 apartment units owned during the first quarters of both
1997 and 1996 showed an increase in revenues of 4.2%, operating expenses
remained stable, resulting in an increase in net operating income of 6.8% over
the comparable quarter of 1996. Weighted average physical occupancy for the 51
properties increased approximately 1% from 93.8% at March 31, 1996 to 94.5% at
March 31, 1997. Average monthly rent per occupied unit increased from $541 at
March 31, 1996 to $563 at March 31, 1997, a 4.1% increase.
The Board of Directors of AIMCO declared a cash dividend of $0.4625 per
common share for the quarter ended March 31, 1997, payable on May 15, 1997,
to shareholders of record on May 8, 1997. This dividend is equivalent to
an annualized dividend rate of $1.85 per common share and represents a
distribution of 82.6% of CEFS and 72.3% of FFO for the quarter. Based on the
closing price for the first quarter of $29 1/8, the dividend represents a yield
of 6.4%.
The first quarter 1997 earnings conference call will be conducted on
Monday, April 28, 1997 at 3:00 p.m. Eastern time. You can participate in the
conference call by dialing (800) 374-0616 approximately five minutes before the
conference call is scheduled to begin and indicating that you wish to join the
Apartment Investment and Management Company first quarter results conference
call.
AIMCO is a real estate investment trust with headquarters in Denver,
Colorado and 8 regional and local offices, which holds a geographically
diversified portfolio of apartment communities, primarily serving the middle
market. As of March 31, 1997, AIMCO owned or controlled 94 apartment
communities containing 23,764 apartment units and managed 131 apartment
communities containing 17,731 apartment units for third parties and affiliates,
bringing the total managed portfolio to 225 apartment communities containing
41,495 apartment units located primarily in the sunbelt regions of the United
States.
SOURCE Apartment Investment and Management Company
-0- 04/24/97
/CONTACT: Leeann Morein, Chief Financial Officer, 303-757-8101, or Peter
Kompaniez, Vice Chairman, 909-336-4821, or email:
[email protected], both of Apartment Investment and
Management Company/ (AIV)
-0-
<PAGE>
EXHIBIT 99.3
AIMCO
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
Apartment Investment and Management Company Announces
Merger Agreement with
NHP Incorporated
DENVER, April 21/PRNewswire/ -- Apartment Investment and Management
Company ("AIMCO") (NYSE: AIV) announced today that it has entered into a
Merger Agreement with NHP Incorporated ("NHP"), pursuant to which NHP will
merge with a wholly owned subsidiary of AIMCO. In the merger, NHP's
stockholders may elect to receive, for each share of NHP, either (i) 0.74766
shares of AIMCO common stock, or (ii) a combination of 0.37383 shares of
AIMCO common stock and $10 in cash. The Merger Agreement also provides for
NHP to distribute rights to its stockholders that will entitle them to
receive shares of NHP Financial Services, Ltd. ("NHP Financial"), a NHP's
commercial mortgage banking subsidiary, upon the effectiveness of the merger
or on December 1, 1997 if the merger has not yet occurred. The merger is
conditioned on, among other things, the approval of the stockholders of AIMCO
and NHP (excluding AIMCO) and certain governmental approvals. NHP is the
nation's second largest manager of apartment communities, with over 700
apartment communities (135,000 units) under management at March 31, 1997.
NHP's common stock is traded on the NASDAQ Stock Market under the symbol
"NHPI."
AIMCO has also entered into a Stock Purchase Agreement with Demeter
Holdings Corporation ("Demeter"), an affiliate of Harvard Private Capital
Group, Inc. and Capricorn Investors, L.P. ("Capricorn"), pursuant to which
AIMCO will acquire all of the 6.93 million shares of NHP common stock held by
Demeter and Capricorn. For each share of NHP common stock, AIMCO will either
pay $20 per share in cash or will issue 0.74766 shares of AIMCO common stock,
and will also deliver the shares of NHP Financial that it receives in respect
of such share of NHP common stock. AIMCO is obligated to pay Demeter at least
$59.5 million in cash. The remainder of the purchase price is payable to
Demeter and Capricorn in shares
<PAGE>
of AIMCO common stock. The 6.93 million NHP shares held by Demeter and
Capricorn represent approximately 53% of NHP's currently outstanding shares.
The closing under the Stock Purchase Agreement is subject to certain
conditions, but is expected to occur in May 1997.
AIMCO also announced that it is continuing to negotiate, amplify and
expand the terms of a definitive agreement with Demeter, Capricorn and
another affiliate of Demeter for the acquisition of certain entities that own
interests in conventional and affordable multifamily apartment properties
managed by NHP. In connection with the Merger Agreement, NHP has agreed to
waive its right of first refusal to purchase these entities, effective May 3,
1997, provided that such an agreement is entered into on satisfactory terms
no later than May 31, 1997. The closing under the Stock Purchase Agreement is
also conditioned on such an agreement.
AIMCO is a real estate investment trust with headquarters in Denver,
Colorado and 18 regional and local offices, which holds a geographically
diversified portfolio of apartment communities, primarily serving the middle
market. As of March 31, 1997, AIMCO owned or controlled 94 apartment
communities containing 23,764 apartment units and managed 131 apartment
communities containing 17,731 apartment units for third parties and
affiliates, bringing the total managed portfolio to 225 apartment communities
containing 41,495 apartment units located primarily in the sunbelt regions of
the United States. Upon completion of these transactions, AIMCO will own or
control 127 apartment communities containing 34,842 apartment units, will
have an equity interest in 44 apartment communities containing 9,996
apartment units and will manage approximately 760 conventional and affordable
apartment communities containing approximately 131,000 apartment units,
bringing the total managed portfolio to approximately 930 apartment
communities containing approximately 176,000 apartment units located in 24
states.
SOURCE: Apartment Investment and Management Company 04/21/97
/CONTACT: Peter Kompaniez, Vice Chairman, 909-336-4821, or
Leeann Morein, Senior Vice President, 303-757-8101,
E-Mail: [email protected], both of Apartment
Investment and Management Company/
(AIV)
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