EXHIBIT 3
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
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, ▇▇▇▇▇▇▇ & ▇▇▇▇
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 ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Counsel
to NHP
Exhibit D-2 -- Form of Legal Opinion of Arent Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇,
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.
"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.
4
"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. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, 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.
5
"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
6
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.
7
"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. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
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.
8
"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 ▇▇▇ ▇. ▇▇▇▇▇▇▇.
"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
9
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
10
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, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
11
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").
12
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
13
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
14
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
15
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
16
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
17
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
18
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
19
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
20
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
21
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 ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, and the stock option agreement, dated as of August 18, 1995, between
NHP and J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 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
22
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
23
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
24
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
25
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
26
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.
27
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 ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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
28
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.
29
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
30
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
31
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
32
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
33
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
34
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
35
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
36
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
37
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
38
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,
39
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
40
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
41
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
▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇, (▇▇) 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
43
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-
44
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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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.
45
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
46
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
47
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
48
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,
49
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
50
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
51
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:
52
(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,
▇▇▇▇▇▇▇ & ▇▇▇▇ 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:
53
(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
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to NHP, and an opinion of Arent Fox ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇, 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
54
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;
55
(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.
56
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
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
58
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:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ F-240
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
59
if to NHP, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III and
▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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
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
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.
62
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
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. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, III
---------------------------------------
Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, III
Title: Chairman, President and
Chief Executive Officer
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice Chairman
AIMCO/NHP ACQUISITION CORP.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
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
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, ▇▇▇▇▇▇▇ & ▇▇▇▇ 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 ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, Counsel to NHP..................................D1-1
EXHIBIT D-2 Form of Legal Opinion of Arent Fox ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇, Special Counsel to NHP.......................D2-1
EXHIBIT A
FORM OF AFFILIATE LETTER
Apartment Investment and Management Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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
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
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
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
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
"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
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
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
B-5
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
B-6
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:
B-7
(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-
B-8
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
B-9
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
B-10
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
B-12
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
B-13
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:
B-15
To AIMCO:
Apartment Investment and Management Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
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
(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.
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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
EXHIBIT C-1
FORM OF LEGAL OPINION OF
SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ 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
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.
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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 ▇▇▇.
▇▇-▇
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.
▇▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF LEGAL OPINION OF
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
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
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
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
SCHEDULE A
NHP Management Company
NHP-▇▇ ▇▇, Inc.
D1-4
EXHIBIT D-2
FORM OF LEGAL OPINION OF
ARENT FOX ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇,
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
[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.]