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Exhibit 1.1
UNDERWRITING AGREEMENT
February 13, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, INC.
IRVINE APARTMENT COMMUNITIES, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We (the "Manager") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"Underwriters"), and we understand that Irvine Apartment Communities, Inc., a
Maryland corporation (the "Company"), proposes to issue and sell 1,150,000
shares of Common Stock, par value $0.01 per share (the "Firm Securities").
On the basis of the representations and warranties contained
herein and subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective number of shares of Firm Securities set forth below
opposite their names at a purchase price of $26.06 per share:
Number of Shares
Underwriter of Firm Securities
----------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated 287,500
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. 287,500
▇▇▇▇▇▇▇▇▇▇ Securities 287,500
▇.▇. ▇▇▇▇▇▇ Securities Inc. 287,500
Total 1,150,000
=========
Underwriters will pay for the Firm Securities upon delivery
thereof at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00
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a.m. (New York time) on February 20, 1997, or at such other time and date as
shall be designated by the Manager and the Company. The time and date of such
payment and delivery are hereinafter referred to as the "Closing Date."
On the basis of the representations and warranties contained
herein and subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby grants an option to the Underwriters,
severally and not jointly, to purchase up to an additional 172,500 shares of
Common Stock, par value $0.01 per share (the "Additional Securities") at the
price per share set forth above. The option hereby granted will expire 30 days
after the date hereof, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Additional Securities upon
notice by the Manager to the Company setting forth the number of Additional
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Additional Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
the Manager, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date unless
otherwise agreed by the Manager and the Company. If the option is exercised as
to all or any portion of the Additional Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of Additional Securities then being purchased which the number of Firm
Securities set forth above opposite the name of such Underwriter bears to the
total number of Firm Securities, subject in each case to such adjustments as the
Manager in its discretion shall make to eliminate any sales or purchases of
fractional shares. The Firm Securities and the Additional Securities are
collectively referred to herein as the "Equity Securities." The Equity
Securities are also sometimes referred to herein as the "Offered Securities."
The Equity Securities shall have the terms set forth in the
Prospectus dated May 8, 1996, and the Prospectus Supplement dated February 13,
1997.
All provisions contained in the document entitled Irvine
Apartment Communities, Inc. Underwriting Agreement Standard Provisions (Equity
Securities and Warrants to Purchase Equity Securities) dated February 13, 1997,
a copy of which is attached hereto as Exhibit "A" (the "Standard Provisions"),
are herein incorporated by reference in their entirety and shall be deemed to be
a part of this Agreement to the same extent as if such provisions had been set
forth in full herein, except that (i) if any term defined in such document is
otherwise defined herein, the definition set forth herein shall control, (ii)
all references in such document to a type of security that is not an Equity
Security shall not be deemed to be a part of this Agreement, (iii) if the Equity
Securities do not include Equity Warrants, then all references in such document
to Equity Warrant Securities shall not be deemed to be a part of this Agreement
and (iv) all references in such document to a type of agreement that has not
been entered into in connection with the transactions contemplated hereby shall
not be deemed to be a part of this Agreement.
In addition to the foregoing and the provisions incorporated
by reference from the Standard Provisions, the following provisions are included
as part of this Agreement:
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1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each of the
Company and the Operating Partnership, jointly and severally, represents and
warrants to and agrees with each of the Underwriters that:
(a) The financial statements (including the notes thereto)
incorporated in the Registration Statement and the Prospectus present fairly the
financial position of the respective entity or entities presented therein as at
the respective dates indicated and the results of their operations for the
respective periods specified, and except as otherwise stated in the Registration
Statement, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis. The
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. The financial information and data
included in the Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis consistent with
that of the financial statements included in the Registration Statement and the
Prospectus. Except as reflected or disclosed in the financial statements
included in the Registration Statement or otherwise set forth in the Prospectus,
neither the Company nor the Operating Partnership is subject to any material
indebtedness, obligation or liability, contingent or otherwise.
(b) The issuance of OP Units to The Irvine Company as
described in the Prospectus (the "Irvine Investment") has been duly authorized
and, when paid for in accordance with the OP Partnership Agreement and the
relevant funding notice and election notice by The Irvine Company, such OP Units
will be validly issued in accordance with the OP Partnership Agreement. The
issuance, sale and delivery of the OP Units to The Irvine Company in the Irvine
Investment constitute transactions exempt from registration under Section 4(2)
of the Act and such OP Units will have been offered and sold in compliance with
all federal and applicable state securities laws.
(c) Amendment No. 3 to the Land Rights Agreement has been duly
and validly authorized, executed and delivered by the Company and the Operating
Partnership and, assuming due authorization, execution and delivery thereof by
The Irvine Company, the Land Rights Agreement, as so amended, is a valid and
legally binding agreement of the Company and the Operating Partnership
enforceable against the Company and the Operating Partnership in accordance with
its terms. The execution, delivery and performance of Amendment No. 3 to the
Land Rights Agreement do not contravene any provision of applicable law or the
certificate of incorporation or bylaws of the Company, the certificates of
limited partnership of the Operating Partnership and the Property Partnership,
the OP Partnership Agreement, the Property Partnership Agreement or any
agreement or other instrument binding upon the REIT Entities that is material to
the REIT Entities, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over any of the REIT
Entities and no consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the performance by the
Company or the Operating Partnership of their obligations under the Land Rights
Agreement, as so amended.
(d) The OP Partnership Agreement, as amended as of the date of
this Agreement, has been duly and validly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery thereof by
the other partners of the Operating
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Partnership, the OP Partnership Agreement, as so amended, is a valid and legally
binding agreement of the Operating Partnership and enforceable against the
Operating Partnership in accordance with its terms. The execution, delivery and
performance of the OP Partnership Agreement do not contravene any provision of
applicable law or the certificate of incorporation or bylaws of the Company, the
certificates of limited partnership of the Operating Partnership and the
Property Partnership, the Property Partnership Agreement or any agreement or
other instrument binding upon the REIT Entities that is material to the REIT
Entities, taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over any of the REIT Entities and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Operating
Partnership of its obligations under the OP Partnership Agreement, as so
amended.
(e) The Miscellaneous Rights Agreement dated as of March 20,
1996 by and among the Company, the Operating Partnership and The Irvine Company
(the "Miscellaneous Rights Agreement") has been duly and validly authorized,
executed and delivered by the Company and the Operating Partnership and,
assuming due authorization, execution and delivery thereof by The Irvine
Company, the Miscellaneous Rights Agreement, as so amended, is a valid and
legally binding agreement of the Company and the Operating Partnership
enforceable against the Company and the Operating Partnership in accordance with
its terms. The execution, delivery and performance of the Miscellaneous Rights
Agreement do not contravene any provision of applicable law or the certificate
of incorporation or bylaws of the Company, the certificates of limited
partnership of the Operating Partnership and the Property Partnership, the OP
Partnership Agreement, the Property Partnership Agreement or any agreement or
other instrument binding upon the REIT Entities that is material to the REIT
Entities, taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over any of the REIT Entities and no
consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Company or
the Operating Partnership of their obligations under the Miscellaneous Rights
Agreement.
(f) On the Closing Date, the Equity Securities will have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance.
(g) Neither the Company nor the Operating Partnership is, or
at the Closing Time will be, an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined under the Investment
Company Act of 1940, as amended (the "1940 Act").
(h) Other than as specified in the Miscellaneous Rights
Agreement, there are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities Act of 1933, as amended
(the "Securities Act"). Any such rights have been waived in connection with the
transactions contemplated by this Agreement.
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2. ADDITIONAL CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
several obligations of the Underwriters are subject to the following:
(a) Section 5(c) of the Standard Provisions is amended to add
the following after paragraph (x):
(xi) amendment No. 3 to the Land Rights Agreement has been
duly authorized, executed and delivered by the Company in its
individual capacity and its capacity and its capacity as general
partner of the Operating Partnership. The execution, delivery and
performance of Amendment No. 3 to the Land Rights Agreement and the
consummation of the transactions set forth therein and compliance by
the Company, to the extent a party thereto, with its obligations
thereunder, do not and will not contravene any provision of applicable
law or the charter or by-laws of the Company and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency of the State of Maryland is required for the performance by
the Company and the Operating Partnership of their respective
obligations under the Land Rights Agreement, as so amended;
(xii) the OP Partnership Agreement, as amended as of the
date of this Agreement, has been duly and validly authorized, executed
and delivered by the Company. The execution, delivery and performance
of the OP Partnership Agreement, as so amended, do not contravene any
provision of applicable law or the charter or by-laws of the Company
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency of the State of Maryland is
required for the performance by the Company of its obligations under
the OP Partnership Agreement, as so amended (excluding the securities
or Blue Sky laws of the State of Maryland, as to which such counsel
need not express any opinion); and
(xiii) the Miscellaneous Rights Agreement has been duly
and validly authorized, executed and delivered by the Company in its
individual capacity and its capacity and its capacity as general
partner of the Operating Partnership. The execution, delivery and
performance of the Miscellaneous Rights Agreement do not contravene any
provision of applicable law or the charter or by-laws of the Company
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency of the State of Maryland is
required for the performance by the Company and the Operating
Partnership of their respective obligations under the Miscellaneous
Rights Agreement.
(b) Section 5(d) of the Standard Provisions is amended to add
the following after paragraph (ix):
(x) the statements in the Prospectus set forth under the
captions "Description of Capital Stock - Exchange Rights," "Description
of Capital Stock - Cash Tender Rights" and "Business and Properties -
Exclusive Land Rights Agreement" in each case insofar as such
statements constitute summaries of the documents referred to
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therein, fairly presents the information called for with respect to
such documents and fairly summarizes the matters referred to therein;
(xi) the discussion contained in that portion of the
Registration Statement under the caption "Federal Income Tax
Considerations," insofar as such information constitutes summaries of
the legal matters, documents or proceedings referred to therein,
correctly summarizes the matters referred to therein;
(xii) the Company is currently organized in conformity
with the requirements for qualification as a real estate investment
trust under the Code and has been so organized since its formation, and
its method of operation has satisfied the requirements for taxation as
a real estate investment trust under the Code, and its proposed method
of operation will enable it to continue to do so;
(xiii) the OP Units outstanding prior to the issuance of
the OP Units to The Irvine Company in the Irvine Investment have been
duly authorized and are validly issued in accordance with the Operating
Partnership Agreement and pursuant to transactions exempt from
registration under Section 4(2) of the Securities Act;
(xiii) the issuance of OP Units to The Irvine Company in
the Irvine Investment has been duly authorized and, when paid for in
accordance with the OP Partnership Agreement and the relevant funding
notice and election notice by The Irvine Company, such OP Units will be
validly issued in accordance with the Operating Partnership Agreement.
The issuance, sale and delivery of the OP Units to The Irvine Company
in the Irvine Investment constitute transactions exempt from
registration under Section 4(2) of the Securities Act;
(xiv) the Equity Securities have been approved for listing
on the New York Stock Exchange;
(xv) the Registration Statement has been declared
effective under the Securities Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of
such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act and
no proceedings therefor have been instituted by the Commission;
(xvi) assuming due authorization, execution and delivery
of Amendment No. 3 to the Land Rights Agreement by the Company in its
capacity as general partner of the Operating Partnership, Amendment No.
3 to the Land Rights Agreement has been duly authorized, executed and
delivered by the Operating Partnership. Assuming due authorization,
execution and delivery of Amendment No. 3 to the Land Rights Agreement
by the Company in its individual capacity and its capacity as general
partner of the Operating Partnership, the execution, delivery and
performance of the Land Rights Agreement, as so amended, and the
consummation of the transactions set forth therein and compliance by
the Company and the Operating Partnership, to the extent a party
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thereto, with their obligations thereunder, do not and will not
contravene any provision of applicable law or the certificate of
limited partnership of the Operating Partnership, the OP Partnership
Agreement or any agreement or other instrument binding upon any of the
REIT Entities that is material to the REIT Entities, taken as a whole,
or, to the best knowledge of such counsel, any judgment or decree of
any governmental body, agency or court having jurisdiction over any of
the REIT Entities (it being understood that such counsel expresses no
opinion as to any judgment or decree of HUD) and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency (it being understood that such counsel expresses no opinion
as to any consent, approval, authorization or order of, or
qualification with, HUD) is required for the performance by the Company
or the Operating Partnership of their respective obligations under the
Land Rights Agreement, as so amended;
(xvii) assuming due authorization, execution and delivery
of the OP Partnership Agreement, as amended as of the date of this
Agreement, by the Company in its capacity as general partner of the
Operating Partnership and the other partners of the Operating
Partnership, the OP Partnership Agreement, as so amended, is a valid
and legally binding agreement of the Company and enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by the availability of
equitable principles of general applicability. Assuming due
authorization, execution and delivery of the OP Partnership Agreement,
as so amended, by the Company in its capacity as general partner of the
Operating Partnership, the execution, delivery and performance of the
OP Partnership Agreement, as so amended, by the Company do not
contravene any provision of applicable law, the certificate of limited
partnership of the Operating Partnership or any agreement or other
instrument binding upon any of the REIT Entities that is material to
the REIT Entities, taken as a whole, or, to the best knowledge of such
counsel, any judgment or decree of any governmental body, agency or
court having jurisdiction over any of the REIT Entities (it being
understood that such counsel expresses no opinion as to any judgment or
decree of HUD) and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency (it being
understood that such counsel expresses no opinion as to any consent,
approval, authorization or order of, or qualification with, HUD) is
required for the performance by the Company of their its obligations
under the OP Partnership Agreement, as so amended, except such as may
be required by the securities, blue sky or real estate syndication laws
of the various states and the federal securities laws; and
(xviii) assuming due authorization, execution and delivery
of the Miscellaneous Rights Agreement by the Company in its individual
capacity and its capacity as general partner of the Operating
Partnership, the Miscellaneous Rights Agreement has been duly
authorized, executed and delivered by the Operating Partnership.
Assuming due authorization, execution and delivery of the Miscellaneous
Rights Agreement by the Company in its individual capacity and its
capacity as general partner of the Operating Partnership, the
execution, delivery and performance of the Miscellaneous Rights
Agreement do not contravene any provision of applicable law, the
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certificate of limited partnership of the Operating Partnership, the OP
Partnership Agreement or any agreement or other instrument binding upon
any of the REIT Entities that is material to the REIT Entities, taken
as a whole, or, to the best knowledge of such counsel, any judgment or
decree of any governmental body, agency or court having jurisdiction
over any of the REIT Entities (it being understood that such counsel
expresses no opinion as to any judgment or decree of HUD) and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency (it being understood that such counsel
expresses no opinion as to any consent, approval, authorization or
order of, or qualification with, HUD) is required for the performance
by the Company or the Operating Partnership of their respective
obligations under the Miscellaneous Rights Agreement.
(c) At or prior to the Closing Time, the Manager shall have
received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and General Counsel for
The Irvine Company, dated the Closing Date and addressed to the Underwriters to
the effect that:
(i) The Irvine Company has all requisite corporate power
and authority to enter into and perform its obligations in connection
with the Irvine Investment and has taken all necessary corporate action
to authorize the Irvine Investment. The consummation of the Irvine
Investment do not contravene any provision of applicable law or the
certificate of incorporation or bylaws or any agreement or other
instrument binding upon The Irvine Company that is material to The
Irvine Company or any judgment or decree of any governmental body,
agency or court having jurisdiction over The Irvine Company (it being
understood that such counsel expresses no opinion as to any judgment or
decree of HUD) and no consent, approval, authorization or order of or
qualification with any governmental body or agency (it being understood
that such counsel expresses no opinion as to any consent, approval,
authorization or order of or qualification with HUD) is required for
the performance by The Irvine Company of its obligations in connection
with the Irvine Investment;
(ii) The Irvine Company has all requisite corporate power
and authority to enter into, deliver and perform its obligations under
Amendment No. 3 to the Land Rights Agreement and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of such amendment. Amendment No. 3 to the Land Rights
Agreement has been duly and validly executed and delivered by The
Irvine Company and, assuming due authorization, execution and delivery
by the other parties thereto, the Land Rights Agreement, as so amended,
is a valid and binding agreement of The Irvine Company enforceable
against The Irvine Company in accordance with its terms, except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by the
availability of equitable principles of general applicability, and (B)
to the enforceability of any noncompetition arrangements. The
execution, delivery and performance of Amendment No. 3 to the Land
Rights Agreement and the consummation of the transactions set forth
therein and compliance by The Irvine Company with its obligations under
the Land Rights Agreement, as so amended, do not contravene any
provision of applicable law or the certificate of incorporation or
bylaws or any agreement or other instrument binding upon
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The Irvine Company that is material to The Irvine Company or any
judgment or decree of any governmental body, agency or court having
jurisdiction over The Irvine Company (it being understood that such
counsel expresses no opinion as to any judgment or decree of HUD) and
no consent, approval, authorization or order of or qualification with
any governmental body or agency (it being understood that such counsel
expresses no opinion as to any consent, approval, authorization or
order of or qualification with HUD) is required for the performance by
The Irvine Company of its obligations under the Land Rights Agreement,
as so amended;
(iii) The Irvine Company has all requisite corporate power
and authority to enter into, deliver and perform its obligations under
the Miscellaneous Rights Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance
by it of the Miscellaneous Rights Agreement. The Miscellaneous Rights
Agreement has been duly and validly executed and delivered by The
Irvine Company and, assuming due authorization, execution and delivery
by the other parties thereto, the Miscellaneous Rights Agreement is a
valid and binding agreement of The Irvine Company enforceable against
The Irvine Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by the
availability of equitable principles of general applicability. The
execution, delivery and performance of the Miscellaneous Rights
Agreement and the consummation of the transactions set forth therein
and compliance by The Irvine Company with its obligations under the
Miscellaneous Rights Agreement do not contravene any provision of
applicable law or the certificate of incorporation or bylaws or any
agreement or other instrument binding upon The Irvine Company that is
material to The Irvine Company or any judgment or decree of any
governmental body, agency or court having jurisdiction over The Irvine
Company (it being understood that such counsel expresses no opinion as
to any judgment or decree of HUD) and no consent, approval,
authorization or order of or qualification with any governmental body
or agency (it being understood that such counsel expresses no opinion
as to any consent, approval, authorization or order of or qualification
with HUD) is required for the performance by The Irvine Company of its
obligations under the Miscellaneous Rights Agreement; and
(iv) The Irvine Company has all requisite corporate power
and authority to enter into, deliver and perform its obligations under
the OP Partnership Agreement, as amended as of the date of this
Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the OP Partnership
Agreement, as so amended. The OP Partnership Agreement, as so amended,
has been duly and validly executed and delivered by The Irvine Company
and, assuming due authorization, execution and delivery by the other
parties thereto, the OP Partnership Agreement, as so amended, is a
valid and binding agreement of The Irvine Company enforceable against
The Irvine Company in accordance with its terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by the
availability of equitable principles of general applicability, and (B)
to the enforceability of any noncompetition arrangements. The
execution, delivery and performance of the OP Partnership Agreement, as
so amended,
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and the consummation of the transactions set forth therein and
compliance by The Irvine Company with its obligations under the OP
Partnership Agreement, as so amended, do not contravene any provision
of applicable law or the certificate of incorporation or bylaws or any
agreement or other instrument binding upon The Irvine Company that is
material to The Irvine Company or any judgment or decree of any
governmental body, agency or court having jurisdiction over The Irvine
Company (it being understood that such counsel expresses no opinion as
to any judgment or decree of HUD) and no consent, approval,
authorization or order of or qualification with any governmental body
or agency (it being understood that such counsel expresses no opinion
as to any consent, approval, authorization or order of or qualification
with HUD) is required for the performance by The Irvine Company of its
obligations under the OP Partnership Agreement, as so amended;
For purposes of the foregoing opinions, references to The
Irvine Company include any person directly or indirectly controlled by The
Irvine Company. "Controlled" as used in this Section 2(c) means the possession,
directly or indirectly, of the power to direct or cause the direction of
management and policies of such person, whether through the ownership of voting
securities, by contract or otherwise.
(d) At or prior to the Closing Date, the Managers shall have
received an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ dated the Closing Date and addressed to
the Underwriters as to the authorization, execution and delivery of this
Agreement by the Company, the conformity of the Equity Securities to the
descriptions thereof in "Description Of Capital Stock," the effectiveness of the
Registration Statement under the Securities Act and the absence of any stop
orders, and the compliance as to form of the Registration Statement and the
Prospectus. Such counsel shall also provide a statement that no facts came to
its attention that caused it to believe that the Registration Statement
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(e) At or prior to the Closing Date, the Equity Securities
shall have been duly listed on the New York Stock Exchange, subject to official
notice of issuance.
(f) At or prior to the Closing Date, each director and
executive officer of the Company and The Irvine Company shall have executed and
delivered to the Managers a Lock-Up Agreement in the form attached hereto as
Exhibit B.
(g) At the Closing Date, the transactions comprising the
Irvine Investment as described in the Prospectus shall have been completed.
(h) In the event that the Underwriters exercise their option
provided above to purchase all or any portion of the Additional Securities, the
representations and warranties of the Company contained herein and in the
Standard Provisions incorporated herein by reference and the statements in any
certificates furnished by the Company hereunder shall be true and correct in all
material respects as of each Date of Delivery and, at the relevant Date of
Delivery, the Manager shall have received:
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(i) a certificate, dated such Date of Delivery, of an
executive officer of the Company confirming that the certificate
delivered at the Closing Date pursuant to Section 5(b) of the Standard
Provisions hereof remains true and correct in all material respects
with the same force and effect as though expressly made at and as of
such Date of Delivery;
(ii) the favorable opinion of Piper & Marbury L.L.P.,
counsel for the Company, in form and substance reasonably satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating
to the Additional Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section
5(c) of the Standard Provisions as amended by Section 2(a) hereof;
(iii) the favorable opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Company, in form and substance reasonably satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating
to the Additional Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section
5(d) of the Standard Provisions as amended by Section 2(b) hereof;
(iv) the favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice
President and General Counsel for The Irvine Company, dated such Date
of Delivery, relating to the issuance of additional OP Units to The
Irvine Company in connection with the purchase of the Additional
Securities on such Date of Delivery (the "Irvine Over-allotment
Investment") and otherwise to the same effect as any opinion required
by Section 2(c)(i) hereof;
(v) the favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for
the Underwriters, dated such Date of Delivery, relating to the
Additional Securities to be purchased on such Date of Delivery and
otherwise to the same effect as any opinion required by Section 2(d)
hereof;
(vi) a letter from Ernst & Young, in form and substance
satisfactory to the Manager and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished to
the Manager pursuant to Section 5(f) of the Standard Provisions, except
that the "specified date" in the letter furnished pursuant to this
Section 2(h)(vi) shall be a date not more than five days prior to such
Date of Delivery.
3. ADDITIONAL COVENANTS OF THE COMPANY. In further
consideration of the agreements of the Underwriters herein contained, the
Company and the Operating Partnership covenant as follows:
(a) to notify the Manager immediately, and confirm the notice
in writing, (i) of the receipt of any comments regarding the Registration
Statement from the Commission, (ii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iii) of the effectiveness of any
post-effective amendment to the Registration Statement, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration
11
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Statement or any order by any state securities administrator suspending the
qualification of the Securities in such state or the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) during a period of 90 days from the date hereof, the
Company and the Operating Partnership will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Equity Securities, or any
other security convertible into or exchangeable or exercisable for Equity
Securities, except for (i) Equity Securities issued pursuant to this Agreement,
(ii) the Irvine Investment and Irvine Over-allotment Investment, (iii) options
or Equity Securities issued pursuant to stock incentive plans as described in
the Prospectus, (iv) Equity Securities or OP Units issued in connection with
land purchases under the Land Rights Agreement, (v) Equity Securities issued
upon exchange of OP Units pursuant to the OP Partnership Agreement or (vi)
Equity Securities issued pursuant to the Company's Dividend Reinvestment and
Additional Cash Investment Plan or Equity Securities or OP Units issued to The
Irvine Company in connection therewith pursuant to The Irvine Company's rights
under the Miscellaneous Rights Agreement and the OP Partnership Agreement.
(c) the Company will use its best efforts to maintain its
qualification as a "real estate investment trust" under the Code.
(d) except for the authorization of actions permitted to be
taken by the Underwriters as contemplated herein or in the Prospectus, the
Company will not (i) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Equity Securities, (ii) sell, bid for or
purchase the Equity Securities or pay any person any compensation for soliciting
purchases of the Equity Securities or (iii) pay or agree to pay to any person
any compensation for soliciting another to purchase any other securities of the
Company.
4. All representations, warranties and agreements contained in
this Agreement and the Standard Provisions, or contained in certificates of
officers of the Company or representatives of the Operating Partnership
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Equity Securities to the Underwriters.
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Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇▇▇ SECURITIES
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Managing Director
For themselves and as representatives of the
other Underwriters named in the Underwriting
Agreement.
Accepted:
IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and Chief
Financial Officer
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation,
its sole general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and Chief
Financial Officer
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EXHIBIT "A"
IRVINE APARTMENT COMMUNITIES, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(EQUITY SECURITIES AND WARRANTS
TO PURCHASE EQUITY SECURITIES)
February 13, 1997
From time to time, Irvine Apartment Communities, Inc., a
Maryland corporation (the "Company"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "Underwriting
Agreement"). The Underwriting Agreement, including the provisions incorporated
therein by reference, is sometimes referred to herein as this "Agreement." Terms
defined in the Underwriting Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Equity Securities and Equity Warrants and a post-effective
amendment, including a prospectus, to such registration statement, and has filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to the Offered Securities and the Equity
Warrant Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term "Registration Statement" means such
post-effective amendment to the registration statement, including the exhibits
thereto, as amended to the date of this Agreement. The term "Basic Prospectus"
means the prospectus included in the Registration Statement. The term
"Prospectus" means the Basic Prospectus together with the Prospectus Supplement.
The term "preliminary prospectus" means a preliminary prospectus supplement
specifically relating to the Offered Securities and the Equity Warrant
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The Company owns a general partnership interest in Irvine
Apartment Communities, L.P., a Delaware Limited Partnership (the "Operating
Partnership") and is its sole
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managing general partner. The Operating Partnership owns and operates
multifamily apartment communities (the "Properties"). The Operating Partnership
holds general and limited partnership interests in (i) a partnership (the
"Property Partnerships") which owns one of the properties and (ii) Santa ▇▇▇▇▇▇
L.P., a California limited partnership ("Santa ▇▇▇▇▇▇"). The Company, the
Operating Partnership, the Property Partnership and Santa ▇▇▇▇▇▇ are herein
collectively referred to as the "REIT Entities," and all references to
properties or assets of the REIT Entities include, without limitation, the
Properties unless otherwise noted.
The term "Contract Securities" means the Offered Securities to
be purchased pursuant to the delayed delivery contracts substantially in the
form of Schedule I hereto, with such changes therein as the Company may approve
(the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means
the Offered Securities other than Contract Securities.
1. REPRESENTATIONS AND WARRANTIES. Each of the Company and the
Operating Partnership, jointly and severally, represents and warrants to and
agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
Section 1(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein or (b) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would
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not have a material adverse effect on the REIT Entities, taken as a whole. Other
than the Operating Partnership, the Property Partnership, Santa ▇▇▇▇▇▇ and IAC
Management, Inc., a California corporation ("IAC Management"), the Company has
no subsidiaries.
(d) Each of the Operating Partnership and the Property
Partnership have been duly formed, is validly existing as a limited partnership
in good standing under the laws of the jurisdiction of its formation, has the
power and authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the REIT Entities, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and the Operating Partnership.
(f) The authorized capital stock of the Company conforms to
the description thereof contained in the Prospectus. The shares of Equity
Securities outstanding prior to the issuance of the Offered Securities have been
duly authorized and are validly issued, fully paid and non-assessable.
(g) If applicable, the Equity Warrant Agreement has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(h) If applicable, the Delayed Delivery Contracts have been
duly authorized, executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their respective terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Offered Securities and the Equity Warrant Securities,
if applicable, have been duly authorized and, when executed and delivered to and
paid for (A) by the Underwriters in accordance with the terms of the
Underwriting Agreement, in the case of the Underwriters' Securities, or by
institutional investors in accordance with the terms of any applicable Delayed
Delivery Contracts, in the case of the Contract Securities and (B) upon the
exercise of Equity Warrants pursuant to the Equity Warrant Agreement, if
applicable, in the case of the Equity Warrant Securities, will be validly
issued, fully paid and non-assessable, and the issuance of such Offered
Securities and Equity Warrant Securities will not be subject to any preemptive
or similar rights and, in the case of the Equity Warrant Securities, will be
entitled to the benefits of the Equity Warrant Agreement.
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(j) The execution and delivery by the Company and the
Operating Partnership of, and the performance by them of their obligations
under, this Agreement, the Offered Securities, the Equity Warrant Securities,
the Delayed Delivery Contracts and the Equity Warrant Agreement, as applicable,
will not contravene any provision of applicable law or the charter or by-laws of
the Company, the certificate of limited partnership or partnership agreement of
the Operating Partnership, as amended or restated, (the "OP Partnership
Agreement"), the certificate of limited partnership or partnership agreement of
the Property Partnership (the "Property Partnership Agreement") or any agreement
or other instrument binding upon the REIT Entities that is material to the REIT
Entities, taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the REIT Entities, and no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company or
the Operating Partnership of their obligations under this Agreement, the Offered
Securities, the Equity Warrant Securities, the Delayed Delivery Contracts or the
Equity Warrant Agreement, as applicable, except such as may be required by the
securities or blue sky laws of the various states in connection with the offer
and sale of the Offered Securities.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the REIT
Entities, taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement).
(l) There are no legal or governmental proceedings pending or
threatened to which any of the REIT Entities is a party or to which any of the
Properties is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Securities Act, complied when so filed
in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) The Properties are, to the best knowledge of the REIT
Entities in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), and the REIT Entities (i) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (ii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the REIT Entities,
taken as a whole.
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(o) To the best of the knowledge of the Company and the
Operating Partnership, there are no costs and liabilities associated with
Environmental Laws except as disclosed in the Registration Statement, which
would, singly or in the aggregate, have a material adverse effect on the REIT
Entities, taken as a whole.
(p) The Operating Partnership has (whether directly or
indirectly through the ownership of the Property Partnership) good title in fee
simple to the Properties and good title to all personal property owned as is
material to the business of the REIT Entities, taken as a whole, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or in title policies held by the Operating
Partnership or such as do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of such property by
the REIT Entities, (ii) any real property held under lease by any REIT Entity is
held by it under valid, subsisting, enforceable leases, and no default by any
REIT Entity has occurred and is continuing thereunder, with such exceptions as
are not material and do not interfere in any material respect with the use made
and proposed to be made of such property by any REIT Entity, (iii) the operation
of the buildings, fixtures and other improvements located on the Properties as
presently conducted is not in violation of any applicable building code, zoning
ordinance or other law or regulation, except where such violation of any
applicable building code, zoning ordinance or other law or regulation would not,
singly or in the aggregate, have a material adverse effect on the REIT Entities,
taken as a whole, (iv) neither the Company nor the Operating Partnership has
received notice of any proposed special assessment or any proposed material
change in any property tax, zoning or land use laws or availability of water for
irrigation affecting all or any portion of the Properties, (v) there do not
exist any material violations of any declaration of covenants, conditions and
restrictions (the "CC&R's") with respect to any of the Properties, nor is there
any existing state of facts or circumstances or condition or event which could,
with the giving of notice or passage of time, or both, constitute such a
violation and (vi) the improvements comprising any portion of the Properties
(the "Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects and the Improvements (including,
without limitation, all water, electric, sewer, plumbing, heating, ventilation,
gas and air conditioning servicing the Improvements) are in good condition and
proper working order and are free of material defects.
(q) The Company is organized in conformity with the
requirements for qualification as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (the "Code") and its method of
operation enables it to meet the requirements for taxation as a real estate
investment trust under the Code.
(r) The REIT Entities have and will maintain liability,
property, casualty and other insurance policies, with respect to each of the
Properties, insuring them against the risks of loss arising out of or related to
their businesses, in an amount and on such terms as is adequate and appropriate
for such businesses.
(s) All of the partnership interests of the Operating
Partnership ("OP Units") have been validly issued and are validly owned,
directly or indirectly, in the percentage amounts set forth in the Prospectus by
the Company and The Irvine Company, in the case of the Company, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim
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or equity (each of the foregoing a "Lien"). The Company is the sole general
partner of the Operating Partnership.
(t) All of the partnership interests of the Property
Partnership have been validly issued and are owned of record by the Operating
Partnership and a third party, in the case of the Operating Partnership, free
and clear of all Liens.
(u) The security, if any, into which the Equity Securities or
Equity Warrant Securities are convertible, initially reserved for issuance upon
conversion of the Equity Securities or Equity Warrant Securities (the
"Underlying Securities"), have been duly authorized and reserved for issuance.
(v) When the Underlying Securities, if any, are issued upon
conversion of the Equity Securities or Equity Warrant Securities in accordance
with the terms of the Equity Securities or Equity Warrant Securities, such
Underlying Securities will be validly issued, fully paid and non-assessable and
will not be subject to any preemptive or other right to subscribe for or
purchase such Underlying Securities.
2. DELAYED DELIVERY CONTRACTS. If the Prospectus provides for
sales of Offered Securities pursuant to Delayed Delivery Contracts, the Company
hereby authorizes the Underwriters to solicit offers to purchase Contract
Securities on the terms and subject to the conditions set forth in the
Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery Contracts
may be entered into only with institutional investors approved by the Company of
the types set forth in the Prospectus. On the Closing Date, the Company will pay
to the Manager as compensation for the accounts of the Underwriters the
commission set forth in the Underwriting Agreement in respect of the Contract
Securities. The Underwriters will not have any responsibility in respect of the
validity or the performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery
Contracts with institutional investors, the aggregate amount of Offered
Securities to be purchased by the several Underwriters shall be reduced by the
aggregate amount of Contract Securities; such reduction shall be applied to the
commitment of each Underwriter pro rata in proportion to the amount of Offered
Securities set forth opposite such Underwriter's name in the Underwriting
Agreement, except to the extent that the Manager determines that such reduction
shall be applied in other proportions and so advises the Company; provided,
however, that the total amount of Offered Securities to be purchased by all
Underwriters shall be the aggregate amount set forth above, less the aggregate
amount of Contract Securities.
3. TERMS OF PUBLIC OFFERING. The Company is advised by the
Manager that the Underwriters propose to make a public offering of their
respective portions of the Underwriters' Securities as soon after this Agreement
has been entered into as in the Manager's judgment is advisable. The terms of
the public offering of the Underwriters' Securities are set forth in the
Prospectus.
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4. PAYMENT AND DELIVERY. Payment for the Underwriters'
Securities shall be made by wire transfer of immediately available funds to a
bank account designated by the Company at the time and place set forth in the
Underwriting Agreement, upon delivery to the Manager for the respective accounts
of the several Underwriters of the Underwriters' Securities registered in such
names and in such denominations as the Manager shall request in writing not less
than two full business days prior to the date of delivery, with any transfer
taxes payable in connection with the transfer of the Underwriters' Securities to
the Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date there shall not have
occurred any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the REIT Entities, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement) that, in the judgment of the Manager, is material and adverse
and that makes it, in the judgment of the Manager, impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in clause (a) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may
rely upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Piper & Marbury L.L.P., Maryland counsel for the Company or other
counsel for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Maryland, has the corporate power to own its property and to conduct
its business as described in the Prospectus;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company in its individual capacity and its capacity as
general partner of the Operating Partnership;
(iii) the authorized capital stock of the Company conforms
as to legal matters in all material respects to the description thereof
contained in the Prospectus. The shares of capital stock of the Company
outstanding prior to the issuance of the
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Offered Securities have been duly authorized and are validly issued,
fully paid and non-assessable;
(iv) if applicable, the Equity Warrant Agreement has been
duly authorized, executed and delivered by the Company;
(v) if applicable, the Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
(vi) the Offered Securities and the Equity Warrant
Securities, if applicable, have been duly authorized and, when executed
and delivered to and paid for (A) by the Underwriters in accordance
with the terms of the Underwriting Agreement, in the case of the
Underwriters' Securities, or by institutional investors in accordance
with the terms of any applicable Delayed Delivery Contracts, in the
case of the Contract Securities and (B) upon the exercise of Equity
Warrants pursuant to the Equity Warrant Agreement, if applicable, will
be validly issued, fully paid and non-assessable and the issuance of
such Offered Securities and Equity Warrant Securities will not be
subject to any preemptive or similar rights arising by law or the
charter of the Company or, to such counsel's knowledge, any other
agreement to which the Company is a party and, in the case of the
Equity Warrant Securities, if applicable, will be entitled to the
benefits of the Equity Warrant Agreement;
(vii) The execution and delivery by the Company (in its
individual capacity and, with respect to this Agreement, in its
capacity as general partner of the Operating Partnership) of, and the
performance by the Company of its obligations under, this Agreement,
the Offered Securities, the Equity Warrant Securities, the Delayed
Delivery Contracts and the Equity Warrant Agreement, as applicable,
will not contravene any provision of applicable law or the charter or
by-laws of the Company and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency of the State
of Maryland is required for the performance by the Company and the
Operating Partnership of their respective obligations under this
Agreement, the Offered Securities, the Equity Warrant Securities, the
Delayed Delivery Contract or the Equity Warrant Agreement, as
applicable (excluding the securities or Blue Sky laws of the State of
Maryland, as to which such counsel need not express any opinion);
(viii) if applicable, the Underlying Securities, have been
duly authorized and are reserved for issuance;
(ix) if applicable, when the Underlying Securities are
issued upon conversion of the Equity Securities or Equity Warrant
Securities in accordance with the terms of the Equity Securities or
Equity Warrant Securities, such Underlying Securities will be validly
issued, fully paid and non-assessable and will not be subject to any
preemptive or other right to subscribe for or purchase such Underlying
Securities; and
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(x) the statements in the Prospectus set forth under the
caption "Description of the Capital Stock," except for the statements
set forth under the subcaptions "Description of Capital Stock-Exchange
Rights" and "Description of Capital Stock - Cash Tender Rights" and set
forth in the last in the last sentence in the paragraph under the
subcaption "Description of Capital Stock - Common Stock, "insofar as
such statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
In rendering the foregoing opinions, Piper & Marbury L.L.P. or
other counsel for the Company may state that its opinion relates only to the
laws of the State of Maryland and may expressly state that no opinion is
rendered with respect to the authority of the Company to take action as general
partner of the Operating Partnership to the extent governed by the laws of the
State of Delaware, the jurisdiction of its formation.
(d) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, outside counsel for the Company or other
counsel for the Company, dated the Closing Date, to the effect that:
(i) based solely on certificates of public officials, such
counsel confirms that the Company is qualified to do business in
California. To the best of such counsel's knowledge, other than the
Operating Partnership, the Property Partnership, Santa ▇▇▇▇▇▇ and IAC
Management, the Company has no subsidiaries;
(ii) the Operating Partnership has been duly formed, is
validly existing as a limited partnership in good standing under the
laws of the State of Delaware and has the power and authority to own,
lease and operate its property and to conduct its business as described
in the Prospectus. Based solely on certificates of public officials,
such counsel confirms that the Operating Partnership is qualified to do
business in California;
(iii) assuming due authorization, execution and delivery
of this Agreement by the Company in its capacity as general partner of
the Operating Partnership, this Agreement has been duly authorized,
executed and delivered by the Operating Partnership;
(iv) if applicable, assuming due authorization, execution
and delivery by the Company, the Equity Warrant Agreement is a valid
and binding agreement of the Company;
(v) if applicable, assuming due authorization, execution
and delivery by the Company, the Delayed Delivery Contracts are valid
and binding agreements of the Company, enforceable in accordance with
their respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) the availability of equitable remedies may be
limited by equitable principles of general applicability;
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(vi) assuming due authorization, execution and delivery by
the Company in its individual capacity and its capacity as general
partner of the Operating Partnership, the execution and delivery by the
Company and the Operating Partnership of, and the performance by them
of their obligations under, this Agreement, the Offered Securities, the
Equity Warrant Securities, the Delayed Delivery Contracts and the
Equity Warrant Agreement, as applicable, will not contravene any
provision of applicable law or the charter or by-laws of the Company,
the certificate of limited partnership of the Operating Partnership,
the OP Partnership Agreement, the Miscellaneous Rights Agreement (as
defined in the Prospectus) or any agreement or other instrument binding
upon any of the REIT Entities that is material to the REIT Entities,
taken as a whole, or, to the best knowledge of such counsel, any
judgment or decree of any governmental body, agency or court having
jurisdiction over any of the REIT Entities (it being understood that
such counsel expresses no opinion as to any judgment or decree of the
United States Department of Housing and Urban Development ("HUD")), and
no consent, approval, authorization or order of, or qualification with,
any governmental body or agency (it being understood that such counsel
expresses no opinion as to any consent, approval, authorization or
order of, or qualification with, HUD) is required for the performance
by the Company or the Operating Partnership of its obligations under
this Agreement, the Offered Securities, the Equity Warrant Securities,
the Delayed Delivery Contract or the Equity Warrant Agreement, as
applicable, except such as may be required by the securities, Blue Sky
or real estate syndication laws of the various states in connection
with the offer and sale of the Offered Securities, provided that in
giving this opinion as to any agreement or other instrument binding
upon any of the REIT Entities, such counsel may rely without
independent investigation upon an opinion of counsel for the Company;
(vii) the statements (A) in the Prospectus under the
captions "Description of Warrants -- Other Warrants" and "Plan of
Distribution," (B) in the Registration Statement under Item 15, (C) in
"Item 3 - Legal Proceedings" of the Company's most recent annual report
on Form 10-K incorporated by reference in the Prospectus and (D) in
"Item 1 - Legal Proceedings" of Part II of the Company's quarterly
reports on Form 10-Q, if any, filed since such annual report, in each
case insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein;
(viii) such counsel does not know of any legal or
governmental proceedings pending or threatened to which any of the REIT
Entities or any of the Properties is subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference
as exhibits to the Registration Statement that are not described, filed
or incorporated as required; and
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(ix) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus (except for financial statements and
other financial or statistical data included therein as to which such
counsel need not express any opinion) complied when so filed as to form
in all material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (B) has no reason to
believe that (except for financial statements and other financial or
statistical data as to which such counsel need not express any belief)
each part of the Registration Statement, when such part became
effective, contained and, as of the date such opinion is delivered,
contains any untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (C) is of the opinion that
the Registration Statement and Prospectus (except for financial
statements and other financial or statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) has no
reason to believe that (except for financial statements and other
financial or statistical data as to which such counsel need not express
any belief) the Prospectus as of the date such opinion is delivered
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In rendering the foregoing opinions, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or
other counsel for the Company may state that (i) they have relied as to factual
matters on certificates of one or more officers of the Company and (ii) their
opinion relates only to the federal laws of the United States, the laws of the
State of New York and the partnership laws of the State of Delaware.
(e) The Underwriters shall have received on the Closing Date
an opinion of special counsel for the Underwriters, dated the Closing Date,
covering the matters specified in the Underwriting Agreement.
With respect to the subparagraph (ix) of paragraph (d) above,
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or other counsel may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as specified.
The opinions of Piper & Marbury L.L.P. or other counsel for
the Company described in paragraph (c) above and of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ or
other counsel for the Company described in paragraph (d) above shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Underwriters, from the Company's independent public accountants, containing
statements and information of the type ordinarily
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25
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Prospectus.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company and the Operating
Partnership covenant as follows:
(a) To furnish the Manager, without charge, 3 signed copies of
the Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto or to the Registration Statement as
the Manager may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Securities, to furnish
to the Manager a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which the Manager reasonably
objects.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses the Manager will furnish to the Company) to
which Offered Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law; it being understood that, in
the case of any amendment to the Prospectus by means of the filing of the
Company's quarterly or annual reports under the Exchange Act, the Underwriters
and their counsel will be furnished copies promptly after the filing thereof.
(d) To endeavor to qualify the Offered Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Manager shall reasonably request and to maintain such qualification for as long
as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning statement covering
a twelve month period beginning on the first day of the first full fiscal
quarter after the date of this Agreement, which earning statement shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the
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26
Company's fiscal year, such earning statement shall be made available not later
than 90 days after the close of the period covered thereby and in all other
cases shall be made available not later than 45 days after the close of the
period covered thereby.
(f) To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing of
the Registration Statement and the Prospectus and all amendments and supplements
thereto; (ii) the preparation, issuance and delivery of the Offered Securities;
(iii) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel; (iv) the qualification of the Offered Securities
under state securities or Blue Sky laws in accordance with the provisions of
Section 6(d), including filing fees and the fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the
preparation of any Blue Sky Memoranda; (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the Registration
Statement and all amendments thereto and of any preliminary prospectus and the
Prospectus and any amendments or supplements thereto; (vi) the printing and
delivery to the Underwriters of copies of any Blue Sky Memoranda; (vii) the
filing fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc. made in connection with the
Offered Securities; (viii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the
Operating Partnership agree, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Manager expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Operating Partnership, the
Company's directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company and the Operating Partnership within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
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27
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) of this Section
7, such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Manager, in the case
of parties indemnified pursuant to paragraph (a) above, and by the Company and
the Operating Partnership, in the case of parties indemnified pursuant to
paragraph (b) above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership on the one hand
and the Underwriters on the other hand from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted
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by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Operating Partnership on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Operating Partnership on the one hand and the Underwriters on
the other hand in connection with the offering of the Offered Securities shall
be deemed to be in the same respective proportions as the net proceeds from the
offering of such Offered Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company and the Operating
Partnership on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Operating
Partnership or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective number of Offered
Securities they have purchased hereunder, and not joint.
(e) The Company the Operating Partnership and the Underwriters
agree that it would not be just or equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) of this Section 7. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 7 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements of the
Company and the Operating Partnership contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or the Company or the Operating
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29
Partnership, its officers or directors or any person controlling the Company or
the Operating Partnership and (iii) acceptance of and payment for any of the
Offered Securities.
8. TERMINATION. This Agreement shall be subject to termination
by notice given by the Manager to the Company, if (a) after the execution and
delivery of the Underwriting Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv), such event, singly or together with any other such event, makes it, in the
judgment of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
9. DEFAULTING UNDERWRITERS. If, on the Closing Date or a Date
of Delivery, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Underwriters' Securities that it has or they have agreed
to purchase hereunder on such date, and the aggregate amount of Underwriters'
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate amount of the
Underwriters' Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the amount of Underwriters'
Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Underwriters' Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Manager may specify, to purchase the Underwriters' Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the amount of
Underwriters' Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such amount of Underwriters' Securities without the written consent
of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Underwriters' Securities and the aggregate
amount of Underwriters' Securities with respect to which such default occurs is
more than one-tenth of the aggregate amount of Underwriters' Securities to be
purchased on such date, and arrangements satisfactory to the Manager and the
Company for the purchase of such Underwriters' Securities are not made within 36
hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either the Manager or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. If, on a Date of Delivery, any
Underwriter or Underwriters shall fail or refuse to purchase Underwriters'
Securities to be purchased on such date and the aggregate number of
Underwriters' Securities with respect to which such default occurs is more than
one-tenth of the
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30
aggregate number of Underwriters' Securities to be purchased on such date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Underwriters' Securities to be purchased on
such date or (ii) purchase not less than the number of Underwriters' Securities
that such non-defaulting Underwriters would have been obligated to purchase on
such date in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
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"EXHIBIT B"
FORM OF LOCK-UP AGREEMENT
February __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇▇ Securities
▇.▇. ▇▇▇▇▇▇ Securities Inc.
c/o
Merrill ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering
by Irvine Apartment Communities, Inc.
Ladies and Gentlemen:
The undersigned, an officer and/or director of Irvine Apartment
Communities, Inc., a Maryland corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇▇▇▇▇ Securities and ▇.▇.
▇▇▇▇▇▇ Securities Inc. propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with the Company, providing for the public offering
of shares of the Company's Common Stock, par value $0.01 per share (the "Common
Stock"), as contemplated by post-effective amendment No. 1 to the registration
statement filed with the Securities and Exchange Commission (the "Commission")
on Form S-3 (Registration No. 33-92036) declared effective on May 8, 1996 and
the prospectus supplement filed with the Commission on or about February 14,
1997.
In recognition of the benefit that such an offering will confer upon the
undersigned as an officer and/or director of the Company and for other good and
valuable consideration, the undersigned hereby agrees with you that, during a
period of 90 days from the date of the Underwriting Agreement, the undersigned
will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or
indirectly, sell, offer to sell, assign, transfer, encumber, grant any option
for the sale of, contract to sell or otherwise dispose of any shares of, or
rights to acquire shares of the Common Stock, or any security convertible into
or exchangeable or exercisable for Common Stock, or request or demand
registration under the Securities Act of 1933, as amended, (the "Securities
Act") or inclusion in any other registration statement filed by the Company
under the Securities Act of any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for, or any rights to purchase
or acquire any such shares of Common Stock, now owned or hereafter acquired by
the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition.
Very truly yours,
Signature:
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Print Name:
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