<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 29549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 11)
CONSOLIDATED CAPITAL GROWTH FUND
(Name of Subject Company)
AIMCO PROPERTIES, L.P.
(Bidder)
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)
NONE
(CUSIP Number of Class of Securities)
PATRICK J. FOYE
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
COLORADO CENTER, TOWER TWO, 2000 SOUTH COLORADO BOULEVARD
DENVER, COLORADO 80222
(303) 757-8101
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
JONATHAN L. FRIEDMAN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 SOUTH GRAND, 34TH FLOOR
LOS ANGELES, CALIFORNIA 90071
(213) 687-5000
------------------------
<PAGE> 2
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction Valuation* $9,398,219.80 Amount of Filing Fee: $1,879.64
- --------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the
purchase of 26,033.85 units of limited partnership interest of the
subject partnership for $361 per unit. The amount of the filing fee,
calculated in accordance with Section 14(g)(1)(B)(3) and Rule 0-11(d)
under the Securities Exchange Act of 1934, as amended, equals 1/50th of
one percent of the aggregate of the cash offered by the bidder.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number or the form or schedule and the date of its filing.
Amount Previously Paid: Filing Parties:
Form or Registration No.: Date Filed:
(Continued on following pages)
Page 1 of 12 Pages
<PAGE> 3
CUSIP No. NONE 14D-1 AND 13D/A
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
AIMCO PROPERTIES, L.P.
84-1275621
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC, BK
5. (CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,161.50
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 2.34%
10. TYPE OF REPORTING PERSON
PN
Page 2 of 12 Pages
<PAGE> 4
CUSIP No. NONE 14D-1 AND 13D/A
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
AIMCO-GP, INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCES OF FUNDS
Not Applicable
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,161.50
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 2.34%
10. TYPE OF REPORTING PERSON
CO
Page 3 of 12 Pages
<PAGE> 5
CUSIP No. NONE 14D-1 AND 13D/A
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
INSIGNIA PROPERTIES, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCES OF FUNDS
Not Applicable
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,000.65
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 44.27%
10. TYPE OF REPORTING PERSON
PN
Page 4 of 12 Pages
<PAGE> 6
CUSIP No. NONE 14D-1 AND 13D/A
1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
AIMCO/IPT, INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) OR 2(f) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,000.65
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 44.06%
10. TYPE OF REPORTING PERSON
CO
Page 5 of 12 Pages
<PAGE> 7
CUSIP No. NONE 14D-1 AND 13D/A
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
APARTMENT INVESTMENT AND MANAGEMENT COMPANY
84-129577
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCES OF FUNDS
Not Applicable
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) OR 2(f)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,162.15
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Approximately 46.61%
10. TYPE OF REPORTING PERSON
CO
Page 6 of 12 Pages
<PAGE> 8
SCHEDULE 14D-1/AMENDMENT NO. 11 TO SCHEDULE 13D
This statement (the "Statement") constitutes a initial
Schedule 14D-1 of AIMCO Properties, L.P. (the "AIMCO OP"), relating to AIMCO
OP's offer to purchase units of limited partnership interest ("Units") of
Consolidated Capital Growth Fund (the "Partnership"); and (b) Amendment No. 10
to the Schedule 13D (the "Schedule 13D") originally filed with the Securities
and Exchange Commission (the "Commission") on December 19, 1994, by Insignia
Financial Group, Inc. ("Insignia"), as amended by (i) Amendment No. 1, filed
with the Commission on March 11, 1997, by Insignia, Insignia Properties, L.P.
("IPLP"), Insignia Properties Trust ("IPT") and Andrew L. Farkas, (ii) Amendment
No. 2, filed with the Commission on December 19, 1997, by Madison River
Properties, L.L.C. ("Madison River"), IPLP, IPT, Insignia and Andrew L. Farkas,
(iii) Amendment No. 3, filed with the Commission on January 15, 1998, by Madison
River, IPLP, IPT, Insignia and Andrew L. Farkas, (iv) Amendment No. 4, filed
with the Commission on January 22, 1998, by Madison River, IPLP, IPT, INsignia
and Andrew L. Farkas, (v) Amendment No. 5, filed with the Commission on February
2, 1998, by Madison River, IPLP, IPT, Insignia and Andrew L. Farkas, (vi)
Amendment No. 6, filed with the Commission on March 12, 1998, by Madison River,
IPLP, IPT, INsignia and Andrew L. Farkas, (vii) Amendment No. 7, filed with the
Commission on October 26, 1998, by Madison River, AIMCO OP, AIMCO-GP, Inc.
("AIMCO-GP") and Apartment Investment and Management Company ("AIMCO"), (viii)
Amendment No. 8, filed with the Commission on June 9, 1999, by Madison River,
AIMCO/IPT, IPLP, AIMCO OP, AIMCO-GP and AIMCO, and (x) Amendment No. 10 filed
with the Commission on July 30, 1999, by Madison River, AIMCO/IPT, IPLP, AIMCO
OP, AIMCO- GP, and AIMCO. Madison River, AIMCO/IPT, IPLP, AIMCO OP, AIMCO-GP and
AIMCO are herein referred to as the "Reporting Persons." The item numbers and
responses thereto are set forth below in accordance with the requirements of
Schedule 14D-1.
(1) SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Consolidated Capital
Growth Fund, a California limited partnership. The address of the Partnership's
principal executive offices is Colorado Center, Tower Two, 2000 South Colorado,
Boulevard, Suite 2-1000 Denver, Colorado 80222.
(b) This Statement relates to an offer by AIMCO OP to purchase
up to 26,033.85 of the 49,196 outstanding units of limited partnership interest
(the "Units") of the Partnership at a purchase price per Unit, net to the
seller, of $361 in cash (less the amount of any distributions paid by the
Partnership on and after November 24, 1999), upon the terms and subject to the
conditions set forth in an Offer to Purchase, dated November 24, 1999 (as
amended or supplemented from time to time, the "Offer to Purchase"), and the
related Letter of Transmittal and Instructions thereto (as amended or
supplemented from time to time, the "Letter of Transmittal"), copies of which
are filed as Exhibits (a)(1) and (a)(2) hereto, respectively.
(c) The information set forth in the Offer to Purchase under
"The Offer -- Section 9. Background and Reasons for the Offer -- Prices on
Secondary Market" is incorporated herein by reference.
(2) IDENTITY AND BACKGROUND.
(a) - (d), (g) This Statement is being filed by AIMCO
Properties, L.P., a Delaware limited partnership, and, insofar as this Statement
constitutes Amendment No. 8 to the Schedule 13D, by Madison River Properties,
L.L.C., a Delaware limited liability company, Insignia Properties, L.P., a
Delaware limited partnership, AIMCO/IPT, Inc., a Delaware corporation, AIMCO-GP,
Inc., a Delaware corporation, and Apartment Investment and Management Company, a
Maryland corporation. The sole
Page 7 of 12 Pages
<PAGE> 9
general partner of AIMCO OP is AIMCO-GP. AIMCO-GP is a wholly owned subsidiary
of AIMCO. On February 26, 1999, IPT was merged into AIMCO, and AIMCO contributed
IPT's interest in IPLP to AIMCO's wholly owned subsidiary, AIMCO/IPT. AIMCO/IPT
also replaced IPT as the sole general partner of IPLP. Madison River is a wholly
owned subsidiary of IPLP. The principal business of the Reporting Persons is the
ownership, acquisition, development, expansion and management of multi-family
apartment properties. The principal executive offices of the Reporting Persons
are located at Colorado Center, Tower Two, 2000 South Colorado, Boulevard, Suite
2-1000 Denver, Colorado 80222. The information set forth in the Offer to
Purchase under "The Offer -- Section 8. Information Concerning Us and Certain of
Our Affiliates" is incorporated herein by reference. The executive officers and
directors of AIMCO and AIMCO-GP are listed on Annex I to the Offer to Purchase
("Annex I"), which is incorporated herein by reference.
(e) - (f) During the last five years, none of the Reporting Persons
nor, to the best of their knowledge, any of the persons listed in Annex I (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining further
violations of or prohibiting activities subject to federal or state securities
laws or finding any violation with respect to such laws.
(3) PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in Part III of the
Partnership's Form 10-KSB for the year ended December 31, 1998, and the
financial statements and notes thereto included therein, and the information set
forth in the Offer to Purchase under "The Offer -- Section 9. Background and
Reasons for the Offer -- General," "The Offer -- Section 9. Background and
Reasons for the Offer -- Prior Tender Offers," "The Offer -- Section 11.
Conflicts of Interest and Transactions with Affiliates," "The Offer -- Section
13. Certain Information Concerning Your Partnership -- Distributions" and "The
Offer -- Section 13. Certain Information Concerning Your Partnership --
Compensation Paid to the General Partner and Its Affiliates" is incorporated
herein by reference.
(4) SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in the Offer to Purchase
under "The Offer -- Section 15. Source of Funds" is incorporated herein by
reference.
(5) PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the Offer to Purchase
under "The Offer -- Section 9. Background and Reasons for the Offer," "The Offer
- -- Section 12. Future Plans of the Purchaser" and "The Offer -- Section 7.
Effects of the Offer" is incorporated herein by reference.
(6) INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) Madison River directly owns 2,690 Units, IPLP directly owns
19,310.65 Units, and AIMCO OP directly owns 1,161.50 Units (for an aggregate of
23,162.15 Units), representing 5.41%, 38.86% and 2.34%, respectively, or a total
of 46.61% of the outstanding Units based on the 49,196 Units outstanding at
October 26, 1999.
IPLP, AIMCO/IPT and AIMCO may be deemed to beneficially own the Units
directly owned by Madison River by reason of each of their relationship with
Madison River. AIMCO/IPT and AIMCO
Page 8 of 12 Pages
<PAGE> 10
may be deemed to beneficially own the units directly owned by IPLP by reason of
each of their relationships with IPLP. Madison River is a wholly owned
subsidiary of IPLP, and AIMCO/IPT is the sole general partner of IPLP (owning
approximately 66.17% of the total equity interests). AIMCO/IPT is a wholly owned
subsidiary of AIMCO.
AIMCO-GP and AIMCO may be deemed to beneficially own the Units directly
owned by AIMCO OP by each of their relationship with AIMCO OP. AIMCO-GP is the
sole general partner of AIMCO OP (owning approximately 1% of the total equity
interests). AIMCO-GP is a wholly owned subsidiary of AIMCO.
Accordingly, for purposes of this Statement: (i) Madison River is
reporting that it shares the power to vote or direct the vote and the power to
dispose or direct the disposition of the 2,690 Units directly owned by it; (ii)
IPLP is reporting that it shares the power to vote or direct the vote and the
power to dispose and direct the disposition of the 19,310.65 Units owned by it
and the 2,690 Units directly owned by Madison River; (iii) AIMCO/IPT is
reporting that it shares the power to vote or direct the vote and the power to
dispose or direct the disposition of the 2,690 Units directly owned by Madison
River and the 19,310.65 Units directly owned by IPLP; (iv) AIMCO OP is reporting
that it shares the power to vote or direct the power to vote and the power to
dispose or direct the disposition of the 1,161.50 Units directly owned by it;
(v) AIMCO-GP is reporting that it shares the power to vote or direct the
disposition of the 1,161.50 Units owned by AIMCO OP; and (vi) AIMCO is reporting
that it shares the power to vote or direct the vote and the power to dispose or
direct the disposition of the 2,690 Units directly owned by Madison River, the
19,310.65 Units directly owned by IPLP and the 1,161.50 Units directly owned by
AIMCO OP.
(7) CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Not applicable.
(8) PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Offer to Purchase under "The
Offer -- Fees and Expenses" is incorporated herein by reference.
(9) FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The financial statements included in AIMCO OP's Annual Report
on Form 10-K for the year ended December 31, 1998, which are listed on the Index
to Financial Statements on page F-1 of such report, are incorporated herein by
reference. Such report may be inspected at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can also be obtained from the Public Reference Room of
the Commission in Washington, D.C. at prescribed rates and from the Commission's
web site at www.sec.gov.
(10) ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(d) The information set forth in the Offer to Purchase
under "The Offer -- Section 18. Certain Legal Matters" is incorporated herein by
reference.
Page 9 of 12 Pages
<PAGE> 11
(e) The information set forth in the Offer to Purchase under
"The Offer -- Section 9. Background and Reasons for the Offer -- Certain
Litigation" is incorporated herein by reference
(f) The Offer to Purchase is hereby incorporated by reference.
(11) MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated November 24, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated November 24, 1999, from AIMCO OP to the
Limited Partners of the Partnership.
(b) Credit Agreement (Secured Revolving Credit Facility),
dated as of August 16, 1999, among AIMCO Properties,
L.P., Bank of America, Bank Boston, N.A., and First
Union National Bank. (Exhibit 10.1 to AIMCO's Current
Report on Form 8-K, dated August 16, 1999, is
incorporated herein by this reference.)
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(z)(1) Agreement of Joint Filing, dated November 24, 1999,
among AIMCO, AIMCO- GP, AIMCO OP, AIMCO/IPT, IPLP,
and Madison River.
Page 10 of 12 Pages
<PAGE> 12
SIGNATURE
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: November 24, 1999
MADISON RIVER PROPERTIES, L.L.C.
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
AIMCO/IPT, INC.
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
INSIGNIA PROPERTIES, L.P.
By: AIMCO/IPT, INC.
(General Partner)
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
(General Partner)
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
AIMCO-GP, INC.
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
----------------------------------
Executive Vice President
Page 11 of 12 Pages
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ------------
<S> <C>
(a)(1) Offer to Purchase, dated November 24, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated November 24, 1999, from AIMCO OP to the
Limited Partners of the Partnership. (b) Credit
Agreement (Secured Revolving Credit Facility), dated
as of August 16, 1999, among AIMCO Properties, L.P.,
Bank of America, Bank Boston, N.A., and First Union
National Bank. (Exhibit 10.1 to AIMCO's Current
Report on Form 8-K, dated August 16, 1999, is
incorporated herein by this reference.)
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(z)(1) Agreement of Joint Filing, dated November 24, 1999,
among AIMCO, AIMCO- GP, AIMCO OP, AIMCO/IPT, IPLP,
and Madison Properties.
</TABLE>
Page 12 of 12 Pages
<PAGE> 1
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
AIMCO Properties, L.P.
is offering to purchase any and all units of limited partnership interest in
CONSOLIDATED CAPITAL GROWTH FUND
for $361.00 per unit in CASH
Upon the terms and subject to the conditions set forth herein, we will accept
any and all units validly tendered in response to our offer. We will accept all
units in response to our offer. If units are validly tendered and not properly
withdrawn prior to the expiration date and the purchase of all such units would
result in there being less than 320 unitholders, we will purchase only 99% of
the total number of units so tendered by each limited partner.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
Our offer and your withdrawal rights will expire at 12:00 midnight, New York
City time, on December 22, 1999, unless we extend the deadline.
You will not pay any partnership transfer fees if you tender your units. You
will pay any other fees and costs, including any transfer taxes.
Our offer is not subject to a minimum number of units being tendered.
SEE "RISK FACTORS" BEGINNING ON PAGE 1 OF THIS OFFER TO PURCHASE FOR A
DESCRIPTION OF RISK FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH OUR
OFFER, INCLUDING THE FOLLOWING:
o We determined the offer price of $361.00 per unit without any
arms-length negotiations. Accordingly, our offer price may not reflect
the fair market value of your units.
o Your general partner and the property manager of the properties are
subsidiaries of ours and, therefore, the general partner has
substantial conflicts of interest with respect to our offer.
o We are making this offer with a view to making a profit and, therefore,
there is a conflict between our desire to purchase your units at a low
price and your desire to sell your units at a high price.
(continued on next page)
--------------------------------------------------
If you desire accept our offer, you should complete and sign the enclosed
letter of transmittal in accordance with the instructions thereto and mail or
deliver the signed letter of transmittal and any other required documents to
River Oaks Partnership Services, Inc., which is acting as Information Agent in
connection with our offer, at one of its addresses set forth on the back cover
of this offer to purchase. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THIS OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL MAY
ALSO BE DIRECTED TO THE INFORMATION AGENT AT (888) 349-2005.
November 24, 1999
<PAGE> 2
(continued from cover page)
o Continuation of your partnership will result in our affiliates
continuing to receive management fees from your partnership. Such fees
would not be payable if your partnership was liquidated.
o It is possible that we may conduct a subsequent offer at a higher
price.
o For any units that we acquire from you, you will not receive any future
distributions from operating cash flow of your partnership or upon a
sale or refinancing of property owned by your partnership.
o If we acquire a substantial number of units, we will increase our
ability to influence voting decisions with respect to your partnership
and may control such voting decisions, including but not limited to the
removal of the general partner, most amendments to the partnership
agreement and the sale of all or substantially all of your
partnership's assets.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................................................................1
RISK FACTORS................................................................................................1
No Third Party Valuation or Appraisal; No Arms-Length Negotiation......................................2
No Fairness Opinion From a Third Party.................................................................2
Offer Price May Not Represent Fair Market Value........................................................2
Offer Price Does Not Reflect Future Prospects..........................................................2
Offer Price Based on Our Estimate of Liquidation Proceeds..............................................2
Offer Price May Not Represent Liquidation Value........................................................2
Continuation of the Partnership; No Time Frame Regarding Sale of Properties............................2
Holding Units May Result in Greater Future Value.......................................................3
Conflicts of Interest With Respect to the Offer........................................................3
No General Partner Recommendation......................................................................3
Conflicts of Interest Relating to Management Fees......................................................3
Possible Subsequent Offer at a Higher Price............................................................3
Recognition of Taxable Gain on a Sale of Your Units....................................................3
Loss of Future Distributions from Your Partnership.....................................................4
Possible Increase in Control of Your Partnership by Us.................................................4
Recognition of Gain Resulting from Possible Future Reduction in Your Partnership Liabilities...........4
Risk of Inability to Transfer Units for 12-Month Period................................................4
Potential Delay in Payment.............................................................................4
Balloon Payments.......................................................................................5
THE OFFER...................................................................................................5
Section 1. Terms of the Offer; Expiration Date; Proration............................................5
Section 2. Acceptance for Payment and Payment for Units..............................................6
Section 3. Procedure for Tendering Units.............................................................7
Section 4. Withdrawal Rights.........................................................................9
Section 5. Extension of Tender Period; Termination; Amendment........................................9
Section 6. Certain Federal Income Tax Matters.......................................................10
Section 7. Effects of the Offer.....................................................................13
Section 8. Information Concerning Us and Certain of Our Affiliates..................................14
Section 9. Background and Reasons for the Offer.....................................................15
Section 10. Position of the General Partner of Your Partnership With Respect to the Offer............23
Section 11. Conflicts of Interest and Transactions with Affiliates...................................24
Section 12. Future Plans of the Purchaser............................................................25
Section 13. Certain Information Concerning Your Partnership..........................................26
Section 14. Voting Power.............................................................................31
Section 15. Source of Funds..........................................................................31
Section 16. Dissenters' Rights.......................................................................32
Section 17. Conditions of the Offer..................................................................32
Section 18. Certain Legal Matters....................................................................34
Section 19. Fees and Expenses........................................................................34
ANNEX I -- OFFICERS AND DIRECTORS.........................................................................I-1
</TABLE>
i
<PAGE> 4
INTRODUCTION
We are offering to purchase any and all units, representing approximately
53.39% of the outstanding units of limited partnership interest in your
partnership, for the purchase price of $361.00 per unit, net to the seller in
cash, without interest, less the amount of distributions, if any, made by your
partnership in respect of any unit from the date hereof until the expiration
date. Our offer is made upon the terms and subject to the conditions set forth
in this offer to purchase and in the accompanying letter of transmittal.
Upon the terms and subject to the conditions set forth herein, we will
accept all units validly tendered in response to our offer. If units are validly
tendered prior to the expiration date and not properly withdrawn prior to the
expiration date in accordance with the procedures set forth in Section 4 and the
purchase of all such units would result in there being less than 320
unitholders, we will purchase only 99% of the total number of units so tendered
by each limited partner.
We will pay any transfer fees imposed for the transfer of units by your
partnership. However, you will have to pay any taxes that arise from your sale
of units. You will also have to pay any fees or commissions imposed by your
broker, or by any custodian or other trustee of any Individual Retirement
Account or benefit plan which is the owner of record of your units. Although the
fees charged for transferring units from an Individual Retirement Account vary,
such fees are typically $25-$50 per transaction. Depending on the number of
units that you tender, any fees charged on a per transaction basis could exceed
the aggregate offer price you receive (as a result of proration or otherwise).
We have retained River Oaks Partnership Services, Inc. to act as the
Information Agent in connection with our offer. We will pay all charges and
expenses in connection with the services of the Information Agent. The offer is
not conditioned on any minimum number of units being tendered. However, certain
other conditions do apply. See "The Offer -- Section 17. Conditions of the
Offer." You may tender all or any portion of the units that you own. Under no
circumstances will we be required to accept any unit if the transfer of that
unit to us would be prohibited by the agreement of limited partnership of your
partnership.
Our offer will expire at midnight, New York City time, on December 22,
1999, unless extended. If you desire to accept our offer, you must complete and
sign the letter of transmittal in accordance with the instructions contained
therein and forward or hand deliver it, together with any other required
documents, to the Information Agent. You may withdraw your tender of units
pursuant to the offer at any time prior to the expiration date of our offer and,
if we have not accepted such units for payment, on or after January 22, 2000.
We are AIMCO Properties, L.P., a Delaware limited partnership. Together
with our subsidiaries, we conduct substantially all of the operations of
Apartment Investment and Management Company, or AIMCO. AIMCO is a
self-administered and self-managed real estate investment trust engaged in the
ownership, acquisition, development, expansion and management of multifamily
apartment properties. As of September 30, 1999, AIMCO owned or controlled, held
an equity interest in or managed 362,818 apartment units in 1,985 properties
located in 49 states, the District of Columbia and Puerto Rico. AIMCO's Class A
Common Stock is listed and traded on the New York Stock Exchange under the
symbol "AIV."
RISK FACTORS
Before deciding whether or not to tender any of your units, you should
consider carefully the following risks and disadvantages of the offer:
<PAGE> 5
NO THIRD PARTY VALUATION OR APPRAISAL; NO ARMS-LENGTH NEGOTIATION
We did not base our valuation of the properties owned by your partnership
on any third-party appraisal or valuation. We established the terms of our offer
without any arms-length negotiation. The terms of the offer could differ if they
were subject to independent third party negotiations. It is uncertain whether
our offer price reflects the value which would be realized upon a sale of your
units to a third party.
NO FAIRNESS OPINION FROM A THIRD PARTY
We did not obtain an opinion from a third party that our offer price is
fair from a financial point of view.
OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE
There is no established or regular trading market for your units, nor is
there another reliable standard for determining the fair market value of the
units. Our offer price does not necessarily reflect the price that you would
receive in an open market for your units. Such prices could be higher than our
offer price.
OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS
Our offer price is based on your partnership's historical property income.
It does not ascribe any value to potential future improvements in the operating
performance of your partnership's properties.
OFFER PRICE BASED ON OUR ESTIMATE OF LIQUIDATION PROCEEDS
The offer price represents only our estimate of the amount you would
receive if we liquidated the partnership. In determining the liquidation value,
we used for the properties the direct capitalization method to estimate the
value of your partnership's properties because we think a prospective purchaser
of the properties would value the properties using this method. In doing so, we
applied a capitalization rate to your partnership's property income for the nine
months ended September 30, 1999. If property income for a different period or a
different capitalization rate was used, a higher valuation could result. Other
methods of valuing your units could also result in a higher valuation.
OFFER PRICE MAY NOT REPRESENT LIQUIDATION VALUE
The actual proceeds obtained from a liquidation are highly uncertain and
could be more than our estimate. Accordingly, our offer price could be less than
the net proceeds that you would realize upon an actual liquidation of your
partnership.
CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTIES
Your general partner (which is our subsidiary) is proposing to continue to
operate your partnership and not to attempt to liquidate it at the present time.
It is not known when the properties owned by your partnership may be sold. There
may be no way to liquidate your investment in a partnership in the future until
the properties are sold and the partnership is liquidated. The general partner
of your partnership continually considers whether a property should be sold or
otherwise disposed of after consideration of relevant factors, including
prevailing economic conditions, availability of favorable financing and tax
considerations, with a view to achieving maximum capital appreciation for your
partnership. At the current time the general partner of your partnership
believes that a property sale of the properties would not be advantageous given
market conditions, the condition of the properties and tax considerations. In
particular, the general partner considered the changes in the local rental
market, the potential for appreciation in the value of a property and the tax
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consequences to you and your partners on a sale of property. We cannot predict
when any property will be sold or otherwise disposed of.
HOLDING UNITS MAY RESULT IN GREATER FUTURE VALUE
Although a liquidation of your partnership is not currently contemplated in
the near future, you might receive more value if you retain your units until
your partnership is liquidated.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER
The general partner of your partnership is our subsidiary and, therefore,
has substantial conflicts of interest with respect to our offer. We are making
this offer with a view to making a profit. There is a conflict between our
desire to purchase your units at a low price and your desire to sell your units
at a high price. We determined our offer price without negotiation with any
other party, including any general or limited partner.
NO GENERAL PARTNER RECOMMENDATION
The general partner of your partnership makes no recommendation as to
whether you should tender or refrain from tendering your units. Although the
general partner believes the offer is fair, you must make your own decision
whether or not to participate in the offer, based upon a number of factors,
including your financial position, your need or desire for liquidity, other
financial opportunities available to you, and your tax position and the tax
consequences to you of selling your units.
CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES
Since we or our subsidiaries receive fees for managing your partnership and
its properties, a conflict of interest exists between our continuing the
partnership and receiving such fees, and the liquidation of the partnership and
the termination of such fees. Another conflict is the fact that a decision of
the limited partners of your partnership to remove, for any reason, the general
partner of your partnership or the property manager of any property owned by
your partnership would result in a decrease or elimination of the substantial
fees paid to them for services provided to your partnership.
POSSIBLE SUBSEQUENT OFFER AT A HIGHER PRICE
It is possible that we may conduct a subsequent offer at a higher price.
Such a decision will depend on, among other things, the performance of the
partnership, prevailing economic conditions, and our interest in acquiring
additional limited partnership interests.
RECOGNITION OF TAXABLE GAIN ON A SALE OF YOUR UNITS
Your sale of units for cash will be a taxable sale, with the result that
you will recognize taxable gain or loss measured by the difference between the
amount realized on the sale and your adjusted tax basis in the units of limited
partnership interest of your partnership you transfer to us. The "amount
realized" with respect to a unit of limited partnership interest you transfer to
us will be equal to the sum of the amount of cash received by you for the unit
sold pursuant to the offer plus the amount of partnership liabilities allocable
to the unit. The particular tax consequences for you of our offer will depend
upon a number of factors related to your tax situation, including your tax basis
in the units you transfer to us, whether you dispose of all of your units and
whether you have available suspended passive losses, credits or other tax items
to offset any gain recognized as a result of your sale of your units. Therefore,
depending on your basis in the units and your tax position, your taxable gain
and any tax liability resulting from a sale of units to us pursuant to the offer
could
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exceed our offer price. Because the income tax consequences of tendering units
will not be the same for everyone, you should consult your own tax advisor to
determine the tax consequences of the offer to you.
LOSS OF FUTURE DISTRIBUTIONS FROM YOUR PARTNERSHIP
If you tender your units in response to our offer, you will transfer to us
all right, title and interest in and to all of the units we accept, and the
right to receive all distributions in respect of such units on and after the
date on which we accept such units for purchase. Accordingly, for any units that
we acquire from you, you will not receive any future distributions from
operating cash flow of your partnership or upon a sale or refinancing of
properties owned by your partnership.
POSSIBLE INCREASE IN CONTROL OF YOUR PARTNERSHIP BY US
Decisions with respect to the day-to-day management of your partnership are
the responsibility of the general partner. Because the general partner of your
partnership is our affiliate, we control the management of your partnership.
Under your partnership's agreement of limited partnership, limited partners
holding a majority of the outstanding units must approve certain extraordinary
transactions, including the removal of the general partner, the addition of a
new general partner, most amendments to the partnership agreement and the sale
of all or substantially all of your partnership's assets. If we acquire 1,947.28
additional units, we will own a majority of the outstanding units and will have
the ability to control any vote of the limited partners.
RECOGNITION OF GAIN RESULTING FROM POSSIBLE FUTURE REDUCTION IN YOUR PARTNERSHIP
LIABILITIES
Generally, a decrease in your share of partnership liabilities is treated,
for Federal income tax purposes, as a deemed cash distribution. Although no
general partner of your partnership has any current plan or intention to reduce
the liabilities of your partnership, it is possible that future economic,
market, legal, tax or other considerations may cause a general partner to reduce
the liabilities of your partnership. If you retain all or a portion of your
units and the liabilities of your partnership were to be reduced, you would be
treated as receiving a hypothetical distribution of cash resulting from a
decrease in your share of the liabilities of the partnership. Any such
hypothetical distribution of cash would be treated as a nontaxable return of
capital to the extent of your adjusted tax basis in your units and thereafter as
gain. Gain recognized by you on the disposition of retained units with a holding
period of 12 months or less may be classified as short-term capital gain and
subject to taxation at ordinary income tax rates.
RISK OF INABILITY TO TRANSFER UNITS FOR 12-MONTH PERIOD
Your partnership's agreement of limited partnership prohibits any transfer
of an interest if such transfer, together with all other transfers during the
preceding 12 months, would cause 50% or more of the total interest in capital
and profits of your partnership to be transferred within such 12-month period.
If we acquire a significant percentage of the interest in your partnership, you
may not be able to transfer your units for a 12-month period following our
offer.
POTENTIAL DELAY IN PAYMENT
We reserve the right to extend the period of time during which our offer is
open and thereby delay acceptance for payment of any tendered units. The offer
may be extended indefinitely, and no payment will be made in respect of rendered
units until the expiration of the offer and acceptance of units for payment.
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BALLOON PAYMENTS
Your partnership has balloon payments of approximately $6,000,000 and
$24,690,000 due on mortgage debt in November, 2003 and December, 2005,
respectively. For each such mortgage debt, your partnership will have to
refinance such debt or sell the property or properties securing that mortgage
debt prior to the balloon payment date, or it will become in default on the debt
and could lose the property or properties to foreclosure.
THE OFFER
Section 1. Terms of the Offer; Expiration Date; Proration.
Upon the terms and subject to the conditions of the offer, we will accept
(and thereby purchase) any and all units that are validly tendered on or prior
to the expiration date and not withdrawn in accordance with the procedures set
forth in "The Offer -- Section 4. Withdrawal Rights." For purposes of the offer,
the term "expiration date" shall mean 12:00 midnight, New York City time, on
December 22, 1999, unless we in our sole discretion shall have extended the
period of time for which the offer is open, in which event the term "expiration
date" shall mean the latest time and date on which the offer, as extended by us,
shall expire. See "The Offer -- Section 5. Extension of Tender Period;
Termination; Amendment" for a description of our right to extend the period of
time during which the offer is open and to amend or terminate the offer.
The purchase price per unit will automatically be reduced by the aggregate
amount of distributions per unit, if any, made by your partnership to you on or
after the commencement of our offer and prior to the date on which we acquire
your units pursuant to our offer.
If, prior to the expiration date, we increase the consideration offered to
limited partners pursuant to the offer, the increased consideration will be paid
for all units accepted for payment pursuant to the offer, whether or not the
units were tendered prior to the increase in consideration.
If units are validly tendered prior to the expiration date and not properly
withdrawn prior to the expiration date in accordance with the procedures set
forth in Section 4 and the purchase of all such units would result in there
being less than 320 unitholders, we will purchase only 99% of the total number
of units so tendered by each limited partner. In such case, you would continue
to be a limited partner and receive a K-1 for tax reporting purposes.
The offer is conditioned on satisfaction of certain conditions. THE OFFER
IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING TENDERED. See "The
Offer -- Section 17. Conditions of the Offer," which sets forth in full the
conditions of the offer. We reserve the right (but in no event shall we be
obligated), in our reasonable discretion, to waive any or all of those
conditions. If, on or prior to the expiration date, any or all of the conditions
have not been satisfied or waived, we reserve the right to (i) decline to
purchase any of the units tendered, terminate the offer and return all tendered
units to tendering limited partners, (ii) waive all the unsatisfied conditions
and purchase all units validly tendered, (iii) extend the offer and, subject to
the withdrawal rights of limited partners, retain the units that have been
tendered during the period or periods for which the offer is extended, or (iv)
amend the offer. The transfer of units will be effective September 1, 1999.
This offer is being mailed to the persons shown by your partnership's
records to have been limited partners or, in the case of units owned of record
by Individual Retirement Accounts and qualified plans, beneficial owners of
units, as of November 1, 1999.
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Section 2. Acceptance for Payment and Payment for Units.
Upon the terms and subject to the conditions of the offer, we will
purchase, by accepting for payment, and will pay for, any and all units validly
tendered as promptly as practicable following the expiration date. A tendering
beneficial owner of units whose units are owned of record by an Individual
Retirement Account or other qualified plan will not receive direct payment of
the offer price; rather, payment will be made to the custodian of such account
or plan. In all cases, payment for units purchased pursuant to the offer will be
made only after timely receipt by the Information Agent of a properly completed
and duly executed letter of transmittal and other documents required by the
letter of transmittal. See "The Offer -- Section 3." UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE OFFER PRICE BY REASON OF ANY DELAY IN MAKING SUCH
PAYMENT.
Upon the terms and subject to the conditions of the offer, we will accept
for payment and pay for all units validly tendered, with appropriate adjustments
to avoid purchases that would violate the agreement of limited partnership of
your partnership and any relevant procedures or regulations promulgated by the
general partner. Accordingly, in some circumstances, we may pay you the full
offer price and accept an assignment of your right to receive distributions and
other payments and an irrevocable proxy in respect of the units and defer,
perhaps indefinitely, the transfer of ownership of the units on the partnership
books. In other circumstance we may only be able to purchase units which,
together with units previously transferred within the preceding twelve months,
do not exceed 50% of the outstanding units.
If more units than can be purchased under the partnership agreement are
validly tendered prior to the expiration date and not properly withdrawn prior
to the expiration date in accordance with the procedures specified herein, we
will, upon the terms and subject to the conditions of the offer, accept for
payment and pay for those units so tendered which do not violate the terms of
the partnership agreement, pro rata according to the number of units validly
tendered by each limited partner and not properly withdrawn on or prior to the
expiration date, with appropriate adjustments to avoid purchases of fractional
units. If the number of units validly tendered and not properly withdrawn on or
prior to the expiration date is less than or equal to the maximum number we can
purchase under the partnership agreement, we will purchase all units so tendered
and not withdrawn, upon the terms and subject to the conditions of the offer.
If proration of tendered units is required, then, subject to our obligation
under Rule 14e-1(c) under the Securities Exchange Act of 1934 ("Exchange Act")
to pay limited partners the purchase price in respect of units tendered or
return those units promptly after termination or withdrawal of the offer, we do
not intend to pay for any units accepted for payment pursuant to the offer until
the final proration results are known. Notwithstanding any such delay in
payment, no interest will be paid on the cash offer price.
For purposes of the offer, we will be deemed to have accepted for payment
pursuant to the offer, and thereby purchased, validly tendered units, if, as and
when we give verbal or written notice to the Information Agent of our acceptance
of those units for payment pursuant to the offer. Payment for units accepted for
payment pursuant to the offer will be made through the Information Agent, which
will act as agent for tendering limited partners for the purpose of receiving
cash payments from us and transmitting cash payments to tendering limited
partners.
If any tendered units are not accepted for payment by us for any reason,
the letter of transmittal with respect to such units not purchased may be
destroyed by us or the Information Agent. If, for any reason, acceptance for
payment of, or payment for, any units tendered pursuant to the offer is delayed
or we are unable to accept for payment, purchase or pay for units tendered
pursuant to the offer, then, without prejudice to our rights under "The Offer --
Section 17. Conditions of the Offer," the Information Agent may, nevertheless,
on our behalf retain tendered units, and those units may not be withdrawn except
to the extent that the tendering limited partners are entitled to withdrawal
rights as described in "The Offer -- Section 4. Withdrawal Rights"; subject,
however,
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to our obligation under Rule 14e-1(c) under the Exchange Act, to pay you the
offer price in respect of units tendered or return those units promptly after
termination or withdrawal of the offer.
We reserve the right to transfer or assign, in whole or in part, to one or
more of our affiliates, the right to purchase units tendered pursuant to the
offer, but no such transfer or assignment will relieve us of our obligations
under the offer or prejudice your rights to receive payment for units validly
tendered and accepted for payment pursuant to the offer.
Section 3. Procedure for Tendering Units.
VALID TENDER. To validly tender units pursuant to the offer, a properly
completed and duly executed letter of transmittal and any other documents
required by such letter of transmittal must be received by the Information
Agent, at one of its addresses set forth on the back cover of this offer to
purchase, on or prior to the expiration date. You may tender all or any portion
of your units. No alternative, conditional or contingent tenders will be
accepted.
SIGNATURE REQUIREMENTS. If the letter of transmittal is signed by the
registered holder of a unit and payment is to be made directly to that holder,
then no signature guarantee is required on the letter of transmittal. Similarly,
if a unit is tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc. or a commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the United
States (each an "Eligible Institution"), no signature guarantee is required on
the letter of transmittal. However, in all other cases, all signatures on the
letter of transmittal must be guaranteed by an Eligible Institution.
In order for you to tender in the offer, your units must be validly
tendered and not withdrawn on or prior to the expiration date.
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT YOUR OPTION AND RISK AND DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
APPOINTMENT AS PROXY; POWER OF ATTORNEY. By executing the letter of
transmittal, you are irrevocably appointing us and our designees as your proxy,
in the manner set forth in the letter of transmittal, each with full power of
substitution, to the fullest extent of the your rights with respect to the units
tendered by you and accepted for payment by us. Each such proxy shall be
considered coupled with an interest in the tendered units. Such appointment will
be effective when, and only to the extent that, we accept the tendered unit for
payment. Upon such acceptance for payment, all prior proxies given by you with
respect to the units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). We and our designees
will, as to those units, be empowered to exercise all voting and other rights as
a limited partner as we, in our sole discretion, may deem proper at any meeting
of limited partners, by written consent or otherwise. We reserve the right to
require that, in order for units to be deemed validly tendered, immediately upon
our acceptance for payment of the units, we must be able to exercise full voting
rights with respect to the units, including voting at any meeting of limited
partners then scheduled or acting by written consent without a meeting. By
executing the letter of transmittal, you agree to execute all such documents and
take such other actions as shall be reasonably required to enable the units
tendered to be voted in accordance with out directions. The proxy and power of
attorney granted by you to us upon your execution of the letter of transmittal
will remain effective and be irrevocable for a period of ten years following the
termination of our offer.
By executing the letter of transmittal, you also irrevocably constitute and
appoint us and our managers and designees as your attorneys-in-fact, each with
full power of substitution, to the full extent of your rights with
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respect to the units tendered by you and accepted for payment by us. Such
appointment will be effective when, and only to the extent that, we pay for your
units. You will agree not to exercise any rights pertaining to the tendered
units without our prior consent. Upon such payment, all prior powers of attorney
granted by you with respect to such units will, without further action, be
revoked, and no subsequent powers of attorney may be granted (and if granted
will not be effective). Pursuant to such appointment as attorneys-in-fact, we
and our managers and designees each will have the power, among other things, (i)
to transfer ownership of such units on the partnership books maintained by your
general partner (and execute and deliver any accompanying evidences of transfer
and authenticity it may deem necessary or appropriate in connection therewith),
(ii) upon receipt by the Information Agent of the offer consideration, to become
a substituted limited partner, to receive any and all distributions made by your
partnership on or after the date on which we acquire such units, and to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
units in accordance with the terms of our offer, (iii) to execute and deliver to
the general partner of your partnership a change of address form instructing the
general partner to send any and all future distributions to which we are
entitled pursuant to the terms of the offer in respect of tendered units to the
address specified in such form, and (iv) to endorse any check payable to you or
upon your order representing a distribution to which we are entitled pursuant to
the terms of our offer, in each case, in your name and on your behalf.
If you tender units through the enclosed letter of transmittal you will
irrevocably constitute and appoint us and any of our designees as your true and
lawful agent and attorney-in-fact with respect to such units, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to withdraw any or all of such units that have been
previously tendered in response to any other tender or exchange offer, provided
that the price per unit we are offering is equal to or higher than the price per
unit being offered in the other tender or exchange offer. Such appointment is
effective upon the receipt of such letter of transmittal and shall continue to
be effective unless and until you withdraw such units from this offer prior to
the expiration date.
ASSIGNMENT OF INTEREST IN FUTURE DISTRIBUTIONS. By executing the letter of
transmittal, you will irrevocably assign to us and our assigns all of your
right, title and interest in and to any and all distributions made by your
partnership from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up, or dissolution, payments in
settlement of existing or future litigation, and all other distributions and
payments from and after the expiration date of our offer, in respect of the
units tendered by you and accepted for payment and thereby purchased by us. If,
after the unit is accepted for payment and purchased by us, you receive any
distribution from any source and of any nature, including, without limitation,
distributions in the ordinary course, distributions from sales of assets,
distributions upon liquidation, winding-up or dissolution, payments in
settlement of existing or future litigation and all other distributions and
payments, from your partnership in respect of such unit, you will agree to
forward promptly such distribution to us.
DETERMINATION OF VALIDITY; REJECTION OF UNITS; WAIVER OF DEFECTS; NO
OBLIGATION TO GIVE NOTICE OF DEFECTS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of units pursuant to our offer will be determined by us, in our reasonable
discretion, which determination shall be final and binding on all parties. We
reserve the absolute right to reject any or all tenders of any particular unit
determined by us not to be in proper form or if the acceptance of or payment for
that unit may, in the opinion of our counsel, be unlawful. We also reserve the
absolute right to waive or amend any of the conditions of the offer that we are
legally permitted to waive as to the tender of any particular unit and to waive
any defect or irregularity in any tender with respect to any particular unit of
any particular limited partner. Our interpretation of the terms and conditions
of the offer (including the letter of transmittal) will be final and binding on
all parties. No tender of units will be deemed to have been validly made unless
and until all defects and irregularities have been cured or waived. Neither us,
the Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in the tender of any unit or will
incur any liability for failure to give any such notification.
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BACKUP FEDERAL INCOME TAX WITHHOLDING. To prevent the possible application
of back-up Federal income tax withholding of 31% with respect to payment of the
offer price, you may have to provide us with your correct taxpayer
identification number. See the instructions to the letter of transmittal and
"The Offer -- Section 6. Certain Federal Income Tax Matters."
FIRPTA WITHHOLDING. To prevent the withholding of Federal income tax in an
amount equal to 10% of the amount realized on the disposition (the amount
realized is generally the offer price plus the partnership liabilities allocable
to each unit purchased), you must certify that you are not a foreign person if
you tender units. See the instructions to the letter of transmittal and "The
Offer -- Section 6. Certain Federal Income Tax Matters."
TRANSFER TAXES. The amount of any transfer taxes (whether imposed on the
registered holder of units or any person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
BINDING AGREEMENT. A tender of a unit pursuant to any of the procedures
described above and the acceptance for payment of such unit will constitute a
binding agreement between the tendering unitholder and us on the terms set forth
in this offer to purchase and the related letter of transmittal.
Section 4. Withdrawal Rights.
You may withdraw tendered units at any time prior to the expiration date or
on or after January 22, 2000, if the units have not been previously accepted for
payment.
For a withdrawal to be effective, a written notice of withdrawal must be
timely received by the Information Agent at one of its addresses set forth on
the back cover of the offer to purchase. Any such notice of withdrawal must
specify the name of the person who tendered, the number of units to be withdrawn
and the name of the registered holder of such units, if different from the
person who tendered. In addition, the notice of withdrawal must be signed by the
person who signed the letter of transmittal in the same manner as the letter of
transmittal was signed.
If purchase of, or payment for, a unit is delayed for any reason, or if we
are unable to purchase or pay for a unit for any reason, then, without prejudice
to our rights under the offer, tendered units may be retained by the Information
Agent; subject, however, to our obligation, pursuant to Rule 14e-1(c) under the
Exchange Act, to pay the offer price in respect of units tendered or return
those units promptly after termination or withdrawal of our offer.
Any units properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of our offer. However, withdrawn units may be
re-tendered at any time prior to the expiration date by following the procedures
described in "The Offer -- Section 3. Procedure for Tendering Units."
All questions as to the validity and form (including time of receipt) of
notices of withdrawal will be determined by us in our reasonable discretion,
which determination will be final and binding on all parties. Neither we, the
Information Agent, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Section 5. Extension of Tender Period; Termination; Amendment.
We expressly reserve the right, in our reasonable discretion, at any time
and from time to time, (i) to extend the period of time during which our offer
is open and thereby delay acceptance for payment of, and the payment for, any
unit, (ii) to terminate the offer and not accept any units not theretofore
accepted for payment or paid for if any of the conditions to the offer are not
satisfied or if any event occurs that might reasonably be
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expected to result in a failure to satisfy such conditions, (iii) upon the
occurrence of any of the conditions specified in "The Offer -- Section 17.
Conditions of the Offer," to delay the acceptance for payment of, or payment
for, any units not already accepted for payment or paid for, and (iv) to amend
our offer in any respect (including, without limitation, by increasing the
consideration offered, increasing or decreasing the units being sought, or
both). Notice of any such extension, termination or amendment will promptly be
disseminated to you in a manner reasonably designed to inform you of such
change. In the case of an extension of the offer, the extension will be followed
by a press release or public announcement which will be issued no later than
9:00 a.m., New York City time, on the next business day after the scheduled
expiration date of our offer, in accordance with Rule 14e-1(d) under the
Exchange Act.
If we extend the offer, or if we delay payment for a unit (whether before
or after its acceptance for payment) or are unable to pay for a unit pursuant to
our offer for any reason, then, without prejudice to our rights under the offer,
the Information Agent may retain tendered units and those units may not be
withdrawn except to the extent tendering unitholders are entitled to withdrawal
rights as described in "The Offer -- Section 4. Withdrawal Rights"; subject,
however, to our obligation, pursuant to Rule 14e-l(c) under the Exchange Act, to
pay the offer price in respect of units tendered or return those units promptly
after termination or withdrawal of the offer.
If we make a material change in the terms of our offer, or if we waive a
material condition to our offer, we will extend the offer and disseminate
additional tender offer materials to the extent required by Rule 14e-1 under the
Exchange Act. The minimum period during which the offer must remain open
following any material change in the terms of the offer, other than a change in
price or a change in percentage of securities sought or a change in any dealer's
soliciting fee, if any, will depend upon the facts and circumstances, including
the materiality of the change. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought or a change
in any dealer's soliciting fee, if any, a minimum of ten business days from the
date of such change is generally required to allow for adequate dissemination to
unitholders. Accordingly, if, prior to the expiration date, we increase (other
than increases of not more than two percent of the outstanding units) or
decrease the number of units being sought, or increase or decrease the offer
price, and if the offer is scheduled to expire at any time earlier than the
tenth business day after the date that notice of such increase or decrease is
first published, sent or given to unitholders, the offer will be extended at
least until the expiration of such ten business days. As used in the offer to
purchase, "business day" means any day other than a Saturday, Sunday or a
Federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, New York City time.
Section 6. Certain Federal Income Tax Matters.
The following summary is a general discussion of certain of the United
States federal income tax consequences of the offer that may be relevant to (i)
unitholders who tender some or all of their units for cash pursuant to our
offer, and (ii) unitholders who do not tender any of their units pursuant to our
offer. This discussion is based on the Internal Revenue Code of 1986, as amended
(the "Internal Revenue Code"), Treasury Regulations, rulings issued by the
Internal Revenue Service (the "IRS"), and judicial decisions, all as of the date
of this offer to purchase. All of the foregoing are subject to change or
alternative construction, possibly with retroactive effect, and any such change
or alternative construction could affect the continuing accuracy of this
summary. This summary is based on the assumption that your partnership is
operated in accordance with its organizational documents including its
certificate of limited partnership and agreement of limited partnership. This
summary is for general information only and does not purport to discuss all
aspects of federal income taxation which may be important to a particular person
in light of its investment or tax circumstances, or to certain types of
investors subject to special tax rules (including financial institutions,
broker-dealers, insurance companies, and, except to the extent discussed below,
tax-exempt organizations and foreign investors, as determined for United States
federal income tax purposes), nor (except as otherwise expressly indicated) does
it describe any aspect of state, local, foreign or other tax laws. This summary
assumes that the units constitute capital assets in the hands of the unitholders
(generally, property held for investment). No advance ruling has been or will be
sought from
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the IRS regarding any matter discussed in this offer to purchase. Further, no
opinion of counsel has been obtained with regard to the offer.
THE UNITED STATES FEDERAL INCOME TAX TREATMENT OF A UNITHOLDER
PARTICIPATING IN THE OFFER DEPENDS IN SOME INSTANCES ON DETERMINATIONS OF FACT
AND INTERPRETATIONS OF COMPLEX PROVISIONS OF UNITED STATES FEDERAL INCOME TAX
LAW FOR WHICH NO CLEAR PRECEDENT OR AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU
SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL, STATE,
LOCAL AND FOREIGN TAX CONSEQUENCES OF SELLING THE LIMITED PARTNERSHIP INTERESTS
IN YOUR PARTNERSHIP REPRESENTED BY UNITS PURSUANT TO OUR OFFER OR OF A DECISION
NOT TO SELL IN LIGHT OF YOUR SPECIFIC TAX SITUATION.
TAX CONSEQUENCES TO LIMITED PARTNERS TENDERING UNITS FOR CASH. You will
recognize gain or loss on a sale of a unit of limited partnership of your
partnership equal to the difference between (i) your "amount realized" on the
sale and (ii) your adjusted tax basis in the unit sold. The "amount realized"
with respect to a unit of limited partnership of your partnership will be equal
to the sum of the amount of cash received by you for the unit sold pursuant to
the offer plus the amount of partnership liabilities allocable to the unit (as
determined under Section 752 of the Internal Revenue Code). Thus, your taxable
gain and tax liability resulting from a sale of a unit of limited partnership of
your partnership could exceed the cash received upon such sale.
ADJUSTED TAX BASIS. If you acquired your units of limited partnership of
your partnership for cash, your initial tax basis in such units was generally
equal to your cash investment in your partnership increased by your share of
partnership liabilities at the time you acquired such units. Your initial tax
basis generally has been increased by (i) your share of partnership income and
gains, and (ii) any increases in your share of partnership liabilities, and has
been decreased (but not below zero) by (i) your share of partnership cash
distributions, (ii) any decreases in your share of partnership liabilities,
(iii) your share of partnership losses, and (iv) your share of nondeductible
partnership expenditures that are not chargeable to capital. For purposes of
determining your adjusted tax basis in units of limited partnership of your
partnership immediately prior to a disposition of your units, your adjusted tax
basis in your units will include your allocable share of partnership income,
gain or loss for the taxable year of disposition. If your adjusted tax basis is
less than your share of partnership liabilities (e.g., as a result of the effect
of net loss allocations and/or distributions exceeding the cost of your unit),
your gain recognized with respect to a unit of limited partnership of your
partnership pursuant to the offer will exceed the cash proceeds realized upon
the sale of such unit.
CHARACTER OF GAIN OR LOSS RECOGNIZED PURSUANT TO THE OFFER. Except as
described below, the gain or loss recognized by you on a sale of a unit of
limited partnership of your partnership pursuant to the offer generally will be
treated as a long-term capital gain or loss if you held the unit for more than
one year. Long-term capital gains recognized by individuals and certain other
noncorporate taxpayers generally will be subject to a maximum United States
federal income tax rate of 20%. If the amount realized with respect to a unit of
limited partnership of your partnership that is attributable to your share of
"unrealized receivables" of your partnership exceeds the tax basis attributable
to those assets, such excess will be treated as ordinary income. Among other
things, "unrealized receivables" include depreciation recapture for certain
types of property. In addition, the maximum United States federal income tax
rate applicable to persons who are noncorporate taxpayers for net capital gains
attributable to the sale of depreciable real property (which may be determined
to include an interest in a partnership such as your units) held for more than
one year is currently 25% (rather than 20%) with respect to that portion of the
gain attributable to depreciation deductions previously taken on the property.
If you tender a unit of limited partnership interest of your partnership in
the offer, you will be allocated a share of partnership taxable income or loss
for the year of tender with respect to any units sold. You will not receive any
future distributions on units of limited partnership interest of your
partnership tendered on or after the date on which such units are accepted for
purchase and, accordingly, you may not receive any distributions with respect to
such accreted income. Such allocation and any partnership cash distributions to
you for that year will
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affect your adjusted tax basis in your unit of limited partnership interest of
your partnership and, therefore, the amount of your taxable gain or loss upon a
sale of a unit pursuant to the offer.
PASSIVE ACTIVITY LOSSES. The passive activity loss rules of the Internal
Revenue Code limit the use of losses derived from passive activities, which
generally include investments in limited partnership interests such as the units
of limited partnership interest of your partnership. An individual, as well as
certain other types of investors, generally cannot use losses from passive
activities to offset nonpassive activity income received during the taxable
year. Passive losses that are disallowed for a particular tax year are
"suspended" and may be carried forward to offset passive activity income earned
by the investor in future taxable years. In addition, such suspended losses may
be claimed as a deduction, subject to other applicable limitations, upon a
taxable disposition of the investor's interest in such activity.
Accordingly, if your investment in your units is treated as a passive
activity, you may be able to reduce gain from the sale of your units of limited
partnership interest of your partnership pursuant to the offer with passive
losses in the manner described below. If you sell all or a portion of your units
of limited partnership interest of your partnership pursuant to the offer and
recognize a gain on your sale, you will generally be entitled to use your
current and "suspended" passive activity losses (if any) from your partnership
and other passive sources to offset that gain. In general, if you sell all or a
portion of your units of limited partnership interest of your partnership
pursuant to the offer and recognize a loss on such sale, you will be entitled to
deduct that loss currently (subject to other applicable limitations) against the
sum of your passive activity income from your partnership for that year (if any)
plus any passive activity income from other sources for that year. If you sell
all of your units pursuant to the offer, the balance of any "suspended" losses
from your partnership that were not otherwise utilized against passive activity
income as described in the two preceding sentences will generally no longer be
suspended and will generally therefore be deductible (subject to any other
applicable limitations) by you against any other income for that year,
regardless of the character of that income. You are urged to consult your tax
advisor concerning whether, and the extent to which, you have available
"suspended" passive activity losses from your partnership or other investments
that may be used to reduce gain from the sale of units pursuant to the offer.
INFORMATION REPORTING, BACKUP WITHHOLDING AND FIRPTA. If you tender any
units, you must report the transaction by filing a statement with your United
States federal income tax return for the year of the tender which provides
certain required information to the IRS. To prevent the possible application of
back-up United States federal income tax withholding of 31% with respect to the
payment of the offer consideration, you are generally required to provide us
with your correct taxpayer identification number. See the instructions to the
letter of transmittal.
Gain realized by a foreign person on the sale of a unit pursuant to the
offer will be subject to federal income tax under the Foreign Investment in Real
Property Tax Act of 1980. Under these provisions of the Internal Revenue Code,
the transferee of an interest held by a foreign person in a partnership which
owns United States real property generally is required to deduct and withhold
10% of the amount realized on the disposition. Amounts withheld would be
creditable against a foreign person's United States federal income tax liability
and, if in excess thereof, a refund could be claimed from the Internal Revenue
Service by filing a United States income tax return. See the instructions to the
letter of transmittal.
TAX CONSEQUENCES TO NON-TENDERING AND PARTIALLY-TENDERING LIMITED PARTNERS.
Section 708 of the Internal Revenue Code provides that if there is a sale or
exchange of 50% or more of the total interest in capital and profits of a
partnership within any 12-month period, such partnership terminates for United
States federal income tax purposes. It is possible that our acquisition of units
pursuant to the offer alone or in combination with other transfers of interests
in your partnership could result in such a termination of your partnership. If
your partnership is deemed to terminate for tax purposes, the following Federal
income tax events will be deemed to occur: the terminated partnership will be
deemed to have contributed all of its assets (subject to its liabilities) to a
new partnership in exchange for an interest in the new partnership and,
immediately thereafter, the old
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partnership will be deemed to have distributed interests in the new partnership
to the remaining limited partners in proportion to their respective interests in
the old partnership in liquidation of the old partnership.
A remaining limited partner will generally not recognize any gain or loss
upon the deemed distribution or upon the deemed contribution and the capital
accounts of the remaining limited partners in the old partnership will carry
over intact into the new partnership. A termination may change (and possibly
shorten) a remaining partner's holding period with respect to its retained units
in your partnership for United States federal income tax purposes.
The new partnership's adjusted tax basis in its assets will be the same as
the old partnership's basis in such assets immediately before the termination. A
termination may also subject the assets of the new partnership to depreciable
lives in excess of those currently applicable to the old partnership. This would
generally decrease the annual average depreciation deductions allocable to the
remaining limited partners for a number of years following consummation of the
offer (thereby increasing the taxable income allocable to their units in each
such year), but would have no effect on the total depreciation deductions
available over the useful lives of the assets of your partnership.
Elections as to certain tax matters previously made by the old partnership
prior to termination will not be applicable to the new partnership unless the
new partnership chooses to make the same elections.
Additionally, upon a termination for tax purposes, the old partnership's
taxable year will close for all limited partners. In the case of a remaining
limited partner or a partially tendering limited partner reporting on a tax year
other than a calendar year, the closing of the partnership's taxable year may
result in more than 12 months' taxable income or loss of the old partnership
being includible in such limited partner's taxable income for the year of
termination.
Section 7. Effects of the Offer.
FUTURE CONTROL BY AIMCO. Because the general partner of your partnership is
our subsidiary, we have control over the management of your partnership. If we
are successful in acquiring 1,947.28 units pursuant to the offer, we will own
more than 50% of the outstanding units and, as a result, will be able to control
the outcome of all voting decisions with respect to your partnership. Even if we
acquire a lesser number of units pursuant to the offer, however, because we
currently own approximately 46.61% of the outstanding units, we will be able to
significantly influence the outcome of all voting decisions with respect to your
partnership. In general, we will vote the units owned by us in whatever manner
we deem to be in our best interests, which may not be in the interest of other
limited partners. This could (1) prevent non-tendering limited partners from
taking action they desire but that we oppose and (2) enable us to take action
desired by us but opposed by non-tendering limited partners. We also own the
company that manages the properties owned by your partnership. In the event that
we acquire a substantial number of units pursuant to the offer, removal of a
property manager may become more difficult or impossible.
DISTRIBUTIONS TO US. If we acquire units in the offer, we will participate
in any subsequent distributions to limited partners to the extent of the units
purchased.
PARTNERSHIP STATUS. We believe our purchase of units should not adversely
affect the issue of whether your partnership is classified as a partnership for
Federal income tax purposes.
BUSINESS. Our offer will not affect the operation of the properties owned
by your partnership. We will continue to control the general partner of your
partnership and the property manager, both of which will remain the same.
Consummation of the offer will not affect your agreement of limited partnership,
the operations of any partnership, the business and properties owned by your
partnership, the management compensation payable to your
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general partner or any other matter relating to your partnership, except it
would result in us increasing our ownership of units. We have no current
intention of changing the fee structure for your general partner or the manager
of your partnership's properties.
EFFECT ON TRADING MARKET; REGISTRATION UNDER 12(g) OF THE EXCHANGE ACT. If
a substantial number of units are purchased pursuant to the offer, the result
will be a reduction in the number of limited partners in your partnership. In
the case of certain kinds of equity securities, a reduction in the number of
securityholders might be expected to result in a reduction in the liquidity and
volume of activity in the trading market for the security. In the case of your
partnership, however, there is no established public trading market for the
units and, therefore, we do not believe a reduction in the number of limited
partners will materially further restrict your ability to find purchasers for
your units through secondary market transactions.
The units are registered under Section 12(g) of the Exchange Act, which
means, among other things, that your partnership is required to file periodic
reports with the Securities and Exchange Commission ("SEC") and to comply with
the SEC's proxy rules. We do not expect or intend that consummation of the offer
will cause the units to cease to be registered under Section 12(g) of the
Exchange Act. If the units were to be held by fewer than 300 persons, your
partnership could apply to de-register the units under the Exchange Act. Because
the units are widely-held, however, we believe that, even if we purchase the
maximum number of units in the offer, the units will be held of record by more
than 300 persons. Your partnership currently has 2,444 unitholders of record. If
units are tendered which would result in less than 320 unitholders, we will
purchase no more than 99% of the units tendered by each unitholder to assure
that there are more than 300 unitholders after the offer. See "The Offer -
Section 1. Terms of the Offer; Expiration Date."
Section 8. Information Concerning Us and Certain of Our Affiliates.
We are AIMCO Properties, L.P., a Delaware limited partnership. Together
with our subsidiaries, we conduct substantially all of the operations of
Apartment Investment and Management Company, a Maryland corporation ("AIMCO").
AIMCO is a real estate investment trust that owns and manages multifamily
apartment properties throughout the United States. Based on apartment unit data
compiled by the National Multi-Housing Council, we believe that, as of June 30,
1999, AIMCO was one of the largest owners and managers of multifamily apartment
properties in the United States, with a total portfolio of 369,404 apartment
units in 2,037 properties located in 49 states, the District of Columbia and
Puerto Rico. AIMCO's Class A Common Stock is listed and traded on the New York
Stock Exchange under the symbol "AIV." As of September 30, 1999, AIMCO:
o owned or controlled 65,546 units in 240 apartment properties;
o held an equity interest in 167,165 units in 880 apartment properties;
and
o managed 130,107 units in 865 apartment properties for third party
owners and affiliates.
Our general partner is AIMCO-GP, Inc., which is a wholly-owned subsidiary
of AIMCO. Our principal executive offices are located at Colorado Center, Tower
Two, 2000 South Colorado Boulevard, Suite 2-1000, Denver, Colorado 80222, and
our telephone number is (303) 757-8101.
The names, positions and business addresses of the directors and executive
officers of AIMCO and your general partner (which is our subsidiary) as well as
a biographical summary of the experience of such persons for the past five years
or more, are set forth on Annex I attached hereto and are incorporated herein by
reference.
We and AIMCO are both subject to the information and reporting requirements
of the Exchange Act and, in accordance therewith, file reports and other
information with the Securities and Exchange Commission relating to our
business, financial condition and other matters. Such reports and other
information may be inspected at the
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public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can also be obtained from the Public
Reference Room of the SEC in Washington, D.C. at prescribed rates. The SEC also
maintains a site on the World Wide Web at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. In addition, information
filed by AIMCO with the New York Stock Exchange may be inspected at the offices
of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
For more information regarding AIMCO Properties, L.P., please refer to the
Annual Report on Form 10-K for the year ended December 31, 1998 and the
Quarterly Report for the quarterly periods ended March 31, 1999, June 30, 1999
and September 30, 1999 (particularly the management's discussion and analysis of
financial condition and results of operations) and other reports and documents
filed by it with the SEC.
Except as described below in "The Offer -- Section 9. Background and
Reasons for the Offer" and "The Offer -- Section 11. Conflicts of Interest and
Transactions with Affiliates", neither we nor, to the best of our knowledge, any
of the persons listed on Annex I attached hereto, (i) beneficially own or have a
right to acquire any units, (ii) has effected any transaction in the units in
the past 60 days, or (iii) have any contract, arrangement, understanding or
relationship with any other person with respect to any securities of your
partnership, including, but not limited to, contracts, arrangements,
understandings or relationships concerning transfer or voting thereof, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies (except for
previous tender offers we may have conducted for units).
Section 9. Background and Reasons for the Offer.
GENERAL. We are in the business of acquiring direct and indirect interests
in apartment properties such as the properties owned by your partnership. Our
offer provides us with an opportunity to increase our ownership interest in your
partnership's properties while providing you and other investors with an
opportunity to liquidate your current investment.
On October 1, 1998, AIMCO merged (the "Insignia Merger") with Insignia
Financial Group, Inc. ("Insignia"). As a result of the Insignia Merger, AIMCO
acquired approximately 51% of the outstanding common shares of beneficial
interest of Insignia Properties Trust ("IPT"). The general partner of your
partnership is a wholly owned subsidiary of IPT. Through the Insignia Merger,
AIMCO also acquired a majority ownership interest in the entity that manages the
properties owned by your partnership. On October 31, 1998, IPT and AIMCO entered
into an agreement and plan of merger, dated as of October 1, 1998, pursuant to
which IPT merged with AIMCO on February 26, 1999 (the "IPT Merger"). Together
with its subsidiaries, AIMCO currently owns, in the aggregate, approximately
46.61% of your partnership's outstanding limited partnership units.
During our negotiations with Insignia in early 1998, we decided that if the
merger with Insignia were consummated, we could also benefit from making offers
for limited partnership interests of some of the limited partnerships formerly
controlled or managed by Insignia (the "Insignia Partnerships"). Such offers
would provide liquidity for the limited partners of the Insignia Partnerships,
and would provide AIMCO Properties, L.P. with a larger asset and capital base
and increased diversification.. While some of the Insignia Partnerships are
public partnerships and information is publicly available on such partnerships
for weighing the benefits of making a tender offer, many of the partnerships are
private partnerships and information about such partnerships comes principally
from the general partner. Our control of the general partner makes it possible
for us to obtain access to such information. Further, such control also means
that we control the operations of the partnerships and their properties.
Insignia did not propose that we conduct such tender offers, rather we initiated
the offers on our own.
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CERTAIN LITIGATION. On March 24, 1998, certain persons claiming to own
limited partner interests in certain of the limited partnerships for which our
subsidiaries act as general partner (excluding your partnership) filed a
purported class and derivative action in California Superior Court in the County
of San Mateo against AIMCO, Insignia, the general partners of the partnerships,
certain persons and entities who purportedly formerly controlled the general
partners, and additional entities affiliated with and individuals who are
officers, directors and/or principals of several of the defendants. The
complaint contains allegations that, among other things, (i) the defendants
breached fiduciary duties owed to the plaintiffs, or aided and abetted in those
purported breaches, by selling or agreeing to sell their "fiduciary positions"
as stockholders, officers and directors of the general partners for a profit and
retaining said profit rather than distributing it to the plaintiffs; (ii) the
defendants breached fiduciary duties, or aided and abetted in those purported
breaches, by mismanaging the partnerships and misappropriating assets of the
partnerships by (a) manipulating the operations of the partnerships to depress
the trading price of limited partnership units of the partnerships; (b) coercing
and fraudulently inducing unitholders to sell units to certain of the defendants
at depressed prices; and (c) using the voting control obtained by purchasing
units at depressed prices to entrench certain of the defendants' positions of
control over the partnerships; and (iii) the defendants breached their fiduciary
duties to the plaintiffs by (a) selling assets of the partnerships such as
mailing lists of unitholders and (b) causing the general partners to enter into
exclusive arrangements with their affiliates to sell goods and services to the
general partners, the unitholders and tenants of properties owned by the
partnerships. The complaint also alleges that the foregoing allegations
constitute violations of various California securities, corporate and
partnership statutes, as well as conversion and common law fraud. The complaint
seeks unspecified compensatory and punitive damages, an injunction blocking the
sale of control of the general partners and a court order directing the
defendants to discharge their fiduciary duties to the plaintiffs. On June 25,
1998, the defendants filed motions seeking dismissal of the action. In lieu of
responding to the motion, plaintiffs have filed an amended complaint. On October
14, 1998, the AIMCO and Insignia defendants filed demurrers to the amended
complaint. The demurrers (which are requests to dismiss the action as a matter
of law) were heard on February 8, 1999, but no decision has been reached by the
Court. While no assurances can be given, we believe that the ultimate outcome of
this litigation will not have a material adverse effect on us.
ALTERNATIVES CONSIDERED BY YOUR GENERAL PARTNER. Before we commenced this
offer, your general partner (which is our subsidiary) considered a number of
alternative transactions. The following is a brief discussion of the advantages
and disadvantages of the alternatives considered by your general partner.
LIQUIDATION
One alternative would be for the partnership to sell its assets, distribute
the net liquidation proceeds to its partners in accordance with the agreement of
limited partnership, and thereafter dissolve. Partners would be at liberty to
use the net liquidation proceeds after taxes for investment, business, personal
or other purposes, at their option. If your partnership were to sell its assets
and liquidate, you and your partners would not need to rely upon capitalization
of income or other valuation methods to estimate the fair market value of
partnership assets. Instead, such assets would be valued through negotiations
with prospective purchasers (in many cases unrelated third parties).
However, in the opinion of your general partner (which is our subsidiary),
the present time may not be the most desirable time to sell the real estate
assets of your partnership in a private transaction, and the proceeds realized
from any such sale would be uncertain. Liquidation of the partnership assets may
trigger a prepayment penalty under the mortgages for the properties. Your
general partner believes it currently is in the best interest of your
partnership to continue holding its real estate assets. Although there might be
a prepayment penalty of approximately 1 to 2% of the outstanding balance of the
mortgages depending on when and under what circumstances they are prepaid, such
prepayment penalties are not a significant factor in determining when a property
may be sold. See "The Offer -- Section 13. Certain Information Concerning Your
Partnership Investment Objectives and Policies; Sale or Financing of
Investments."
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CONTINUATION OF THE PARTNERSHIP WITHOUT THE OFFER
A second alternative would be for your partnership to continue as a
separate legal entity, with its own assets and liabilities and continue to be
governed by its existing agreement of limited partnership, without our offer. A
number of advantages could result from the continued operation of your
partnership. Given improving rental market conditions, the level of
distributions might increase over time. It is possible that the private resale
market for properties could improve over time, making a sale of the
partnership's properties in a private transaction at some point in the future a
more attractive option than it is currently. The continuation of your
partnership will allow you to continue to participate in the net income and any
increases in revenue of your partnership and any net proceeds from the sale of
any property owned by your partnership. However, no assurance can be given as to
future operating results or as to the results of any attempts to sell any
property owned by your partnership.
There are several risks and disadvantages that result from continuing the
operations of your partnership without our offer. If your partnership were
continue operating as presently structured, your partnership could be forced to
borrow on terms that could result in net losses from operations. In addition,
continuation of your partnership without our offer would deny you and your
partners the benefits of our offer. For example, you would have no opportunity
for liquidity unless you were to sell your units in a private transaction. Any
such sale would likely be at a discount from your pro rata share of the fair
market value of the properties owned by your partnership.
SALE OF ASSETS
Your partnership could sell the properties it owns and not liquidate. Your
general partner (which is our subsidiary) considers the sale of partnership
properties from time to time. However, any such sale would likely be a taxable
transaction, and, without a liquidating distribution, would not provide limited
partners with any cash to pay any tax liabilities arising as a result thereof.
ALTERNATIVE TRANSACTIONS CONSIDERED BY US. Before we decided to make our
offer, we considered a number of alternative transactions, including purchasing
some or all of your partnership's properties or merging your partnership with
us. However, both of these alternatives would require a vote of all the limited
partners. If the transaction was approved, all limited partners, including those
who wish to continue to participate in the ownership of your partnership's
properties, would be forced to participate in the transaction. If the
transaction was not approved, all limited partners, including those who would
like to dispose of their investment in your partnership's properties, would be
forced to retain their investment. We also considered an offer to exchange units
in your partnership for units of AIMCO Properties, L.P. However, because of the
expense and delay associated with making such an exchange offer, we decided to
make an offer for cash only. In addition, our historical experience has been
that most holders of limited partnership units, when given a choice, prefer
cash.
DETERMINATION OF OFFER PRICE. In establishing the offer price, we reviewed
certain publicly available information and certain information made available to
us by the general partner (which is our subsidiary) and our other affiliates,
including among other things: (i) the agreement of limited partnership, as
amended to date; (ii) the partnership's Annual Report on Form 10-KSB for the
year ended December 31, 1998 and Quarterly Reports on Form 10-QSB for the
quarters ended March 31, 1999, June 30, 1999, and September 30, 1999; (iii)
unaudited results of operations of the partnership's properties for the period
since the beginning of the partnership's current fiscal year and to date in
1999; (iv) the operating budgets prepared by the property manager with respect
to the partnership's properties for the year ending December 31, 1999; and (v)
tender offer statements, solicitation/recommendation statements and beneficial
ownership reports on Schedules 14D-1, 14D-9 and 13D. Our determination of the
offer price was based on our review and analysis of the foregoing information,
the other financial information and the analyses concerning the partnership
summarized below.
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<PAGE> 21
VALUATION OF UNITS. We determined our offer price by estimating the value
of each property owned by your partnership using the direct capitalization
method. This method involves applying a capitalization rate to your
partnership's annual property income. A capitalization rate is a percentage
(rate of return), commonly applied by purchasers of real estate to property
income to determine the present value of income property. The lower the
capitalization rate utilized the higher the value produced, and the higher the
capitalization rate utilized the lower the value produced. We used your
partnership's property income for the nine months ended September 30, 1999. Our
method for selecting a capitalization rate begins with each property being
assigned a location and condition rating (e.g., "A" for excellent, "B" for good,
"C" for fair, and "D" for poor). We then adjust the capitalization rate based on
whether the property's mortgage debt bears interest at a rate above or below
7.5% per annum. Generally, for every 0.5% in excess of 7.5%, the capitalization
rate would be increased by 0.25% The evaluation of a property's location and
condition, and the determination of an appropriate capitalization rate for a
property, is subjective in nature, and others evaluating the same property might
use a different capitalization rate and derive a different property value.
Property income is the difference between the revenues from the property
and related costs and expenses, excluding income derived from sources other than
its regular activities and before income deductions. Income deductions include
interest, income taxes, prior-year adjustments, charges to reserves, write-off
of intangibles, adjustments arising from major changes in accounting methods and
other material and nonrecurring items. In this respect, property income differs
from net income disclosed in the partnership's financial statements, which does
not exclude these income sources and deductions. The following is a
reconciliation of your partnership's property income for the nine months ended
September 30, 1999, to your partnership's net operating income for the same
period:
<TABLE>
<S> <C>
Net Income (Loss) ...................................... $ 1,738,667
Other Non-Operating Expense ............................ (412,333)
Depreciation ........................................... 2,149,333
Equity in Income of Joint Venture ...................... --
Interest ............................................... 2,233,333
-----------
Property Income ........................................ $ 5,709,000
===========
</TABLE>
Although the direct capitalization method is a widely accepted way of
valuing real estate, there are a number of other methods available to value real
estate, each of which may result in different valuations of a property. Further,
in applying the direct capitalization method, others may make different
assumptions and obtain different results. The proceeds that you would receive if
you sold your units to someone else or if your partnership were actually
liquidated might be higher than our offer price. We determined our offer price
as follows:
o First, we estimated the value of the property owned by your partnership
using the direct capitalization method. We selected capitalization
rates based on our experience in valuing similar properties. The lower
the capitalization rate applied to a property's income, the higher its
value. We considered local market sales information for comparable
properties, estimated actual capitalization rates (property income less
capital reserves divided by sales price) and then evaluated each
property in light of its relative competitive position, taking into
account property location, occupancy rate, overall property condition
and other relevant factors. We believe that arms-length purchasers
would base their purchase offers on capitalization rates comparable to
those used by us, however there is no single correct capitalization
rate and others might use different rates. We annualized the property
income for the first nine months of 1999 and then divided such amount
by the property's capitalization rate to derive an estimated gross
property value as described in the following table.
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<PAGE> 22
<TABLE>
<CAPTION>
ESTIMATED FISCAL
1999 PROPERTY CAPITALIZATION ESTIMATED GROSS
PROPERTY INCOME* RATE PROPERTY VALUE
- -------- ---------------- -------------- ---------------
<S> <C> <C> <C>
Breckinridge Square $ 1,079,000 10.25% $ 10,524,000
Churchill Park 1,303,000 10.50% 12,410,000
Tahoe Springs 1,214,000 10.25% 11,847,000
The Lakes 2,113,000 10.50% 20,125,000
------------- -------------
Estimated Total Gross Property Value $ 5,709,000 54,906,000
============= =============
</TABLE>
- -------------
*Property income for the nine months ended September 30, 1999 has been
annualized by multiplying by 1.33. Actual 1999 property income may be higher or
lower.
o Second, we calculated the value of the equity of your partnership by
adding to the aggregate gross property value of all properties owned by
your partnership, the value of the non-real estate assets of your
partnership, and deducting the liabilities of your partnership,
including mortgage debt and debt owed by your partnership to its
general partner (which is our subsidiary) or its affiliates after
consideration of any applicable subordination provisions affecting
payment of such debt. We deducted from this value certain other costs,
including required capital expenditures, deferred maintenance, and
closing costs, to derive a net equity value for your partnership of
$17,743,802. Closing costs, which are estimated to be 5% of the gross
property value, include legal and accounting fees, real property
transfer taxes, title and escrow costs and broker's fees.
o Third, using this net equity value, we determined the proceeds that
would be paid to holders of units in the event of a liquidation of your
partnership, based on the terms of your partnership's agreement of
limited partnership. Accordingly, 86% of the estimated liquidation
proceeds are assumed to be distributed to holders of units. Our offer
price represents the per unit liquidation proceeds determined in this
manner.
<TABLE>
<S> <C>
Gross valuation of partnership properties $ 54,906,000
Plus: Cash and cash equivalents 1,713,817
Plus: Other partnership assets, net of security deposits 1,417,000
Less: Mortgage debt, including accrued interest (30,869,646)
Less: Accounts payable and accrued expenses (109,076)
Less: Other liabilities (914,956)
-------------
Partnership valuation before taxes and certain costs 26,143,138
Less: Disposition fees (1,647,180)
Less: Extraordinary capital expenditures and deferred maintenance (1,118,330)
Less: Closing costs (2,745,300)
-------------
Estimated net valuation of your partnership 20,632,328
Percentage of estimated net valuation allocated to holders of units 86.00%
-------------
Estimated net valuation of units 17,743,802
Total number of units 49,196
-------------
Estimated valuation per unit $ 361
=============
Cash consideration per unit $ 361
=============
</TABLE>
COMPARISON OF CONSIDERATION TO ALTERNATIVE CONSIDERATION. To assist holders
of units in evaluating the offer, your general partner (which is our subsidiary)
has attempted to compare the offer price against: (a) prices at which the units
have sold in the secondary market; (b) estimates of the value of the units on a
liquidation basis; (c) your general partner's estimate of net asset value; (d)
an affiliate's estimate of net liquidation value; and (e) the
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<PAGE> 23
recent appraisals of your partnership's properties. The general partner of your
partnership believes that analyzing the alternatives in terms of estimated
value, based upon currently available data and, where appropriate, reasonable
assumptions made in good faith, establishes a reasonable framework for comparing
alternatives. Since the value of the consideration for alternatives to the offer
is dependent upon varying market conditions, no assurance can be given that the
estimated values reflect the range of possible values.
The results of these comparative analyses are summarized in the chart
below. You should bear in mind that some of the alternative values are based on
a variety of assumptions that have been made by us. These assumptions relate to,
among other things, the operating results, if any since June 30, 1999 as to
income and expenses of the property, other projected amounts and the
capitalization rates that may be used by prospective buyers if your partnership
assets were to be liquidated.
In addition, these estimates are based upon certain information available
to your general partner (which is our subsidiary) at the time the estimates were
computed, and no assurance can be given that the same conditions analyzed by it
in arriving at the estimates of value would exist at the time of the offer. The
assumptions used have been determined by the general partner of your partnership
in good faith, and, where appropriate, are based upon current and historical
information regarding your partnership and current real estate markets, and have
been highlighted below to the extent critical to the conclusions of the general
partner of your partnership. Actual results may vary from those set forth below
based on numerous factors, including interest rate fluctuations, tax law
changes, supply and demand for similar apartment properties, the manner in which
your partnership's properties is sold and changes in availability of capital to
finance acquisitions of apartment properties.
Under your partnership's agreement of limited partnership, the term of the
partnership will continue until 2035, unless sooner terminated as provided in
the agreement or by law. Limited partners could, as an alternative to tendering
their units, take a variety of possible actions, including voting to liquidate
the partnership or amending the agreement of limited partnership to authorize
limited partners to cause the partnership to merge with another entity or engage
in a "roll-up" or similar transaction.
COMPARISON TABLE
<TABLE>
<CAPTION>
PER UNIT
--------
<S> <C>
Cash offer price .................................. $361.00
Alternatives
Prior tender offers............................. $120, $140, $175,
$180, $230, $300,
and $310
Prices on secondary market...................... $205 - $373
Estimated liquidation proceeds.................. $361.00
</TABLE>
PRIOR TENDER OFFERS. On November 11, 1999, Madison Liquidity Investors,
104, L.L.C. began a tender offer for up to 4.9% of the outstanding units for
$120 per unit. On June 9, 1999, we commenced a tender offer for $310 per unit. A
total of 601.5 units, representing 1.2% of the outstanding units, were validly
tendered pursuant to the offer.
On May 17, 1999, Everest Investors 12, L.L.C., which was unaffiliated with
Insignia and is not affiliated with AIMCO, Commenced a tender offer for $230 per
unit. On March 29,1999, Madison Liquidity Investors 104, L.L.C., which was
unaffiliated with Insignia and is not affiliated with AIMCO, commenced a tender
offer for $180 per unit. On January 26, 1999, Madison Liquidity Investors 104,
L.L.C., which was unaffiliated with Insignia and is not affiliated with AIMCO,
commenced a tender offer for $140 per unit. On December 3, 1998, Madison
Liquidity Investors 104, L.L.C., which was unaffiliated with Insignia and is not
affiliated with AIMCO, commenced a tender offer for $175 per unit. Prior to the
Insignia Merger, a number of tender offers had
20
<PAGE> 24
been made to acquire units of your partnership. On January 21, 1998, then an
affiliate of Insignia and now our affiliate, commenced a tender offer for $300
per unit.
We are aware that tender offers may have been made by unaffiliated third
parties to acquire units in your partnership in exchange for cash. We are
unaware of the amounts offered, terms, tendering parties or number of units
involved in these tender offers. In connection with tender offers made by
Insignia affiliates with respect to partnerships for which we are making offers,
some limited partners filed lawsuits. We are not aware of any merger,
consolidation or other combination involving any of the Insignia Partnerships,
or any acquisitions of any of such partnerships or a material amount of the
assets of such partnerships.
Prices on Secondary Market
Secondary market sales information is not a reliable measure of value
because of the limited amount of any known trades. At present, privately
negotiated sales and sales through intermediaries are the only means which may
be available to a limited partner to liquidate an investment in units (other
than our offer) because the units are not listed or traded on any exchange or
quoted on NASDAQ, on the Electronic Bulletin Board, or in "pink sheets."
Secondary sales activity for the units, including privately negotiated sales,
has been limited and sporadic.
According to information obtained from your general partner relating to the
ownership of units in your partnership, no sales of ownership units occurred
from January 1, 1996 to March 31, 1999.
Set forth below are the high and low sale prices of units for the years
ended December 31, 1996, 1997, 1998 and the nine months ended September 30,
1999, as reported by The Partnership Spectrum, which is an independent,
third-party source. The gross sales prices reported by The Partnership Spectrum
do not necessarily reflect the net sales proceeds received by sellers of units,
which typically are reduced by commissions and other secondary market
transaction costs to amounts less than the reported price. The Partnership
Spectrum represents only one source of secondary sales information, and other
services may contain prices for the units that equal or exceed sales prices
reported in The Partnership Spectrum. We do not know whether the information
compiled by The Partnership Spectrum is accurate or complete.
SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE PARTNERSHIP SPECTRUM
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Nine Months Ended September 30, 1999:............................. $340 $292
Fiscal Year Ended December 31, 1998: ............................. 340 245
Fiscal Year Ended December 31, 1997:.............................. 290 205
Fiscal Year Ended December 31, 1996:.............................. -- --
</TABLE>
Set forth in the table below are the high and low sales prices of units for
the year ended December 31, 1998 and the nine months ended September 30, 1999,
as reported by the American Partnership Board, which is an independent,
third-party source. The gross sales prices reported by American Partnership
Board do not necessarily reflect the net sales proceeds received by sellers of
units, which typically are reduced by commissions and other secondary market
transaction costs to amounts less than the reported prices. The American
Partnership Board represents one source of secondary sales information, and the
other services may contain prices for units that equal or exceed sales prices
reported by the American Partnership Board. We do not know whether the
information compiled by the American Partnership Board is accurate or complete.
21
<PAGE> 25
SALES PRICES OF PARTNERSHIP UNITS, AS REPORTED BY THE AMERICAN PARTNERSHIP BOARD
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Nine Months Ended September 30, 1999:.............................. $ 350.00 $ 311.07
Fiscal Year Ended December 31, 1998: .............................. 373.00 290.00
</TABLE>
ESTIMATED LIQUIDATION PROCEEDS
Liquidation value is a measure of the price at which the assets of your
partnership would sell if disposed of in an arms-length transaction between a
willing buyer and your partnership, each having access to relevant information
regarding the historical revenues and expenses of the business. Your general
partner (which is our subsidiary) estimated the liquidation value of units using
the same direct capitalization method and assumptions as we did in valuing the
units for the offer price. The liquidation analysis assumes that your
partnership's properties are sold to an independent third-party buyer at the
current property value and that other balance sheet assets (excluding amortizing
assets) and liabilities of your partnership are sold at their book value, and
that the net proceeds of sale are allocated to your partners in accordance with
your partnership's agreement of limited partnership.
The liquidation analysis assumes that the assets of your partnership are
sold in a single transaction. Should the assets be liquidated over time, even at
prices equal to those projected, distributions to limited partners from cash
flow from operations might be reduced because your partnership's fixed costs,
such as general and administrative expenses, are not proportionately reduced
with the liquidation of assets. However, for simplification purposes, the sales
of the assets are assumed to occur concurrently. The liquidation analysis
assumes that the assets are disposed of in an orderly manner and are not sold in
forced or distressed sales where sellers might be expected to dispose of their
interests at substantial discounts to their actual fair market value.
ALLOCATION OF CONSIDERATION. We have allocated to the limited partners the
amount of the estimated net valuation of your partnership based on your
partnership's agreement of limited partnership as if your partnership was being
liquidated at the current time.
Section 10. Position of the General Partner of Your Partnership With Respect to
the Offer.
The partnership and the general partner of your partnership have provided
the following information for inclusion in this Offer to Purchase:
The general partner of your partnership believes the offer price and the
structure of the transaction are fair to the limited partners. In making such
determination, the general partner considered all of the factors and information
set forth below, but did not quantify or otherwise attach particular weight to
any such factors or information:
o The offer gives you an opportunity to make an individual decision on
whether to tender your units or to continue to hold them.
o The offer price and the method used to determine the offer price.
o The fact that the price offered for your units is based on an estimated
value of your partnership's properties that has been determined using a
method believed to reflect the valuation of such assets by buyers in
the market for similar assets.
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<PAGE> 26
o Prices at which the units have recently sold, to the extent such
information is available.
o The absence of an established trading market for your units.
o An analysis of possible alternative transactions, including a property
sale, or a liquidation of the partnership.
o An evaluation of the financial condition and results of operations of
your partnership.
The general partner of your partnership is remaining neutral and makes no
recommendation as to whether you should tender or refrain from tendering your
units in any offer. Although the general partner believes the offer of AIMCO
Properties, L.P. is fair, the general partner also believes that you must make
your own decision whether or not to participate in any offer, based upon a
number of factors, including your financial position, your need or desire for
liquidity, other financial opportunities available to you, and your tax position
and the tax consequences to you of selling your units. However, the general
partner notes that the offer of AIMCO Properties, L.P. is at the highest price
of the two offers and if you wish to sell your units for cash, you should do so
at the highest price.
For information relating to certain relationships between your partnership
and its general partner, on one hand, and AIMCO and its affiliates, on the other
and conflicts of interests with respect to the tender offer, see "The Offer --
Section 9. Background and Reasons for the Offer" and "The Offer -- Section 11 --
Conflicts of Interests and Transactions with Affiliate." For certain information
regarding transactions in units of your partnership, see "The Offer -- Section
9. Background and Reasons for the Offer -- Comparison of Consideration to
Alternative Consideration -- Prior Tender Offers" and "The Offer -- Section 13.
Certain Information Concerning Your Partnership -- Beneficial Ownership of
Interests in Your Partnership."
Section 11. Conflicts of Interest and Transactions with Affiliates.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of
your partnership became a majority-owned subsidiary of AIMCO on October 1, 1998,
when AIMCO merged with Insignia. Your general partner became a wholly owned
subsidiary of AIMCO on February 26, 1999 when IPT merged with AIMCO.
Accordingly, the general partner of your partnership has substantial conflicts
of interest with respect to the offer. The general partner of your partnership
has a fiduciary obligation to obtain a fair offer price for you, even as a
subsidiary of AIMCO. As a consequence of our ownership of units, we may have
incentives to seek to maximize the value of our ownership of units, which in
turn may result in a conflict for your general partner in attempting to
reconcile our interests with the interests of the other limited partners.
Additionally, we desire to purchase units at a low price and you desire to sell
units at a high price. The general partner of your partnership makes no
recommendation as to whether you should tender or refrain from tendering your
units. Such conflicts of interest in connection with the offer and the operation
of AIMCO differ from those conflicts of interest that currently exist for your
partnership. See "Risk Factors -- Conflicts of Interest With Respect to the
Offer." Your general partner has filed a Solicitation/Recommendation Statement
on Schedule 14D-9 with the SEC, which indicates that it is remaining neutral and
making no recommendation as to whether limited partners should tender their
units pursuant to the offer. LIMITED PARTNERS ARE URGED TO READ THIS OFFER TO
PURCHASE AND THE SCHEDULE 14D-9 AND THE RELATED MATERIALS CAREFULLY AND IN THEIR
ENTIRETY BEFORE DECIDING WHETHER TO TENDER THEIR UNITS.
CONFLICTS OF INTEREST THAT CURRENTLY EXIST FOR YOUR PARTNERSHIP. We own
both the general partner of your partnership and the property manager of your
partnership's properties. The general partner receives an annual management fee
and reimbursements for expenses incurred in its capacity as general partner. The
general partner of your partnership received total fees and reimbursements of
$482,000 in 1996, $283,000 in 1997 and $228,000 in 1998. The property manager
received management fees of $554,000 in 1996, $567,000 in 1997 and $572,000 in
1998. We have no current intention of changing the fee structure for your
general partner or the manager of your partnership's properties.
24
<PAGE> 27
COMPETITION AMONG PROPERTIES. Because AIMCO and your partnership both
invest in apartment properties, these properties may compete with one another
for tenants. Furthermore, you should bear in mind that AIMCO may acquire
properties in general market areas where your partnership properties are
located. It is believed that this concentration of properties in a general
market area will facilitate overall operations through collective advertising
efforts and other operational efficiencies. In managing AIMCO's properties, we
will attempt to reduce conflicts between competing properties by referring
prospective customers to the property considered to be most conveniently located
for the customer's needs.
FUTURE OFFERS. Although we have no current plans to conduct future tender
offers for your units, our plans may change based on future circumstances. Any
such future offers that we might make could be for consideration that is more or
less than the consideration we are currently offering.
Section 12. Future Plans of the Purchaser.
As described above under "The Offer -- Section 9. Background and Reasons
for the Offer," we own the general partner and thereby control the management of
your partnership. In addition, we own the manager of the properties. We
currently intend that, upon consummation of the offer, your partnership will
continue its business and operations substantially as they are currently being
conducted. The offer is not expected to have any effect on partnership
operations.
Although we have no present intention to do so, we may acquire additional
units or sell units after completion or termination of the offer. Any
acquisition may be made through private purchases, through one or more future
tender or exchange offers, by merger, consolidation or by any other means deemed
advisable. Any acquisition may be at a price higher or lower than the price to
be paid for the units purchased pursuant to this offer, and may be for cash,
limited partnership interests in AIMCO Properties, L.P. or other consideration.
We also may consider selling some or all of the units we acquire pursuant to the
offer to persons not yet determined, which may include our affiliates. We may
also buy your partnership's properties, although we have no present intention to
do so. There can be no assurance, however, that we will initiate or complete, or
will cause your partnership to initiate or complete, any subsequent transaction
during any specific time period following the expiration of the offer or at all.
Except as set forth herein, we do not have any present plans or proposals
which relate to or would result in an extraordinary transaction, such as a
merger, reorganization or liquidation, involving your partnership or any of your
partnership's subsidiaries; a sale or transfer of a material amount of your
partnership's assets (or assets of the partnership's subsidiaries); any changes
in composition of your partnership's senior management or personnel or their
compensation; any changes in your partnership's present capitalization or
distribution policy; or any other material changes in your partnership's
structure or business. We or our affiliates may loan funds to your partnership
which may be secured by your partnership's properties. If any such loans are
made, upon default of such loans, the lender could seek to foreclose on the loan
and related mortgage or security interest. However, we expect that consistent
with your general partner's fiduciary obligations, the general partner will seek
and review opportunities (including opportunities identified by us) to engage in
transactions which could benefit your partnership, such as sales or refinancings
of assets or a combination of the partnership with one or more other entities,
with the objective of seeking to maximize returns to limited partners.
We have been advised that the possible future transactions the general
partner expects to consider on behalf of your partnership include: (1) payment
of extraordinary distributions; (2) refinancing, reducing or increasing existing
indebtedness of the partnership; (3) sales of assets, individually or as part of
a complete liquidation; and (4) mergers or other consolidation transactions
involving the partnership. Any such merger or consolidation transaction could
involve other limited partnerships in which your general partner or its
affiliates serve as general partners, or a combination of the partnership with
one or more existing, publicly traded entities
25
<PAGE> 28
(including, possibly, affiliates of AIMCO), in any of which limited partners
might receive cash, common stock or other securities or consideration. There is
no assurance, however, as to when or whether any of the transactions referred to
above might occur. If any such transaction is effected by the partnership and
financial benefits accrue to the limited partners of your partnership, we will
participate in those benefits to the extent of our ownership of units. The
agreement of limited partnership prohibits limited partners from voting on
actions taken by the partnership, unless otherwise specifically permitted
therein. Limited partners may vote on a liquidation, and if we are successful in
acquiring a substantial number of units pursuant to the offer, we will be able
to control the outcome of any such vote. Even if we acquire a lesser number of
units pursuant to the offer, however, because we currently own approximately
46.61% of the outstanding limited partnership units we will be able to
significantly influence the outcome of any such vote. Our primary objective in
seeking to acquire the units pursuant to the offer is not, however, to influence
the vote on any particular transaction, but rather to generate a profit on the
investment represented by those units.
Section 13. Certain Information Concerning Your Partnership.
GENERAL. Consolidated Capital Growth Fund was organized on December
20,1976, under the laws of the State of California. Its primary business is real
estate ownership and related operations. Your partnership was formed for the
purpose of making investments in various types of real properties which offer
potential capital appreciation and cash distributions to its limited partners.
Your partnership's investment portfolio currently consists of the following
four residential apartment complexes: Breckinridge Square Apartments, a 294-unit
complex in Louisville, Kentucky; Churchill Park Apartments, a 384-unit complex
in Louisville, Kentucky; The Lake Apartments, a 600-unit complex in Raleigh,
North Carolina; and Doral Springs Apartments (formerly Tahoe Springs), a
368-unit complex in Miami, Florida.
The general partner of your partnership is Con Cap Equities, Inc., which is
a wholly owned subsidiary of AIMCO. A wholly owned subsidiary of AIMCO serves as
manager of the properties owned by your partnership. As of October 26, 1999,
there were 49,196 units issued and outstanding, which were held of record by
2,444 limited partners. Your partnership's principal executive offices are
located at Colorado Center, Tower Two, 2000 South Colorado Boulevard, Suite
2-1000, Denver, Colorado 80222, and its telephone number at that address is
(303) 757-8101.
For additional information about your partnership, please refer to the
annual report prepared by your partnership which was sent to you prior to this
offer to purchase, particularly Item 2 of Form 10-KSB which contains detailed
information regarding the properties owned, including mortgages, rental rates
and taxes.
INVESTMENT OBJECTIVES AND POLICIES; SALE OR FINANCING OF INVESTMENTS. In
general, your general partner (which is our subsidiary) regularly evaluates the
partnership's properties by considering various factors, such as the
partnership's financial position and real estate and capital markets conditions.
The general partner monitors the properties' specific locale and sub-market
conditions (including stability of the surrounding neighborhood) evaluating
current trends, competition, new construction and economic changes. The general
partner oversees each asset's operating performance and continuously evaluates
the physical improvement requirements. In addition, the financing structure for
each property (including any prepayment penalties), tax implications,
availability of attractive mortgage financing to a purchaser, and the investment
climate are all considered. Any of these factors, and possibly others, could
potentially contribute to any decision by the general partner to sell,
refinance, upgrade with capital improvements or hold a particular partnership
property. If rental market conditions improve, the level of distributions might
increase over time. It is possible that the private resale market for properties
could improve over time, making a sale of the partnership's properties in a
private transaction at some point in the future a more viable option than it is
currently. After taking into account the foregoing considerations, your general
partner is not currently seeking a sale of your partnership's properties
primarily because it expects the properties' operating performance to improve in
the near term. In making this assessment, your general partner compared the
26
<PAGE> 29
occupancy and rental rates at the properties at December 31, 1998, and at
December 31, 1997. In particular, the general partner noted that it expects to
spend approximately $1,527,000 for capital improvements at the properties in
1999 to repair and update the properties. Although there can be no assurance as
to future performance, however, these expenditures are expected to improve the
desirability of the property to tenants. The general partner does not believe
that a sale of the properties at the present time would adequately reflect the
properties' future prospects. Another significant factor considered by your
general partner is the likely tax consequences of a sale of the properties for
cash. Such a transaction would likely result in tax liabilities for many limited
partners. The general partner has not received any recent indication of interest
or offer to purchase the properties.
Under your partnership's agreement of limited partnership, the term of the
partnership will continue until December 31, 2006, unless sooner terminated as
provided in the agreement or by law. Limited partners could, as an alternative
to tendering their units, take a variety of possible actions, including voting
to liquidate the partnership or amending the agreement of limited partnership to
authorize limited partners to cause the partnership to merge with another entity
or engage in a "roll-up" or similar transaction.
Your partnership has an ongoing program of capital improvements,
replacements and renovations, including roof replacements, kitchen and bath
renovations, balcony repairs (where applicable), replacement of various building
systems and other replacements and renovations in the ordinary course of
business. All capital improvement and renovation costs are expected to be paid
from operating cash flows, cash reserves, or from short-term or long-term
borrowings.
COMPETITION. There are other properties within the market area of your
partnership's properties. The number and quality of competitive properties in
such an area could have a material effect on the rental market for the
apartments at your partnership's properties and the rents that may be charged
for such apartments. While AIMCO is a significant factor in the United States in
the apartment industry, competition for apartments is local. According to data
published by the National Multi-Housing Council, as of January 1, 1999 our
portfolio of 373,409 owned or managed apartment units represents approximately
2.2% of the national stock of rental apartments in structures with at least five
apartments.
FINANCIAL AND PROPERTY-RELATED DATA. The selected financial information of
your partnership set forth below for the years ended December 1998 and 1997 is
based on audited financial statements. The selected financial information set
forth below for the nine months ended September 30, 1999 is based on unaudited
financial statements. This information should be read in conjunction with such
financial statements, including notes thereto, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of Your Partnership"
in the Annual Report on Form 10-KSB of your partnership for the year ended
December 31, 1998, and the Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1999.
CONSOLIDATED CAPITAL GROWTH FUND
(IN THOUSANDS, EXCEPT PER UNIT DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------------- -------------------------
1998 1997 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING DATA:
Total Revenues ................................ $ 11,248 $ 11,255 $ 8,746 $ 8,471
Net Income (Loss) ............................. 1,404 1,233 1,304 1,046
Net Income per limited partnership unit ....... 28.25 24.82 26.24 21.06
Distributions per limited partnership unit .... 76.77 133.28 29.47 39.27
</TABLE>
27
<PAGE> 30
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and Cash Equivalents ................................. $ 968 $ 2,493 $ 1,514 $ 4,012
Real Estate, Net of Accumulated Depreciation ............. 18,602 19,628 18,096 18,697
Total Assets .............................................. 21,389 24,155 21,409 24,667
Notes Payable ............................................. 30,690 30,690 30,690 30,690
General Partners' Capital (Deficit) ....................... (4,782) (4,260) (4,784) (4,564)
Limited Partners' Capital (Deficit) ....................... (5,592) (3,205) (5,751) (4,101)
Partners' Capital (Deficit) ............................... (10,374) (7,465) (10,535) (8,665)
Total Distributions ....................................... 4,313 7,490 1,465 2,246
Net increase (decrease) in cash and cash equivalents ...... (1,525) (5,270) 546 1,519
Net cash provided by operating activities ................. 3,920 3,107 2,981 2,933
</TABLE>
DESCRIPTION OF PROPERTIES. The following shows the location, the date of
purchase, the nature of your partnership's ownership interest in and the use of
each of your partnership's properties.
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
-------- -------- ----------------- ---
<S> <C> <C> <C>
Breckinridge Square Apartments......... 10/78 Fee ownership, subject to Apartment 294 units
Louisville, Kentucky first mortgage.
Churchill Park Apartments.............. 05/90 Fee ownership, subject to Apartment 384 units
Louisville, Kentucky first mortgage.
The Lakes Apartments................... 05/88 Fee ownership, subject to Apartment 600 units
Raleigh, North Carolina first mortgage.
Doral Springs Apartments............... 11/87 Fee ownership, subject to Apartment 368 units
Miami, Florida first mortgage.
(formerly Tahoe Springs)
</TABLE>
ACCUMULATED DEPRECIATION SCHEDULE. The following shows the gross carrying
value, accumulated depreciation and federal tax basis of each of your
partnership's properties as of December 31, 1998.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
-------- -------- ------------ ---- ------ ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Breckinridge Square Apartments ...... $ 8,148 $ 5,965 5-22 yrs S/L $ 2,432
Churchill Park Apartments ........... 8,529 4,263 5-20 yrs S/L 4,235
The Lakes Apartments ................ 14,622 8,357 5-19 yrs S/L 8,609
Doral Springs Apartments
(formerly Tahoe Springs) ........ 12,008 6,102 5-20 yrs S/L 7,990
-------- -------- --------
Total ........................... $ 43,307 $ 24,705 $ 23,266
-------- -------- --------
</TABLE>
28
<PAGE> 31
SCHEDULE OF MORTGAGES. The following shows certain information regarding
the outstanding mortgages encumbering each of your partnership's properties as
of December 31, 1998.
<TABLE>
<CAPTION>
Principal
Principal Stated Balance
Balance At Interest Period Maturity Due At
Property December 31, 1998 Rate Amortized Date Maturity
-------- ----------------- ---- --------- ---- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Breckinridge Square
1st mortgage.................... $ 6,000 6.95% (1) 12/1/05 $ 6,000
Churchill Park
1st mortgage.................... 6,450 6.95% (1) 12/1/05 6,450
The Lakes
1st mortgage.................... 12,240 6.95% (1) 12/1/05 12,240
Doral Springs
(formerly Tahoe Springs)
1st mortgage.................... 6,000 7.33% (1) 11/1/03 6,000
------- -------
Total...................... $30,690 $30,690
======= =======
</TABLE>
- ----------
(1) Payments are interest only.
AVERAGE ANNUAL RENTAL RATES AND OCCUPANCY. The following shows the average
annual rental rates and occupancy percentages for each of your partnership's
properties during the past two years.
<TABLE>
<CAPTION>
Average Annual Rental Rates Average Annual Occupancy
--------------------------- -------------------------
Property 1999* 1998 1999 1998
-------- ----- ---- ---- ----
<S> <C> <C> <C> <C>
Breckinridge Square ....................... $7,891/unit $7,420/unit 95% 91%
Churchill Park ............................ 6,041/unit 6,549/unit 97% 93%
The Lakes ................................. 3,867/unit 7,096/unit 92% 91%
Doral Springs (formerly Tahoe Springs) .... 6,304/unit 7,730/unit 95% 93%
</TABLE>
- ------------------
* Based on annualizing the average annual rent and occupancy rate for the nine
months ended September 30, 1999, by multiplying such averages by 1.33. Actual
1999 average annual rent and occupancy rate could be higher or lower.
PROPERTY MANAGEMENT. Your partnership's properties are managed by an entity
which is a wholly owned subsidiary of AIMCO. Pursuant to the management
agreement between the property manager and your partnership, the property
manager operates your partnership's properties, establishes rental policies and
rates and directs marketing activities. The property manager also is responsible
for maintenance, the purchase of equipment and supplies, and the selection and
engagement of all vendors, suppliers and independent contractors.
DISTRIBUTIONS. The following table shows, for each of the years indicated,
the distributions paid per unit for such years.
29
<PAGE> 32
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 AMOUNT
---------------------- ------
<S> <C>
1995 .............................. $466.38
1996 .............................. 59.11
1997 .............................. 133.28
1998 .............................. 76.77
1999 (through Sept. 30, 1999) ..... 29.47
-------
Total ................... $780.62
=======
</TABLE>
OPERATING BUDGETS OF THE PARTNERSHIP. A summary of the operating budgets of
your partnership's properties for the year ending on December 31, 1999 is as
follows:
FISCAL 1999 OPERATING BUDGET
Consolidated Capital Growth Fund
<TABLE>
<CAPTION>
PROPERTIES BRECKINRIDGE SQUARE CHURCHILL PARK THE LAKES TAHOE SPRINGS
- ---------- ------------------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
Total Revenues ............... $ 2,177,191 $ 2,563,890 $ 2,792,973 $ 4,182,488
Operating Expenses ........... (914,563) (1,107,114) (1,315,604) (1,464,634)
Replacement Reserves-Net ..... 80,850 96,250 73,596 180,000
Debt Service ................. (430,824) (462,756) (467,592) (850,680)
Capital Expenditures ......... (401,000) (226,000) (514,800) (622,052)
------------ ------------ ------------ ------------
Net Cash Flow ........... $ 511,654 $ 864,270 $ 568,573 $ 1,425,122
</TABLE>
The above budget, at the time it was made, was forward-looking information
developed by the general partner of your partnership. Therefore, the budget was
dependent upon future events with respect to the ability of your partnership to
meet such budget. The budget incorporated various assumptions including, but not
limited to, lease revenue (including occupancy rates), various operating
expenses, general and administrative expenses, depreciation expenses, capital
expenditures, and working capital levels. While the general partner deemed such
budget to be reasonable and valid at the date made, there is no assurance that
the assumed facts will be validated or that the budgeted results will actually
occur. Any estimate of the future performance of a business, such as your
partnership's business, is forward-looking and based on assumptions some of
which inevitably will prove to be incorrect.
The budget amounts provided above are figures that were not computed in
accordance with GAAP. In particular, items that are categorized as capital
expenditures for purposes of preparing the operating budget are often
re-categorized as expenses when the financial statements are audited and
presented in accordance with GAAP. Therefore, the summary operating budget
presented for fiscal 1999 should not necessarily be considered as indicative of
what the audited operating results for fiscal 1999 will be. The annualized
results of operations for the nine months ended September 30, 1999 reflect
revenues of $11,525,336, operating expenses of $5,322,231 and replacement
reserves and capital expenditures of $493,000.
BENEFICIAL OWNERSHIP OF INTERESTS IN YOUR PARTNERSHIP. Together with our
subsidiaries, we currently own, in the aggregate, approximately 46.61% your
partnership's limited partnership units. Except as set forth above, neither we,
nor, to the best of our knowledge, any of our affiliates, (i) beneficially own
or have a right to acquire any units, (ii) has effected any transactions in the
units in the past 60 days, or (iii) have any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of your partnership, including, but not limited to, contracts,
arrangements, understandings or relationships concerning transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
30
<PAGE> 33
COMPENSATION PAID TO THE GENERAL PARTNER AND ITS AFFILIATES. The following
table shows, for each of the years indicated, compensation paid to your general
partner and its affiliates on a historical basis.
<TABLE>
<CAPTION>
PARTNERSHIP PROPERTY
FEES AND MANAGEMENT
YEAR EXPENSES FEES
---- ----------- ----------
<S> <C> <C>
1995.......... $840,000 536,000
1996.......... 482,000 554,000
1997.......... 283,000 572,000
1998.......... 228,000 572,000
1999*......... 405,333 594,667
</TABLE>
- -----------------
* Based on annualizing the fees and expenses for the nine months ended September
30, 1999 by multiplying such fees and expenses by 1.33. Actual 1999 fees and
expenses could be higher or lower.
LEGAL PROCEEDINGS. Your partnership may be a party to a variety of legal
proceedings related to its ownership of the partnership's properties, arising in
the ordinary course of the business, which are not expected to have a material
adverse effect on your partnership.
ADDITIONAL INFORMATION CONCERNING YOUR PARTNERSHIP. Your partnership files
annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy any document your partnership files at the
SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Your partnership's SEC filings are also available
to the public at the SEC's web site at http://www.sec.gov.
Section 14. Voting Power.
Decisions with respect to the day-to-day management of your partnership are
the responsibility of the general partner. Because the general partner of your
partnership is our affiliate, we control the management of your partnership.
Under your partnership's agreement of limited partnership, limited partners
holding a majority of the outstanding units must approve certain extraordinary
transactions, including the removal of the general partner, the addition of a
new general partner, most amendments to the partnership agreement and the sale
of all or substantially all of your partnership's assets. If we acquire _____
additional units that we are offering to purchase, we will own a majority of the
outstanding units and will have the ability to control any vote of the limited
partners.
Section 15. Source of Funds.
We expect that approximately $9,398,000 will be required to purchase any
and all of the limited partnership units that we are seeking in this offer
(exclusive of fees and expenses estimated to be $15,000). For more information
regarding fees and expenses, see "The Offer Section 19. Fees and Expenses"
below.
Under our secured $300 million revolving credit facility with Bank of
America, BankBoston, N.A and First Union National Bank, AIMCO Properties, L.P.
is the borrower and all obligations thereunder are guaranteed by AIMCO and
certain of its subsidiaries. The credit facility includes a swing line of up to
$30 million. The obligations under the
31
<PAGE> 34
credit facility are secured by AIMCO Properties, L.P.'s pledge of its stock
ownership in certain subsidiaries of AIMCO as well as a pledge of its interests
in notes issued by it to certain subsidiaries of AIMCO. The annual interest rate
under the credit facility is based on either LIBOR or a base rate which is the
higher of Bank of America's reference rate or 0.5% over the federal funds rate,
plus, in either case, an applicable margin. The margin ranges between 2.05% and
2.55% in the case of LIBOR-based loans and between 0.55% and 1.05% in the case
of base rate loans, based upon a fixed charge coverage ratio. The credit
facility expires on July 31, 2001 unless extended at the discretion of AIMCO
Properties, L.P., at which time the revolving facility would be converted into a
term loan for up to two successive one-year periods. The financial covenants
contained in the credit facility require us to maintain a ratio of debt to gross
asset value of no more than 0.55 to 1.0, and an interest coverage ratio of 2.25
to 1.0, and a fixed charge coverage ratio of at least 1.7 to 1.0 through
September 30, 1999 and 1.75 to 1.0 thereafter. In addition, the credit facility
limits us from distributing more than 80% of our Funds From Operations (as
defined) (or such amounts as may be necessary for us to maintain our status as a
REIT), imposes minimum net worth requirements and provides other financial
covenants related to certain of our assets and obligations.
Section 16. Dissenters' Rights.
Neither the agreement of limited partnership of your partnership nor
applicable law provides any right for you to have your units appraised or
redeemed in connection with, or as a result of, our offer. You have the
opportunity to make an individual decision on whether or not to tender your
units in the offer.
Section 17. Conditions of the Offer.
Notwithstanding any other provisions of our offer, we will not be required
to accept for payment and pay for any units tendered pursuant to our offer, may
postpone the purchase of, and payment for, units tendered, and may terminate or
amend our offer if at any time on or after the date of this offer to purchase
and at or before the expiration of our offer (including any extension thereof),
any of the following shall occur or may be reasonably expected to occur:
(1) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, indebtedness, capitalization, condition
(financial or otherwise), operations, licenses or franchises, management
contract, or results of operations or prospects of your partnership or local
markets in which your partnership owns property, including any fire, flood,
natural disaster, casualty loss, or act of God that, in our reasonable judgment,
are or may be materially adverse to your partnership or the value of the units
to us, or we shall have become aware of any facts relating to your partnership,
its indebtedness or its operations which, in our reasonable judgment, has or may
have material significance with respect to the value of your partnership or the
value of the units to us; or
(2) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or the
over-the-counter market in the United States, (ii) a decline in the closing
price of a share of AIMCO's Class A Common Stock of more than 7.5% from the date
hereof, (iii) any extraordinary or material adverse change in the financial,
real estate or money markets or major equity security indices in the United
States such that there shall have occurred at least a 25 basis point increase in
LIBOR the price of the 10-year Treasury Bond or the 30-year Treasury Bond, or at
least a 7.5% decrease in the S&P 500 Index, the Morgan Stanley REIT Index, in
each case, from the date hereof, (iii) any material adverse change in the
commercial mortgage financing markets, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (not existing on the date hereof), (vi) a commencement of a war,
conflict, armed hostilities or other national or international calamity directly
or indirectly involving the United States (not existing on the date hereof),
(vii) any limitation (whether or not mandatory) by any governmental authority
on, or any other event which, in our reasonable judgment, might affect the
extension of credit by banks or other lending institutions, or (viii) in the
case of any of the foregoing existing at the time of the commencement of the
offer, in our reasonable judgment, a material acceleration or worsening thereof;
or
(3) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by any Federal, state, local or foreign
government, governmental authority or governmental agency, or by any other
person, before any governmental authority, court or regulatory or administrative
agency, authority or tribunal, which (i) challenges or seeks to challenge our
purchase of the units, restrains, prohibits or delays the making or consummation
of our offer, prohibits the performance of any of the contracts or other
arrangements entered into by
32
<PAGE> 35
us (or any affiliates of ours), seeks to obtain any material amount of damages
as a result of the transactions contemplated by our offer, (ii) seeks to make
the purchase of, or payment for, some or all of the units pursuant to our offer
illegal or results in a delay in our ability to accept for payment or pay for
some or all of the units, (iii) seeks to prohibit or limit the ownership or
operation by us or any of our affiliates of the entity serving as general
partner of the partnership or to remove such entity as general partner of your
partnership, or seeks to impose any material limitation on our ability or the
ability of any affiliate of ours to conduct your partnership's business or own
such assets, (iv) seeks to impose material limitations on our ability to acquire
or hold or to exercise full rights of ownership of the units including, but not
limited to, the right to vote the units purchased by us on all matters properly
presented to the limited partners, or (v) might result, in our reasonable
judgment, in a diminution in the value of your partnership or a limitation of
the benefits expected to be derived by us as a result of the transactions
contemplated by our offer or the value of the units to us; or
(4) there shall be any action taken, or any statute, rule, regulation,
order or injunction shall be sought, proposed, enacted, promulgated, entered,
enforced or deemed applicable to our offer, your partnership, any general
partner of your partnership, us or any affiliate of ours or your partnership, or
any other action shall have been taken, proposed or threatened, by any
government, governmental authority or court, that, in our reasonable judgment,
might, directly or indirectly, result in any of the consequences referred to in
clauses (i) through (vi) of paragraph (c) above; or
(5) your partnership shall have (i) changed, or authorized a change of, the
units or your partnership's capitalization, (ii) issued, distributed, sold or
pledged, or authorized, proposed or announced the issuance, distribution, sale
or pledge of (A) any equity interests (including, without limitation, units), or
securities convertible into any such equity interests or any rights, warrants or
options to acquire any such equity interests or convertible securities, or (B)
any other securities in respect of, in lieu of, or in substitution for units
outstanding on the date hereof, (iii) purchased or otherwise acquired, or
proposed or offered to purchase or otherwise acquire, any outstanding units or
other securities, (iv) declared or paid any dividend or distribution on any
units or issued, authorized, recommended or proposed the issuance of any other
distribution in respect of the units, whether payable in cash, securities or
other property, (v) authorized, recommended, proposed or announced an agreement,
or intention to enter into an agreement, with respect to any merger,
consolidation, liquidation or business combination, any acquisition or
disposition of a material amount of assets or securities, or any release or
relinquishment of any material contract rights, or any comparable event, not in
the ordinary course of business, (vi) taken any action to implement such a
transaction previously authorized, recommended, proposed or publicly announced,
(vii) issued, or announced its intention to issue, any debt securities, or
securities convertible into, or rights, warrants or options to acquire, any debt
securities, or incurred, or announced its intention to incur, any debt other
than in the ordinary course of business and consistent with past practice,
(viii) authorized, recommended or proposed, or entered into, any transaction
which, in our reasonable judgment, has or could have an adverse affect on the
value of your partnership or the units, (ix) proposed, adopted or authorized any
amendment of its organizational documents, (x) agreed in writing or otherwise to
take any of the foregoing actions or (xi) been notified that any debt of your
partnership or any of its subsidiaries secured by any of its or their assets is
in default or has been accelerated; or
(6) a tender or exchange offer for any units shall have been commenced or
publicly proposed to be made by another person or "group" (as defined in Section
13(d)(3) of the Exchange Act), or it shall have been publicly disclosed or we
shall have otherwise learned that (i) any person or group shall have acquired or
proposed or be attempting to acquire beneficial ownership of more than five
percent of the units, or shall have been granted any option, warrant or right,
conditional or otherwise, to acquire beneficial ownership of more than five
percent of the units, other than acquisitions for bona fide arbitrage purposes,
or (ii) any person or group shall have entered into a definitive agreement or an
agreement in principle or made a proposal with respect to a merger,
consolidation or other business combination with or involving your partnership;
or
(7) we shall not have adequate cash or financing commitments available to
pay the for the units validly tendered; or
(8) the offer to purchase may have an adverse effect on AIMCO's status as a
REIT.
The foregoing conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to such conditions or may be waived
by us in whole or in part at any time and from time to time in our
33
<PAGE> 36
reasonable discretion. The failure by us at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to any particular facts or circumstances shall not
be deemed a waiver with respect to any other facts or circumstances and each
right shall be deemed a continuing right which may be asserted at any time and
from time to time.
Section 18. Certain Legal Matters.
GENERAL. Except as set forth in this Section 18, we are not, based on
information provided by your general partner (which is our subsidiary), aware of
any licenses or regulatory permits that would be material to the business of
your partnership, taken as a whole, and that might be adversely affected by our
acquisition of units as contemplated herein, or any filings, approvals or other
actions by or with any domestic or foreign governmental authority or
administrative or regulatory agency that would be required prior to the
acquisition of units by us pursuant to the offer, other than the filing of a
Tender Offer Statement on Schedule 14D-1 with the SEC (which has already been
filed) and any required amendments thereto. While there is no present intent to
delay the purchase of units tendered pursuant to the offer pending receipt of
any such additional approval or the taking of any such action, there can be no
assurance that any such additional approval or action, if needed, would be
obtained without substantial conditions or that adverse consequences might not
result to your partnership or its business, or that certain parts of its
business might not have to be disposed of or other substantial conditions
complied with in order to obtain such approval or action, any of which could
cause us to elect to terminate the offer without purchasing units thereunder.
Our obligation to purchase and pay for units is subject to certain conditions,
including conditions related to the legal matters discussed in this Section 18.
ANTITRUST. We do not believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, is applicable to the acquisition of units
contemplated by our offer.
MARGIN REQUIREMENTS. The units are not "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System and,
accordingly, those regulations generally are not applicable to our offer.
STATE LAWS. We are not aware of any jurisdiction in which the making of our
offer is not in compliance with applicable law. If we become aware of any
jurisdiction in which the making of the offer would not be in compliance with
applicable law, we will make a good faith effort to comply with any such law.
If, after such good faith effort, we cannot comply with any such law, the offer
will not be made to (nor will tenders be accepted from or on behalf of)
unitholders residing in such jurisdiction. In those jurisdictions with
securities or blue sky laws that require the offer to be made by a licensed
broker or dealer, the offer shall be made on behalf of us, if at all, only by
one or more registered brokers or dealers licensed under the laws of that
jurisdiction.
Section 19. Fees and Expenses.
Except as set forth in this Section 19, we will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
units pursuant to the offer. We have retained River Oaks Partnership Services,
Inc. to act as Information Agent in connection with our offer. The Information
Agent may contact holders of units by mail, telephone, telex, telegraph and
personal interview and may request brokers, dealers and other nominee limited
partners to forward materials relating to the offer to beneficial owners of the
units. We will pay the Information Agent reasonable and customary compensation
for its services in connection with the offer, plus reimbursement for
out-of-pocket expenses, and will indemnify it against certain liabilities and
expenses in connection therewith, including liabilities under the Federal
securities laws. We will also pay all costs and expenses of printing and mailing
the offer and its legal fees and expenses.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF US NOT CONTAINED HEREIN OR IN THE LETTER OF
TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
We have filed with the SEC a Tender Offer Statement on Schedule 14D-1,
pursuant to Section 14(d)(1) and Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to our offer, and may file
amendments thereto. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected and copies may be obtained at the same place and in
the same manner as described in "The Offer -- Section 13" under "Additional
Information Concerning Your Partnership.
AIMCO PROPERTIES, L.P.
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<PAGE> 37
ANNEX I
OFFICERS AND DIRECTORS
The names and positions of the executive officers of Apartment Investment
and Management Company ("AIMCO"), AIMCO-GP, Inc. ("AIMCO-GP") and the directors
of AIMCO are set forth below. The two directors of AIMCO-GP are Terry Considine
and Peter Kompaniez. The two directors of the general partner of your
partnership are Peter K. Kompaniez and Patrick J. Foye. The two executive
officers of the general partner of your partnership are Patrick J. Foye,
Executive Vice President, and Carla Stoner, Senior Vice President - Real Estate
Accounting. Unless otherwise indicated, the business address of each executive
officer and director is Colorado Center, Tower Two, 2000 South Colorado
Boulevard, Suite 2-100, Denver, Colorado, 80222. Each executive officer and
director is a citizen of the United States of America.
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
Terry Considine................... Chairman of the Board of Directors and Chief Executive Officer
Peter K. Kompaniez................ Vice Chairman, President and Director
Thomas W. Toomey.................. Executive Vice President--Finance and Administration
Joel F. Bonder.................... Executive Vice President, General Counsel and Secretary
Patrick J. Foye................... Executive Vice President
Paul J. McAuliffe................. Executive Vice President--Capital Markets and Chief Financial Officer
Steven D. Ira..................... Executive Vice President and Co-Founder
Harry G. Alcock................... Executive Vice President and Chief Investment Officer
Lance J. Graber................... Executive Vice President--Acquisitions
Richard S. Ellwood................ Director
J. Landis Martin.................. Director
Thomas L. Rhodes.................. Director
John D. Smith..................... Director
</TABLE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Terry Considine......... Chief Executive Officer of AIMCO and AIMCO-GP since July 1994. He
is the sole owner of Considine Investment Co. and prior to July
1994 was owner of approximately 75% of Property Asset Management,
L.L.C., Limited Liability Company, a Colorado limited liability
company, and its related entities (collectively, "PAM"), one of
AIMCO's predecessors. On October 1, 1996, Mr. Considine was
appointed Co-Chairman and director of Asset Investors Corp. and
Commercial Asset Investors, Inc., two other public real estate
investment trusts, and appointed as a director of Financial
Assets Management, LLC, a real estate investment trust manager.
Mr. Considine has been involved as a principal in a variety of
real estate activities, including the acquisition, renovation,
development and disposition of properties. Mr. Considine has also
controlled entities engaged in other businesses such as
television broadcasting, gasoline distribution and environmental
laboratories. Mr. Considine received a B.A. from Harvard College,
a J.D. from Harvard Law School and was formerly admitted as a
member of the Massachusetts Bar (inactive).
Peter K. Kompaniez...... Mr. Kompaniez has been Vice Chairman and a director of AIMCO
since July 1994 and was appointed President of AIMCO in July
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
1997. Mr. Kompaniez has served as Vice President of AIMCO-GP from
July 1994 through July 1998 and was appointed President in July
1998. Mr. Kompaniez has been a director of AIMCO-GP since July
1994. Since September 1993, Mr. Kompaniez has owned 75% of PDI
Realty Enterprises, Inc., a Delaware corporation ("PDI"), one of
AIMCO's predecessors, and serves as its President and Chief
Executive Officer. From 1986 to 1993, he served as President and
Chief Executive Officer of Heron Financial Corporation ("HFC"), a
United States holding company for Heron International, N.V.'s
real estate and related assets. While at HFC, Mr. Kompaniez
administered the acquisition, development and disposition of
approximately 8,150 apartment units (including 6,217 units that
have been acquired by the AIMCO) and 3.1 million square feet of
commercial real estate. Prior to joining HFC, Mr. Kompaniez was a
senior partner with the law firm of Loeb and Loeb where he had
extensive real estate and REIT experience. Mr. Kompaniez received
a B.A. from Yale College and a J.D. from the University of
California (Boalt Hall).
Thomas W. Toomey........ Mr. Toomey has served as Senior Vice President -- Finance and
Administration of AIMCO since January 1996 and was promoted to
Executive Vice-President--Finance and Administration in March
1997. Mr. Toomey has been Executive Vice President -- Finance and
Administration of AIMCO-GP similar capacity with Lincoln Property
Company ("LPC") as well as Vice President/Senior Controller and
Director of Administrative Services of Lincoln Property Services
where he was responsible for LPC's computer systems, accounting,
tax, treasury services and benefits administration. From 1984 to
1990, he was an audit manager with Arthur Andersen & Co. where he
served real estate and banking clients. From 1981 to 1983, Mr.
Toomey was on the audit staff of Kenneth Leventhal & Company. Mr.
Toomey received a B.S. in Business Administration/Finance from
Oregon State University and is a Certified Public Accountant.
Joel F. Bonder.......... Mr. Bonder has served as Executive Vice President and General
Counsel of AIMCO since December 8, 1997. Mr. Bonder has been
Executive Vice President and General Counsel of AIMCO-GP since
July 1998. Prior to joining AIMCO, Mr. Bonder served as Senior
Vice President and General Counsel of NHP Incorporated from April
1994 until December 1997. Mr. Bonder served as Vice President and
Deputy General Counsel of NHP Incorporated from June 1991 to
March 1994 and as Associate General Counsel of NHP from 1986 to
1991. From 1983 to 1985, Mr. Bonder was with the Washington, D.C.
law firm of Lane & Edson, P.C. From 1979 to 1983, Mr. Bonder
practiced with the Chicago law firm of Ross and Hardies. Mr.
Bonder received an A.B. from the University of Rochester and a
J.D. from Washington University School of Law.
Patrick J. Foye......... Mr. Foye has served as Executive Vice President of AIMCO and
AIMCO-GP since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom
LLP from 1989 to 1998 and was Managing Partner of the firm's
Brussels, Budapest and Moscow offices from 1992 through 1994. Mr.
Foye is also Deputy Chairman of the Long Island Power Authority
and serves as a member of the New York State Privatization Council.
He received a B.A. from Fordham College and a J.D. from Fordham
University Law School.
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Paul J. McAuliffe....... Mr. McAuliffe was appointed Executive Vice President -- Capital
Markets in February 1999 and Chief Financial Officer in October
1999. Prior to joining AIMCO, Mr. McAuliffe was Senior Managing
Director of Secured Capital Corporation and prior to that time
had been a Managing Director of Smith Barney, Inc. from 1993 to
1996, where he was a key member of the underwriting team that led
AIMCO's initial public offering in 1994. Mr. McAuliffe was also a
Managing Director and head of the real estate group at CS First
Boston from 1990 to 1993 and he was a Principal in the real
estate group at Morgan Stanley & Co., Inc. from 1983 to 1990. Mr.
McAuliffe received a B.A. from Columbia College and an MBA from
University of Virginia, Darden School.
Steven D. Ira........... Mr. Ira is a Co-Founder of AIMCO and has served as Executive Vice
President of AIMCO since July 1994. Mr. Ira has been Executive
Vice President of AIMCO-GP since July 1998. From 1987 until July
1994, he served as President of PAM. Prior to merging his firm
with PAM in 1987, Mr. Ira acquired extensive experience in
property management. Between 1977 and 1981 he supervised the
property management of over 3,000 apartment and mobile home units
in Colorado, Michigan, Pennsylvania and Florida, and in 1981 he
joined with others to form the property management firm of
McDermott, Stein and Ira. Mr. Ira served for several years on the
National Apartment Manager Accreditation Board and is a former
president of both the National Apartment Association and the
Colorado Apartment Association. Mr. Ira is the sixth individual
elected to the Hall of Fame of the National Apartment Association
in its 54-year history. He holds a Certified Apartment Property
Supervisor (CAPS) and a Certified Apartment Manager designation
from the National Apartment Association, a Certified Property
Manager (CPM) designation from the National Institute of Real
Estate Management (IREM) and he is a member of the Board of
Directors of the National Multi-Housing Council, the National
Apartment Association and the Apartment Association of Metro
Denver. Mr. Ira received a B.S. from Metropolitan State College
in 1975.
Harry G. Alcock......... Mr. Alcock was appointed Vice President of AIMCO and AIMCO-GP in
July 1996, and was promoted to Senior Vice President --
Acquisitions in October 1997 and then Executive Vice President
and Chief Investment Officer in October 1999, with responsibility
for acquisition and financing activities since July 1994. From
June 1992 until July 1994, Mr. Alcock served as Senior Financial
Analyst for PDI and HFC. From 1988 to 1992, Mr. Alcock worked for
Larwin Development Corp., a Los Angeles based real estate
developer, with responsibility for raising debt and joint venture
equity to fund land acquisitions and development. From 1987 to
1988, Mr. Alcock worked for Ford Aerospace Corp. He received his
B.S. from San Jose State University.
Lance J. Graber......... Mr. Graber was appointed Vice President-Acquisitions in October
1999. He was a Director in the Real Estate Principal Transactions
Group of Credit Suisse First Boston. Before joining Credit Suisse
First Boston in 1991, Mr. Graber was a Vice President with
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Sonnenblick Goldman Company, a New York based real estate
investment bank. He has a B.S. in Economics and a M.B.A. from The
Wharton School of the University of Pennsylvania.
Richard S. Ellwood...... Mr. Ellwood was appointed a Director of AIMCO in July 1994 and
12 Auldwood Lane is currently Chairman of the Audit Committee. Mr. Ellwood is the
Rumson, NJ 07660 founder and President of R.S. Ellwood & Co., Incorporated, a real
estate investment banking firm. Prior to forming R.S. Ellwood &
Co., Incorporated in 1987, Mr. Ellwood had 31 years experience on
Wall Street as an investment banker, serving as: Managing
Director and senior banker at Merrill Lynch Capital Markets from
1984 to 1987; Managing Director at Warburg Paribas Becker from
1978 to 1984; general partner and then Senior Vice President and
a director at White, Weld & Co. from 1968 to 1978; and in various
capacities at J.P. Morgan & Co. from 1955 to 1968. Mr. Ellwood
currently serves as a director of FelCor Suite Hotels, Inc. and
Florida East Coast Industries, Inc.
J. Landis Martin........ Mr. Martin was appointed a Director of AIMCO in July 1994 and
199 Broadway became Chairman of the Compensation Committee in March 1998. Mr.
Suite 4300 Martin has served as President and Chief Executive Officer and a
Denver, CO 80202 Director of NL Industries, Inc., a manufacturer of titanium
dioxide, since 1987. Mr. Martin has served as Chairman of Tremont
Corporation, a holding company operating through its affiliates
Titanium Metals Corporation ("TIMET") and NL Industries, Inc.,
since 1990 and as Chief Executive Officer and a director of
Tremont since 1998. Mr. Martin has served as Chairman of Timet,
an integrated producer of titanium, since 1987 and Chief
Executive Officer since January 1995. From 1990 until its
acquisition by Dresser Industries, Inc. ("Dresser") in 1994, Mr.
Martin served as Chairman of the Board and Chief Executive
Officer of Baroid Corporation, an oilfield services company. In
addition to Tremont, NL and TIMET, Mr. Martin is a director of
Dresser, which is engaged in the petroleum services, hydrocarbon
and engineering industries.
Carla R. Stoner......... Ms. Stoner joined AIMCO in July 1997 as Vice President of Finance
and Administration and became Senior Vice President -- Real Estate
Accounting in November 1998. Prior to joining AIMCO, Ms. Stoner
was with National Housing Partners since 1989. While at National
Housing Partners, Ms. Stoner served as a real estate controller
from 1989 to 1992, as Vice President of Accounting from 1992 to
1995 and as Interim Chief Information Officer from 1995 to July
1997. Prior to joining National Housing Partners, Ms. Stoner was
a Senior Auditor with Deloitte & Touche from 1984 to 1989. Ms.
Stoner received a B.A. in accounting from Virginia Tech.
Thomas L. Rhodes........ Mr. Rhodes was appointed a Director of AIMCO in July 1994. Mr.
215 Lexington Avenue Rhodes has served as the President and a Director of National
4th Floor Review magazine since November 30, 1992, where he has also
New York, NY 10016 served as a Director since 1998. From 1976 to 1992, he held
various positions at Goldman, Sachs & Co. and was elected a
General Partner in 1986 and served as a General Partner from 1987
until November 27, 1992. He is currently Co-Chairman of the Board,
Co-Chief Executive Officer and a Director of Commercial Assets
Inc. and Asset Investors Corporation. He also serves as a
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Director of Delphi Financial Group, Inc. and its subsidiaries,
Delphi International Ltd., Oracle Reinsurance Company, and the
Lynde and Harry Bradley Foundation. Mr. Rhodes is Chairman of the
Empire Foundation for Policy Research, a Founder and Trustee of
Change NY, a Trustee of The Heritage Foundation, and a Trustee of
the Manhattan Institute.
John D. Smith........... Mr. Smith was appointed a Director of AIMCO in November 1994. Mr.
3400 Peachtree Road Smith is Principal and President of John D. Smith Developments.
Suite 8311994 Mr. Smith has been a shopping center developer, owner and
Atlanta, GA 30326 consultant for over 8.6 million square feet of shopping center
projects including Lenox Square in Atlanta, Georgia. Mr. Smith is
a Trustee and former President of the International Council of
Shopping Centers and was selected to be a member of the American
Society of Real Estate Counselors. Mr. Smith served as a Director
for Pan-American Properties, Inc. (National Coal Board of Great
Britain) formerly known as Continental Illinois Properties. He
also serves as a director of American Fidelity Assurance
Companies and is retained as an advisor by Shop System Study
Society, Tokyo, Japan.
</TABLE>
The letter of transmittal and any other required documents should be sent
or delivered by each unitholder or such unitholder's broker, dealer, bank, trust
company or other nominee to the Information Agent at one of its addresses set
forth below.
THE INFORMATION AGENT FOR THE OFFER IS:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier: By Hand:
<S> <C> <C>
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
For information, please call:
TOLL FREE: (888) 349-2005
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP IN
CONSOLIDATED CAPITAL GROWTH FUND (THE "PARTNERSHIP")
PURSUANT TO AN OFFER TO PURCHASE
DATED NOVEMBER 24, 1999 (THE "OFFER DATE")
BY
AIMCO PROPERTIES, L.P.
----------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT MIDNIGHT, NEW YORK TIME,
ON DECEMBER 22, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE")
----------------------------------------------------------------------
WE ARE OFFERING TO PURCHASE UNITS IN YOUR PARTNERSHIP FOR $361 PER UNIT.
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
By Telephone:
TOLL FREE (888) 349-2005
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF UNITS TENDERED
- -----------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) (Please indicate Units in Consolidated Capital Growth Fund
changes or corrections to the name, address and tax
identification number printed below.)
- -----------------------------------------------------------------------------------------------------------------------
1. Total Number of Units 2. Total Number of Units
Owned Tendered
(#) (#)
-----------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
[ ] Check box if the units have been tendered in another tender offer.
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
To participate in the offer, you must send a duly completed and executed copy of
this Letter of Transmittal and any other documents required by this Letter of
Transmittal so that such documents are received by River Oaks Partnership
Services, Inc., the Information Agent, on or prior to the Expiration Date,
unless extended. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE INFORMATION AGENT. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. DELIVERY OF
THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE VALID DELIVERY.
--------------------------
IF YOU HAVE THE CERTIFICATE ORIGINALLY ISSUED TO REPRESENT YOUR
INTEREST IN THE PARTNERSHIP PLEASE SEND IT TO THE INFORMATION
AGENT WITH THIS LETTER OF TRANSMITTAL.
---------------------------
FOR INFORMATION OR ASSISTANCE IN CONNECTION WITH THE OFFER OR THE
COMPLETION OF THIS LETTER OF TRANSMITTAL, PLEASE CONTACT THE INFORMATION AGENT
AT (888) 349-2005 (TOLL FREE).
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9)
To be completed ONLY if the consideration for the purchase price of Units
accepted for payment is to be issued in the name of someone other than the
undersigned.
[ ] Issue consideration to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 2, 4 and 9)
To be completed ONLY if the consideration for the purchase price of Units
accepted for payment is to be sent to some one other than the undersigned or to
the undersigned at an address other than that shown above.
[ ] Mail consideration to:
Name
----------------------------------------------------------------------------
(Please Type or Print)
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby acknowledges that he or she has received and reviewed
(i) the Purchaser's Offer to Purchase relating to the offer by AIMCO Properties,
L.P. (the "Purchaser") to purchase Limited Partnership Interests (the "Units")
in the Partnership and (ii) this Letter of Transmittal and the Instructions
hereto, as each may be supplemented or amended from time to time (collectively,
the "Offer").
Upon the terms and subject to the conditions set forth in the Offer to
Purchase, and this Letter of Transmittal, the undersigned hereby tenders to the
Purchaser the Units set forth in the box above entitled "Description of Units
Tendered," including all interests in any limited partnership represented by
such units (collectively, the "Units"), at the price indicated on the Offer to
Purchase, less the amount of distributions, if any, made by the Partnership from
the Offer Date until the Expiration Date (the "Offer Price"), net to the
undersigned in cash, without interest.
Subject to and effective upon acceptance for payment of any of the Units
tendered hereby in accordance with the terms of the Offer, the undersigned
hereby irrevocably sells, assigns, transfers, conveys and delivers to, or upon
the order of, the Purchaser all right, title and interest in and to such Units
tendered hereby that are accepted for payment pursuant to the Offer, including,
without limitation, (i) all of the undersigned's interest in the capital of the
Partnership, and the undersigned's interest in all profits, losses and
distributions of any kind to which the undersigned shall at any time be entitled
in respect of the Units, including, without limitation, distributions in the
ordinary course, distributions from sales of assets, distributions upon
liquidation, winding-up, or dissolution, payments in settlement of existing or
future litigation, and all other distributions and payments from and after the
expiration date of the Offer, in respect of the Units tendered by the
undersigned and accepted for payment and thereby purchased by the Purchaser;
(ii) all other payments, if any, due or to become due to the undersigned in
respect of the Units, under or arising out of the agreement of limited
partnership of the Partnership (the "Partnership Agreement"), or any agreement
pursuant to which the Units were sold (the "Purchase Agreement"), whether as
contractual obligations, damages, insurance proceeds, condemnation awards or
otherwise; (iii) all of the undersigned's claims, rights, powers, privileges,
authority, options, security interests, liens and remedies, if any, under or
arising out of the Partnership Agreement or Purchase Agreement or the
undersigned's ownership of the Units, including, without limitation, all voting
rights, rights of first offer, first refusal or similar rights, and rights to be
substituted as a limited partner of the Partnership; and (iv) all present and
future claims, if any, of the undersigned against the Partnership, the other
partners of the Partnership, or the general partner and its affiliates,
including the Purchaser, under or arising out of the Partnership Agreement, the
Purchase Agreement, the undersigned's status as a limited partner, or the terms
or conditions of the Offer, for monies loaned or advanced, for services
rendered, for the management of the Partnership or otherwise.
The undersigned hereby irrevocably constitutes and appoints the Purchaser
and any designees of the Purchaser as the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Units, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to vote or act in such manner as any such attorney
and proxy or substitute shall, in its sole discretion, deem proper with respect
to such Units, to do all such acts and things necessary or expedient to deliver
such Units and transfer ownership of such Units on the partnership books
maintained by the general partner of the Partnership, together with all
accompanying evidence of transfer and authenticity to, or upon the order of, the
Purchaser, to sign any and all documents necessary to authorize the transfer of
the Units to the Purchaser including, without limitation, the "Transferor's
(Seller's) Application for Transfer" created by the National Association of
Securities Dealers, Inc., if required, and upon receipt by the Information Agent
(as the undersigned's agent) of the Offer Price, to become a substitute limited
partner, to receive any and all distributions made by the Partnership from and
after the Expiration Date of the Offer (regardless of the record date for any
such distribution), and to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Units, all in accordance with the terms
of the Offer. This appointment is effective upon the purchase of the Units by
the Purchaser as provided in the Offer and shall be irrevocable for a period of
ten years following the termination of the Offer. Upon the purchase of Units
pursuant to the Offer, all prior proxies and consents given by the undersigned
with respect to such Units will be revoked and no subsequent proxies or consents
may be given (and if given will not be deemed effective).
3
<PAGE> 4
In addition to and without limiting the generality of the foregoing, the
undersigned hereby irrevocably (i) requests and authorizes (subject to and
effective upon acceptance for payment of any Unit tendered hereby) the
Partnership and its general partners to take any and all actions as may be
required to effect the transfer of the undersigned's Units to the Purchaser (or
its designee) and to admit the Purchaser as a substitute limited partner in the
Partnership under the terms of the Partnership Agreement; (ii) empowers the
Purchaser and its agent to execute and deliver to each general partner a change
of address form instructing the general partner to send any and all future
distributions to the address specified in the form, and to endorse any check
payable to or upon the order of such unitholder representing a distribution to
which the Purchaser is entitled pursuant to the terms of the offer, in each
case, in the name and on behalf of the tendering unitholder; (iii) agrees not to
exercise any rights pertaining to the Units without the prior consent of the
Purchaser; and (iv) requests and consents to the transfer of the Units, to be
effective on the books and records of the Partnership as of the Offer Date.
The undersigned irrevocably constitutes and appoints the Purchaser and any
designees of the Purchaser as the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Units, with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to withdraw any or all of such Units that have been previously
tendered in response to any tender or exchange offer provided that the price per
unit being offered by the Purchaser is equal to or higher than the price per
unit being offered in the other tender or exchange offer. This appointment is
effective immediately and shall continue to be effective unless and until such
Units are withdrawn from the Offer by the undersigned prior to the Expiration
Date.
NOTWITHSTANDING ANY PROVISION IN A PARTNERSHIP AGREEMENT OR ANY PURCHASE
AGREEMENT TO THE CONTRARY, THE UNDERSIGNED HEREBY DIRECTS EACH GENERAL PARTNER
OF THE PARTNERSHIP TO MAKE ALL DISTRIBUTIONS AFTER THE PURCHASER ACCEPTS THE
TENDERED UNITS FOR PAYMENT TO THE PURCHASER OR ITS DESIGNEE. Subject to and
effective upon acceptance for payment of any Unit tendered hereby, the
undersigned hereby requests that the Purchaser be admitted to the Partnership as
a substitute limited partner under the terms of the Partnership Agreement. Upon
request, the undersigned will execute and deliver additional documents deemed by
the Information Agent or the Purchaser to be necessary or desirable to complete
the assignment, transfer and purchase of Units tendered hereby and will hold any
distributions received from the Partnership after the Expiration Date in trust
for the benefit of the Purchaser and, if necessary, will promptly forward to the
Purchaser any such distributions immediately upon receipt. The Purchaser
reserves the right to transfer or assign, in whole or in part, from time to
time, to one or more of its affiliates, the right to purchase Units tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of
tendering unitholders to receive payment for Units validly tendered and accepted
for payment pursuant to the Offer.
By executing this Letter of Transmittal, the undersigned represents that
either (i) the undersigned is not a plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or an entity deemed
to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101 of any
such plan, or (ii) the tender and acceptance of Units pursuant to the Offer will
not result in a nonexempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code.
The undersigned understands that a tender of Units to the Purchaser will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer, the Purchaser may not
be required to accept for payment any of the Units tendered hereby. In such
event, the undersigned understands that any Letter of Transmittal for Units not
accepted for payment may be destroyed by the Purchaser (or its agent). EXCEPT AS
STATED IN THE OFFER, THIS TENDER IS IRREVOCABLE, PROVIDED THAT UNITS TENDERED
PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE,
OR UNLESS ALREADY ACCEPTED FOR PAYMENT, ANY TIME AFTER 60 DAYS FROM THE OFFER
DATE.
THE UNDERSIGNED HAS BEEN ADVISED THAT THE PURCHASER IS AN AFFILIATE OF THE
GENERAL PARTNER OF THE PARTNERSHIP AND NO SUCH GENERAL PARTNER MAKES ANY
RECOMMENDATION AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING UNITS IN THE
OFFER. THE UNDERSIGNED HAS MADE HIS OR HER OWN DECISION TO TENDER UNITS.
4
<PAGE> 5
The undersigned hereby represents and warrants for the benefit of the
Partnership and the Purchaser that the undersigned owns the Units tendered
hereby and has full power and authority and has taken all necessary action to
validly tender, sell, assign, transfer, convey and deliver the Units tendered
hereby and that when the same are accepted for payment by the Purchaser, the
Purchaser will acquire good, marketable and unencumbered title thereto, free and
clear of all liens, restrictions, charges, encumbrances, conditional sales
agreements or other obligations relating to the sale or transfer thereof, and
such Units will not be subject to any adverse claims and that the transfer and
assignment contemplated herein are in compliance with all applicable laws and
regulations.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligations of the undersigned
shall be binding upon the heirs, personal representatives, trustees in
bankruptcy, legal representatives, and successors and assigns of the
undersigned.
The undersigned further represents and warrants that, to the extent a
certificate evidencing the Units tendered hereby (the "original certificate") is
not delivered by the undersigned together with this Letter of Transmittal, (i)
the undersigned represents and warrants to the Purchaser that the undersigned
has not sold, transferred, conveyed, assigned, pledged, deposited or otherwise
disposed of any portion of the Units, (ii) the undersigned has caused a diligent
search of its records to be taken and has been unable to locate the original
certificate, (iii) if the undersigned shall find or recover the original
certificate evidencing the Units, the undersigned will immediately and without
consideration surrender it to the Purchaser; and (iv) the undersigned shall at
all times indemnify, defend, and save harmless the Purchaser and the
Partnership, its successors, and its assigns from and against any and all
claims, actions, and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages, judgments, costs, charges, counsel
fees, and other expenses of every nature and character by reason of honoring or
refusing to honor the original certificate when presented by or on behalf of a
holder in due course of a holder appearing to or believed by the partnership to
be such, or by issuance or delivery of a replacement certificate, or the making
of any payment, delivery, or credit in respect of the original certificate
without surrender thereof, or in respect of the replacement certificate.
5
<PAGE> 6
================================================================================
SIGNATURE BOX
(SEE INSTRUCTION 2)
- --------------------------------------------------------------------------------
Please sign exactly as your name is printed on the front of this Letter of
Transmittal. For joint owners, each joint owner must sign. (See Instruction 2).
TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS
OF A CORPORATION OR OTHER PERSONS ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE COMPLETE THIS BOX AND SEE INSTRUCTION 2.
The signatory hereto hereby tenders the Units indicated in this Letter of
Transmittal to the Purchaser pursuant to the terms of the Offer, and certifies
under penalties of perjury that the statements in Box A, Box B and, if
applicable, Box C and Box D are true.
X
-------------------------------------------------------------------------------
(Signature of Owner)
X
-------------------------------------------------------------------------------
(Signature of Joint Owner)
Name and Capacity (if other than individuals):
----------------------------------
Title:
--------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(City) (State) (Zip)
Area Code and Telephone No. (Day):
----------------------------------------------
(Evening):
------------------------------------------
SIGNATURE GUARANTEE (IF REQUIRED)
(SEE INSTRUCTION 2)
Name and Address of Eligible Institution:
---------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Authorized Signature: X
---------------------------------------------------------
Name:
---------------------------------------------------------------------------
Title: Date:
------------------------------------------ --------------------------
================================================================================
6
<PAGE> 7
TAX CERTIFICATIONS
(See Instruction 4)
By signing the Letter of Transmittal in the Signature Box, the unitholder
certifies as true under penalty of perjury, the representations in Boxes A, B
and C below. Please refer to the attached Instructions for completing this
Letter of Transmittal and Boxes A, B and C below.
================================================================================
BOX A
SUBSTITUTE FORM W-9
(SEE INSTRUCTION 4 - BOX A)
- --------------------------------------------------------------------------------
The unitholder hereby certifies the following to the Purchaser under
penalties of perjury:
(i) The Taxpayer Identification No. ("TIN") printed (or corrected) on
the front of this Letter of Transmittal is the correct TIN of the unitholder,
unless the Units are held in an Individual Retirement Account ("IRA"); or if
this box [ ] is checked, the unitholder has applied for a TIN. If the unitholder
has applied for a TIN, a TIN has not been issued to the unitholder, and either
(a) the unitholder has mailed or delivered an application to receive a TIN to
the appropriate IRS Center or Social Security Administration Office, or (b) the
unitholder intends to mail or deliver an application in the near future (it
being understood that if the unitholder does not provide a TIN to the Purchaser,
31% of all reportable payments made to the unitholder will be withheld); and
(ii) Unless this box [ ] is checked, the unitholder is not subject to
backup withholding either because the unitholder: (a) is exempt from backup
withholding; (b) has not been notified by the IRS that the unitholder is subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) has been notified by the IRS that such unitholder is no longer
subject to backup withholding.
Note: Place an "X" in the box in (ii) above, only if you are unable to
certify that the unitholder is not subject to backup withholding.
================================================================================
================================================================================
BOX B
FIRPTA AFFIDAVIT
(SEE INSTRUCTION 4 - BOX B)
- --------------------------------------------------------------------------------
Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interests plus cash equivalents, and the holder of the partnership
interest is a foreign person. To inform the Purchaser that no withholding is
required with respect to the unitholder's Units in the Partnership, the person
signing this Letter of Transmittal hereby certifies the following under
penalties of perjury:
(i) Unless this box [ ] is checked, the unitholder, if an individual,
is a U.S. citizen or a resident alien for purposes of U.S. income taxation, and
if other than an individual, is not a foreign corporation, foreign partnership,
foreign estate or foreign trust (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
(ii) The unitholder's U.S. social security number (for individuals) or
employer identification number (for non-individuals) is correct as furnished in
the blank provided for that purpose on the front of the Letter of Transmittal;
(iii) The unitholder's home address (for individuals), or office
address (for non-individuals), is correctly printed (or corrected) on the front
of this Letter of Transmittal.
The person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchaser and that any false
statements contained herein could be punished by fine, imprisonment, or both.
================================================================================
================================================================================
BOX C
SUBSTITUTE FORM W-8
(SEE INSTRUCTION 4 - BOX C)
- --------------------------------------------------------------------------------
By checking this box [ ], the person signing this Letter of Transmittal
hereby certifies under penalties of perjury that the unitholder is an "exempt
foreign person" for purposes of the Backup Withholding rules under the U.S.
Federal income tax laws, because the unitholder has the following
characteristics:
(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in the
U.S. for a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business
that has effectively connected gains from transactions with a broker
or barter exchange.
================================================================================
7
<PAGE> 8
INSTRUCTIONS
FOR COMPLETING LETTER OF TRANSMITTAL
1. REQUIREMENTS OF TENDER. To be effective, a duly completed and signed
Letter of Transmittal (or facsimile thereof) and any other required
documents must be received by the Information Agent at one of its
addresses (or its facsimile number) set forth herein before 5:00 p.m.,
New York Time, on the Expiration Date, unless extended. To ensure
receipt of the Letter of Transmittal and any other required documents,
it is suggested that you use overnight courier delivery or, if the
Letter of Transmittal and any other required documents are to be
delivered by United States mail, that you use certified or registered
mail, return receipt requested.
Our records indicate that the undersigned owns the number of Units
set forth in the box above entitled "Description of Units Tendered"
under the column entitled "Total Number of Units Owned." If you
would like to tender only a portion of your Units, please so
indicate in the space provided in the box above entitled
"Description of Units Tendered."
WHEN TENDERING, YOU MUST SEND ALL PAGES OF THE LETTER OF TRANSMITTAL,
INCLUDING TAX CERTIFICATIONS (BOXES A, B, AND C).
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNITHOLDER
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
INFORMATION AGENT. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY.
2. SIGNATURE REQUIREMENTS.
INDIVIDUAL AND JOINT OWNERS -- After carefully reading and completing
the Letter of Transmittal, to tender Units, unitholders must sign at the
"X" in the Signature Box of the Letter of Transmittal. The signature(s)
must correspond exactly with the names printed (or corrected) on the
front of the Letter of Transmittal. If the Letter of Transmittal is
signed by the unitholder (or beneficial owner in the case of an IRA), no
signature guarantee on the Letter of Transmittal is required. If any
tendered Units are registered in the names of two or more joint owners,
all such owners must sign this Letter of Transmittal.
IRAS/ELIGIBLE INSTITUTIONS -- For Units held in an IRA account, the
beneficial owner should sign in the Signature Box and no signature
guarantee is required. Similarly, if Units are tendered for the account
of a member firm of a registered national security exchange, a member
firm of the National Association of Securities Dealers, Inc. or a
commercial bank, savings bank, credit union, savings and loan
association or trust company having an office, branch or agency in the
United States (each an "Eligible Institution"), no signature guarantee
is required.
TRUSTEES, CORPORATIONS, PARTNERSHIP AND FIDUCIARIES -- Trustees,
executors, administrators, guardians, attorneys-in-fact, officers of a
corporation, authorized partners of a partnership or other persons
acting in a fiduciary or representative capacity must sign at the "X" in
the Signature Box and have their signatures guaranteed by an Eligible
Institution by completing the signature guarantee set forth in the
Signature Box of the Letter of Transmittal. If the Letter of Transmittal
is signed by trustees, administrators, guardians, attorneys-in-fact,
officers of a corporation, authorized partners of a partnership or
others acting in a fiduciary or representative capacity, such persons
should, in addition to having their signatures guaranteed, indicate
their title in the Signature Box and must submit proper evidence
satisfactory to the Purchaser of their authority to so act (see
Instruction 3 below).
3. DOCUMENTATION REQUIREMENTS. In addition to the information required to
be completed on the Letter of Transmittal, additional documentation may
be required by the Purchaser under certain circumstances including, but
not limited to, those listed below. Questions on documentation should be
directed to the Information Agent at its telephone number set forth
herein.
8
<PAGE> 9
<TABLE>
<S> <C> <C>
DECEASED OWNER (JOINT TENANT) -- Copy of death certificate.
DECEASED OWNER (OTHERS) -- Copy of death certificate (see also Executor/
Administrator/Guardian below).
EXECUTOR/ADMINISTRATOR/GUARDIAN -- Copy of court appointment documents for executor or
administrator; and
(a) a copy of applicable provisions of the will (title
page, executor(s)' powers, asset distribution); or
(b) estate distribution documents.
ATTORNEY-IN-FACT -- Current power of attorney.
CORPORATION/PARTNERSHIP -- Corporate resolution(s) or other evidence of authority
to act. Partnership should furnish a copy of the
partnership agreement.
TRUST/PENSION PLANS -- Unless the trustee(s) are named in the registration, a
copy of the cover page of the trust or pension plan,
along with a copy of the section(s) setting forth names
and powers of trustee(s) and any amendments to such
sections or appointment of successor trustee(s).
</TABLE>
4. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If consideration is to be
issued in the name of a person other than the person signing the
Signature Box of the Letter of Transmittal or if consideration is to be
sent to someone other than such signer or to an address other than that
set forth on the Letter of Transmittal in the box entitled "Description
of Units Tendered," the appropriate boxes on the Letter of Transmittal
should be completed.
5. TAX CERTIFICATIONS. The unitholder(s) tendering Units to the Purchaser
pursuant to the Offer must furnish the Purchaser with the unitholder(s)'
taxpayer identification number ("TIN") and certify as true, under
penalties of perjury, the representations in Box A, Box B and, if
applicable, Box C. By signing the Signature Box, the unitholder(s)
certifies that the TIN as printed (or corrected) on this Letter of
Transmittal in the box entitled "Description of Units Tendered" and the
representations made in Box A, Box B and, if applicable, Box C, are
correct. See attached Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for guidance in determining
the proper TIN to give the Purchaser.
U.S. PERSONS. A unitholder that is a U.S. citizen or a resident alien
individual, a domestic corporation, a domestic partnership, a domestic
trust or a domestic estate (collectively, "U.S. Persons"), as those
terms are defined in the Code, should follow the instructions below with
respect to certifying Box A and Box B.
BOX A - SUBSTITUTE FORM W-9.
Part (i), Taxpayer Identification Number -- Tendering unitholders must
certify to the Purchaser that the TIN as printed (or corrected) on this
Letter of Transmittal in the box entitled "Description of Units
Tendered" is correct. If a correct TIN is not provided, penalties may be
imposed by the Internal Revenue Service (the "IRS"), in addition to the
unitholder being subject to backup withholding.
Part (ii), Backup Withholding -- In order to avoid 31% Federal income
tax backup withholding, the tendering unitholder must certify, under
penalty of perjury, that such unitholder is not subject to backup
withholding. Certain unitholders (including, among others, all
corporations and certain exempt non-profit organizations) are not
subject to backup withholding. Backup withholding is not an additional
tax. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS. DO NOT CHECK THE BOX IN BOX A, PART (ii), UNLESS
YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING.
When determining the TIN to be furnished, please refer to the following
as a guide:
Individual accounts - should reflect owner's TIN.
Joint accounts - should reflect the TIN of the owner whose name appears
first.
Trust accounts - should reflect the TIN assigned to the trust.
IRA custodial accounts - should reflect the TIN of the custodian (not
necessary to provide).
9
<PAGE> 10
Custodial accounts for the benefit of minors - should reflect the TIN of
the minor.
Corporations, partnership or other business entities - should reflect
the TIN assigned to that entity.
By signing the Signature Box, the unitholder(s) certifies that the TIN
as printed (or corrected) on the front of the Letter of Transmittal is
correct.
BOX B - FIRPTA AFFIDAVIT -- Section 1445 of the Code requires that each
unitholder transferring interests in a partnership with real estate
assets meeting certain criteria certify under penalty of perjury the
representations made in Box B, or be subject to withholding of tax equal
to 10% of the purchase price for interests purchased. Tax withheld under
Section 1445 of the Code is not an additional tax. If withholding
results in an overpayment of tax, a refund may be obtained from the IRS.
PART (i) SHOULD BE CHECKED ONLY IF THE TENDERING UNITHOLDER IS NOT A
U.S. PERSON, AS DESCRIBED THEREIN.
BOX C - FOREIGN PERSONS -- In order for a tendering unitholder who is a
Foreign Person (i.e., not a U.S. Person, as defined above) to qualify as
exempt from 31% backup withholding, such foreign Unitholder must
certify, under penalties of perjury, the statement in Box C of this
Letter of Transmittal, attesting to that Foreign Person's status by
checking the box preceding such statement. UNLESS THE BOX IS CHECKED,
SUCH UNITHOLDER WILL BE SUBJECT TO 31% WITHHOLDING OF TAX.
6. VALIDITY OF LETTER OF TRANSMITTAL. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance of a Letter
of Transmittal and other required documents will be determined by the
Purchaser and such determination will be final and binding. The
Purchaser's interpretation of the terms and conditions of the Offer
(including these Instructions for this Letter of Transmittal) will be
final and binding. The Purchaser will have the right to waive any
irregularities or conditions as to the manner of tendering. Any
irregularities in connection with tenders, unless waived, must be cured
within such time as the Purchaser shall determine. This Letter of
Transmittal will not be valid until any irregularities have been cured
or waived. Neither the Purchaser nor the Information Agent are under any
duty to give notification of defects in a Letter of Transmittal and will
incur no liability for failure to give such notification.
7. ASSIGNEE STATUS. Assignees must provide documentation to the Information
Agent which demonstrates, to the satisfaction of the Purchaser, such
person's status as an assignee.
8. TRANSFER TAXES. The amount of any transfer taxes (whether imposed on the
registered holder or such person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is
submitted.
10
<PAGE> 11
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER - - Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
GIVE THE
TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF - -
- -----------------------------------------------------------------------------------------------
<S> <C>
1. An individual account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if
combined funds, the first individual on
the account
3. Husband and wife (joint account) The actual owner of the account or, if
joint funds, either person
4. Custodian account of a minor (Uniform The minor (2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the
only contributor, the minor (1)
6. Account in the name of guardian or The ward, minor or incompetent person (3)
committee for a designated ward, minor
or incompetent person (3)
7. a. The usual revocable savings trust The grantor trustee (1)
account (grantor is also trustee)
b. So-called trust account that is not a The actual owner (1)
legal or valid trust under state law
8. Sole proprietorship account The owner (4)
9. A valid trust, estate or pension trust The legal entity (Do not furnish the
identifying number of the personal
representative or trustee unless the
legal entity itself is not designated
in account title.) (5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name of The partnership
the business
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or prison)
that receives agricultural program
payments
- -----------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
(1) List first and circle the name of the person whose number you
furnish.
(2) Circle the minor's name and furnish the minor's social
security number.
(3) Circle the ward's or incompetent person's name and furnish
such person's social security number or employer
identification number.
(4) Show your individual name. You may also enter your business
name. You may use your social security number or employer
identification number.
(5) List first and circle the name of the legal trust, estate, or
pension trust.
NOTE: If no name is circled when there is more than one name, the
number will be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the Code.
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947 (a)(1).
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
- A futures commission merchant registered with the Commodity Futures
Trading Commission.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441
of the Code.
- Payments to Partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
12
<PAGE> 13
- Payments made by certain foreign organizations.
- Payments made to an appropriate nominee.
- Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and
you have not provided your correct taxpayer identification number to the
payer. Payments of tax exempt interest (including exempt interest
dividends under section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments of mortgage interest to you.
- Payments made to an appropriate nominee.
Exempt payees described above should file a substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(A),
6045, and 6050A of the Code.
PRIVACY ACT NOTICE -- Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes. Payers must be given the numbers whether or
not recipients are required to file a tax return. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a correct taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you
fail to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If
you make a false statement with no reasonable basis that results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
13
<PAGE> 14
The Information Agent for the offer is:
RIVER OAKS PARTNERSHIP SERVICES, INC.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier: By Hand:
P.O. Box 2065 111 Commerce Road 111 Commerce Road
S. Hackensack, N.J. 07606-2065 Carlstadt, N.J. 07072 Carlstadt, N.J. 07072
Attn.: Reorganization Dept. Attn.: Reorganization Dept.
</TABLE>
By Telephone:
TOLL FREE (888) 349-2005
<PAGE> 1
EXHIBIT (a)(3)
AIMCO PROPERTIES IS OFFERING $361 WHICH IS
THE HIGHEST PRICE CURRENTLY BEING OFFERED TO
PURCHASE UNITS OF LIMITED PARTNERSHIP INTEREST OF
CONSOLIDATED CAPITAL GROWTH FUND
AIMCO
AIMCO PROPERTIES, L.P.
COLORADO CENTER, TOWER TWO
200 SOUTH COLORADO BOULEVARD, SUITE 2-1000
DENVER, COLORADO 80222
November 24, 1999
Dear Unitholder:
AIMCO PROPERTIES, L.P. is offering $361, net to the seller in cash, to
purchase any and all units of limited partnership interest (the "Units") in
Consolidated Capital Growth Fund (the "Partnership"). Our offer price is over
71% HIGHER than the price that has recently been offered by Madison Liquidity
Investors 104, L.L.C. IF IT IS LIQUIDITY YOU DESIRE, OUR OFFER PROVIDES YOU
WITH THE GREATEST PURCHASE PRICE CURRENTLY BEING OFFERED. Our offer price will
be reduced for any distributions subsequently made by your partnership prior to
the expiration of our offer. We will pay for accepted units promptly after
expiration of our offer.
GREATEST NUMBER OF UNITS: We are offering to purchase more than ten
(10) times the number of Units than Madison is offering to purchase. OUR OFFER
PROVIDES YOU WITH THE GREATEST CHANCE TO RECEIVE THE HIGHEST PURCHASE PRICE
CURRENTLY BEING OFFERED FOR THE GREATEST NUMBER OF UNITS.
There are advantages and disadvantages to you of accepting or declining
our offer. The terms of the offer are more fully described in the enclosed
materials. These documents describe the material risks and opportunities
associated with the offer, including certain tax considerations. Please review
these documents carefully. The general partner of the Partnership is our
affiliate. The general partner of your partnership has informed us that it is
remaining neutral and makes no recommendation as to whether you should tender
or refrain from tendering your units in any offer. Although the general partner
believes that our offer is fair, the general partner also believes that you must
make your own decision whether or not to participate in any offer, based upon a
number of factors, including your financial position, your need or desire for
liquidity, other financial opportunities available to you, and your tax position
and the tax consequences to you of selling your units. However, the general
partner notes that the our offer is at the highest price of the two offers and
if you wish to sell your units for cash, you should do so at the highest price.
LIMITED PARTNERS ARE URGED TO READ OUR OFFER TO PURCHASE, AND THE RELATED
MATERIALS CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING WHETHER TO TENDER
THEIR UNITS.
<PAGE> 2
You should be aware, however, that, as with any rational investment
decision, we are making our offer with a view to making a profit. No independent
person has been retained to evaluate or render any opinion with respect to the
fairness of our offer, and no representation is made by us or any of our
affiliates as to such fairness.
If you desire to tender any of your units in response to our offer, you
should complete and sign the enclosed letter of transmittal in accordance with
the enclosed instructions and mail or deliver the signed letter of transmittal
and any other required documents to River Oaks Partnership Services, Inc., which
is acting as the Information Agent in connection with our offer at the address
set forth on the back cover of the enclosed Offer to Purchase. The offer will
expire at 12:00 midnight, New York City time, on December 22, 1999, unless
extended. If you have any questions concerning the terms of the offer, or need
assistance in completing the forms necessary to tender your units, please
contact the Information Agent at (888) 349-2005 or (201) 896-1900.
Very truly yours,
AIMCO PROPERTIES, L.P.
2
<PAGE> 1
Exhibit (z)(1)
AGREEMENT OF JOINT FILING
Madison River Properties, L.L.C., AIMCO/IPT, Inc., Insignia Properties,
L.P., AIMCO Properties, L.P., AIMCO-GP, Inc. and Apartment Investment and
Management Company agree that the Amendment No. 11 to Schedule 13D to which this
agreement is attached as an exhibit, and all further amendments thereto, and all
filings under Schedule 14D-1 to which this agreement is attached as an exhibit,
and all amendments thereto, shall be filed on behalf of each of them. This
agreement is intended to satisfy the requirements of Rule 13d-1(f)(1)(iii) under
the Securities Exchange Act of 1934, as amended.
Dated: November 24, 1999
MADISON RIVER PROPERTIES, L.L.C.
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President]
AIMCO/IPT, INC.
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President
INSIGNIA PROPERTIES, L.P.
By: AIMCO/IPT, INC.
(General Partner)
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President
AIMCO PROPERTIES, L.P.
By: AIMCO-GP, INC.
(General Partner)
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President
AIMCO-GP, INC.
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President
APARTMENT INVESTMENT
AND MANAGEMENT COMPANY
By: /s/ Patrick J. Foye
-------------------------------
Executive Vice President
