<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. 6)
ANGELES INCOME PROPERTIES, LTD. II
(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
1873 SOUTH BELLAIRE STREET, 17TH FLOOR
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* $6,656,171 Amount of Filing Fee: $1,331.23
- ------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the
purchase of 34,849.06 units of limited partnership interest of the
subject partnership for $191 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 13 Pages
<PAGE> 3
Page 2 of 13 Pages
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
12,750
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
12.2%
10. TYPE OF REPORTING PERSON
PN
<PAGE> 4
Page 3 of 13 Pages
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
12,750
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
12.2%
10. TYPE OF REPORTING PERSON
CO
<PAGE> 5
Page 4 of 13 Pages
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
9,834
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9.9%
10. TYPE OF REPORTING PERSON
PN
<PAGE> 6
Page 5 of 13 Pages
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
9,834
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9.9%
10. TYPE OF REPORTING PERSON
CO
<PAGE> 7
Page 6 of 13 Pages
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
22,584
8. CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
22.6%
10. TYPE OF REPORTING PERSON
CO
<PAGE> 8
SCHEDULE 14D-1/AMENDMENT NO. 6 TO SCHEDULE 13D
This Statement (the "Statement") constitutes (a) the 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
Angeles Income Properties, Ltd. II (the "Partnership"); and (b) Amendment No. 6
to the Schedule 13D (the "Schedule 13D") originally filed with the Securities
and Exchange Commission (the "Commission") on July 6, 1998, by Broad River
Properties, L.L.C. ("Broad River"), Insignia Properties, L.P. ("IPLP"),
Insignia Properties Trust ("IPT"), Insignia Financial Group, Inc. ("Insignia")
and Andrew L. Farkas, as amended by (i) Amendment No. 1, filed with the
Commission on August 13, 1998, by Cooper River Properties, L.L.C. ("Cooper
River"), IPLP, IPT, Insignia and Andrew L. Farkas, (ii) Amendment No. 2, filed
with the Commission on September 11, 1998, by Cooper River, IPLP, IPT, Insignia
and Andrew L. Farkas, (iii) Amendment No. 3, filed with the Commission on
September 21, 1998, by Cooper River, IPLP, IPT, Insignia and Andrew L. Farkas,
(iv) Amendment No. 4, filed with the Commission on October 26, 1998, by Broad
River, IPLP, IPT, AIMCO OP, AIMCO-GP, Inc. ("AIMCO-GP") and Apartment
Investment and Management Company ("AIMCO"), and (v) Amendment No. 5, filed
with the Commission on January 22, 1999, by Cooper River, IPLP, IPT, Broad
River, AIMCO OP, AIMCO-GP and AIMCO. Cooper River, Broad River, AIMCO/IPT, Inc.
("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.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Angeles Income
Properties, Ltd. II, a California limited partnership. The address of the
Partnership's principal executive offices is 1873 South Bellaire Street, 17th
Floor, Denver, Colorado 80222.
(b) This Statement relates to an offer by AIMCO OP to
purchase up to 34,849.06 of the 99,784 outstanding units of limited partnership
interest (the "Units") of the Partnership at a purchase price per Unit, net to
the seller, of $191 in cash (less the amount of any distributions paid by the
Partnership on and after May 13, 1999), upon the terms and subject to the
conditions set forth in an Offer to Purchase, dated May 13, 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.
ITEM 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. 6 to the Schedule 13D, by Cooper River
Properties, L.L.C., a Delaware limited liability company, Broad 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 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
Page 7 of 13 Pages
<PAGE> 9
subsidiary, AIMCO/IPT. AIMCO/IPT also replaced IPT as the sole general partner
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 1873 South Bellaire Street, 17th Floor, 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, AIMCO-GP and
AIMCO/IPT 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.
ITEM 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.
ITEM 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.
ITEM 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.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) Cooper River directly owns 5,864 Units, Broad River
directly owns 8,908 Units, IPLP directly owns 3,970 Units, and AIMCO OP
directly owns 3,842 Units (for an aggregate of 22,584 Units), representing
5.9%, 8.9%, 4.0 and 3.9%, respectively, or a total of 22.6% of the outstanding
Units based on the 99,784 Units outstanding at December 22, 1998.
IPLP, AIMCO/IPT and AIMCO may be deemed to beneficially own
the Units directly owned by Cooper River by reason of each of their
relationship with Cooper River. AIMCO/IPT and AIMCO may be deemed to
beneficially own the units directly owned by IPLP by reason of each of their
relationships with IPLP. Cooper River is a wholly owned subsidiary of IPLP, and
AIMCO/IPT is the sole
Page 8 of 13 Pages
<PAGE> 10
general partner of IPLP (owning approximately 66.17% of the total equity
interests). AIMCO/IPT is a wholly owned subsidiary of AIMCO.
AIMCO OP, AIMCO-GP and AIMCO may be deemed to beneficially
own the Units directly owned by Broad River by reason of their relationship
with Broad River. 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.
Broad River is a wholly owned subsidiary of AIMCO OP, and 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) Cooper 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 5,864 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 3,970 Units owned by it;
(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 5,864 Units
directly owned by Cooper River and the 3,970 Units directly owned by IPLP; (iv)
Broad 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 8,908 Units directly
owned by it; (v) 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 3,842 Units directly owned by it and the 8,908 Units directly owned by
Broad River; (vi) AIMCO-GP is reporting that it shares the power to vote or
direct the disposition of the 3,842 Units owned by AIMCO OP and the 8,908 Units
directly owned by Broad River; and (vii) 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 5,864 Units directly owned by Cooper River, the 3,970 Units
directly owned by IPLP, the 8,908 Units owned by Broad River and the 3,842
Units directly owned by AIMCO OP.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
Not applicable.
ITEM 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.
ITEM 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.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
Page 9 of 13 Pages
<PAGE> 11
(b)-(d) The information set forth in the Offer to Purchase
under "The Offer -- Section 18. Certain Legal Matters" is incorporated herein
by reference.
(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.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 13, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated May 13, 1999, from AIMCO OP to the
Limited Partners of the Partnership.
(b) Amended and Restated Credit Agreement (Unsecured
Revolver-to-Term Facility), dated as of October 1,
1998, among AIMCO OP, Bank of America National Trust
and Savings Association, and BankBoston, N.A.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K,
dated October l, 1998, is incorporated herein by
this reference).
(b)(2) First Amendment to Credit Agreement, dated as of
November 6, 1998, by and among AIMCO OP, the
financial institutions listed on the signature pages
thereof and Bank of America National Trust and
Savings Association (Exhibit 10.2 to AIMCO's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998, 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 May 13, 1999, among
AIMCO, AIMCO-GP, AIMCO OP, AIMCO/IPT, IPLP, Broad
River and Cooper River.
Page 10 of 13 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: May 13, 1999
COOPER RIVER PROPERTIES, L.L.C.
By: /s/Patrick J. Foye
------------------------------------
Executive Vice President
BROAD 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 13 Pages
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
(a)(1) Offer to Purchase, dated May 13, 1999.
(a)(2) Letter of Transmittal and related Instructions.
(a)(3) Letter, dated May 13, 1999, from AIMCO OP to the
Limited Partners of the Partnership.
(b) Amended and Restated Credit Agreement (Unsecured
Revolver-to-Term Facility), dated as of October 1,
1998, among AIMCO OP, Bank of America National Trust
and Savings Association, and BankBoston, N.A.
(Exhibit 10.1 to AIMCO's Current Report on Form 8-K,
dated October 1, 1998, is incorporated herein by
this reference).
(b)(2) First Amendment to Credit Agreement, dated as of
November 6, 1998, by and among AIMCO OP, the
financial institutions listed on the signature pages
thereof and Bank of America National Trust and
Savings Association (Exhibit 10.2 to AIMCO's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1998, 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 May 13, 1999, among
AIMCO, AIMCO-GP, AIMCO OP, AIMCO/IPT, IPLP, Broad
River and Cooper River.
</TABLE>
Page 12 of 13 Pages
<PAGE> 1
OFFER TO PURCHASE FOR CASH
AIMCO Properties, L.P.
is offering to purchase up to 34,849.06 units of limited partnership interest in
Angeles Income Properties, Ltd. II
for $191 per unit in CASH
<TABLE>
<S> <C>
Our offer price will be reduced for any distributions Our offer and your withdrawal rights will expire at 5:00
subsequently made by your partnership prior to the p.m., New York City time, on June 29, 1999, unless we
expiration of our offer. extend the deadline.
We will only accept a maximum of 34.92% of the YOU WILL NOT PAY ANY FEES OR COMMISSIONS IF YOU
outstanding units in response to our offer. If more units TENDER YOUR UNITS.
are tendered to us, we will generally accept units on a
pro rata basis according to the number of units tendered Our offer is not subject to any minimum number of units
by each person. being tendered.
</TABLE>
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 $191 per unit without any
arms-length negotiations. Accordingly, our offer price may
not reflect the fair market value of your units.
o As of June 30, 1998, your general partner (which is our
subsidiary) estimated the net asset value of your units to be
$260 per unit and an affiliate estimated the net liquidation
value of your units based on recent appraisals, to be $249.78
per unit.
o Your general partner and the property manager of the
residential 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.
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.
If you desire accept our offer, you should complete and sign the
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.
May 13, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION..........................................................................................................1
RISK FACTORS..........................................................................................................1
No Third Party Valuation or Appraisal; No Arms-Length Negotiation.................................................1
No Fairness Opinion From a Third Party............................................................................1
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; 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................................................................3
Possible Increase in Control of Your Partnership by Us............................................................3
Recognition of Gain Resulting from Possible Future Reduction in Your Partnership Liabilities......................4
Risk of Inability to Transfer Units for 12-Month Period...........................................................4
THE OFFER.............................................................................................................4
Section 1. Terms of the Offer; Expiration Date; Proration..................................................4
Section 2. Acceptance for Payment and Payment for Units....................................................5
Section 3. Procedure for Tendering Units...................................................................6
Section 4. Withdrawal Rights...............................................................................7
Section 5. Extension of Tender Period; Termination; Amendment..............................................8
Section 6. Certain Federal Income Tax Matters..............................................................9
Section 7. Effects of the Offer...........................................................................11
Section 8. Information Concerning Us and Certain of Our Affiliates........................................12
Section 9. Background and Reasons for the Offer...........................................................13
Section 10. Position of the General Partner of Your Partnership With Respect to the Offer..................22
Section 11. Conflicts of Interest and Transactions with Affiliates.........................................23
Section 12. Future Plans of the Purchaser..................................................................24
Section 13. Certain Information Concerning Your Partnership................................................25
Section 14. Voting Power...................................................................................30
Section 15. Source of Funds................................................................................30
Section 16. Dissenters' Rights.............................................................................31
Section 17. Conditions of the Offer........................................................................31
Section 18. Certain Legal Matters..........................................................................33
Section 19. Fees and Expenses..............................................................................33
ANNEX I - OFFICERS AND DIRECTORS....................................................................................I-1
</TABLE>
i
<PAGE> 3
INTRODUCTION
We are offering to purchase up to 34,849.06 units, representing
approximately 34.92% of the outstanding units of limited partnership interest
in your partnership, for the purchase price of $191 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.
If you tender your units in response to our offer you will not be
obligated to pay any commissions or partnership transfer fees but will be
obligated to pay any transfer taxes (see Instruction 8 to the letter of
transmittal). 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." 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 5:00 P.M., New York City time, on June 29,
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 July 11, 1999.
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 March 31, 1999, AIMCO owned or managed 373,409
apartment units in 2,071 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 a result of our October 1, 1998 merger with Insignia Financial
Group, Inc. and our February 26, 1999 merger with Insignia Properties Trust, we
acquired a 100% ownership interest in the general partner of your partnership
and the company that manages the residential properties owned by your
partnership.
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:
NO THIRD PARTY VALUATION OR APPRAISAL; NO ARMS-LENGTH NEGOTIATION
We did not base our valuation of the property 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.
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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
Except for one residential property, 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. The commercial property value is based on offers for
such property.
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 residential 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 year ended December 31, 1998. 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. 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. However, your partnership currently holds one commercial
property, which is located in Montgomery, Alabama and is currently being
marketed for sale. While these offers have been received for the purchase of
such property, it is unknown whether or not such property will be sold and for
what price. The general partner of your partnership believes that the market
for the sale of commercial properties is strong at this time.
Thus, our offer does not satisfy any expectation that you would
receive the return of your investment in the partnership through a sale of any
property. 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 residential properties
would not be advantageous given market conditions, the condition of the
property 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 consequences to you and your partners on a sale
of property. We cannot predict when any property will be sold or otherwise
disposed of.
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HOLDING UNITS MAY RESULT IN GREATER FUTURE VALUE
You might receive more value if you retain your units until your
partnership is liquidated.
CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER; NO GENERAL PARTNER
RECOMMENDATION
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.
Because of our affiliation with the general partner of your partnership, your
general partner makes no recommendation as to whether you should tender your
units.
CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES
Since our subsidiaries receive fees for managing your partnership and
its residential 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 residential 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 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 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 your units of limited
partnership interest of your partnership you transfer to us, whether you
dispose of all of your units and whether you are no longer subject to the
"passive loss" rules with respect to your partnership. Because the income tax
consequences of tendering units will not be the same for everyone, you should
consult your own tax advisor with specific reference to your own tax situation.
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
property owned by your partnership.
POSSIBLE INCREASE IN CONTROL OF YOUR PARTNERSHIP BY US
Because the general partner of your partnership is our subsidiary, we
control the management of your partnership. In addition, if we acquire more
units, we will increase our ability to influence voting decisions with respect
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to your partnership and may control such voting decisions. Furthermore, in the
event that we acquire a substantial number of units pursuant to our offer,
removal of a general partner without our consent may become more difficult or
impossible. We also own a majority of the company that manages the residential
property owned by your partnership. In the event that we acquire
a substantial number of units pursuant to our offer, removal of any property
manager without our consent may become more difficult or even impossible.
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 of limited partnership interest of your partnership and
the liabilities of your partnership were to be reduced, you will 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.
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.
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) up to 34,849.06 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." For purposes of the offer,
the term "expiration date" shall mean 5:00 p.m., New York City time, on June
29, 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" 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 more than 34,849.06 units are validly tendered prior to the
expiration date and not properly withdrawn prior to the expiration date in
accordance with the procedures specified in Section 4, we will, upon the terms
and subject to the conditions of the offer, accept for payment and pay for an
aggregate of 34,849.06 of the units so tendered, 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 34,849.06 units, we will purchase all units so tendered and not
withdrawn, upon the terms and subject to the conditions of the offer.
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If proration of tendered units is required, then, subject to our
obligation under Rule 14e-1(c) under the Securities Exchange Act of 1934 (the
"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.
The offer is conditioned on satisfaction of certain conditions. THE
OFFER IS NOT CONDITIONED UPON ANY MINIMUM AMOUNT OF UNITS BEING TENDERED. See
"The Offer -- Section 17," 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 right of
limited partners to withdraw units until the expiration date or on or after
July 11, 1999, retain the units that have been tendered during the period or
periods for which the offer is extended, or (iv) amend the offer. For
administrative purposes, the transfer of units will be effective March 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 May 13, 1999.
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, up to 34,849.06 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.
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," 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"; subject, however, 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.
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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 and accepted for payment by you. 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 for 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 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 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
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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.
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.
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."
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 the you are not a
foreign person if you tender units. See the instructions to the letter of
transmittal and "The Offer -- Section 6."
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 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.
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SECTION 4. WITHDRAWAL RIGHTS.
You may withdraw tendered units at any time prior to the expiration
date or on or after July 11, 1999, 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."
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 shall 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 our offer and not accept for payment any units not
theretofore accepted for payment or paid for, (iii) upon the occurrence of any
of the conditions specified in "The Offer -- Section 17," 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";
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
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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
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 with possible retroactive effect, and any such change
or alternative construction could affect the continuing accuracy of this
summary. Such summary is based on the assumption that your partnership will be
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 the IRS regarding any matter discussed in this
offer to purchase. Further, no opinion of tax counsel has been obtained with
regard to the offer.
THE 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 FEDERAL INCOME TAX LAW FOR WHICH NO CLEAR PRECEDENT OR
AUTHORITY MAY BE AVAILABLE. ACCORDINGLY, YOU SHOULD CONSULT YOUR TAX ADVISOR
REGARDING THE 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 pursuant to the offer 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 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 is generally
equal to the 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
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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 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 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%) to the extent of previously claimed
depreciation deductions that would not be treated as "unrealized receivables."
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 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 shelter 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 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 no longer be
suspended and will 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. Accordingly, you should 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 offset gain from the sale of units pursuant to the offer.
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INFORMATION REPORTING, BACKUP WITHHOLDING AND FIRPTA. If you tender
any units, you must report the transaction by filing a statement with your
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
Federal income tax withholding of 31% with respect to the payment of the offer
consideration, you may have 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. 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 Federal income tax liability and, if in excess
thereof, a refund could be obtained from the Internal Revenue Service by filing
a U.S. 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
Federal income tax purposes. It is possible that our acquisition of units
pursuant to the offer could result in such a termination of your partnership.
Notwithstanding the fact that the agreement of limited partnership of your
partnership may prohibit a transfer of ownership of an interest that would
cause a tax termination, the assignment to us of rights to distributions with
respect to units may cause a termination of your partnership for Federal income
tax purposes. 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 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 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 will change (and possibly
shorten) a remaining partner's holding period with respect to its retained
units in your partnership for 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 more than 27.61% of the units
pursuant to the offer, we will own in excess of 50% of the total outstanding
units and, as a result, will be able to control
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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 22.39% of the outstanding limited partnership
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
residential property 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 property
owned by your partnership. We will continue to control the general partner of
your partnership and the residential property manager, both of which will
remain the same. Consummation of the offer will not affect any agreement of
limited partnership, the operations of any partnership, the business and
properties owned by any partnership, the management compensation payable to any
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 residential property.
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
this case, 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 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.
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 March 31, 1999, AIMCO was one of the largest owners and managers of
multifamily apartment properties in the United States, with a total portfolio
of 373,409 apartment units in 2,071 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 March
31, 1999, AIMCO:
o owned or controlled 63,069 units in 240 apartment properties;
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o held an equity interest in 168,817 units in 891 apartment
properties; and
o managed 141,523 units in 940 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 1873 South
Bellaire Street, 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 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
(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.
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) have effected any transaction in the units in the past
three years, except the transfer of 20 units at $182 per unit in privately
negotiated transactions, 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 property owned by your
partnership. Our offer provides us with an opportunity to increase our
ownership interest in your partnership's property 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 residential 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 our subsidiaries, AIMCO currently owns, in the
aggregate, approximately 22.39% of the outstanding limited partnership units of
your partnership.
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One of the reasons we chose to acquire Insignia is that we would be
able to make the tender offers to acquire 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. As of the
date of this offering, AIMCO Properties, L.P. proposes to make offers to
approximately 90 of the Insignia Partnerships, including your partnership.
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 in the Insignia Partnerships. 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 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. We determined in
June of 1998 that if the merger with Insignia were consummated, we would offer
to limited partners of the Insignia Partnerships limited partnership units of
AIMCO Properties, L.P. and/or cash.
PRIOR TENDER OFFERS. Prior to the Insignia Merger, a number of tender
offers had been made to acquire units of your partnership. On August 13, 1998,
IPT, then an affiliate of Insignia and now our affiliate, commenced a tender
offer pursuant to which it acquired 5,864 units (representing approximately
5.70% of the number outstanding) at a cash purchase price of $175 per unit.
Prior to such tender offer, on August 7, 1998, Madison Partnership
Liquidity Investors 64, LLC ("Madison"), which was unaffiliated with Insignia
and is not affiliated with AIMCO, commenced a tender offer for $130 per unit.
On April 13, 1998, IPT commenced a tender offer pursuant to which it
acquired 8,908 of the outstanding limited partnership units for $160 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.
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 (including 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
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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). Currently, your partnership is marketing for sale its one commercial
property.
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
residential real estate assets of your partnership in private transactions, and
any liquidation sale would be uncertain. Liquidation of the partnership assets
may trigger a substantial prepayment penalty under the mortgage for the
properties. Your general partner believes it currently is in the best interest
of your partnership to continue holding its real estate assets.
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 property 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. Currently, your partnership is marketing
its one commercial property for sale and has received offers for such property.
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 property owned by your partnership.
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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 property, 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 property, 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; (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 residential property manager with respect to
the partnership's properties for the year ending December 31, 1999 and (iv)
tender offer statements and beneficial ownership reports on Schedules 13D,
14D-1 and 14D-9. Our determination of the offer price was based on our review
and analysis of the foregoing information and the analyses concerning the
partnership summarized below.
VALUATION OF UNITS. We determined our offer price by estimating the
value of each residential 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 residential 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 fiscal year ended December 31,
1998. 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 mortgage debt that the property is subject to 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 year ended December 31, 1998, to your partnership's net
operating income for the same period.
16
<PAGE> 19
<TABLE>
<S> <C>
Net Income (Loss)...................................................... $ 60,000
Other Non-Operating Expense............................................ 4,067,000
Depreciation........................................................... 1,867,000
Interest............................................................... 1,439,000
-----------
Property Income........................................................ $ 7,433,000
</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:
Your partnership currently holds one commercial property, Atlanta
Crossing, located in Montgomery, Alabama. This property is currently being
marketed for sale and the table below reflects the current offers to purchase
the property. There can be no assurance, however, that such property will be
sold or the price or cost of any sale. If the property is subject to offers to
purchase, the value we used is the highest offer, which is then discounted to
reflect the uncertainty of the actual closing price for a sale and the
likelihood of price negotiations up until the closing date.
<TABLE>
<CAPTION>
Offers For Atlanta Crossing
---------------------------
<S> <C>
$ 3,120,000
3,050,000
$ 1,900,000
</TABLE>
o First, we estimated the value of the residential 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 divided the fiscal 1998 property income by the property's
capitalization rate to derive an estimated gross property value as
described in the following table. For the commercial property, we used
the highest offer price, which is then discounted to reflect the
uncertainties in closing a sale.
<TABLE>
<CAPTION>
FISCAL 1998 ESTIMATED
PROPERTY CAPITALIZATION GROSS PROPERTY
PROPERTY INCOME RATE VALUE
-------- ------ ---- -----
<S> <C> <C> <C>
Deer Creek Apartments $ 1,465,000 10.25% $ 14,243,000
Georgetown Apartments 757,000 10.50 7,213,000
Landmark Apartments 1,216,000 10.00 12,163,000
Atlanta Crossing Shopping Center 3,995,000
------------
Estimated Total Gross Property Value $ 37,664,000
</TABLE>
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
17
<PAGE> 20
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 $19,231,736. 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, 99% 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>
Estimated gross valuation of partnership properties............................. $ 37,664,000
Plus: Cash and cash equivalents................................................. 2,194,119
Plus: Other partnership assets, net of security deposits........................ 1,859,743
Less: Mortgage debt, including accrued interest................................. (18,105,541)
Less: Notes payable, including accrued interest................................. 0
Less: Other liabilities......................................................... (621,514)
--------------
Partnership valuation before taxes and certain costs............................ $ 22,990,807
Less: Extraordinary capital expenditures for deferred maintenance............... (1,875,871)
Less: Closing costs............................................................. (1,883,200)
--------------
Estimated net valuation of your partnership..................................... $ 19,231,735
Percentage of estimated net valuation allocated to units........................ 99%
--------------
Estimated net valuation of units................................................ $ 19,039,419
Total number of units................................................. 99,748
--------------
Estimated valuation per unit.................................................... $ 191
--------------
Cash consideration per unit..................................................... $ 191
--------------
</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
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
following chart. You should bear in mind that the estimated values assigned to
the alternate forms of consideration are based on a variety of assumptions that
have been made by us. These assumptions relate to, among other things,
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
18
<PAGE> 21
similar apartment properties, the manner in which your partnership's property
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 December 31, 2037, 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................................................... $ 191
Alternatives:
Prices on secondary market....................................... $ 35 to $565
Estimated liquidation proceeds................................... $ 191
General partner's estimate of net asset value.................... $ 260
Affiliate's estimate of net liquidation value.................... $ 249.78 (1)
</TABLE>
- ----------
(1) Represents a per unit amount of the appraised value of approximately
$42.4 million.
PRICES ON SECONDARY MARKET
Secondary market sales activity for the units, including privately
negotiated sales, has been limited and sporadic. Set forth in the table below
are the high and low sales prices of units for the quarterly periods from
January 1, 1996 to March 31, 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
prices; thus, we do not know whether the information complied by The
Partnership Spectrum is accurate and complete. The transfer paperwork submitted
to the general partner often does not include the requested price information
or contains conflicting information as to the actual sales price. Accordingly,
you should not rely upon this information as being completely accurate.
19
<PAGE> 22
ANGELES INCOME PROPERTIES, LTD. II
REPORTED SALES PRICES OF PARTNERSHIP UNITS
<TABLE>
<CAPTION>
AS REPORTED BY
THE PARTNERSHIP
SPECTRUM(a)
-------------------------
LOW SALES HIGH SALES
PRICE PRICE
PER UNIT PER UNIT
-------- --------
<S> <C> <C>
Fiscal Year Ended December 31, 1999:
First Quarter................................ $ 108.25 $ 199.00
Fiscal Year Ended December 31, 1998:
Fourth Quarter............................... -- --
Third Quarter................................ 125.00 178.10
Second Quarter............................... 120.00 152.50
First Quarter................................ 128.00 15110
Fiscal Year Ended December 31, 1997:
Fourth Quarter............................... 95.00 147.00
Third Quarter................................ 110.00 145.00
Second Quarter............................... 110.00 135.00
First Quarter................................ 80.00 127.00
Fiscal Year Ended December 31, 1996:
Fourth Quarter............................... 61.50 122.00
Third Quarter................................ 76.00 112.00
Second Quarter............................... 35.00 102.00
First Quarter................................ 36.00 565.00
</TABLE>
- ----------
(a) 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 prices. We
do not know whether the information compiled by The Partnership
Spectrum is accurate or complete.
We believe that, although secondary market sales information probably
is not a reliable measure of value because of the limited and inefficient
nature of the market for units, this information may be relevant to a limited
partner's decision as to whether to tender his or her units pursuant to the
offer. At present, privately negotiated sales and sales through intermediaries
are the only means available to a limited partner to liquidate an investment in
units (other than the offer) because the units are not listed or traded on any
exchange or quoted, on NASDAQ, on the Electronic Bulletin Board, or on "pink
sheets."
APPRAISALS
Your partnership's properties were appraised in 1998 by an independent
third party appraiser, Koeppel Tener Real Estate Services, Inc. (the
"Appraiser"), in connection with your general partner's estimate of net asset
value as of December 31, 1997 and not in connection with the offer. According
to the appraisal reports, the scope of the appraisals included an inspection of
the properties and an analysis of the surrounding market. The Appraiser relied
principally on the income capitalization approach to valuation and secondarily
on the sales comparison approach, and represented that its report was prepared
in accordance with the Code of Professional Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute and the Uniform
Standards of Professional Appraisal Practice, and in compliance with the
Appraisal Standards set forth in the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 (known
20
<PAGE> 23
as "FIRREA"). The estimated market value of the fee simple estate of each
property as specified in the reports is as follows.
<TABLE>
<CAPTION>
Property 1998
-------- ----
<S> <C>
Dear Creek Apartments $ 12,200,000
Georgetown Apartments 8,500,000
Landmark Apartments 13,500,000
Atlanta Crossing Shopping Center $ 5,100,000
</TABLE>
The total appraised value of the properties is $39,300,000. However,
the appraisal does not reflect the mortgage encumbering the properties of
$17,999,000 (including interest), other assets and liabilities of the
partnership or any costs of sale of the properties. Using the appraisal amount
instead of the "Estimated gross valuation of partnership properties" in the
table in "Valuation of Units" would result in a higher amount per unit than our
offer. Previously, an affiliate of your general partner relied on such
appraisal amounts to calculate an estimated net liquidation value of $249.78
per unit.
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 also assumed
that your partnership's property was 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 were sold at their book
value, and that the net proceeds of sale were 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
relatively 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 would be
disposed of in an orderly manner and 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.
GENERAL PARTNER'S ANNUAL ESTIMATES OF NET ASSET VALUE
Your general partner (which is our subsidiary) prepared an estimate of
your partnership's net asset value per unit in connection with an offer to
purchase up to 4.9% of the outstanding units commenced by an unaffiliated party
in August 1998. That estimate of your partnership's net asset value per unit as
of June 30, 1998 was $260. This estimated net asset value is based on a
hypothetical sale of the partnership's properties and the distribution to the
limited partners and the general partner of the gross proceeds of such sales,
net of related indebtedness, together with the cash, proceeds from temporary
investments, and all other assets that are believed to have liquidation value,
after provision in full for all of the other known liabilities of your
partnership. This net asset value does not take into account (i) timing
considerations, (ii) costs associated with winding up the partnership, (iii)
the distribution paid by your partnership of $14.75 per unit for the fiscal
year ended December 31, 1998, or (iv) $1,875,871 in deferred maintenance costs.
Therefore, we believe that this estimate of net asset value per unit does not
necessarily represent either the fair market value of a unit or the amount a
limited partner reasonably could expect to receive if the partnership's
properties were sold and the partnership was liquidated. For this reason, we
considered this net asset value estimate to be less meaningful in determining
the offer price than the analysis described above.
21
<PAGE> 24
AFFILIATE'S ESTIMATE OF NET LIQUIDATION VALUE
An affiliate of your general partner which is now an affiliate of
ours, prepared an estimate of your partnership's net liquidation value per unit
in connection with your general partner's estimate of net asset value as of
December 31, 1997. That estimate of your partnership's net liquidation value
per unit as of June 30, 1998 was $249.78. This estimated net liquidation value
is based on the appraisals set forth above. While this value is higher than our
offer price per unit, because this value is based on the appraisals because
different income and capitalization rates were used and we believe that the
appraisals overstate the value of the properties.
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.
Your general partner is our subsidiary. Therefore, the general partner
of your partnership has substantial conflicts of interest with regard to the
offer and makes no recommendation as to whether you should tender or refrain
from tendering your units. You must make your own decision whether or not to
participate in the offer, based upon a number of factors, including your
financial position, need or desire for liquidity, other financial opportunities
and tax position.
Your general partner has not retained an unaffiliated representative
to act on behalf of the limited partners in negotiating the terms of the offer
since each individual limited partner can make his or her own decision as to
whether or not to tender. Unlike a merger or other form of partnership
reorganization, the preferences of other limited partners in your partnership
cannot bind you. If an unaffiliated representative had been obtained, it is
possible that such representative could have negotiated a higher price for your
units than we are offering.
The terms of our offer have been established by us and are not the
result of arms-length negotiations. In determining the terms of the offer, we
considered the following factors and information:
1. The opportunity for you to make an individual decision on
whether to tender your units in the offer and that the offer
allows each investor to continue to hold his or her units.
2. The estimated value of your partnership's properties has been
determined based on a method believed to reflect the
valuation of such assets by buyers in the market.
3. An analysis of the possible alternatives including
liquidation and continuation without the option of the offer.
See "The Offer -- Section 9. Background and Reasons for the
Offer -- Alternatives Considered."
4. An evaluation of the financial condition and results of
operations of your partnership and AIMCO Properties, L.P. and
their anticipated level of operating results. The offer is
not expected to have an effect on your partnership's
financial condition or results of operations. The property
income of your partnership has decreased from $7,767,173 for
the year ended December 31, 1997 to $7,433,000 for the year
ended December 31, 1998. These factors are reflected in our
valuation of your partnership.
5. The method of determining the offer price which is
substantially the financial equivalent to your interest in
your partnership. See "The Offer -- Section 9. Background and
Reasons for the Offer -- Valuation of Units."
22
<PAGE> 25
6. The fact that the units are illiquid and the offer provides
holders of units with liquidity. However, we did review
whether trading information was available.
7. The estimated unit value of $191, based on a total estimated
value of your partnership's properties of $37,664,000. Your
general partner (which is our subsidiary) has no present
intention to liquidate your partnership or to sell or
refinance your partnership's properties except for the
commercial property. See "The Offer -- Section 9. Background
and Reasons for the Offer -- Valuation of Units" for a
detailed explanation of the methods we used to value your
partnership.
8. The offer price in light of any previous tender offers and
the results of such offers since the results of the offer
indicate a price at which some limited partners sold their
units. See "The Offer -- Section 9.
Background and Reasons for the Offer -- Prior Tender Offers."
9. The fact that if your partnership was liquidated as opposed
to continuing, the general partner would not receive the
substantial management fees it currently receives. We do not
believe that liquidation of the partnership is in the best
interests of the unitholders. We are not proposing to change
the current management fee arrangement.
10. The recent appraisals for the properties and offers for the
commercial property received by your partnership.
In evaluating these factors, we did not quantify or otherwise attach
particular weight to any of them.
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. It also has a duty to remove the property manager for your
partnership's residential property, under certain circumstances, even though
the property manager is also an affiliate of AIMCO. The conflicts of interest
include: (1) the fact that a decision to remove, for any reason, the general
partner of your partnership from its current position as a general partner of
your partnership would result in a decrease or elimination of the substantial
management fees paid to an affiliate of the general partner of your partnership
for managing your partnership property; and (2) as a consequence of our
ownership of units, because 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 manager of your
partnership's residential property. 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 $217,000 in 1996, $229,000 in 1997 and $309,000 in 1998.
The reimbursement amount to your general partner for the 1998 fiscal year
included $90,000 which was paid to an
23
<PAGE> 26
affiliate of your general partner for costs incurred in connection with
construction oversight services. The residential property manager received
management fees of $322,000 in 1996, $335,000 in 1997 and $350,000 in 1998. We
have no current intention of changing the fee structure for your general
partner or the manager of your partnership's residential property.
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 such 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
residential property. 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 property, 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. 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 (including,
possibly, affiliates of
24
<PAGE> 27
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 22.39% 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. Angeles Income Properties, Ltd. II was organized on October
12, 1982, 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 includes the
following three residential apartment complexes: Deer Creek Apartments, a
288-unit complex in Plainsboro, New Jersey; Georgetown Apartments, a 200-unit
complex in South Bend, Indiana; and Landmark Apartments, a 292-unit complex in
Raleigh, North Carolina. Your partnership's investment portfolio also includes
a 100% leasehold interest in Atlanta Crossing Shopping Center, a 169,168
square-foot retail center in Montgomery, Alabama. In addition, your partnership
has a 14.4% interest in the Princeton Meadows Joint Venture. However, the joint
venture recently sold its only investment property, Princeton Meadows Golf
Course, to an unaffiliated third party.
The general partner of your partnership is Angeles Realty Corporation
II, which is a wholly owned subsidiary of AIMCO. A wholly owned subsidiary of
AIMCO serves as manager of the residential properties owned by your
partnership. As of December 31, 1998 , there were 99,784 units issued and
outstanding, which were held of record by 3,025 limited partners. Your
partnership's principal executive offices are located at 1873 South Bellaire
Street, 17th Floor, 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 residential 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 residential properties primarily because it expects
the properties' operating performance to improve in the
25
<PAGE> 28
near term. In making this assessment, your general partner noted the occupancy
and rental rates at the properties in 1998 compared to 1997. For more detailed
information regarding the average occupancy and rental rates, see "Average
Annual Rental Rates and Occupancy" below. In particular, the general partner
noted that it expects to spend approximately $1,848.000 for capital
improvements at the properties in 1999. Capital improvements at the properties
consist primarily of landscaping and irrigation improvements, parking lot and
pool repairs, and exterior painting. 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 residential 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 residential properties.
The general partner believes that the market for the sale of
commercial properties is strong at this time. Your partnership is currently
marketing its commercial property and has received three offers.
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, which are budgeted,
at $1,848,000 in 1999, are expected to be paid from operating cash flows, cash
reserves, or from short-term or long-term borrowings.
COMPETITION. There are other residential 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 we are 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.
SELECTED FINANCIAL AND PROPERTY-RELATED DATA. The summary financial
information of Angeles Income Properties, Ltd. II for the years ended December
1998 and 1997 is based on audited 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.
ANGELES INCOME PROPERTIES, LTD. II
(in thousands, except per unit data)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
----------------------------
1998 1997
--------- ---------
<S> <C> <C>
OPERATING DATA:
Total Revenues................................................. $ 7,563 $ 7,242
Net Income (Loss).............................................. 60 145
Net Income per limited partnership unit........................ .59 1.44
Distributions per limited partnership unit..................... 14.75 9.92
</TABLE>
26
<PAGE> 29
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1998 1997
--------- ---------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and Cash Equivalents...................................... $ 2,063 $ 3,099
Real Estate, Net of Accumulated Depreciation................... (25,859) (24,462)
Total Assets................................................... 15,217 16,868
Notes Payable.................................................. 17,999 18,197
General Partners' Capital (Deficit)............................ (476) (462)
Limited Partners' Capital (Deficit)............................ (3,180) (1,767)
Partners' Capital Deficit...................................... (3,656) (2,229)
Total Distributions............................................ (1,487) (1,000)
Net increase (decrease) in cash and cash equivalents........... (1,036) 244
Net cash provided by operating activities...................... 2,076 2,311
</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>
Property Date of Purchase Type of Ownership Use
-------- ---------------- ----------------- ---
<S> <C> <C> <C>
Atlanta Crossing Shopping 09/27/83 100% Leasehold Interest Retail Center
Center Montgomery, AL 169,168 s.f.
Deer Creek Apartments 09/28/83 Fee ownership subject to Apartments
Plainsboro, NJ a first mortgage 288 units
Georgetown Apartments 11/21/83 Fee ownership subject to Apartments
South Bend, IN a first and second 200 units
mortgage (1)
Landmark Apartments 12/16/83 Fee ownership subject to Apartments
Raleigh, NC a first mortgage 292 units
</TABLE>
- -------------------
(1) Property is held by a limited partnership in which your partnership
owns a 99% interest.
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>
Atlanta Crossing Shopping Center $ 5,313 $ 4,762 5-20 yrs (1) $ 1,514
Deer Creek Apts. 11,933 6,957 5-20 yrs (1) 4,143
Georgetown Apts. 7,387 5,275 5-20 yrs (1) 945
Landmark Apartments 12,157 8,865 5-20 yrs (1) 2,174
--------- -------- -------
$ 36,750 $ 25,859 $ 8,776
--------- -------- -------
</TABLE>
(1) Straight line and accelerated.
SCHEDULE OF MORTGAGES. The following shows certain information
regarding the outstanding mortgages encumbering each of your partnership's
properties as of December 31, 1998.
27
<PAGE> 30
<TABLE>
<CAPTION>
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
Property 1998 Rate Amortized Date Maturity
-------- ---- ---- --------- ---- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Deer Creek Apts. $ 6,170 7.33% 30 yrs 11/2003 $ 5,779
1st mortgage
Georgetown Apts.
1st mortgage 5,257 7.83% 28.67 yrs 10/2003 4,806
2nd mortgage 173 7.83% (1) 10/2003 173
Landmark Apts.
1st mortgage 6,463 7.33% 30 yrs 11/2003 6,054
-------- --------
$ 18,063 $ 16,812
--------
Less amortized discount (64)
--------
$ 17,999
</TABLE>
- ------------------
(1) Interest only payments.
AVERAGE ANNUAL RENTAL RATE 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>
Property Average Annual Rental Rate Average Annual Occupancy
-------- -------------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Atlanta Crossing Shopping Center $ 4.51/s.f. $ 4.46/s.f. 59% 91%
Deer Creek Apartments 8,920/unit 8,698/s.f. 97% 96%
Georgetown Apartments 7,624/unit 7,378/unit 96% 97%
Landmark Apartments 8,308/unit 8,176/unit 92% 91%
</TABLE>
SCHEDULE OF REAL ESTATE TAXES AND RATES. The following shows the real
estate taxes and rates for 1998 for each of your partnership's properties.
<TABLE>
<CAPTION>
Property 1998 Billing 1998 Rate
-------- ------------ ---------
(in thousands)
--------------
<S> <C> <C>
Atlanta Crossing Shopping Center $ 50 3.45%
Deer Creek Apartments 281 2.62%
Georgetown Apartments 128 9.08%
Landmark Apartments 113 1.15%
</TABLE>
PROPERTY MANAGEMENT. Your partnership's residential 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 residential 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.
28
<PAGE> 31
DISTRIBUTIONS. The following table shows, for each of the years
indicated, the distributions paid per unit in such years.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 AMOUNT
- ---------------------- ------
<S> <C>
1995.................................................... $ 0.00
1996.................................................... 0.00
1997.................................................... 9.92
1998.................................................... 14.75
-------
Total $ 24.67
</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 BUDGETS
<TABLE>
<CAPTION>
DEER
CREEK GEORGETOWN LANDMARK
----------- ----------- -----------
<S> <C> <C> <C>
Total Revenues ................................... $ 2,799,523 $ 1,517,611 $ 2,368,991
Operating Expenses ............................... (1,130,575) (564,905) 9899,543)
Replacement Reserves - Net ....................... 83,520 -- 78,840
Debt Service ..................................... (519,834) (537,768) (544,587)
Capital Expenditures ............................. -- -- (201,584)
----------- ----------- -----------
Net Cash Flow ................ $ 1,232,634 $ 414,938 $ 802,117
</TABLE>
The above budgets at the time they were made were forward-looking
information developed by your general partner (which is our subsidiary).
Therefore, the budgets were dependent upon future events with respect to the
ability of your partnership to meet such budget. The budgets 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 we deemed such budgets to be reasonable and valid at the date
made, there is no assurance that the assumed facts will be validated or that
the circumstances 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. For the year ended
December 31, 1998, the partnership reported revenues of $7,563,000, operating
expenses of $2,997,000 and replacement reserves and capital expenditures of
$39,224.
BENEFICIAL OWNERSHIP OF INTERESTS IN YOUR PARTNERSHIP. Together with
our subsidiaries, we currently own, in the aggregate, approximately 22.39% of
the outstanding limited partnership units of your partnership. 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)
have effected any transaction in the units in the past three years, except for
the transfer of 20 units at $182 per unit in privately negotiated transactions,
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.
29
<PAGE> 32
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, and on a pro
forma basis assuming that all of the units sought in our offer had been
acquired at the beginning of each period:
<TABLE>
<CAPTION>
PARTNERSHIP PROPERTY
FEES AND MANAGEMENT
YEAR EXPENSES FEES
---- -------- ----
<S> <C> <C>
1995.................................. $ 161,210 $ 326,338
1996.................................. 217,000 322,000
1997.................................. 229,000 335,000
1998.................................. 309,000 350,000
</TABLE>
LEGAL PROCEEDINGS. Your partnership may be a party to a variety of
legal proceedings related to its ownership of the partnership's properties and
management and leasing business, respectively, 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.
If we acquire a substantial number of additional units pursuant to our
offer, we may be in a position to influence or control voting decisions with
respect to the limited partners of your partnership. See "The Offer - Section
7. Effects of the Offer."
SECTION 15. SOURCE OF FUNDS.
We expect that approximately $6,656,171 will be required to purchase
up to 34,849.06 outstanding units (exclusive of fees and expenses estimated to
be $12,000). For more information regarding the fees and expenses, see "The
Offer Section 19."
We will obtain all necessary funds from working capital or from our
$100 million revolving credit facility with Bank of America National Trust and
Savings Association ("Bank of America") and BankBoston, N.A. AIMCO Properties,
L.P. is the borrower under the credit facility, and all obligations thereunder
are guaranteed by AIMCO and certain of its subsidiaries. The annual interest
rate under the credit facility is based on either LIBOR or Bank of America's
reference rate, at our election of the AIMCO, plus, an applicable margin. We
elect which interest rate will be applicable to particular borrowings under the
credit facility. The margin ranges between 2.25% and 2.75% in the case of
LIBOR-based loans and between 0.75% and 1.25% in the case of base rate loans,
depending upon a ratio of our consolidated unsecured indebtedness to the value
of certain unencumbered assets. The credit facility matures on September 30,
1999 unless extended, at the discretion of the lenders. The credit facility
provides for the conversion of the revolving facility into a three year term
loan. The availability of funds to us under the credit facility is subject to
certain borrowing base restrictions and other customary restrictions, including
compliance with financial and other covenants thereunder. The financial
covenants require us to maintain a ratio of debt to gross asset value of no
more than 0.55 to 1.0, an interest coverage ratio of 2.25 to 1.0 and a fixed
charge coverage ratio of at least 1.7 to 1.0 from January 1, 1999 through June
30, 1999, and 1.8 to 1.0 thereafter. In addition, the credit facility limits us
from distributing more than 80% of our Funds From Operations (as defined) to
holders of our units, imposes minimum net worth requirements and provides other
financial covenants related to certain unencumbered assets.
30
<PAGE> 33
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:
(a) 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
(b) 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 7.5% increase in
LIBOR or at least a 7.5% decrease in the S&P 500 Index, the Morgan Stanley REIT
Index, or the price of the 10-year Treasury Bond or the 30-year Treasury Bond,
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, (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
(c) 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 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
31
<PAGE> 34
(d) 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
(e) 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
(f) 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
(g) we shall not have adequate cash or financing commitments available
to pay the for the units validly tendered; or
(h) 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
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.
32
<PAGE> 35
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.
33
<PAGE> 36
We have filed with the Commission 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.
34
<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 1873 South Bellaire Street, 17th Floor,
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
Robert Ty Howard................................. Executive Vice President -- Ancillary Services
Steven D. Ira.................................... Executive Vice President and Co-Founder
Harry G. Alcock.................................. Senior Vice President -- Acquisitions
Troy D. Butts.................................... Senior Vice President and Chief Financial Officer
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 Manage
ment, 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).
</TABLE>
I-1
<PAGE> 38
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
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 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.
</TABLE>
I-2
<PAGE> 39
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
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 Privatiza tion Council. He received a B.A.
from Fordham College and a J.D. from Fordham University Law School.
Robert Ty Howard............... Mr. Howard has served as Executive Vice President - Ancillary
Services since February 1998. Mr. Howard was appointed Executive
Vice President - Ancillary Services of AIMCO-GP in July 1998.
Prior to joining AIMCO, Mr. Howard served as an officer and/or
director of four affiliated companies, Hecco Ventures, Craig Corpora
tion, Reading Company and Decurion Corporation. Mr. Howard was
responsible for financing, mergers and acquisitions activities,
investments in commercial real estate, both nationally and interna-
tionally, cinema development and interest rate risk management.
From 1983 to 1988, he was employed by Spieker Properties. Mr.
Howard received a B.A. from Amherst College, a J.D. from Harvard
Law School and an M.B.A. from Stanford University Graduate
School of Business.
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 Apart-
ment 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 Apart-
ment 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.
</TABLE>
I-3
<PAGE> 40
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Harry G. Alcock................ Mr. Alcock has served as Vice President of AIMCO and AIMCO-GP since
July 1996, and was promoted to Senior Vice President Acquisitions in
October 1997, 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.
Troy D. Butts.................. Mr. Butts has served as Senior Vice President and Chief Financial
Officer of AIMCO since November 1997. Mr. Butts has been Senior
Vice President and Chief Financial Officer of AIMCO-GP since July
1998. Prior to joining AIMCO, Mr. Butts served as a Senior Manager
in the audit practice of the Real Estate Services Group for Arthur
Andersen LLP in Dallas, Texas. Mr. Butts was employed by Arthur
Andersen LLP for ten years and his clients were primarily publicly-
held real estate companies, including office and multi-family real
estate investment trusts. Mr. Butts holds a Bachelor of Business
Administration degree in Accounting from Angelo State University
and is a Certified Public Accountant.
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.
Suite 4300 Mr. Martin has served as President and Chief Executive Officer and
Denver, CO 80202 a Director of NL Industries, Inc., a manufacturer of titanium dioxide,
since 1987. Mr. Martin has served as Chairman of Tremont Corpora
tion, 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.
</TABLE>
I-4
<PAGE> 41
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATIONS FOR THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
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 Lexingon Avenue Rhodes has served as the President and a Director of National Review
4th Floor magazine since November 30, 1992, where he has also served as a
New York, NY 10016 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 Director of Delphi Financial Group,
Inc. and its subsidiaries, Delphi International Ltd., Oracle Reinsur-
ance 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.
3400 Peachtree Road Mr. Smith is Principal and President of John D. Smith Developments.
Suite 831 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>
I-5
<PAGE> 42
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>
<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>
For information, please call:
TOLL FREE: (888) 349-2005
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER UNITS OF LIMITED PARTNERSHIP ANGELES INCOME PROPERTIES, LTD. II
PURSUANT TO AN OFFER TO PURCHASE
DATED MAY 13, 1999
BY
AIMCO PROPERTIES, L.P.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON JUNE 29, 1999, UNLESS EXTENDED.
- -------------------------------------------------------------------------------
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
DESCRIPTION OF UNITS TENDERED
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s) (Please indicate Units in Angeles Income Properties, Ltd. II
changes or corrections to the name, address and tax
identification number printed below.)
- --------------------------------------------------------------------------------------------------------------------
2. Number of 3. Total Num
1. Total Number of Units Tendered ber of Units
Units Owned for Cash Tendered
(#) (#) (#)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
</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 June 29, 1999, unless
extended (the "Expiration Date"). 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.
<TABLE>
<CAPTION>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2, 4 AND 9) (SEE INSTRUCTIONS 2, 4 AND 9)
<S> <C>
To be completed ONLY if the consideration for the pur- To be completed ONLY if the consideration for the pur-
chase price of Units accepted for payment is to be issued chase price of Units accepted for payment is to be sent to
in the name of someone other than the undersigned. someone other than the undersigned or to the undersigned at an
address other than that shown above.
[ ] Issue consideration to: [ ] Mail consideration to:
Name Name
----------------------------------------------------- --------------------------------------------------------
(Please Type or Print) (Please Type or Print)
Address Address
-------------------------------------------------- --------------------------------------------------------
- ---------------------------------------------------------- ----------------------------------------------------------------
(Include Zip Code) (Include Zip Code)
- ----------------------------------------------------------
(Tax Identification or Social Security No.)
(See Substitute Form W-9)
- ---------------------------------------------------------- --------------------------------------------------------------
- ---------------------------------------------------------- --------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
</TABLE>
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, dated May 13, 1999 (the "Offer
Date") relating to the offer by AIMCO Properties, L.P. (the "Purchaser") to
purchase Limited Partnership Interests (the "Units") in Angeles Opportunity
Properties, Ltd., a California limited partnership (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 of $347 per Unit, 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; (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. 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).
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
3
<PAGE> 4
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 March 1, 1999.
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 JULY 11, 1999.
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.
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.
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."
4
<PAGE> 5
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.
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.
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
8
<PAGE> 9
(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).
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). 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.
9
<PAGE> 10
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.
9. MINIMUM TENDERS. A unitholder may tender any or all of his, her or its
Units.
10. CONDITIONAL TENDERS. No alternative, conditional or contingent tenders
will be accepted.
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 com The ward, minor or
mittee for a designated ward, minor or incompetent person (3)
incompetent person (3)
7. a. The usual revocable savings trust account The grantor trustee (1)
(grantor is also trustee)
b. So-called trust account that is not a legal The actual owner (1)
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
the account title.) (5)
10. Corporate account The corporation
11. Religious, charitable, or educational organi The organization
zation account
12. Partnership account held in the name of the The partnership
business
13. Association, club, or other tax-exempt orga- The organization
nization
14. A broker or registered nominee The broker or nominee
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C>
15. Account with the Department of Agriculture The public entity
in the name of a public entity (such as a
State or local government, school district,
or prison) that receives agricultural program
payments
- -------------------------------------------------------------------------------
(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.
</TABLE>
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
14
<PAGE> 1
AIMCO PROPERTIES, L.P.
1873 SOUTH BELLAIRE STREET, 17TH FLOOR
DENVER, COLORADO 80222
May 13, 1999
Dear Unitholder:
We are offering to acquire up to 34,849.06 units in your partnership,
Angeles Income Properties, Ltd. II. Our offer presents you with the following
two options, which you are free to accept or reject in any combination you like:
1. You may tender each of your units in exchange for $191
cash, in which case you may recognize a gain or loss for federal income
tax purposes.
2. You may retain any or all of your units. If you choose to
retain any or all of your units, your rights as a holder of units will
remain unchanged. You will continue to participate in gains and losses
of your partnership(s), and you will receive distributions, if any,
payable in respect of your units.
If more units are tendered than we are offering to acquire, we will
prorate the purchase so that the same approximate percentage of units tendered
by each partner will be purchased. We are offering to acquire any and all
outstanding units in your partnership. Our offer is not subject to any minimum
number of units being tendered. YOU WILL NOT BE REQUIRED TO PAY ANY COMMISSIONS
OR FEES IN CONNECTION WITH ANY DISPOSITION OF YOUR UNITS PURSUANT TO OUR OFFER.
Our offer price will be reduced for any distributions subsequently made by your
partnership prior to the expiration of our offer.
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 your partnership, which is
owned by us, has substantial conflicts of interest with respect to the offer.
Accordingly, the general partner of your partnership makes no recommendation to
you as to whether you should tender or refrain from tendering your units in the
offer.
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 5:00 p.m. New York City time on June 29, 1999, unless extended. If you
have questions or require further information, please call the Information
Agent, toll free, at (888) 349-2005.
Very truly yours,
AIMCO PROPERTIES, L.P.
<PAGE> 1
Exhibit (z)(1)
AGREEMENT OF JOINT FILING
Cooper River Properties, L.L.C., Broad 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. 6 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: May 13, 1999
COOPER RIVER PROPERTIES, L.L.C.
By: /s/Patrick J. Foye
------------------------------------
Executive Vice President
BROAD 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 13 of 13 Pages
